S-3

QuickLinks -- Click here to rapidly navigate through this document

As filed with the Securities and Exchange Commission on June 11, 2002

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

FIRST COMMUNITY BANCORP
(Exact Name of Registrant as Specified in Its Charter)

CALIFORNIA	33-0885320
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6110 El Tordo
Rancho Santa Fe, California 92067
(858) 756-3023
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)

Lynn M. Hopkins
Chief Financial Officer
275 N. Brea Avenue
Brea, California 92821
(714) 674-5330

(Name, address, including zip code, and telephone number, including area code, of agent for service)

with a copy to:

Stanley F. Farrar, Esq.
Sullivan & Cromwell
1888 Century Park East
Los Angeles, California 90067
(310) 712-6600 Allen Z. Sussman, Esq.
Morrison & Foerster, LLP
555 West Fifth Street, Suite 3500
Los Angeles, California 90013
(213) 892-5200

Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

        If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.    o

        If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.    o  _______

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o  _______

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o  _______

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.    o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee
Common Stock, no par value	$86,250,000	$7,935

(1)

Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o).

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

SUBJECT TO COMPLETION, DATED JUNE 11, 2002

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state in which the offer or sale is not permitted.

Prospectus

            Shares

FIRST COMMUNITY BANCORP
Common Stock

        We are offering            shares of our common stock, no par value per share, at a price of $                  per share. We will receive all of the net proceeds from the sale of these shares. Our common stock is quoted on the Nasdaq National Market under the symbol "FCBP." On June 7, 2002, the last reported sale price of our common stock was $25.00 per share.

Investing in our common stock involves risks. See "Risk Factors" beginning on page 6 for a discussion of factors you should consider before buying shares of our common stock.

	Per Share	Total
Public offering price
Underwriting discounts
Proceeds, before expenses, to us		$

        We have granted the underwriters an option for a period of 30 days to purchase up to            additional shares of our common stock at the public offering price to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

These securities are not savings or deposit accounts and are not insured by the Federal Deposit Insurance Corporation, Bank Insurance Fund, Savings Association Insurance Fund or any other governmental agency.

        The underwriters expect the shares of our common stock will be ready for delivery to purchasers on or about            , 2002.

FRIEDMAN BILLINGS RAMSEY

KEEFE, BRUYETTE & WOODS, INC.

STIFEL, NICOLAUS & COMPANY
INCORPORATED

The date of this prospectus is            , 2002.

[inside front cover]
[map of Southern California and branch locations]

No dealer, salesperson or other person is authorized to give any information or to make any representation not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy the shares of common stock offered hereby to any person or by anyone in any jurisdiction in which it is unlawful to make such offer or solicitation. The information contained in this prospectus is current only as of its date.

TABLE OF CONTENTS

	Page
Prospectus Summary	1
Summary Consolidated Financial Information	4
Risk Factors	6
Cautionary Statement Regarding Forward-Looking Statements	10
Use of Proceeds	11
Price Range of Common Stock and Dividend Policy	11
Capitalization	13
Selected Consolidated Financial Information	14
Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Business	44
Validity of Common Stock	55
Experts	55
Underwriting	56
Where to Find More Information	58
Unaudited Pro Forma Combined Condensed Consolidated Financial Information	F-1

i

PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in or incorporated by reference into this prospectus. This summary is not intended to be complete. You should carefully read this entire prospectus, including the "Risk Factors" section, and the documents we refer you to under "Where to find additional information," including the documents incorporated by reference into this prospectus, before making an investment in our common stock.

The Company

        We are the holding company for two banks—Rancho Santa Fe National Bank and Pacific Western National Bank. Assuming completion of three currently proposed acquisitions, we will be one of the largest independent bank holding companies headquartered in Southern California and, through Rancho Santa Fe National Bank, we will operate the largest independent commercial bank headquartered in and serving San Diego County. At March 31, 2002, we had consolidated total assets of $1,199.8 million, total deposits of $1,046.0 million and shareholders' equity of $104.3 million. If the three proposed acquisitions, this offering and a proposed issuance by us of additional trust preferred securities with an aggregate liquidation preference of $10.0 million had been completed on March 31, 2002, we would have had on that date consolidated total assets, total deposits and shareholders' equity of $2,193.7 million, $1,761.7 million, and $268.7 million. See "Unaudited Pro Forma Combined Condensed Consolidated Financial Information" beginning on page F-1 for more information on our pro forma financial data.

Business strategy—Our business strategy is to build and maintain premier, relationship-based community banks, serving the needs of small- to medium-sized businesses and the owners and employees of those businesses. As community-based institutions, we strive to offer a superior level of customer service compared to the larger regional and super-regional banks. Our banks offer a broad range of banking products and services to the communities they serve including: accepting time and demand deposits, originating commercial loans, real estate and construction loans, Small Business Administration guaranteed loans, mortgage loans and consumer loans. We are also committed to disciplined cost controls. We have centralized administrative, credit and other functions at the holding company level, allowing our banks to operate more efficiently. Our banks rely on a foundation of locally generated deposits that have a relatively low cost due to a high percentage of noninterest bearing deposits.

Management—The experience of our management team is our primary strength and competitive advantage. That team consists of the following individuals:

•

John Eggemeyer, chairman of the board and formerly chairman of the executive committee of the board of Western Bancorp until its acquisition by U.S. Bancorp in 1999. Mr. Eggemeyer is also a founder and the chief executive of Castle Creek Capital, LLC and Castle Creek Financial, LLC, which together form a merchant banking organization serving the banking industry;



•

Matthew Wagner, chief executive officer and formerly the president and chief executive officer of Western Bancorp;



•

Robert Borgman, chief credit officer and formerly the chief credit officer of Western Bancorp;



•

Suzanne Brennan, chief operations officer and formerly executive vice president-operations of Western Bancorp; and



•

Lynn Hopkins, chief financial officer and formerly the controller of Western Bancorp.

        In 1999, Mr. Eggemeyer and Mr. Wagner joined our management team and orchestrated the merger of Rancho Santa Fe National Bank and First Community Bank of the Desert. Mr. Eggemeyer and Mr. Wagner have worked together for 19 years and have a combined 54 years of experience in the

1

banking industry. Under their leadership, we have assembled the management team described above and have acquired six banks since 1999. Prior to 2002, we acquired and have successfully integrated four of those banks. We are continuing to integrate another two banks acquired since December 31, 2001. To date, we have achieved projected cost savings in connection with those acquisitions and believe that we have also been able to stabilize and improve the operations of those banks that were under-performing at the time of acquisition. We anticipate further cost savings related to the two most recent completed acquisitions.

Acquisition strategy—Since our organization in October 1999, we have completed or announced the following acquisitions:

Acquisitions

Date	Institution Acquired or to be Acquired	Assets			Branches Acquired or to be Acquired
March 2002	W.H.E.C., Inc.	$	147 million		5
January 2002	Pacific Western National Bank	$	260 million		5
October 2001	First Charter Bank, N.A.	$	127 million		2
January 2001	Professional Bancorp, Inc.	$	263 million		5
May 2000	First Community Bank of the Desert	$	140 million		6
May 2000	Rancho Santa Fe National Bank	$	200 million		4
Pending	Upland Bank	$	110 million	(1)	2
Pending	Marathon Bancorp	$	109 million	(1)	1
Pending	First National Bank	$	649 million	(1)	7

(1)

At March 31, 2002.

        We continue to seek opportunities to acquire small-to medium-sized banks that we believe will enable us to grow our business in a manner consistent with our community-banking focus. Ideally, we seek banks in or around the footprint of our existing branch networks that present opportunities for consolidation and rationalization of operating expenses. We believe that by streamlining the administration of these banks and providing back-office services for all our banks at the holding company level, we are able to lower operating costs, improve performance and quickly integrate acquired banks into the First Community organization while maintaining the stability of our franchise.

General Information—We were incorporated in California in 1999. Our principal executive offices are located at 6110 El Tordo, Rancho Santa Fe, California 92067. Our telephone number is (858) 756-3023.

2

The Offering

Shares offered	shares
Common stock to be outstanding after this offering	shares
Use of proceeds	Our net proceeds from this offering are estimated to be approximately $             million. We currently expect that the net proceeds will be used together with cash on hand to fund the cash portion of the purchase price with respect to our proposed acquisitions. We cannot assure you that any of these acquisitions will occur. In the event that any of the acquisitions are not completed, any net proceeds not used to fund the cash portion of the purchase price of the proposed acquisitions will be used for general corporate purposes. See "Use of Proceeds" on page 11.
Nasdaq National Market symbol	FCBP

        The number of shares of our common stock that will be outstanding after this offering includes 7,539,227 shares outstanding as of March 31, 2002 and excludes:

•

873,260 shares of common stock underlying options which have been granted and are outstanding as of May 31, 2002 and 524,376 shares of common stock issuable upon exercise of stock options available for grant under our stock option plans at May 31, 2002;



•

up to 28,300 shares of common stock issuable on the conversion of convertible debt as of March 31, 2002;



•

up to 79,511 shares of common stock issuable upon exercise of outstanding warrants as of March 31, 2002; and



•

an estimated 3,632,000 shares of common stock issuable in connection with the proposed acquisitions of First National, Upland and Marathon.

        Unless otherwise indicated, all information in this prospectus assumes no exercise of the underwriters' over-allotment option to purchase additional shares in this offering.

3

Summary Consolidated Financial Information

		At or for the Three Months Ended March 31, 2002				At or for the Year Ended December 31, 2001				At or for the Years Ended December 31,
		Actual(1)		Pro forma(2)		Actual(3)		Pro forma(2)		2000(4)(5)		1999(4)
		(dollars in thousands, except per share data)
Consolidated Statements of Earnings Data:
	Interest income	$	13,901	$	29,641	$	43,114	$	141,673	$	28,831	$	23,405
	Interest expense		2,988		7,685		11,251		51,439		7,924		5,688
	Net interest income		10,913		21,956		31,863		90,234		20,907		17,717
	Provision for loan losses		—		1,045		639		12,844		520		518
	Net interest income after provision for loan losses		10,913		20,911		31,224		77,390		20,387		17,199
	Noninterest income		1,940		4,790		5,177		18,459		2,465		2,304
	Noninterest expense		9,217		20,654		25,915		88,166		18,145		12,073
	Earnings from continuing operations before income taxes		3,636		5,047		10,486		7,683		4,707		7,430
	Income taxes		1,474		1,873		4,376		2,716		2,803		3,166
	Net earnings from continuing operations	$	2,162	$	3,174	$	6,110	$	4,967	$	1,904	$	4,264
	Basic earnings from continuing operations per share	$	0.33	$	0.22	$	1.30	$	0.35	$	0.49	$	1.10
	Diluted earnings from continuing operations per share		0.32		0.22		1.23		0.35		0.47		1.05
Consolidated Balance Sheets Data:
	Loans, net of deferred fees and costs	$	798,714	$	1,365,149	$	501,740		N/A	$	250,552	$	206,102
	Total assets		1,199,817		2,193,684		770,217		N/A		358,287		304,362
	Total deposits		1,046,032		1,761,730		677,167		N/A		316,938		274,232
	Total shareholders' equity		104,326		268,664		55,297		N/A		27,772		25,855

		At or for the Three Months Ended March 31, 2002(1)			At or for the Years Ended December 31,
					2001(3)			2000(4)(5)			1999(4)
Other Data:
	Dividends declared per share	$	0.09		$	0.36		$	0.36		$	0.30
	Dividends payout ratio		28.1	%		29.3	%		76.6	%		28.6	%
	Book value per share	$	13.84		$	10.48		$	6.99		$	6.67
	Tangible book value per share		7.77			8.62			6.99			6.67
	Shareholders' equity to assets at period end		8.70	%		7.18	%		7.75	%		8.49	%
	Return on average assets		0.89			0.92			0.56			1.44
	Return on average equity		12.86			16.33			7.01			17.46
	Net interest margin		5.24			5.33			6.81			6.60
	Non-performing assets to total assets		0.76			1.01			0.92			1.06
	Allowance for loan losses to total loans		1.70			2.23			1.57			1.95
	Net charge-offs to average loans		0.38			1.60			0.27			0.15
	Non-performing loans to total loans		0.79			0.93			0.91			0.93
	Allowance for loan losses to non-performing loans		214.7			239.9			173.1			209.6

(1)

We acquired Pacific Western on January 31, 2002 in a transaction accounted for as a purchase and we acquired WHEC on March 7, 2002 in a transaction accounted for as a purchase. The

4

consolidated statements of earnings and other data for the three months ended March 31, 2002 include the results of operations of Pacific Western subsequent to January 31, 2002 and of WHEC subsequent to March 7, 2002.

(2)

The pro forma statement of earnings data for the three months ended March 31, 2002 reflect the completed acquisitions of Pacific Western and WHEC and the proposed acquisitions of First National, Upland and Marathon as if each of those acquisitions had occurred on January 1, 2002, and the pro forma statement of earnings data for the year ended December 31, 2001 reflect the completed and proposed acquisitions, as well as the acquisition of First Charter, as if each of those acquisitions had occurred on January 1, 2001. The pro forma balance sheet data as of March 31, 2002 reflect the proposed acquisitions as if they had occurred on March 31, 2002. Please see "Unaudited Pro Forma Combined Condensed Consolidated Financial Information" beginning on page F-1 for additional information regarding our pro forma data and the other matters to which our pro forma data give effect.

(3)

We acquired First Professional on January 16, 2001 in a transaction accounted for as a purchase and we acquired First Charter on October 8, 2001 in a transaction accounted for as a purchase. The consolidated statements of earnings and other data for the year ended December 31, 2001 include the results of operations of First Professional subsequent to January 16, 2001 and of First Charter subsequent to October 8, 2001.

(4)

We acquired First Community Bank of the Desert and Rancho Santa Fe National Bank on May 31, 2000 in a transaction accounted for on a pooling of interests basis. Accordingly, our historical financial data has been restated and our consolidated results of operations for the years ended December 31, 2000, 1999, 1998 and 1997 include the results of both Rancho Santa Fe National Bank and First Community Bank of the Desert.

(5)

The statements of earnings and other data for the year ended December 31, 2000 include non-recurring merger costs of $3.6 million.

5

RISK FACTORS

A purchase of our common stock involves risk. You should carefully consider, in addition to the other information set forth herein, the following risk factors.

If we are unable to successfully integrate our business with those of the banks we have acquired or propose to acquire, our business and earnings may be negatively affected.

        We have acquired six banks since our formation, including three banks in the last two full calendar quarters alone. In addition, we have announced agreements to acquire three additional banks, including First National which, if consummated, will nearly double the size of our operations. Successful integration of these banks, each of which previously operated independently, will depend primarily on our ability to consolidate operations, systems and procedures and to eliminate redundancies and costs. We cannot assure you that we will be able to integrate our operations without encountering difficulties including, without limitation, the loss of key employees and customers, the disruption of our respective ongoing businesses or possible inconsistencies in standards, controls, procedures and policies. Estimated cost savings are projected to come from various areas that we identified through our due diligence and integration planning process. If we have difficulties with any of these integrations, we might not achieve the economic benefits we expect to result from these acquisitions and this would likely hurt our business and our earnings. In addition, we may experience greater than expected costs or difficulties relating to the integration of these banks, and/or may not realize expected cost savings from these acquisitions within the expected time frames.

Our business is subject to interest rate risk and variations in interest rates may negatively affect our financial performance.

        Changes in the interest rate environment may reduce our profits. It is expected that we will continue to realize income from the differential or "spread" between the interest earned on loans, securities and other interest-earning assets, and interest paid on deposits, borrowings and other interest-bearing liabilities. Net interest spreads are affected by the difference between the maturities and repricing characteristics of interest-earning assets and interest-bearing liabilities. In addition, loan volume and yields are affected by market interest rates on loans, and rising interest rates generally are associated with a lower volume of loan originations. We cannot assure you that we can minimize our interest rate risk. In addition, an increase in the general level of interest rates may adversely affect the ability of certain borrowers to pay the interest on and principal of their obligations. Accordingly, changes in levels of market interest rates could materially and adversely affect our net interest spread, asset quality, loan origination volume and overall profitability.

We face strong competition from financial service companies and other companies that offer banking services which can hurt our business.

        We conduct our banking operations exclusively in Southern California. Increased competition in our market may result in reduced loans and deposits. Ultimately, we may not be able to compete successfully against current and future competitors. Many competitors offer the banking services that we offer in our service area. These competitors include national banks, regional banks and other community banks. We also face competition from many other types of financial institutions, including without limitation, savings and loans, finance companies, brokerage firms, insurance companies, credit unions, mortgage banks and other financial intermediaries. In particular, our competitors include several major financial companies whose greater resources may afford them a marketplace advantage by enabling them to maintain numerous banking locations and mount extensive promotional and advertising campaigns. Additionally, banks and other financial institutions with larger capitalization and financial intermediaries not subject to bank regulatory restrictions have larger lending limits and are thereby able to serve the credit needs of larger customers. Areas of competition include interest rates

6

for loans and deposits, efforts to obtain deposits, and range and quality of products and services provided, including new technology-driven products and services. Technological innovation continues to contribute to greater competition in domestic and international financial services markets as technological advances enable more companies to provide financial services. We also face competition from out-of-state financial intermediaries that have opened low-end production offices or that solicit deposits in our market areas. If we are unable to attract and retain banking customers, we may be unable to continue our loan growth and level of deposits and our results of operations and financial condition may otherwise be adversely affected.

Changes in economic conditions, in particular an economic slowdown in Southern California, could hurt our business materially.

        Our business is directly affected by factors such as economic, political and market conditions, broad trends in industry and finance, legislative and regulatory changes, changes in government monetary and fiscal policies and inflation, all of which are beyond our control. A deterioration in economic conditions, in particular an economic slowdown in Southern California, could result in the following consequences, any of which could hurt our business materially:

•

loan delinquencies may increase;



•

problem assets and foreclosures may increase;



•

demand for our products and services may decline;



•

low cost or non-interest bearing deposits may decrease; and



•

collateral for loans made by us, especially real estate, may decline in value, in turn reducing customers' borrowing power, and reducing the value of assets and collateral associated with our existing loans.

A downturn in the real estate market could hurt our business.

        A downturn in the real estate market could hurt our business because many of our loans are secured by real estate. Our ability to recover on defaulted loans by selling the real estate collateral would then be diminished, and we would be more likely to suffer losses on defaulted loans. As of March 31, 2002, approximately 50% of the book value of our loan portfolio consisted of loans secured by various types of real estate. Substantially all of our real property collateral is located in Southern California. If there is a significant decline in real estate values, especially in Southern California, the collateral for our loans will provide less security. Real estate values in California could be affected by, among other things, earthquakes and other national disasters particular to California.

We are dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects.

        We currently depend heavily on the services of our chairman, John Eggemeyer, our chief executive officer, Matthew Wagner, and a number of other key management personnel. The loss of Mr. Eggemeyer's or Mr. Wagner's services or that of other key personnel could materially and adversely affect our results of operations and financial condition. Our success will also depend in part on the ability to attract and retain additional qualified management personnel. Competition for such personnel is strong in the banking industry and we may not be successful in attracting or retaining the personnel we require.

7

We are subject to extensive regulation which could adversely affect our business.

        Our operations are subject to extensive regulation by federal, state and local governmental authorities and are subject to various laws and judicial and administrative decisions imposing requirements and restrictions on part or all of our operations. We believe that we are in substantial compliance in all material respects with applicable federal, state and local laws, rules and regulations. Because our business is highly regulated, the laws, rules and regulations applicable to us are subject to regular modification and change. There are currently proposed various laws, rules and regulations that, if adopted, would impact our operations. There can be no assurance that these proposed laws, rules and regulations, or any other laws, rules or regulations, will not be adopted in the future, which could make compliance much more difficult or expensive, restrict our ability to originate, broker or sell loans, further limit or restrict the amount of commissions, interest or other charges earned on loans originated or sold by us or otherwise adversely affect our business or prospects.

We are exposed to risk of environmental liabilities with respect to properties to which we take title.

        In the course of our business, we may foreclose and take title to real estate, and could be subject to environmental liabilities with respect to these properties. We may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination, or may be required to investigate or clean up hazardous or toxic substances, or chemical releases at a property. The costs associated with investigation or remediation activities could be substantial. In addition, as the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. If we ever become subject to significant environmental liabilities, our business, financial condition, liquidity and results of operations could be materially and adversely affected.

Our ability to pay dividends is restricted by law and contractual arrangements and depends on capital distributions from the banks which are subject to regulatory limits.

        Our ability to pay dividends to our shareholders is subject to the restrictions set forth in California law. In addition, our ability to pay dividends to our shareholders is restricted under specified circumstances under indentures and a revolving credit agreement to which we are a party. See "Business—Limitations on Dividends" beginning on page 50 for more information on these restrictions. We cannot assure you that we will meet the criteria specified under California law or these agreements in the future, in which case we may reduce or stop paying dividends on our common stock.

        The primary source of our income from which we pay dividends is the receipt of dividends from our banks. The availability of dividends from the banks is limited by various statutes and regulations. It is possible, depending upon the financial condition of the bank in question, and other factors, that the Board of Governors of the Federal Reserve System, which we refer to as the Federal Reserve Board, and/or the Office of the Comptroller of the Currency could assert that payment of dividends or other payments is an unsafe or unsound practice. In the event our subsidiaries were unable to pay dividends to us, we in turn would likely have to reduce or stop paying dividends on our common stock. Our failure to pay dividends on our common stock could have a material adverse effect on the market price of our common stock. See "Business—Supervision and Regulation" beginning on page 51 for additional information on the regulatory restrictions to which we and our banks are subject.

Only a limited market exists for First Community common stock which could lead to price volatility and losses for investors purchasing in this offering.

        Our common stock was designated for quotation on the Nasdaq National Market in June 2000 and trading volumes since that time have been modest. We cannot assure you that an active trading market

8

for our common stock will develop. The limited trading market for our common stock may cause fluctuations in the market value of our common stock to be exaggerated, leading to price volatility in excess of that which would occur in a more active trading market of our common stock. In addition, even if a more active market in our common stock develops, we cannot assure you that such a market will continue or that shareholders will be able to sell their shares at or above the offering price.

Our allowance for loan losses may not be adequate to cover actual losses.

        Like all financial institutions, we maintain an allowance for loan losses to provide for loan defaults and non-performance. Our allowance for loan losses may not be adequate to cover actual loan losses, and future provisions for loan losses could materially and adversely affect our operating results. Our allowance for loan losses is based on prior experience, as well as an evaluation of the risks in the current portfolio. The amount of future losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates that may be beyond our control, and these losses may exceed current estimates. Federal regulatory agencies, as an integral part of their examination process, review our loans and allowance for loan losses. While we believe that our allowance for loan losses is adequate to cover current losses, we cannot assure you that we will not further increase the allowance for loan losses or that regulators will not require us to increase this allowance. Either of these occurrences could materially adversely affect our earnings.

Concentrated ownership of our common stock creates a risk of sudden changes in our share price.

        As of March 31, 2002, directors and members of our executive management team beneficially owned or controlled approximately 35% of our common stock. Certain shareholders in First National will also acquire large percentages of our common stock if we consummate the First National acquisition. Investors who purchase our common stock may be subject to certain risks due to the concentrated ownership of our common stock. The sale by any of our large shareholders of a significant portion of that shareholder's holdings could have a material adverse effect on the market price of our common stock. In addition, the registration of shares of our common stock in the First National acquisition will have the immediate effect of increasing the public float of our common stock. Such increase may cause the market price of our common stock to decline or fluctuate significantly.

9

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus contains and incorporates by reference forward-looking statements about our financial condition, results of operations and business and about the financial conditions, results of operations and businesses of the entities we have agreed to acquire. These statements may include statements regarding projected performance for the period following the completion of this offering. You can find many of these statements by looking for words such as "believes," "expects," "anticipates," "estimates," "intends," "will," "plans" or similar words or expressions. These forward-looking statements involve substantial risks and uncertainties. Some of the factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to, those identified under "Risk Factors" above as well as the following:

•

we may not be able to successfully complete this offering or alternative transactions to raise additional capital;



•

combining our business with those of the various entities that we have recently acquired or agreed to acquire may cost more than we expect;



•

the timing of the completion of the proposed acquisitions of First National, Upland and Marathon and new operations may be delayed or prohibited;



•

there may be increases in competitive pressure among financial institutions;



•

general economic conditions, either nationally or locally in areas in which we conduct or will conduct our operations, or conditions in securities markets may be less favorable than we currently anticipate;



•

expected cost savings from the acquisitions of Pacific Western, WHEC, First National, Upland and Marathon may not be fully realized or realized within the expected time frame;



•

our revenues after the acquisitions of First National, Upland and Marathon may be lower than we expect;



•

we may lose more business or customers after our proposed acquisitions than we expect, or our operating costs may be higher than we expect;



•

changes in the interest rate environment may reduce interest margins; or



•

legislation or regulatory changes may adversely affect our ability to conduct our business.

        Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such statements. You are cautioned not to place undue reliance on such statements, which speak only as of the date of this prospectus. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. The future results and shareholder values of First Community following this offering may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control or predict. Accordingly, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

        All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.

10

USE OF PROCEEDS

        We estimate that the net proceeds to us from the sale of                   shares of our common stock will be approximately $         million, based on an assumed offering price of $    per share and after deducting our estimated offering expenses and underwriting discounts, or $       million if the underwriters' over-allotment is exercised in full. We currently expect that the net proceeds will be used together with cash on hand to fund the cash portions of the purchase prices for the proposed acquisitions of First National, Upland and Marathon. We currently estimate the cash portion of those proposed acquisitions to be $71.8 million, $6.7 million and $6.8 million. For more information on these proposed acquisitions, see "Business" beginning on page 44. We cannot assure you that any of these acquisitions will occur. In the event that any of the pending acquisitions are not completed, any net proceeds not used for these acquisitions will be used for general corporate purposes.

        Prior to the consummation of these acquisitions, we expect to invest the proceeds of this offering in short-term investment grade securities.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

        Our common stock trades on the Nasdaq National Market under the symbol "FCBP." The table below presents dividends paid per share for the periods indicated as well as the high and low reported closing sales prices for our common stock as reported on the Nasdaq National Market for the periods indicated or, with respect to periods prior to June 1, 2000, the high and low trade prices of which management is aware for Rancho Santa Fe National Bank common stock, the predecessor to our common stock. Trading in Rancho Santa Fe National Bank's common stock occurred solely "over the counter" and was not extensive. Consequently, the prices listed before June 1, 2000 represent quotations by dealers making a market in Rancho Santa Fe National Bank common stock and reflect inter-dealer prices, without adjustments for mark-ups, mark-downs or commissions, and may not necessarily represent actual transactions and may not be a reliable indicator of that stock's market value. On June 1, 2000, our common stock was designated for quotation on the Nasdaq National Market.

		High		Low		Cash Dividends Paid Per Share
Quarter Ended
2000:
	First quarter	$	15.50	$	13.75	$	0.09
	Second quarter	$	14.25	$	13.00	$	0.09
	Third quarter	$	15.44	$	13.88	$	0.09
	Fourth quarter	$	15.13	$	14.75	$	0.09
2001:
	First quarter	$	21.00	$	14.81	$	0.09
	Second quarter	$	20.63	$	17.44	$	0.09
	Third quarter	$	22.95	$	18.75	$	0.09
	Fourth quarter	$	21.90	$	18.50	$	0.09
2002:
	First quarter	$	22.00	$	19.25	$	0.09
	Second quarter (through June 7, 2002)	$	28.96	$	23.75	$	0.15

        According to the records of our transfer agent, the number of record holders of our common stock as of May 31, 2002 was approximately 1,103. On June 7, 2002, the last reported sales price for our common stock on the Nasdaq National Market was $25.00.

11

        We and our predecessor Rancho Santa Fe National Bank have paid regular quarterly cash dividends since January 1998. We currently intend to declare and pay regular quarterly cash dividends on our common stock. Our ability to pay dividends could be restricted by California law, the Federal Reserve Board or the Office of the Comptroller of the Currency or covenant restrictions contained in the agreements that govern the terms of our debt. For more information on these restrictions, see "Business—Limitations on Dividends" beginning on page 50.

12

CAPITALIZATION

        The following table sets forth our capitalization as of March 31, 2002:

•

on an actual basis; and



•

on a pro forma basis giving effect to the acquisitions of First National, Upland and Marathon as if these acquisitions had occurred on March 31, 2002 and to the receipt and application by us of estimated net proceeds from our sale of 3,000,000 shares of common stock in this offering at an assumed offering price of $25.00 per share, after deducting the underwriting discounts and estimated offering expenses.

				As of March 31, 2002
				Actual			Pro forma(1)(2)
				(dollars in thousands)
Indebtedness:
	Borrowings (short-term)			$	3,719		$	68,605
	Convertible debt				654			654
	Trust preferred securities				28,000			38,000
Shareholders' equity:
	Preferred stock, no par value, 5,000,000 shares authorized, no shares issued and outstanding				—			—
	Common stock, no par value, 15,000,000 shares authorized(3)				90,933			255,271
	Retained earnings				13,432			13,432
	Accumulated other comprehensive loss(4)				(39	)		(39	)
		Total shareholders' equity			104,326			268,664
			Total capitalization	$	136,699		$	375,923
Tier 1 risk-based capital ratio					9.63	%		7.68	%
Tier 1 leverage capital ratio					8.98			8.98
Total risk-based capital ratio					10.96			10.23

(1)

See "Unaudited Pro Forma Combined Condensed Consolidated Financial Information" and the accompanying notes beginning on page F-1 for more information on our pro forma financial data.

(2)

Our pro forma capitalization also reflects our proposed issuance of additional trust preferred securities with an aggregate liquidation preference of $10.0 million.

(3)

We had 7,539,227 shares of common stock outstanding at March 31, 2002 and 14,171,227 pro forma shares outstanding at March 31, 2002 after giving effect to our proposed acquisitions and this offering. Neither of those numbers include:

•

873,260 shares of common stock underlying options which have been granted and are outstanding as of May 31, 2002 and 524,376 shares of common stock issuable upon exercise of stock options available for grant under our stock option plans at May 31, 2002;

•

up to 28,300 shares of common stock issuable on the conversion of convertible debt as of March 31, 2002; and

•

up to 79,511 shares of common stock issuable upon exercise of outstanding warrants as of March 31, 2002.

(4)

Accumulated other comprehensive loss represents unrealized losses on securities available-for-sale, net.

13

SELECTED CONSOLIDATED FINANCIAL INFORMATION

        You should read the selected consolidated financial data set forth below in conjunction with our historical consolidated financial statements and related notes, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Unaudited Pro Forma Combined Condensed Consolidated Financial Information," all of which appear elsewhere or are incorporated by reference in this prospectus. The consolidated statements of operations and balance sheet data as of and for the three months ended March 31, 2002 set forth below have been derived from our unaudited condensed consolidated financial statements that are incorporated by reference in this prospectus. The consolidated statements of earnings data for the years ended December 31, 2001, 2000 and 1999 and the consolidated balance sheets data as of December 31, 2001 and 2000 set forth below have been derived from our audited consolidated financial statements that are incorporated by reference in this prospectus. The consolidated statements of earnings data for the years ended December 31, 1998 and 1997 and the consolidated balance sheets data as of December 31, 1999, 1998 and 1997 set forth below have been derived from our audited consolidated financial statements not included or incorporated by reference into this prospectus. The consolidated unaudited pro forma financial data set forth below as of and for the three months ended March 31, 2002 and for the year ended December 31, 2001 have been derived from our unaudited pro forma combined condensed consolidated financial statements included in this prospectus beginning on page F-1.

		At or for the Three Months Ended March 31, 2002				At or for the Year Ended December 31, 2001				At or for the Years Ended December 31,
		Actual(1)		Pro forma(2)		Actual(3)		Pro forma(2)		2000(4)(5)		1999(4)		1998(4)		1997(4)
		(dollars in thousands, except per share data)
Consolidated Statements of Earnings Data:
	Interest income	$	13,901	$	29,641	$	43,114	$	141,673	$	28,831	$	23,405	$	20,258	$	16,707
	Interest expense		2,988		7,685		11,251		51,439		7,924		5,688		5,390		4,564
	Net interest income		10,913		21,956		31,863		90,234		20,907		17,717		14,868		12,143
	Provision for loan losses		—		1,045		639		12,844		520		518		941		310
	Net interest income after provision for loan losses		10,913		20,911		31,224		77,390		20,387		17,199		13,927		11,833
	Noninterest income		1,940		4,790		5,177		18,459		2,465		2,304		2,692		2,426
	Noninterest expense		9,217		20,654		25,915		88,166		18,145		12,073		10,897		9,544
	Earnings from continuing operations before income taxes		3,636		5,047		10,486		7,683		4,707		7,430		5,722		4,715
	Income taxes		1,474		1,873		4,376		2,716		2,803		3,166		2,140		1,878
	Net earnings from continuing operations	$	2,162	$	3,174	$	6,110	$	4,967	$	1,904	$	4,264	$	3,582	$	2,837
	Basic earnings from continuing operations per share	$	0.33	$	0.22	$	1.30	$	0.35	$	0.49	$	1.10	$	0.93	$	0.74
	Diluted earnings from continuing operations per share		0.32		0.22		1.23		0.35		0.47		1.05		0.88		0.71
Consolidated Balance Sheets Data:
	Total cash and cash equivalents	$	157,595	$	256,165	$	104,703		N/A	$	52,655	$	32,037	$	54,966	$	25,728
	Time deposits in financial institutions		390		1,083		190		N/A		495		7,502		5,440		4,160
	Total securities		158,445		329,004		128,593		N/A		46,313		50,563		38,380		28,136
	Loans, net of deferred fees and costs		798,714		1,365,149		501,740		N/A		250,552		206,102		170,980		151,064
	Total assets		1,199,817		2,193,684		770,217		N/A		358,287		304,362		277,613		214,846
	Total deposits		1,046,032		1,761,730		677,167		N/A		316,938		274,232		251,421		191,940
	Trust preferred securities		28,000		38,000		28,000		N/A		8,000		—		—		—
	Total shareholders' equity		104,326		268,664		55,297		N/A		27,772		25,855		22,833		19,680

14

		At or for the Three Months Ended March 31, 2002
								At or for the Years Ended December 31,
					Pro forma(2)
		Actual(1)						2001(3)			2000(4)(5)			1999(4)			1998(4)			1997(4)
Other Data:
	Dividends declared per share	$	0.09			N/A		$	0.36		$	0.36		$	0.30		$	0.24			—
	Dividends payout ratio		28.1	%		N/A			29.3	%		76.6	%		28.6	%		27.3	%		—
	Book value per share	$	13.84		$	18.96		$	10.48		$	6.99		$	6.67		$	5.92		$	5.15
	Tangible book value per share	$	7.77		$	7.38		$	8.62		$	6.99		$	6.67		$	5.92		$	5.15
	Shareholders' equity to assets at period end		8.70	%		12.25	%		7.18	%		7.75	%		8.49	%		8.22	%		9.16	%
	Return on average assets		0.89			N/A			0.92			0.56			1.44			1.48			1.45
	Return on average equity		12.86			N/A			16.33			7.01			17.46			16.87			15.62
	Net interest margin		5.24			N/A			5.33			6.81			6.60			6.79			6.85
	Non-performing assets to total assets		0.76			N/A			1.01			0.92			1.06			0.33			0.49
	Allowance for loan losses to total loans		1.70			N/A			2.23			1.57			1.95			2.21			2.24
	Net charge-offs to average loans		0.38			N/A			1.60			0.27			0.15			0.33			0.09
	Non-performing loans to total loans		0.79			N/A			0.93			0.91			0.93			0.47			0.59
	Allowance for loan losses to non-performing loans		214.7			N/A			239.9			173.1			209.6			471.9			376.6

(1)

We acquired Pacific Western on January 31, 2002 in a transaction accounted for as a purchase and we acquired WHEC on March 7, 2002 in a transaction accounted for as a purchase. The consolidated statements of earnings and other data for the three months ended March 31, 2002 include the results of operations of Pacific Western subsequent to January 31, 2002 and of WHEC subsequent to March 7, 2002.

(2)

The pro forma statement of earnings and other data for the three months ended March 31, 2002 reflect the completed acquisitions of Pacific Western and WHEC and the proposed acquisitions of First National, Upland and Marathon as if each of those acquisitions had occurred on January 1, 2002, and the pro forma statement of earnings data for the year ended December 31, 2001 reflect the completed and proposed acquisitions, as well as the acquisition of First Charter, as if each of those acquisitions had occurred on January 1, 2001. The pro forma balance sheet data as of March 31, 2002 reflect the proposed acquisitions as if they had occurred on March 31, 2002. Please see "Unaudited Pro Forma Combined Condensed Consolidated Financial Information" beginning on page F-1 for additional information regarding our pro forma data and the other matters to which our pro forma data give effect.

(3)

We acquired First Professional on January 16, 2001 in a transaction accounted for as a purchase and we acquired First Charter on October 8, 2001 in a transaction accounted for as a purchase. The consolidated statements of earnings and other data for the year ended December 31, 2001 include the results of operations of First Professional subsequent to January 16, 2001 and of First Charter subsequent to October 8, 2001.

(4)

We acquired First Community Bank of the Desert and Rancho Santa Fe National Bank on May 31, 2000 in a transaction accounted for on a pooling of interests basis. Accordingly, our historical financial data has been restated for the years ended December 31, 2000, 1999, 1998 and 1997 include the results of both Rancho Santa Fe National Bank and First Community Bank of the Desert.

(5)

The statements of earnings and other data for the year ended December 31, 2000 include non-recurring merger costs of $3.6 million.

15

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Overview

        Since our organization in October 1999, we have acquired six separate banks and have integrated or are in the process of integrating them into our two wholly owned subsidiaries, Pacific Western National Bank and Rancho Santa Fe National Bank. The following table sets forth for each acquisition the type of consideration paid, the aggregate consideration paid, and the number or amount of branches, assets and deposits acquired. The acquisition of First Community Bank of the Desert in May 2000, together with the acquisition of Rancho Santa Fe National Bank, was accounted for on a pooling-of-interests basis. Each of the other acquisitions has been accounted for as a purchase.

Institution Acquired	Type of Consideration	Aggregate Consideration	Branches Acquired	Assets Acquired	Deposits Acquired
W.H.E.C., Inc.	Stock	$24.5 million	5	$147 million	$135 million
Pacific Western National Bank	Cash	$36.6 million	5	$260 million	$239 million
First Charter Bank, N.A.	Stock	$14.2 million	2	$127 million	$111 million
Professional Bancorp, Inc.	Cash/Stock	$16.3 million	5	$263 million	$244 million
First Community Bank of the Desert	Stock	$19.4 million	6	$140 million	$126 million
Rancho Santa Fe National Bank	Stock	$33.5 million	4	$200 million	$179 million

        In the second quarter of 2002, we executed definitive agreements for the acquisition of three additional banks: First National Bank, Upland Bank and Marathon Bancorp. See "Business" beginning on page 44.

Critical Accounting Policies

        The following discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, and the notes thereto, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. On an ongoing basis, we evaluate our estimates and assumptions based upon historical experience and various other factors and circumstances. We believe that our estimates and assumptions are reasonable in the circumstances; however, actual results may differ significantly from these estimates and assumptions which could have a material impact on the carrying value of assets and liabilities at the balance sheet dates and our results of operations for the reporting periods.

        Our significant accounting policies and practices are described in note 1 to our consolidated financial statements filed with our Annual Report on Form 10-K for the year ended December 31, 2001, which is incorporated by reference in this prospectus. These accounting policies include the following policy for allowance for loan losses:

Allowance for loan losses

        We maintain an allowance for loan losses at an amount that management believes is sufficient to provide adequate protection against losses in the portfolio. Management's periodic evaluation of the adequacy of the allowance is based on such factors as our past loan loss experience, known and inherent risks in the portfolio, adverse situations that have occurred but are not yet known that may affect the borrower's ability to repay, the estimated value of underlying collateral, and economic conditions. As management utilizes information currently available to evaluate the allowance for loan

16

losses, the allowance for loan losses is subjective and may be adjusted in the future depending on changes in economic conditions or other factors.

        During the time we hold a loan, we are subject to credit risks, including risks of borrower defaults, bankruptcies and special hazard losses that are not covered by standard hazard insurance (such as those occurring from earthquakes or floods). Although management has established an allowance for loan losses that it considers adequate, there can be no assurance that the established allowance for loan losses will be sufficient to offset losses on loans in the future.

Quarter Ended March 31, 2002

        The information in this subsection "—Quarter Ended March 31, 2002" sets forth certain of our statistical information as of March 31, 2002, and for the three-month periods ended March 31, 2002 and March 31, 2001. This discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto as of March 31, 2002, included in our Quarterly Report on Form 10-Q, which has been incorporated by reference in this prospectus, and our consolidated financial statements and notes thereto for the year ended December 31, 2001, included in our Annual Report on Form 10-K, which has also been incorporated by reference in this prospectus.

        During the first quarter of 2002, our total assets increased by $429.6 million, or 55.8%, to $1,199.8 million at March 31, 2002. Of this increase in assets, $436.1 million relates to assets acquired in the Pacific Western and WHEC acquisitions. Excluding the assets acquired through the acquisitions, assets decreased $6.5 million. This decrease is comprised of a decrease in cash and cash equivalents of $3.0 million and a decrease in securities of $15.2 million partially offset by an increase in net loans, after allowance for loan losses, of $8.0 million, and an increase in other assets of $4.0 million.

        During the first quarter of 2002, our total deposits increased by $368.9 million to $1,046.0 million at March 31, 2002. Of this increase in deposits, $373.7 million relates to deposits acquired in the Pacific Western and WHEC acquisitions. Before the increase in deposits acquired as a result of the acquisitions, deposits decreased $4.8 million from December 31, 2001. Short-term borrowings increased by $3.3 million from December 31, 2001.

        On April 24, 2002, our board of directors approved a quarterly dividend of $0.15 per common share which was paid on May 31, 2002 to shareholders of record on May 15, 2002.

Results of Operations

        Consolidated net income for the three months ended March 31, 2002 was $2.2 million, or $0.32 per diluted share. This compares to net income, before goodwill amortization, for the three months ended March 31, 2001 of $1.6 million or $0.35 per diluted share. The comparison of net income in 2002 is made to net income, before goodwill amortization, in 2001 due to a new accounting standard we adopted on January 1, 2002 which requires the discontinuance of goodwill amortization. We reported net income for the three months ended March 31, 2001 of $1.6 million, or $0.34 per diluted share.

        The decline in diluted earnings per share relates primarily to compression of our net interest margin to 5.24% for the first quarter of 2002 compared to 6.25% for the first quarter of 2001, offset by the absence of a provision for loan losses in the recent quarter. In addition, the integration of Pacific Western and WHEC into our infrastructure is in its early stages and the expected cost savings have not yet been fully realized.

        Operating Income.    Our return on average assets was 1.04% in the first quarter of 2001 versus 0.89% in the first quarter of 2002. This decrease was due to a substantial growth in average assets as a result of the Pacific Western and WHEC acquisitions with a moderate growth in net income between the two periods. Our operating efficiency ratio increased from 68.1% in the first quarter of 2001 to

17

71.7% in the first quarter of 2002. Operating revenues grew 33.8% from the first quarter of 2001 to the first quarter of 2002 while operating expense grew 40.9% during the same period. Changes in the profitability ratios can be attributed generally to the fact that operating expense increases as we develop our infrastructure to smoothly absorb acquisitions and specifically for these periods to the following factors:

•

expected cost savings and revenue opportunities from recent acquisitions have not been fully realized; and



•

a lower net interest margin due to a decline in market rates implemented by the Federal Reserve Board during the second, third and fourth quarters of 2001 which negatively impacts our current yields on earning assets and affects our ability to reduce our cost of funds as much as market rate declines.

Supplemental Operational Information

		At or for the Three Months Ended March 31,
		2002			2001
		(dollars in thousands, except per share data)
Per share information with goodwill amortization:
Number of shares (weighted average, in thousands)			6,491			4,401
Diluted shares (weighted average, in thousands)			6,774			4,647
Basic earnings per share		$	0.33		$	0.36
Diluted earnings per share		$	0.32		$	0.34
Per share information before goodwill amortization:
Basic earnings per share		$	0.33		$	0.37
Diluted earnings per share		$	0.32		$	0.35
Profitability measures with goodwill amortization:
Return on average assets			0.89	%		1.04	%
Return on average equity			12.9	%		18.3	%
Efficiency ratio			71.7	%		68.7	%
Profitability measures before goodwill amortization:
Return on average assets			0.89	%		1.08	%
Return on average equity			12.9	%		19.0	%
Efficiency ratio			71.7	%		68.1	%
Adjustments to net income:
Net income		$	2,162		$	1,577
Goodwill amortization			—			58
	Operating income	$	2,162		$	1,635
Operating revenues:
Net interest income		$	10,913		$	8,489
Noninterest income			1,940			1,118
	Operating revenues	$	12,853		$	9,607
Adjustments to expenses:
Noninterest expense		$	9,217		$	6,601
Goodwill amortization			—			(58	)
	Operating expenses	$	9,217		$	6,543

18

        Net Interest Income.    Our income is dependent on loan growth, controlling costs and continual efforts to prevent any unexpected loan losses that would require additions to the allowance for loan losses. Excluding the $286.6 million in loans, net of deferred fees and costs, acquired in the Pacific Western and WHEC acquisitions, our business development efforts resulted in an increase in loans, net of deferred fees and costs, of $7.4 million in the first quarter of 2002. As a result of the increase in gross loans of 59.4%, including loans acquired in the acquisitions, and the 54.5% increase in deposits, our loan-to-deposit ratio has increased from 74.1% as of December 31, 2001 to 76.5% as of March 31, 2002. Our loan-to-deposit ratio has a significant effect on our net interest income.

        Net interest income is the difference between interest earned on assets and interest paid on liabilities. Net interest margin is net interest income expressed as a percentage of average interest-earning assets. The following tables provide information concerning average interest-earning assets and interest-bearing liabilities and yields and rates thereon for the three months ended March 31, 2002 and March 31, 2001. Nonaccrual loans are included in the average earning assets amounts.

		Three Months Ended March 31,
		2002			2001
		(dollars in thousands)
Average Assets:
Loans, net of deferred fees and costs		$	655,196		$	358,644
Investment securities			143,712			101,033
Federal funds sold			44,771			90,813
Interest-bearing deposits in financial institutions			190			441
	Average earning assets		843,869			550,931
Other assets			144,476			62,477
	Average total assets	$	988,345		$	613,408
Average Liabilities and Shareholders' Equity:
Average Liabilities:
Noninterest-bearing deposits		$	324,495		$	230,686
Time deposits of $100,000 or more			94,264			52,252
Other interest-bearing deposits			457,524			273,637
	Average deposits		876,283			556,575
Other interest-bearing liabilities			30,767			13,779
Other liabilities			13,090			8,091
	Average liabilities		920,140			578,445
Shareholders' equity			68,205			34,963
	Average liabilities and shareholders' equity	$	988,345		$	613,408
Yield Analysis:
Average earning assets		$	843,869		$	550,931
	Yield		6.68	%		8.47	%
Average interest-bearing deposits		$	551,788		$	325,889
	Cost		1.80	%		3.36	%
Average deposits		$	876,283		$	556,575
	Cost		1.13	%		1.97	%
Average interest-bearing liabilities		$	582,554		$	339,668
	Cost		2.08	%		3.60	%
Average interest sensitive liabilities		$	907,050		$	570,354
	Cost		1.34	%		2.14	%
Interest spread			4.60	%		4.87	%
Net interest margin			5.24	%		6.25	%

19

        Interest income increased by $2.4 million from $11.5 million for the first quarter of 2001 to $13.9 million for the same period of 2002. The increase in interest income was due largely to the increase of $292.9 million in average earning assets. This increase in average earnings assets was mostly a result of the earning assets acquired in the Pacific Western and WHEC acquisitions. During this same period, the yield on earning assets decreased from 8.47% to 6.68%, a reduction of 179 basis points. The Federal Reserve Board lowered interest rates several times between these time periods and since a substantial portion of our earning assets reprice with the general level of interest rates, the yield on our earning assets declined significantly.

        Interest expense decreased by $28,000 from $3.02 million for the first quarter of 2001 to $2.99 million for the same period of 2002. Even though average interest-bearing liabilities grew from $339.7 million to $582.6 million, interest expense decreased because of the Federal Reserve Board rate reductions. This increase in average interest-bearing liabilities was due mostly to the interest-bearing liabilities acquired in the Pacific Western and WHEC acquisitions. The cost of interest-bearing liabilities decreased from 3.60% to 2.08% over the same periods of time as a result of a decrease in the cost of interest-bearing deposits partially offset by:

•

customers shifting deposits to higher costing deposits;



•

the lag of deposit repricing versus asset repricing; and



•

the addition of higher costing interest-bearing liabilities such as the trust preferred securities and the revolving line of credit.

        Noninterest Income.    The following table sets forth the details of noninterest income for the three months ended March 31, 2002 and 2001 and pro forma details for the three months ended March 31, 2002 and 2001 as if the acquisitions of First Charter, Pacific Western and WHEC had been effective at the beginning of 2001. Comparisons are then performed on a pro forma basis.

			Three Months Ended March 31,								Pro forma
			2002 Actual		2001 Actual		2002 Pro forma		2001 Pro forma		Increase (Decrease)
			(in thousands)
Noninterest income:
	Service charges and fees on deposit accounts		$	1,118	$	707	$	1,409	$	1,229	$	180
	Merchant discount fees			84		69		107		142		(35	)
	Other commissions and fees			346		128		423		485		(62	)
	Gain on sale of loans			64		105		75		153		(78	)
	Other income			328		109		416		207		209
		Total noninterest income	$	1,940	$	1,118	$	2,430	$	2,216	$	214

        On a pro forma basis, total noninterest income increased by $214,000, or 9.7%, to $2.4 million for the three months ended March 31, 2002 from $2.2 million for the three months ended March 31, 2001. Service charges and fees on deposit accounts increased by $180,000 due primarily to account analysis fees increasing $150,000. Gain on sale of loans decreased by $78,000 due mainly to a decrease in SBA loan activity in the 2002 period. Other income increased $209,000 due primarily to gain on sale of other real estate owned of $145,000 in the 2002 quarter compared to a $13,000 loss recognized in the 2001 quarter.

20

        Noninterest Expense.    The following table sets forth the details of noninterest expense for the three months ended March 31, 2002 and 2001 and pro forma details for the three months ended March 31, 2002 and 2001 as if the acquisitions of First Charter, Pacific Western and WHEC had been effective at the beginning of 2001. This pro forma comparison simply combines historical financial information and therefore no additional goodwill amortization expense is included. Comparisons are then performed on a pro forma basis.

		Actual				Pro Forma				Pro Forma
		Three Months Ended March 31,
										Increase (Decrease)
		2002		2001		2002		2001
		(in thousands)
Noninterest expense:
	Salaries and employee benefits	$	4,714	$	3,473	$	5,655	$	6,335	$	(680	)
	Occupancy		1,080		730		1,329		1,276		53
	Furniture and equipment		640		356		758		732		26
	Legal expenses		242		110		259		404		(145	)
	Other professional services		974		681		1,092		1,284		(192	)
	Stationery, supplies and printing		403		149		517		456		61
	FDIC assessment		67		144		75		159		(84	)
	Cost of other real estate owned		65		30		65		34		31
	Advertising		157		139		229		330		(101	)
	Insurance		79		79		101		143		(42	)
	Other		796		652		954		934		20
Operating expense			9,217		6,543		11,034		12,087		(1,053	)
	Goodwill amortization		—		58		—		58		(58	)
Total noninterest expense		$	9,217	$	6,601	$	11,034	$	12,145	$	(1,111	)

        Total operating expense (noninterest expenses before the amortization of goodwill) decreased, on a pro forma basis, $1.1 million, or 8.7%, to $11.0 million for the three months ended March 31, 2002 from $12.1 million for the three months ended March 31, 2001. The decrease in almost all categories of expense is primarily a result of the efficiencies associated with the consolidation of functions, partially offset by the increased level of economic activity in our markets and our response to this increased level of customers and customer activity. We expect further expense consolidation related to the acquisitions completed during the first quarter of 2002.

        The efficiency ratio—which we calculate as operating expense divided by net interest income plus noninterest income—is a measure of how effective we are at using our expense dollars. A lower or declining ratio indicates improving efficiency. The increase in the efficiency ratio, on an actual basis, to 71.7% for the first quarter of 2002 from 68.7% for the first quarter of 2001 is mostly a result of the decline in the net interest margin and the operation consolidations related to the acquisitions which will not be fully implemented until the second half of 2002.

        Income Taxes.    Our normal effective income tax rate is 42.0%, representing a blend of the statutory Federal income tax rate of 35.0% and the California income tax rate of 10.84%. Our actual effective income tax rates were 40.5% and 41.4% for the three months ended March 31, 2002 and 2001.

21

Balance Sheet Analysis

        Credit Quality.    We define nonperforming assets to include:

•

loans past due 90 days or more and still accruing;



•

loans on which interest has ceased to accrue, which we refer to as nonaccrual loans; and



•

assets acquired through foreclosure including other real estate owned.

        Impaired loans are commercial, commercial real estate, and individually significant mortgage and consumer loans for which it is probable that we will not be able to collect all amounts due according to the original contractual terms of the loan agreement. The category of impaired loans is not coextensive with the category of nonaccrual loans, although the two categories overlap. Nonaccrual loans include impaired loans and are those on which the accrual of interest is discontinued when collectibility of principal or interest is uncertain or payments of principal or interest have become contractually past due 90 days. We may choose to place a loan on nonaccrual status due to payment delinquency or uncertain collectibility, while not classifying the loan impaired, if (1) it is probable that we will collect all amounts due in accordance with the original contractual terms of the loan or (2) the loan is not a commercial, commercial real estate or an individually significant mortgage or consumer loan.

        Loans past due 90 days and still accruing represent loans which are past due 90 days or more as to interest or principal, but not included in the nonaccrual or restructured categories. All loans in this category are well-secured and in the process of collection or renewal. Planned workout arrangements are currently in place or in negotiation for all nonperforming assets. Management is not aware of any additional significant loss potential that has not already been included in the estimation of the allowance for loan losses.

22

Credit Quality Measures

        The following table shows the historical trends in our nonperforming assets and key credit quality statistics:

		At or for the Periods Ending
		(Three Months) March 31, 2002			(Year) December 31, 2001			(Nine Months) September 30, 2001			(Six Months) June 30, 2001			(Three Months) March 31, 2001			(Year) December 31, 2000
		(dollars in thousands)
Loans past due 90 days or more and still accruing		$	112		$	—		$	—		$	—		$	250		$	—
Nonaccrual loans and leases			6,205			4,672			6,103			11,225			11,340			2,271
Other real estate owned			2,747			3,075			309			654			654			1,031
	Nonperforming assets	$	9,064		$	7,747		$	6,412		$	11,879		$	12,244		$	3,302
Impaired loans, gross		$	6,205		$	4,672		$	6,103		$	11,225		$	11,340		$	2,271
Allocated allowance for loan losses			(784	)		(1,256	)		(2,409	)		(3,026	)		(3,161	)		(368	)
	Net investment in impaired loans	$	5,421		$	3,416		$	3,694		$	8,199		$	8,179		$	1,903
Charged off loans year-to-date (normalized)			1,039		$	2,666		$	2,065		$	1,798		$	119		$	708
Recoveries year-to-date			(429	)		(1,203	)		(710	)		(618	)		(182	)		(93	)
	Net charge offs (recoveries) (normalized)	$	610		$	1,463		$	1,355		$	1,180		$	(63	)	$	615
Allowance for loan losses to loans, net of deferred fees and costs			1.70	%		2.23	%		2.63	%		2.77	%		3.15	%		1.57	%
Allowance for loan losses to nonaccrual loans and leases			218.6	%		239.9	%		167.9	%		92.9	%		98.9	%		173.1	%
Allowance for loan losses to nonperforming assets			149.6	%		144.7	%		159.8	%		87.8	%		91.6	%		119.0	%
Nonperforming assets to loans and other real estate owned			1.13	%		1.53	%		1.65	%		3.15	%		3.43	%		1.31	%
Annualized net charge offs (recoveries) (normalized) to average loans			0.38	%		0.37	%		0.47	%		0.65	%		(0.07	)%		0.27	%
Nonaccrual loans to loans, net of deferred fees and costs			0.78	%		0.93	%		1.57	%		2.98	%		3.18	%		0.91	%
Loans, net of deferred fees and costs		$	798,714		$	501,740		$	389,244		$	376,502		$	356,055		$	250,552
Allowance for loan loss			13,563			11,209			10,248			10,424			11,215			3,930
Average loans			655,196			395,337			381,531			362,920			358,644			228,638

        As of March 31, 2002, we had $6.2 million of loans which were considered impaired, all of which were on nonaccrual status, compared to $4.7 million at December 31, 2001. The allowance for loan losses at March 31, 2002 includes allocated allowances of $784,000 established for certain impaired loans. Nonperforming assets increased approximately $1.3 million from $7.7 million at December 31, 2001 to $9.1 million at March 31, 2002. This increase is mostly a result of increased nonaccrual loans of $1.5 million primarily due to the addition of $1.4 million in loans classified as nonaccrual by Pacific Western and WHEC. Nonetheless, nonaccrual loans as a percentage of loans, net of deferred fees and costs, decreased to 0.78% as of March 31, 2002 from 0.93% as of December 31, 2001. The allowance for loan losses totaled $13.6 million at March 31, 2002 and represents 218.6% of nonaccrual loans and, in the opinion of management, is adequate to cover any shortfall that may occur upon disposition of the collateral along with the remaining nonaccrual loans. During the three months ended March 31, 2002, we foreclosed on approximately $1.4 million of other real estate owned and sold approximately $1.7 million of other real estate owned.

23

        Normalized net recoveries for the quarter ended March 31, 2001 totaled $63,000 and normalized net charge-offs for the year ended December 31, 2001 totaled $1.5 million. This represented 0.07% of average loans for the quarter ended March 31, 2001 and 0.37% of average loans for the year ended December 31, 2001. During the quarter ended March 31, 2001, $4.9 million of First Professional loans were also charged-off in a one-time charge associated with the First Professional acquisition.

        Allowance for Loan Losses.    We have established a monitoring system for our loans in order to identify impaired loans and potential problem loans and to permit periodic evaluation of impairment and the adequacy of the allowance for loan losses in a timely manner. We utilize a risk-rating system on loans and a monthly credit review and reporting process. The monitoring system and allowance for loan losses methodology have evolved over a period of years, and loan classifications have been incorporated into the determination of the allowance for loan losses. This monitoring system and allowance methodology include a loan-by-loan analysis for all classified loans as well as loss factors for the balance of the portfolio that are based on migration analysis relative to our unclassified portfolio. This analysis includes such factors as historical loss experience, current portfolio delinquency and trends, and other inherent risk factors such as economic conditions, concentrations in the portfolio risk levels of particular loan categories, internal loan review and management oversight.

        The percentage of allowance for loan losses to gross loans, net of deferred fees and costs, was 1.70% at March 31, 2002, down from 2.23% at December 31, 2001. The decrease in the percentage in the first quarter of 2002 is almost entirely a result of the loans and allowance for loan losses acquired in the acquisitions of Pacific Western and WHEC. Net other real estate owned decreased $328,000 to $2.7 million during the first quarter of 2002. Although total nonperforming assets increased by $1.3 million during the first quarter of 2002, the ratio to gross loans and other real estate owned decreased to 1.13% at March 31, 2002 compared to 1.53% at December 31, 2001. First Community had net charge-offs of $610,000 during the three months ended March 31, 2002 represented by charge-offs of $1.0 million and recoveries of $429,000 during the period. The allowance for loan losses increased by $2.4 million from $11.2 million at December 31, 2001 to $13.6 million at March 31, 2002. The allowance for loan losses as a percentage of nonperforming assets increased from 144.7% at December 31, 2001 to 149.6% at March 31, 2002 mainly due to the increase in the allowance for loan losses. Management believes that the allowance for loan losses at March 31, 2002 is adequate based on our quarterly migration analysis of loan losses, current economic conditions and continued adherence to established credit policies.

        Regulatory Matters.    The regulatory capital guidelines as well as the actual regulatory capital ratios for Rancho, Pacific Western and First Community on a consolidated basis as of March 31, 2002 are as follows:

	(greater than or equal to)				Actual
	Adequately Capitalized		Well Capitalized		Rancho		Pacific Western		Consolidated
Tier 1 leverage capital ratio	4.00	%	5.00	%	12.34	%	7.25	%	8.98	%
Tier 1 risk-based capital ratio	4.00	%	6.00	%	11.11	%	8.42	%	9.63	%
Total risk-based capital	8.00	%	10.00	%	12.19	%	9.67	%	10.96	%

        In the second quarter of 2002, we made a contribution of capital to Pacific Western of $4.0 million. If we had made this contribution on March 31, 2002, Pacific Western's pro forma total risk-based capital at March 31, 2002 would have been 10.43%.

24

Three Years Ended December 31, 2001

Results of Operations

        Earnings Performance.    We reported net earnings for the year ended December 31, 2001 of $6.1 million, compared to $1.9 million for the year ended December 31, 2000, an increase of $4.2 million, or 220.9%. We reported net earnings for the year ended December 31, 2000 of $1.9 million, compared with $4.3 million for 1999, a decrease of $2.4 million or 55.3%. In 2001, basic earnings per share and diluted earnings per share were $1.30 and $1.23 compared with $0.49 and $0.47 in 2000 and $1.10 and $1.05 in 1999. The increase in net earnings for the year ended December 31, 2001 was primarily due to the acquisitions of First Professional and First Charter as well as the absence of nonrecurring merger costs of $3.6 million incurred in 2000. The decrease in net earnings for the year ended December 31, 2000 was primarily attributable to nonrecurring merger costs of $3.6 million related to the acquisition of First Community Bank of the Desert. Before these nonrecurring merger costs, net income for 2000 would have been $4.7 million, or a 10.3% increase from 1999. Our improved earnings performance, before nonrecurring merger costs, between 2000 and 1999 is primarily attributable to an increase in net interest income arising from a greater quantity of interest-earnings assets particularly in the loan segment. We believe that the demand for loans increased in the banks' market areas due to a strong local economy as well as low interest rates. In addition to the growth in earning assets, a general improvement in operating efficiencies contributed to our earnings performance.

        The following is a condensed summary of the statement of earnings along with selected profitability ratios:

Analysis of Net Income

	For the Year Ended December 31,
	2001			2000			1999
	(dollars in thousands, except per share data)
Net interest income	$	31,863		$	20,907		$	17,717
Provision for loan losses		639			520			518
Other non-interest income		4,733			2,151			1,951
Net gains on sales of loans		444			314			353
Non-interest expenses		25,915			18,145			12,073
Income taxes		4,376			2,803			3,166
Net income		6,110			1,904			4,264
Basic earnings per share	$	1.30		$	0.49		$	1.10
Diluted earnings per share		1.23			0.47			1.05
Return on average assets		0.92	%		0.56	%		1.44	%
Return on average equity		16.33			7.01			17.46
Dividend payout ratio		29.3			76.6			28.6
Average equity to average assets		5.61			7.99			8.27
Measures before after-tax nonrecurring merger costs
Return on average assets		0.92			1.38			1.44
Return on average equity		16.33			17.31			17.46
Dividend payout ratio		29.3			31.3			28.6

25

        Net Interest Income.    Net interest income, which constitutes one of our principal sources of income, represents the difference between interest earned on assets and interest paid on liabilities. Net interest margin is net interest income expressed as a percentage of average interest-earning assets. Net interest income is affected by changes in both interest rates and the volume of average earning assets and interest-bearing liabilities. The following tables provide information concerning average interest-earning assets and interest-bearing liabilities, interest earned and paid and the related yields and rates on major categories for the periods indicated:

Analysis of Average Rates and Balances

		Average Balance		2001 Interest Income/ Expense		Interest Yields and Rates		Average Balance		2000 Interest Income/ Expense		Interest Yields and Rates		Average Balance		1999 Interest Income/ Expense		Interest Yields and Rates
		(dollars in thousands)
Assets:
Loans, net(1)(2)		$	395,337	$	33,052	8.36	%	$	228,638	$	23,980	10.49	%	$	187,811	$	19,056	10.15	%
Investment securities(2)			107,277		6,335	5.91			47,620		2,957	6.21			45,731		2,614	5.72
Federal funds sold			95,260		3,713	3.90			26,602		1,637	6.15			28,372		1,380	4.86
Deposits with financial institutions			286		14	4.90			4,227		257	6.08			6,512		355	5.45
Total interest earning assets			598,160		43,114	7.21			307,087		28,831	9.39			268,426		23,405	8.72
Noninterest earning assets			68,433						32,931						26,930
	Total assets		666,593						340,018						295,356
Liabilities:
Time deposits of $100,000 or more			58,398		2,747	4.70			28,779		1,810	6.29			25,680		1,253	4.88
All other interest-bearing deposits			303,019		7,113	2.35			172,190		5,741	3.33			154,692		4,395	2.84
Borrowings—Short-term			7,789		429	5.51			1,655		95	5.74			793		40	5.04
Borrowings—Long-term			9,508		962	10.12			2,623		278	10.60			—		—	—
Total interest-bearing liabilities			378,714		11,251	2.97			205,247		7,924	3.86			181,165		5,688	3.14
Noninterest-bearing deposits			239,394						104,518						87,466
Other liabilities			11,059						3,082						2,310
Shareholders' equity			37,426						27,171						24,415
Total liabilities and shareholders' equity		$	666,593					$	340,018					$	295,356
Net interest rate spread						4.24	%					5.53	%					5.58	%
Net interest income				$	31,863					$	20,907					$	17,717
Net interest margin						5.33	%					6.81	%					6.60	%

(1)

Includes nonaccrual loans and loan fees.

(2)

Yields on loans and securities have not been adjusted to a tax-equivalent basis because the impact is not material.

        As discussed below, our net interest income is affected by the change in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as a volume change, as well as yields earned on interest-earning assets and rates paid on deposits and other borrowed funds, referred to as a

26

rate change. The following table reflects changes in interest income and expense attributable to changes in volume and interest rates of significant interest-bearing assets and liabilities:

Analysis of Volume and Interest Rates

	2001 Compared to 2000 Attributable to Change									2000 Compared to 1999 Attributable to Change
	Total Change			In Volume			In Rate			Total Change			In Volume			In Rate
	(in thousands)
Loans, net(1)(2)	$	9,072		$	17,484		$	(8,412	)	$	4,924		$	4,142		$	782
Investment securities(2)		3,378			3,704			(326	)		343			108			235
Federal funds sold		2,076			4,225			(2,149	)		257			(86	)		343
Deposits with financial institutions		(243	)		(240	)		(3	)		(98	)		(125	)		27
Total		14,283			25,173			(10,890	)		5,426			4,039			1,387
Time deposits of $100,000 or more		937			1,863			(926	)		557			151			406
All other interest-bearing deposits		1,372			4,362			(2,990	)		1,346			497			849
Other interest-bearing liabilities		1,018			1,135			(117	)		333			162			171
Total		3,327			7,360			(4,033	)		2,236			810			1,426
Changes in net interest income	$	10,956		$	17,813		$	(6,857	)	$	3,190		$	3,229		$	(39	)

(1)

Includes nonaccrual loans and loan fees.

(2)

Yields on loans and securities have not been adjusted to a tax-equivalent basis because the impact is not material.

        Net interest income before provision for loan losses was $31.9 million for the year ended December 31, 2001 compared to $20.9 million in 2000, an increase of $11.0 million or 52.4%. The increase was attributable to an increase in average interest earning assets of $291.0 million in 2001 compared to an increase of average interest bearing liabilities of $173.5 million, a net increase of $117.6 million. The rate earned on interest earning assets decreased to 7.21% in 2001 compared to 9.39% in 2000. The decrease was attributable to a decreased interest rate environment in 2001 over 2000 due to decreases in interest rates by the Federal Reserve Bank. Average net loans outstanding during 2001 were $395.3 million and yielded 8.36% compared to average loans outstanding of $228.6 million in 2000 that yielded 10.49%. The increase in average loans outstanding of $166.7 million in 2001 was primarily due to the acquisitions of First Professional and First Charter, which accounted for $118.1 million of the increase, and the remaining $48.6 million was due to internal growth.

        Average investments outstanding during 2001 were $107.3 million earning interest at a yield of 5.91%, compared with $47.6 million and 6.21% in 2000. Average Federal funds sold were $95.3 million and yielded 3.90% in 2001 compared with $26.6 million and 6.15% in 2000. Average deposits with financial institutions were $286,000 and yielded 4.90% in 2001 compared to $4.2 million and 6.08% in 2000. These changes in yields are comparable to the changes in interest rates in the general economy over the same period.

        Average outstanding interest-bearing liabilities during 2001 were $378.7 million and paid an average of 2.97% compared to $205.2 million and 3.86% in 2000. The increase in average balances is primarily due to the acquisitions of First Professional and First Charter. These changes in interest costs are comparable to the changes in interest rates in the general economy over this period of time.

        Net interest income before provision for loan losses was $20.9 million for the year ended December 31, 2000 compared to $17.7 million in 1999, an increase of $3.2 million or 18.0%. The

27

increase was attributable to an increase in average interest earning assets of $38.7 million in 2000 compared to an increase of average interest bearing liabilities of $24.1 million, a net increase of $14.6 million. The rate earned on interest earning assets increased to 9.39% in 2000 compared to 8.72% in 1999. The increase was attributable to an increased interest rate environment in 2000 over 1999 due to increases in interest rates by the Federal Reserve Bank. Average net loans outstanding during 2000 was $228.6 million and yielded 10.49% compared to average loans outstanding of $187.8 million in 1999 that yielded 10.15%. The increase in average loans outstanding of $40.8 million in 2000 was due to a continued strong economic climate in Southern California throughout the year and our successful efforts to exploit this economic climate.

        Average investments outstanding during 2000 were $47.6 million earning interest at a yield of 6.21%, compared with $45.7 million and 5.72% in 1999. Average Federal funds sold were $26.6 million and yielded 6.15% in 2000 compared with $28.4 million and 4.86% in 1999. Average deposits with financial institutions were $4.2 million and yielded 6.08% in 2000 compared to $6.5 million and 5.45% in 1999. These changes in yields are comparable to the changes in interest rates in the general economy over the same period.

        Average outstanding interest-bearing liabilities during 2000 were $205.2 million and paid an average of 3.86% compared to $181.2 million and 3.14% in 1999. The increase in average balances is due to the general increase in economic activity in this period of time and our success in taking advantage of this increase. These changes in interest costs are comparable to the changes in interest rates in the general economy over this period of time.

        The change in interest income/expense attributable to volume reflects the change in volume times the 2000 rate and the change in interest income/expense attributable to rate reflects the change in rates times the 2001 volume. The change in rate/volume has been allocated to the change attributed to rate.

        Provision for Loan Losses.    The amount of the provision for loan losses in each year is a charge against earnings in that year. The amount of provision is based upon management's evaluation of the loan portfolio, past loan loss experience, general economic conditions and other pertinent factors.

        We provided $639,000 for loan losses for the year ended December 31, 2001 compared to $520,000 in the prior year. The allowance for loan losses was $11.2 million, or 2.23% of total loans outstanding, as of December 31, 2001, compared with an allowance for loan losses of $3.9 million, or 1.56% of total loans outstanding, as of December 31, 2000. This increase in the allowance for loan losses is due primarily to the acquisitions of First Professional and First Charter. Net loans charged off in 2001 increased by $5.7 million to $6.3 million compared to $615,000 in net loans charged off for the year ended December 31, 2000. Included in the net loans charged off of $6.3 million in 2001, $4.9 million of First Professional loans were charged off in connection with this acquisition.

        We provided $520,000 for loan losses for the year ended December 31, 2000 compared to $518,000 in 1999. The small change in the provision for loan losses, even with the increase in loans and the small increase in impaired loans, is reflective of the improved credit quality of our loan portfolio during the year ended December 31, 2000. The allowance for loan losses was $3.9 million, or 1.56% of total loans outstanding, compared with an allowance for loan losses of $4.0 million, or 1.95% of total loans outstanding, as of December 31, 1999. Net loans charged off in 2000 increased by $337,000 to $615,000 compared to $278,000 in net loans charged off for the year ended December 31, 1999.

28

        Noninterest Income.    The following table sets forth the details of noninterest income for the years ended December 31, 2001, 2000 and 1999. The columns entitled "Increase (Decrease)" set forth the year-on-year changes between 1999 and 2000 and 2000 and 2001.

			For the Years Ended December 31,
			2001		Increase (Decrease)			2000		Increase (Decrease)			1999
			(in thousands)
Noninterest income:
	Service charges on deposit accounts		$	2,560	$	1,375		$	1,185	$	10		$	1,175
	Merchant discount fees, net			327		220			107		23			84
	SBA loan servicing fees			187		(81	)		268		98			170
	Gain on sale of loans			444		130			314		(39	)		353
	Other			1,659		1,068			591		69			522
		Total noninterest income	$	5,177	$	2,712		$	2,465	$	161		$	2,304

        Noninterest income increased $2.7 million, or 110.0%, to $5.2 million for the year ended December 31, 2001 compared with $2.5 million in 2000. The increase in income was due primarily to the acquisitions of First Professional and First Charter. SBA loan servicing fees decreased $81,000, or 30.2%, to $187,000 in 2001 compared with $268,000 in 2000. The primary reason for this decrease was the average decrease in SBA loans serviced by First Community in 2001. The increase in gain on sale of loans was due to the increase in SBA activity as a result of the lower interest rate environment in 2001.

        Noninterest income increased $161,000, or 7.0%, to $2.5 million for the year ended December 31, 2000 compared with $2.3 million in 1999. SBA loan servicing fees increased $98,000, or 57.6%, to $268,000 in 2000 compared with $170,000 in 1999. The primary reason for this increase was the increase in SBA loans serviced by First Community from 2000 and 1999 loan sales. Merchant discount fees, net of expenses, increased $23,000, or 27.4%, to $107,000 in 2000 compared with $84,000 in 1999 due to the increased activity of our merchant customer base. The decline in gain on sale of loans was due to the decline in SBA activity as a result of the higher interest rate environment in 2000. Other noninterest income increased $69,000, or 13.2%, in 2000 to $591,000 compared with $522,000 in 1999. The increase was attributable to small increases in several other income categories.

29

        Noninterest Expense.    The following table sets forth the details of noninterest expense for the years ended December 31, 2001, 2000 and 1999. The columns entitled "Increase (Decrease)" set forth the year-on-year changes between 1999 and 2000 and 2000 and 2001.

			For the Years Ended December 31,
			2001		Increase (Decrease)			2000		Increase (Decrease)			1999
			(in thousands)
Noninterest expense:
	Salaries and employee benefits		$	13,285	$	6,612		$	6,673	$	1,050		$	5,623
	Occupancy			3,365		1,802			1,563		67			1,496
	Furniture and equipment			1,438		546			892		205			687
	Legal expenses			605		376			229		(56	)		285
	Other professional services			2,964		1,279			1,685		501			1,184
	Stationery, supplies and printing			662		244			418		23			395
	Advertising			490		55			435		130			305
	Real estate owned and property held for sale			47		(309	)		356		174			182
	Insurance			288		160			128		8			120
	Loss on sale of securities			—		(11	)		11		9			2
	Merger costs			—		(3,561	)		3,561		3,561			—
	Goodwill amortization			207		207			—		—			—
	Other			2,564		370			2,194		400			1,794
		Total noninterest expense	$	25,915	$	7,770		$	18,145	$	6,072		$	12,073

        Total noninterest expense increased $7.8 million, or 42.8%, to $25.9 million for 2001 compared with $18.1 million in 2000. The increase in 2001 in the noninterest expense was due primarily to the acquisitions of First Professional and First Charter offset by nonrecurring merger costs in 2000 of $3.6 million.

        Total noninterest expense increased $6.1 million, or 50.3%, to $18.1 million for 2000 compared with $12.1 million in 1999. Included in the year 2000 noninterest expense was $3.6 million in pre-tax, non recurring expenses associated with the merger of Rancho Santa Fe National Bank and First Community Bank of the Desert. Salaries and employee benefits increased $1.1 million, or 18.7%, to $6.7 million in 2000 compared with $5.6 million in 1999. This increase was a result of increased staff levels necessary to accommodate the increased level of business at First Community and required to manage a larger company.

        Occupancy and furniture and equipment expenses increased $272,000, or 12.5%, to $2.5 million in 2000 compared with $2.2 million in 1999. This increase was primarily due to increased depreciation at First Community Bank of the Desert and increased rent expense at Rancho Santa Fe National Bank. Legal and other professional services, consisting of audit, tax and accounting services, data processing and other outside services, increased $445,000, or 30.3%, to $1.9 million in 2000 compared with $1.5 million in 1999. The increase in 2000 was mostly the result of outsourcing more activities, especially at First Community Bank of the Desert. This was partially offset by more favorable data processing contracts.

        Advertising increased $130,000, or 42.6%, in 2000 to $435,000 compared with $305,000 in 1999. Real estate owned and property held-for-sale expenses increased $174,000, or 95.6%, to $356,000 in 2000 compared with $182,000 in 1999. We wrote down our other real estate owned to the current market value of the properties.

        Other noninterest expenses increased $400,000, or 22.3%, to $2.2 million in 2000 compared with $1.8 million in 1999. Other noninterest expense consisted of many different categories, none of which

30

accounted for a majority of the increase. The largest reasons for the increase are attributable to increases in expenses associated with the growth in loans and deposits such as loan expense and customer service expenses such as courier costs and customer analysis expense.

        Income Taxes.    The provision for income taxes was $4.4 million, $2.8 million and $3.2 million for the years ended December 31, 2001, 2000 and 1999. Effective tax rates were 41.7%, 59.5% and 42.6% for the years ended December 31, 2001, 2000 and 1999. The effective tax rate in 2000 was higher than 1999 and 2001 due to the nondeductability of certain merger costs.

Financial Condition

        Loans.    The following table presents the balance of each major category of loans at the dates indicated:

	As of December 31,
	2001					2000					1999					1998					1997
	Amount			% of Loans		Amount			% of Loans		Amount			% of Loans		Amount			% of Loans		Amount			% of Loans
	(dollars in thousands)
Loan Category:
Commercial	$	245,748		49	%	$	118,827		47	%	$	94,657		46	%	$	86,946		51	%	$	80,247		53	%
Real estate—construction		84,241		17			47,989		19			38,464		19			31,492		18			48,452		32
Real estate—mortgage		160,521		32			79,458		32			67,235		32			48,060		28			19,066		12
Consumer		11,580		2			4,911		2			6,293		3			5,121		3			3,944		3
Total gross loans		502,090		100	%		251,185		100	%		206,649		100	%		171,619		100	%		151,709		100	%
Less allowance for loan losses		(11,209	)				(3,930	)				(4,025	)				(3,785	)				(3,382	)
Less deferred loan fees		(350	)				(633	)				(547	)				(639	)				(645	)
Total net loans	$	490,531				$	246,622				$	202,077				$	167,195				$	147,682

        Our loan portfolio net of allowance for loan losses, deferred fees and costs totaled $490.5 million as of December 31, 2001. This represents an increase of $243.9 million, or 98.9%, compared to December 31, 2000. The First Professional and First Charter acquisitions accounted for approximately $160.6 million of the increase. The remaining increase, approximately $83.4 million, was due to internal growth. Loans have increased consistently over the past five years. In 2000, net loans increased $44.5 million, or 22.0%, compared with 1999. The following table presents our interest rate sensitivity

31

analysis at December 31, 2001 with respect to individual categories of loans and provides separate analyses with respect to fixed interest rate loans and floating interest rate loans:

Loans Repricing or Maturing as of December 31, 2001

	Repricing or Maturing In
	1 year or less		Over 1 to 5 years		Over 5 years		Total
	(in thousands)
Loan Category:
Commercial	$	227,701	$	9,856	$	8,191	$	245,748
Real estate—construction		83,312		—		929		84,241
Total	$	311,013	$	9,856	$	9,120	$	329,989
			Fixed Rate		Floating Rate		Total
					(in thousands)
Commercial			$	24,729	$	221,019	$	245,748
Real estate—construction				10,047		74,194		84,241
Total			$	34,776	$	295,213	$	329,989

        Nonperforming Assets.    The following table sets forth certain information with respect to our nonaccrual loans and accruing loans for which payments of principal and interest were contractually past due 90 days or more:

Nonperforming Assets

	As of December 31,
	2001			2000			1999			1998			1997
	(dollars in thousands)
Nonaccrual loans	$	4,672		$	2,271		$	1,845		$	559		$	490
Loans past due 90 days or more and still accruing		—			—			75			243			408
Nonperforming loans	$	4,672		$	2,271		$	1,920		$	802		$	898
Nonperforming assets to loans and other real estate owned		1.53	%		1.31	%		1.56	%		0.53	%		0.69	%
Nonperforming loans to loans, net of deferred fees and costs		0.93			0.91			0.93			0.47			0.59

        Loans are generally placed on nonaccrual status when the borrowers are past due 90 days and when payment in full of principal or interest is not expected. At the time a loan is placed on nonaccrual status, any interest income previously accrued but not collected is reversed and charged against current period income. Income on nonaccrual loans is subsequently recognized only to the extent cash is received and the loan's principal balance is deemed collectible. Loans are restored to accrual status only when the loans become both well secured and are in the process of collection.

        Additional interest income of $596,000, $413,000 and $158,000 would have been recorded for the years ended December 31, 2001, 2000 and 1999 if nonaccrual loans had been performing in accordance with their original terms. Interest income of $110,000, $60,000 and $76,000 was recorded on loans subsequently transferred to a nonaccrual status for the years ended December 31, 2001, 2000 and 1999. On December 31, 2001, we had $4.7 million of loans on nonaccrual status, compared to $2.3 million and $1.8 million on December 31, 2000 and 1999. As of December 31, 2001 and 2000, there were no loans past due over 90 days and still accruing interest.

32

Analysis of Allowance for Loan Losses

			As of or for the Years Ended December 31,
			2001			2000			1999			1998			1997
			(dollars in thousands)
Balance at beginning of year			$	3,930		$	4,025		$	3,785		$	3,382		$	3,194
Loans charged off:
	Commercial			(6,839	)		(573	)		(480	)		(664	)		(274	)
	Real estate—mortgage			(140	)		—			(60	)		—			—
	Consumer			(490	)		(36	)		(52	)		(32	)		(25	)
	Small Business Administration, unguaranteed portion held for investment			(52	)		(99	)		—			—			—
		Total loans charged off		(7,521	)		(708	)		(592	)		(696	)		(299	)
Recoveries on loans charged off:
	Commercial			1,168			81			277			150			153
	Real estate—construction			4			—			—			—
	Real estate—mortgage			6			—			—			—			20
	Consumer			29			8			37			8			4
		Total recoveries on loans charged off		1,203			93			314			158			177
Net loans charged off				(6,318	)		(615	)		(278	)		(538	)		(122	)
Provision for loan losses				639			520			518			941			310
Additions due to acquisitions				12,958			—			—			—			—
Balance at end of year			$	11,209		$	3,930		$	4,025		$	3,785		$	3,382
Ratios:
Allowance for loan losses as a percentage of total loans at year end				2.23	%		1.57	%		1.95	%		2.21	%		2.24	%
Net loans charged off to average loans				1.60	%		0.27	%		0.15	%		0.33	%		0.09	%
Allowance for loan losses to nonperforming loans				239.9	%		173.1	%		209.6	%		471.9	%		376.6	%
Allowance for loan losses to nonperforming assets				144.7	%		119.0	%		124.4	%		417.8	%		322.7	%

        The allowance for loan losses at December 31, 2001 was $11.2 million or 2.23% of total loans outstanding, net of deferred fees and costs, an increase from $3.9 million or 1.56% of total loans, net of deferred fees and costs, at the end of 2000. The increase in the allowance for loan losses as a percentage of total loans, net of deferred fees and costs, is primarily due to the First Professional and First Charter acquisitions. Management believes that the allowance for loan losses of $11.2 million at December 31, 2001 is adequate to cover known and inherent risks in the loan portfolio.

        The following table allocates the allowance for loan losses based on management's judgment of potential losses in the respective areas. While management has allocated reserves to various portfolio

33

segments for purposes of this table, the allowance for loan losses is general and is available for the portfolio in its entirety:

Allocation of Allowance for Loan Losses

		Commercial			Real Estate			Consumer			Small Business Administration			Total
		(dollars in thousands)
Year ended December 31, 2001
	Allowance for loan losses	$	7,182		$	3,604		$	170		$	253		$	11,209
	% of loans in each category to total loans		45	%		49	%		2	%		4	%		100	%
Year ended December 31, 2000
	Allowance for loan losses	$	1,563		$	2,006		$	84		$	277		$	3,930
	% of loans in each category to total loans		40	%		51	%		2	%		7	%		100	%
Year ended December 31, 1999
	Allowance for loan losses	$	1,622		$	1,430		$	356		$	617		$	4,025
	% of loans in each category to total loans		42	%		51	%		3	%		4	%		100	%
Year ended December 31, 1998
	Allowance for loan losses	$	1,894		$	757		$	379		$	755		$	3,785
	% of loans in each category to total loans		46	%		44	%		3	%		7	%		100	%
Year ended December 31, 1997
	Allowance for loan losses	$	1,693		$	676		$	339		$	674		$	3,382
	% of loans in each category to total loans		48	%		43	%		3	%		6	%		100	%

        Investment Portfolio.    Our investment activities are designed to assist in maximizing income consistent with quality and liquidity requirements, to supply collateral to secure public funds, to provide a means for balancing market and credit risks and to provide consistent income and market value throughout changing economic times.

        Our portfolio consists of U.S. Treasury and U.S. Government agency obligations, mortgage-backed securities, obligations of states and political subdivisions, and Federal Reserve Bank and Federal Home Loan Bank stock. Our investment portfolio contains no investments in any one issuer in excess of 10% of our total equity. Exempt from this calculation are securities of the U.S. Treasury and U.S. government agencies.

34

        The following table presents the composition of our investment portfolio at the dates indicated:

Investment Portfolio

	At December 31,
	2001		2000		1999
	(in thousands)
U.S. Treasury and government agency securities	$	11,920	$	34,300	$	36,783
States and political subdivisions		2,896		347		349
Corporate bonds		—		—		504
Equity securities		—		425		—
Federal Reserve Bank Stock		1,358		593		725
Federal Home Loan Bank Stock		779		320		510
Mortgage backed securities		111,640		10,328		11,692
Total Investments	$	128,593	$	46,313	$	50,563

        For the investment portfolio as of December 31, 2001, the following table presents a summary of yields and maturities:

Analysis of Investment Yields and Maturities

	As of December 31, 2001
	One year or Less				Over One Year Through Five Years				Five Years Through Ten Years				Over Ten Years				Total
	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
	(dollars in thousands)
U.S. Treasury and government agency securities	$	517	6.34	%	$	9,357	5.59	%	$	—	—		$	2,046	5.57	%	$	11,920	5.62	%
States and political subdivisions		—	—			—	—			2,896	4.45	%		—	—			2,896	4.45	%
Total investments(1)	$	517	6.34	%	$	9,357	5.59	%	$	2,896	4.45	%	$	2,046	5.57	%	$	14,816	5.39	%

(1)

Yields on securities have not been adjusted to a fully tax-equivalent basis because the impact is not material.

35

        Deposits.    The following table presents a summary of our average deposits as of the dates indicated and average rate paid:

Analysis of Average Deposits

	As of December 31,
	2001				2000				1999
	Amount		Rate		Amount		Rate		Amount		Rate
	(dollars in thousands)
Non-interest bearing	$	239,394	—		$	104,518	—		$	87,466	—
Savings deposits		30,162	1.43	%		12,386	1.63	%		11,567	1.62	%
Market rate deposits		234,260	2.08			129,496	3.25			115,333	2.56
Time deposits <$100,000		38,597	4.69			30,308	4.40			27,792	4.51
Time deposits >$100,000		58,398	4.70			28,779	6.29			25,680	4.88
Total deposits	$	600,811	1.64	%	$	305,487	2.47	%	$	267,838	2.11	%

        For time deposits $100,000 or more, the following table presents a summary of maturities at December 31, 2001:

Maturity of Time Deposits of $100,000 or More

3 Months or Less		Over 3 Months Through		Over 6 Months Through		Over 12 Months		Total
(in thousands)
$	43,459	$	14,723	$	8,374	$	405	$	66,961

        Average deposits for the period through December 31, 2001 were $600.8 million compared with $305.5 million in 2000, an increase of $295.3 million or 96.7%. This significant increase in average deposits was due primarily to the acquisitions of First Professional and First Charter. Average deposits for the period through December 31, 2000 were $305.5 million compared with $267.8 million in 1999, an increase of $37.6 million or 14.1%. This increase was due to our continuing business development activities.

        Borrowings.    We and our banks have various lines of credit available. We also borrow funds from time to time on a short term or overnight basis from the FHLB or other financial institutions.

        Federal Funds Arrangements with Commercial Banks.    As of December 31, 2001 and 2000, we had unsecured lines of credit in the amount of $23.0 million and $14.0 million from correspondent banks. These lines are renewable annually. As of December 31, 2001, 2000 and 1999, there were no balances outstanding. The average balances were $11,000, $462,000 and $82,000 in 2001, 2000 and 1999. The highest balance at any month-end was $0.0, $10.4 million and $700,000 in 2001, 2000 and 1999. The average rate paid was 1.70%, 5.90% and 4.90% in 2001, 2000 and 1999.

        Borrowing Arrangements at the Federal Reserve Discount Window.    As of December 31, 2001 and 2000, we had a Fed discount limit of approximately $4.0 million and $4.7 million none of which was used in 2001 or 2000.

        Federal Home Loan Bank Lines of Credit    As of December 31, 2001 and 2000, we had a Federal Home Loan Bank limit of approximately $9.9 million and $15.6 million none of which was outstanding as of December 31, 2001 or 2000 and none of which was used during 2001 or 2000. The availability of the lines of credit, as well as adjustments in deposit programs, provide for liquidity in the event that the level of deposits should fall abnormally low. These sources provide that funding may be withdrawn depending upon our financial strength.

36

        Treasury, Tax and Loan Note.    We participate in the Treasury, Tax and Loan Note program. We have a limit of $1.7 million at the Federal Reserve Bank. Treasury, Tax and Loan balances fluctuate based on the amounts deposited by customers and the amounts called for payment by the Federal Reserve Bank. As of December 31, 2001, 2000 and 1999, the balance outstanding under the note program was $431,000, $1.7 million and $1.7 million. The average balances under the note program were $719,000 in 2001, $800,000 in 2000 and $711,000 in 1999. The highest balance at any month-end was $1.4 million in 2001 and $1.7 million in 2000 and 1999. The average rate paid was 3.78%, 5.30% and 5.00% in 2001, 2000 and 1999.

        Revolving Line of Credit.    In May 2000, we executed a Revolving Credit Agreement with The Northern Trust Company for $5.0 million. Shares of common stock of Rancho Santa Fe National Bank have been pledged as collateral against the Revolving Credit Agreement. In January 2001, we executed the First Amendment to the Revolving Credit Agreement increasing the credit line to $10.0 million and modifying certain covenants to reflect our larger size and the First Professional acquisition. Shares of common stock of Pacific Western have been pledged as additional collateral against the Revolving Credit Agreement. The loan agreement contains covenants that impose certain restrictions on our activities and financial condition. Such covenants include minimum net worth ratios, maximum debt ratios, a minimum return on average assets, a dividend limitation and minimum and maximum credit quality ratios. As of December 31, 2001, we, and where applicable, our subsidiaries were in compliance with each of such covenants or had obtained the appropriate waivers. The maximum outstanding amount during 2001 and 2000 was $7.7 million and $2.5 million. The average outstanding amount during 2001 and 2000 was $5.4 million and $305,000. The loan bears interest at the prime rate less 75 basis points. As of December 31, 2001 and 2000, the interest rates were 4.00% and 8.75%. We pay a fee of 25 basis points on the unused amount. At December 31, 2001 and 2000, there were no outstanding balances under this line of credit.

Trust Preferred Securities

        In September 2000, we issued $8.0 million of trust preferred securities bearing a fixed interest rate of 10.60% and maturing in thirty years. These instruments were issued to fund part of the First Professional acquisition.

        In November 2001, we issued $10.0 million of trust preferred securities bearing a variable interest rate, which is reset semi-annually, at the 6-Month LIBOR plus 3.75%, provided the rate will not exceed 11% through December 2006, and maturing in 30 years. The initial interest rate was set at approximately 6.00% and the next interest rate reset date is June 8, 2002.

        In December 2001, we issued another $10.0 million of trust preferred securities bearing a variable interest rate, which is reset quarterly, at the 3-Month LIBOR plus 3.60%, provided the rate will not exceed 12.50% through December 2006, and maturing in 30 years. The initial interest rate was set at 5.60% and the next interest rate reset date is June 14, 2002.

Capital Resources

        Bank regulatory agencies measure capital adequacy through standardized risk-based capital guidelines which compare different levels of capital (as defined by such guidelines) to risk-weighted assets and off-balance sheet obligations. Banks are required to maintain a minimum total risk-based capital ratio of 8.0% of which at least 4.0% must be Tier 1 capital. Banking organizations considered to be well capitalized must maintain a minimum leverage ratio of 5.0% and a minimum risk-based capital ratio of 10.0% of which at least 6.0% must be Tier 1 capital.

37

        The following table presents regulatory capital requirements and our risk-based capital levels:

	(greater than or equal to) Regulatory Requirements				Actual
	Adequately Capitalized		Well Capitalized		First Community
December 31, 2001
Tier 1 leverage capital ratio	4.00	%	5.00	%	8.28	%
Tier 1 risk-based capital ratio	4.00	%	6.00	%	11.27	%
Total risk-based capital	8.00	%	10.00	%	14.36	%

        As of December 31, 2001, we exceeded each of the capital requirements of the Federal Reserve Board and were deemed to be well capitalized. In addition, each of our banks exceeded the capital requirements of its primary federal banking regulator and was deemed to be well capitalized at that date.

Liquidity

        Liquidity management requires an ability to meet financial commitments when contractually due and to respond to other demands for funds. We have an asset-liability management committee responsible for managing balance sheet and off-balance sheet commitments to meet the needs of customers while achieving our financial objectives. Our asset-liability management committee meets regularly to review funding capacities, current and forecasted loan demand and investment opportunities.

        On a consolidated basis, liquid assets (cash, federal funds sold and investment securities available-for-sale) as a percent of total deposits were 29.1% as of March 31, 2002.

        Market risk sensitive instruments are generally defined as on and off balance sheet derivatives and other financial instruments. At March 31, 2002, we had no material derivatives. Our financial instruments include loans receivable, federal funds sold, interest-bearing deposits in financial institutions, FRB and FHLB stock, investment securities, deposits, short-term borrowings, convertible debt and trust preferred securities. At March 31, 2002, our interest sensitive assets and interest sensitive liabilities totaled approximately $1,033.6 million and $1,078.4 million. The increase in interest sensitive assets and interest sensitive liabilities resulted mostly from assets and liabilities acquired in the Pacific Western and WHEC acquisitions.

        The yield on interest sensitive assets and the cost of interest sensitive liabilities for the three-month period ended March 31, 2002 was 6.68% and 1.34% compared to 5.93% and 1.50% for the three month period ended December 31, 2001. The increase in the yield on interest sensitive assets during the quarter was primarily a result of acquiring higher yielding assets in the acquisitions of Pacific Western and WHEC. Average loans as a percentage of average earning assets increased to 77.6% for the quarter ended March 31, 2002 compared to 69.2% for the quarter ended December 31, 2001. The decrease in the cost of interest sensitive liabilities during the quarter is primarily a result of higher cost deposits continuing to reprice at current lower rates as well as the effect of low cost deposits acquired in the Pacific Western and WHEC acquisitions.

        As an additional source of liquidity, the banks maintain lines of credit for $23.0 million with correspondent banks for purchase of overnight funds. These lines are subject to availability of funds. The banks also have a combined Fed discount window limit of approximately $4.0 million as well as a credit line with the Federal Home Loan Bank which would allow the banks to borrow up to approximately $9.9 million. Historically, the banks have infrequently used their borrowing capabilities. We have a revolving line of credit with The Northern Trust Company of Chicago.

        Our ability to obtain funds for the payment of dividends and for other cash requirements is largely dependent upon our earnings. Dividends paid by a national bank such as Rancho Santa Fe National

38

Bank and Pacific Western are regulated by the Office of the Comptroller of the Currency under its general supervisory authority as it relates to a bank's capital requirements. A national bank may declare a dividend without the approval of the Office of the Comptroller of the Currency as long as the total dividends declared in a calendar year does not exceed the total of net profits for that year combined with the retained profits for the preceding two years.

        Our primary sources of liquidity are the receipt of dividends from the banks, the ability to raise capital and a revolving line of credit. The availability of dividends from the banks is limited by various statutes and regulations of state and federal law. See "Business—Limitations on Dividends" beginning on page 50.

        See note 9 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2001, which is incorporated by reference in this prospectus, for further discussion of our liquidity.

Quantitative and Qualitative Disclosure About Market Risk

        Our market risk arises primarily from interest rate risk inherent in our lending and deposit taking activities. We do not have any market risk sensitive instruments entered into for trading purposes. Significant changes in interest rates affect the composition, yield and cost of balance sheet components. The rate sensitivity of these assets and liabilities is monitored and matched to control the risk associated with movements in rates. Our asset-liability management committee meets quarterly to monitor and formulate strategies and policies to provide sufficient levels of net interest income while maintaining acceptable levels of interest rate sensitivity, risk and liquidity. The primary objective of rate sensitivity management is to ensure earnings stability by minimizing the sensitivity of net interest income to fluctuations in interest rates. We use gap analysis and other systems to measure, monitor and adapt to changing interest rate environments. We monitor and evaluate our interest rate risk position on a quarterly basis using traditional gap analysis and an analysis of the sensitivity of net interest income to changes in interest rates and an analysis of the impact of changes in interest rates on the market value of equity. Gap analysis calculates the mismatches over certain time periods between assets and liabilities whose interest rates are subject to repricing at their contractual maturity dates or repricing period.

        We use various asset/liability strategies to manage the repricing characteristics of our assets and liabilities to ensure that exposure to interest rate fluctuations is limited within our guidelines of acceptable levels of risk-taking. Hedging strategies, including the terms and pricing of loans and deposits, and managing the deployment of our securities, are used to reduce mismatches in interest rate repricing opportunities of portfolio assets and their funding sources. When appropriate, our management may utilize instruments such as interest rate floors, caps and swaps to hedge our interest rate position. Our board of directors approved a hedging policy statement to govern the use of these instruments. As of December 31, 2001, we had not utilized any interest rate swap or other such financial derivative to alter our interest rate risk profile.

        One way to measure the impact that future changes in interest rates will have on net interest income is through a cumulative gap measure. The gap represents the net position of assets and liabilities subject to repricing in specified time periods. Generally, a liability sensitive gap position indicates that there would be a net positive impact on our net interest margin for the period measured in a declining interest rate environment since our liabilities would reprice to lower market rates before our assets. A net negative impact would result from an increasing interest rate environment. Conversely, an asset sensitive gap indicates that there would be a net positive impact on the net interest margin in a rising interest rate environment since our assets would reprice to higher market interest rates before our liabilities.

39

        The following table sets forth the distribution of repricing opportunities of our interest-earning assets and interest-bearing liabilities, the interest rate sensitivity gap for the period (i.e., interest rate sensitive assets less interest rate sensitive liabilities), the cumulative interest rate sensitivity gap and the cumulative gap as a percentage of total assets and total interest-earning assets as of December 31, 2001. The table also sets forth the time periods during which interest-earning assets and interest-bearing liabilities will mature or may reprice in accordance with their contractual terms. The interest rate relationships between the repriceable assets and repriceable liabilities are not necessarily constant and may be affected by many factors, including the behavior of customers in response to changes in interest rates. This table should, therefore, be used only as a guide as to the possible effect changes in interest rates might have on our net interest margins.

		Interest Rate Sensitivity At December 31, 2001
Repricing Interval		Less than 3 months			3 months to 1 year			1 to 5 years			Over 5 years			Non-rate Sensitive			Total
		(dollars in thousands)
Deposits with financial institutions		$	190		$	—		$	—		$	—		$	—		$	190
Federal funds sold			36,190			—			—			—			—			36,190
Investment securities			13,788			32,276			66,919			13,473			—			126,456
Loans, gross			439,032			25,556			29,765			7,737			—			502,090
	Total rate sensitive assets		489,200			57,832			96,684			21,210			—			664,926
All other assets			—			—			—			—			105,291			105,291
	Total assets	$	489,200		$	57,832		$	96,684		$	21,210		$	105,291		$	770,217
Savings & NOW deposits		$	53,879		$	19,963		$	—		$	—		$	—		$	73,842
Money market deposits			210,053			—			—			—			—			210,053
Time deposits under $100,000			27,738			20,832			2,121			4			—			50,695
Time deposits of $100,000 or more			43,459			23,097			405			—			—			66,961
Other interest-bearing liabilities			20,108			323			671			8,000			—			29,102
	Total rate sensitive liabilities		355,237			64,215			3,197			8,004			—			430,653
All other liabilities			—			—			—			—			284,267			284,267
Shareholders' equity			—			—			—			—			55,297			55,297
	Total liabilities and shareholders' equity	$	355,237		$	64,215		$	3,197		$	8,004		$	339,564		$	770,217
Period gap		$	133,963		$	(6,383	)	$	93,487		$	13,206		$	(234,273	)
Cumulative gap			133,963			127,580			221,067			234,273
Cumulative rate sensitive gap as a % of total assets			17	%		17	%		29	%		30	%

Note: All amounts are reported at their contractual maturity or repricing periods. This analysis makes certain assumptions as to interest rate sensitivity of savings and NOW accounts which have no stated maturity and have had very little price fluctuation in the past three years. Money market accounts are repriced at the discretion of management and generally are more rate sensitive.

        At December 31, 2001, we had $547.0 million in assets and $419.5 million in liabilities repricing within one year. This means that $127.6 million more of our interest rate sensitive assets than our interest rate sensitive liabilities will change to the then current rate (changes occur due to the instruments being at a variable rate or because the maturity of the instrument requires its replacement at the then current rate). The ratio of interest-earning assets to interest-bearing liabilities maturing or repricing within one year at December 31, 2001 was 130%. Interest income is likely to be affected to a greater extent than interest expense for any changes in interest rates within one year from

40

December 31, 2001. If rates were to fall during this period, interest income would decline by a greater amount than interest expense and net income would decrease. Conversely, if rates were to rise, the opposite would apply.

        Our management strives to maintain a balance between our interest-earning assets and interest-bearing liabilities in order to minimize the impact on net interest income due to changes in market rates. Our management realizes that our deposit base has large non-interest costing balances which increase our margins, but make it more difficult for us to maintain the net interest margin in a falling interest rate environment.

        While our stability margin is desirable, we will constantly evaluate the cost trade-off hedging away our advantage in non-interest costing balances.

        In order to measure interest rate risk at December 31, 2001, we also used a simulation model to project changes in net interest income that result from forecasted changes in interest rates. This analysis calculates the difference between net interest income forecasted using a rising and a falling interest rate scenario and net interest income forecast using a base market interest rate derived from the current treasury yield curve. For the rising and falling interest rate scenarios, the base market interest rate forecast was increased or decreased, on an instantaneous and sustained basis, by 100 and 200 basis points. At December 31, 2001, our net interest income exposure related to these hypothetical changes in market interest rate was slightly outside the current guidelines established by the banks. Our asset-liability management committee has made the determination to remain more asset sensitive in the short term due to the expected growth in loans and the current low rate environment.

Sensitivity for Net Interest Income
(dollars in thousands)

Interest Rate Scenario	Adjusted Net Interest Income		Percentage Change from Base		Net Interest Margin Percent		Net Interest Margin change from Base
Down 200 basis points	$	26,705	(18.7	)%	3.89	%	(0.89	)%
Down 100 basis points		30,777	(6.3	)	4.49		(0.30	)
BASE		32,841	—		4.79		—
Up 100 basis points		33,994	3.5		4.96		0.17
Up 200 basis points		36,495	11.1		5.32		0.53

        We measure the impact of market interest rate changes on the net present value of estimated cash flows from our assets, liabilities and off-balance sheet items, defined as market value of equity, using a simulation model. This simulation model assesses the changes in market value of interest rate sensitive financial instruments that would occur in response to an instantaneous and sustained increase or decrease in market interest rates of 100 and 200 basis points. At December 31, 2001, our market value of equity exposure related to these changes in market interest rates was within the current guidelines established by the banks.

41

Market Value of Portfolio Equity
(dollars in thousands)

Interest Rate Scenario	Market Value		Percentage Change from Base		Percentage of Total Assets		Percentage of Portfolio Equity Book Value
Down 200 basis points	$	73,417	(17.1	)%	9.5	%	132.8	%
Down 100 basis points		82,223	(7.2	)	10.6		148.7
BASE		88,589	—		11.4		160.2
Up 100 basis points		93,784	5.9		12.1		169.6
Up 200 basis points		96,608	9.1		12.5		174.7

        The computation of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, asset prepayments and deposit decay, and should not be relied upon as indicative of actual results. Further, the computations do not contemplate any actions we may undertake in response to changes in interest rates. Actual results may vary.

        Information concerning our exposure to market risk has remained relatively unchanged from December 31, 2001.

Recent Accounting Pronouncements

        In June 2001, the FASB issued Statement No. 141, Business Combinations, and Statement No. 142, Goodwill and Other Intangible Assets. Statement 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. Statement 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported separately from goodwill. Statement 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provision of Statement 142. Statement 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with FASB Statement No. 144, Accounting for the Impairment or Disposed Of Long-Lived Assets. We adopted the provisions of Statement 141 as of July 1, 2001, and Statement 142 as of January 1, 2002.

        We are in the process of evaluating our existing intangible assets and goodwill that were acquired in purchase business combinations, in order to make any necessary reclassifications to conform with the new criteria in Statement 141 for recognition separate from goodwill. We are required to reassess the useful lives and residual values of all intangible assets acquired. In addition, to the extent an intangible asset is identified as having an indefinite useful life, we are required to test the intangible asset for impairment in accordance with the provisions of Statement 142. Impairment is measured as the excess carrying value over the fair value of an intangible asset with an indefinite life. Any impairment loss will be recognized as the cumulative effect of a change in accounting principle.

        In connection with Statement 142's transitional goodwill impairment evaluation, the Statement requires us to perform an assessment of whether there is an indication that goodwill is impaired as of the date of adoption. To accomplish this, we are in the process of identifying our reporting units and determining the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units as of January 1, 2002. We have up to six months from January 1, 2002 to determine the fair value of each reporting unit and compare it to the reporting unit's carrying amount. To the extent a reporting unit's carrying amount exceeds its fair value, an indication exists that the reporting unit's goodwill may be impaired and we must perform the

42

second step of the transitional impairment test. In the second step, we must compare the implied fair value of the reporting unit's goodwill, determined by allocating the reporting unit's fair value to all of its assets (recognized and unrecognized) and liabilities in a manner similar to purchase price allocation in accordance with Statement 141, to its carrying amount, both of which will be measured as of the date of adoption. The second step is required to be completed as soon as possible, but no later than the end of the year of adoption. Any transitional impairment loss will be recognized as the cumulative effect of a change in accounting principle.

        As mentioned above, Statement 142 requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values and, accordingly, we will amortize core deposit intangibles based on their estimated useful lives. We completed the process of calculating the separate core deposit intangibles acquired in the Pacific Western and WHEC acquisitions and their respective estimated useful lives for purposes of amortization during the second quarter of 2002 after we filed our first quarter results. We expect to record core deposit intangible amortization expense in our unaudited consolidated statement of earnings for the quarter ended June 30, 2002 representing amortization expense since the respective dates of acquisitions of Pacific Western and WHEC. We currently estimate the amount of core deposit intangible amortization expense, net of tax benefits, that relates to the first quarter of 2002 to be $65,000. We expect to record a quarterly charge, net of tax benefits, of approximately $131,000 to amortize the core deposit intangibles related to Pacific Western and WHEC over their estimated useful lives of 10 years.

        In August 2001, the FASB issued Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Statement No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Statement No. 144 requires companies to separately report discontinued operations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is classified as held for sale. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. The adoption of Statement No. 144 on January 1, 2002 did not have a material impact on our financial condition.

        In April 2002, the FASB issued Statement No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. Statement 145 updates, clarifies and simplifies existing accounting pronouncements including: rescinding Statement No. 4, which required all gains and losses from extinguishment of debt to be aggregated and, if material, classified as an extraordinary item, net of related income tax effect and amending Statement No. 13 to require that certain lease modifications that have economic effects similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. Statement 145 is effective for fiscal years beginning after May 15, 2002, with early adoption of the provisions related to the rescission of Statement No. 4 encouraged. We do not expect the adoption of this statement to have a material impact on the our financial position or results of operations.

43

BUSINESS

        We are the holding company for two banks—Rancho Santa Fe National Bank and Pacific Western National Bank. Assuming completion of three currently proposed acquisitions, we will be one of the largest independent bank holding companies headquartered in Southern California and, through Rancho Santa Fe National Bank, we will operate the largest independent commercial bank headquartered in and serving San Diego County. At March 31, 2002, we had consolidated total assets of $1,199.8 million, total deposits of $1,046.0 million and shareholders' equity of $104.3 million. If the three proposed acquisitions, this offering and a proposed issuance by us of additional trust preferred securities with an aggregate liquidation preference of $10.0 million had been completed on March 31, 2002, we would have had on that date consolidated total assets, total deposits and shareholders' equity of $2,193.7 million, $1,761.7 million, and $269.3 million. See "Unaudited Pro Forma Combined Condensed Consolidated Financial Information" beginning on page F-1 for more information on our pro forma financial data.

Business strategy—Our business strategy is to build and maintain premier, relationship-based community banks, serving the needs of small- to medium-sized businesses and the owners and employees of those businesses. As community-based institutions, we strive to offer a superior level of customer service compared to the larger regional and super-regional banks. Our banks offer a broad range of banking products and services to the communities they serve including: accepting time and demand deposits, originating commercial loans, real estate and construction loans, Small Business Administration guaranteed loans, mortgage loans and consumer loans. We are also committed to disciplined cost controls. We have centralized administrative, credit and other functions at the holding company level, allowing our banks to operate more efficiently. Our banks rely on a foundation of locally generated deposits that have a relatively low cost due to a high percentage of noninterest bearing deposits.

Management—The experience of our management team is our primary strength and competitive advantage. That team consists of the following individuals:

•

John Eggemeyer, chairman of the board and formerly chairman of the executive committee of the board of Western Bancorp until its acquisition by U.S. Bancorp in 1999. Mr. Eggemeyer is also a founder and the chief executive of Castle Creek Capital, LLC and Castle Creek Financial, LLC, which together form a merchant banking organization serving the banking industry;



•

Matthew Wagner, chief executive officer and formerly the president and chief executive officer of Western Bancorp;



•

Robert Borgman, chief credit officer and formerly the chief credit officer of Western Bancorp;



•

Suzanne Brennan, chief operations officer and formerly executive vice president-operations of Western Bancorp; and



•

Lynn Hopkins, chief financial officer and formerly the controller of Western Bancorp.

        In 1999, Mr. Eggemeyer and Mr. Wagner joined our management team and orchestrated the merger of Rancho Santa Fe National Bank and First Community Bank of the Desert. Mr. Eggemeyer and Mr. Wagner have worked together for 19 years and have a combined 54 years of experience in the banking industry. Under their leadership, we have assembled the management team described above and have acquired six banks since 1999. Prior to 2002, we acquired and have successfully integrated four of those banks. We are continuing to integrate another two banks acquired since December 31, 2001. To date, we have achieved projected cost savings in connection with those acquisitions and believe that we have also been able to stabilize and improve the operations of those banks that were under-performing at the time of acquisition. We anticipate further cost savings related to the two recent completed acquisitions.

44

Acquisition strategy—Since our organization in October 1999, we have completed or announced the following acquisitions:

Acquisitions

Date	Institution Acquired or to be Acquired	Assets			Branches Acquired or to be Acquired
March 2002	W.H.E.C., Inc.	$	147 million		5
January 2002	Pacific Western National Bank	$	260 million		5
October 2001	First Charter Bank, N.A.	$	127 million		2
January 2001	Professional Bancorp, Inc.	$	263 million		5
May 2000	First Community Bank of the Desert	$	140 million		6
May 2000	Rancho Santa Fe National Bank	$	200 million		4
Pending	Upland Bank	$	110 million	(1)	2
Pending	Marathon Bancorp	$	109 million	(1)	1
Pending	First National Bank	$	649 million	(1)	7

(1)

At March 31, 2002.

        We continue to seek opportunities to acquire small-to medium-sized banks that we believe will enable us to grow our business in a manner consistent with our community-banking focus. Ideally, we seek banks in or around the footprint of our existing branch networks that present opportunities for consolidation and rationalization of operating expenses. We believe that by streamlining the administration of these banks and providing back-office services for all our banks at the holding company level, we are able to lower operating costs, improve performance and quickly integrate acquired banks into the First Community organization while maintaining the stability of our franchise.

Company History

        Each of our banks, Rancho Santa Fe National Bank and Pacific Western, were independent banks prior to our acquisition of those entities in 2000. In mid-1994, our principal shareholder, Castle Creek Financial LLC, was engaged by Rancho Santa Fe National Bank, a four-branch bank with assets, as of the end of that year, of approximately $92.3 million, to develop a new strategic plan for the bank. Rancho Santa Fe had suffered losses in its loan portfolio as a result of a weak California economy and an over-reliance on real estate lending. At the request of the bank's board of directors, Castle Creek developed a strategic plan for Rancho Santa Fe National Bank that included restructuring that bank's operating system, improving its asset/liability mix, changing its market focus and raising additional capital. Castle Creek assisted the bank in raising additional equity capital through a rights offering in January 1995.

        In late 1994, Castle Creek also began advising First Community Bank of the Desert, a California state-chartered bank that operated through five branches located in the area surrounding Palm Springs, generally referred to as the Coachella Valley. Like Rancho Santa Fe National Bank, First Community Bank of the Desert had suffered substantial losses between 1992 and 1994 as a result of poor loan quality. First Community Bank of the Desert's losses were not only the result of a high concentration in real estate lending, but also the consequence of the bank's direct investment in a wholly-owned real estate development partnership. First Community Bank of the Desert's board of directors engaged Castle Creek to assist in recapitalizing and restructuring the bank. Castle Creek assisted First Community Bank of the Desert in structuring and completing a private placement resulting in additional equity capital. Castle Creek also advised First Community Bank of the Desert in strategically reorganizing the bank. This included redesigning the bank's operations by removing inefficient and

45

redundant reporting functions, and focusing key personnel on developing a low cost deposit base and redirecting the bank's lending focus from real estate toward small- and medium-sized businesses. First Community Bank of the Desert has since been merged with the second of our two banks, Pacific Western.

        In mid-1999, the management of each of Rancho Santa Fe National Bank and First Community Bank of the Desert, together with Castle Creek, determined that a merger of the two banks could create the foundation for a premier community bank. In October 1999, Rancho Santa Fe National Bank announced that it and First Community Bank of the Desert would combine through the creation of First Community Bancorp as a multi-bank holding company that would subsequently own and operate the two banks as separate subsidiaries. When this transaction closed on June 1, 2000, First Community Bancorp became a $325 million-asset multi-bank holding company with branches in San Diego County and the Coachella Valley.

        Following our establishment as a holding company for Rancho Santa Fe National Bank and First Community Bank of the Desert and in order to pursue our acquisition strategy as described above, we determined we needed a management team that could handle the complexities of bringing together many banking organizations. To that end, we began the process of hiring several senior executives who had been instrumental in a similar process with Western Bancorp. Similar to its relationship with us, Castle Creek had also assisted in the creation of Western as a holding company for Southern California-based community banks. The former Western senior executives that we brought to First Community Bancorp included Matthew Wagner, our president and chief executive officer, and Robert Borgman, our chief credit officer.

        In 2000, we began trading on the Nasdaq National Market under the ticker "FCBP." Shortly thereafter, on August 7, 2000, we announced the acquisition of Professional Bancorp, a troubled bank holding company whose sole subsidiary, First Professional Bank, operated five branches in West Los Angeles and targeted borrowers in the health care services sector. The First Professional acquisition, which closed on January 16, 2001, extended our reach into Los Angeles and added $230 million in low-cost deposits to our balance sheet. On May 22, 2001, we announced the acquisition of First Charter Bank, which was headquartered in Beverly Hills. First Charter serviced the banking needs of small- and medium-sized businesses and the real estate industry out of two branches on the west side of Los Angeles. On August 22, 2001, we announced the acquisition of Pacific Western, a bank with four branches in Los Angeles and one branch in Orange County. Pacific Western focused on servicing the banking needs of small- and medium-sized businesses and the real estate industry. On November 13, we announced the acquisition of WHEC, the bank holding company for Capital Bank of North County, a bank with three branches in Carlsbad and one branch each in Encinitas and Vista. On January 31, 2002, we completed the acquisition of Pacific Western, and just five weeks later, on March 7, 2002, the acquisition of WHEC. Each bank that we have acquired since our formation has been merged with Pacific Western, other than Capital Bank which was merged with Rancho Santa Fe National Bank.

Business of First Community

Banking Business

        Through our banks, we provide banking and other financial services throughout Southern California to small- and medium-sized businesses and the owners and employees of those businesses. The banks offer a broad range of banking products and services, including many types of business, personal savings and checking accounts and other consumer banking services. The banks originate several types of loans, including secured and unsecured commercial and consumer loans, commercial and residential real estate mortgage loans, SBA loans and construction loans. The banks' loans are primarily short-term and adjustable rate. Special services or requests beyond the lending limits of the banks can be arranged through correspondent banks. The banks have a network of ATMs and offer

46

access to ATM networks through other major banks. The banks issue MasterCard and Visa credit and debit cards through a correspondent bank and are also merchant depositories for cardholder drafts under Visa and MasterCard. The banks can provide investment and international banking services through correspondent banks.

        Through our banks, we concentrate our lending activities in two principal areas:

        Real Estate Loans.    Real estate loans are comprised of construction loans, miniperm loans collateralized by first or junior deeds of trust on specific properties and equity lines of credit. The properties collateralizing real estate loans are principally located in our primary market areas of Los Angeles, San Bernardino, Riverside and San Diego counties in California and the contiguous communities. The construction loans are comprised of loans on residential and income producing properties that generally have terms of less than two years and typically bear an interest rate that floats with the prime rate or another established index. The miniperm loans finance the purchase and/or ownership of income producing properties. Miniperm loans are generally made with an amortization schedule ranging from fifteen to twenty-five years with a lump sum balloon payment due in one to ten years. Equity lines of credit are revolving lines of credit collateralized by junior deeds of trust on real properties. They bear a rate of interest that floats with the prime rate and have maturities of five years. The banks' real estate portfolio is subject to certain risks, including:

•

a possible downturn in the Southern California economy, similar to the one which occurred during the early 1990s,



•

interest rate increases,



•

reduction in real estate values in Southern California, and



•

continued increase in competitive pricing and loan structure.

The banks strive to reduce the exposure to such risks by:

•

reviewing each loan request and renewal individually,



•

using a dual signature approval system whereby both the marketing and credit administration departments must approve each request individually, and



•

strict adherence to written loan policies, including, among other factors, minimum collateral requirements and maximum loan-to-value ratio requirements.

Each loan request is reviewed on the basis of the bank's ability to recover both principal and interest in view of the inherent risks.

        Commercial Loans.    Commercial loans are made to finance operations, to provide working capital or for specific purposes, such as to finance the purchase of assets, equipment or inventory. Since a borrower's cash flow from operations is generally the primary source of repayment, our policies provide specific guidelines regarding required debt coverage and other important financial ratios. Commercial loans include lines of credit and commercial term loans. Lines of credit are extended to businesses or individuals based on the financial strength and integrity of the borrower and generally (with some exceptions) are collateralized by short-term assets such as accounts receivable, inventory, equipment or real estate and have a maturity of one year or less. Such lines of credit bear an interest rate that floats with the prime rate, LIBOR or another established index. Commercial term loans are typically made to finance the acquisition of fixed assets, refinance short-term debt originally used to purchase fixed assets or, in rare cases, to finance the purchase of businesses. Commercial term loans generally have terms from one to five years. They may be collateralized by the asset being acquired or other available assets and bear interest which either floats with the prime rate, LIBOR or another established index or is

47

fixed for the term of the loan. The banks' portfolio of commercial loans is subject to certain risks, including:

•

a possible downturn in the Southern California economy,



•

interest rate increases, and



•

the deterioration of a company's financial capabilities.

The banks strive to reduce the exposure to such risks through:

•

a dual signature approval system, and



•

strict adherence to written loan policies.

In addition, loans based on short-term asset values are monitored on a monthly or quarterly basis. In general, the banks receive and review financial statements of borrowing customers on an ongoing basis during the term of the relationship and respond to any deterioration noted.

        Other Loans.    In addition, our banks provide consumer loans including personal loans, auto loans, boat loans, home improvement loans, equipment loans, revolving lines of credit and other loans typically made by banks to individual borrowers. The banks' consumer loan portfolio is subject to certain risks, including:

•

amount of credit offered to consumers in the market,



•

interest rates increases, and



•

consumer bankruptcy laws which allow consumers to discharge certain debts.

The banks strive to reduce the exposure to such risks through the direct approval of all consumer loans by:

•

using a dual signature system of approval, and



•

strict adherence to written credit policies.

Lending Procedures and Credit Approval Process

        We maintain a rigorous credit approval process which helps reduce the banks' loan workout costs. Any loans in excess of $250,000 secured by real estate are reviewed by the credit departments of the banks. A chief credit officer at each of the banks is authorized to approve any loan which meets a set of criteria determined by First Community in an amount up to $1.0 million unsecured or $1.5 million secured by real estate. Proposed loans which do not meet our lending criteria or exceed $1.0 million unsecured or $1.5 million secured by real estate must be approved by management of the holding company. Any proposed loan in excess of $2.0 million unsecured or $2.5 million secured by real estate must be approved by Matthew Wagner, the chief executive officer of Pacific Western, or Robert Sporrer, the chief executive officer of Rancho Santa Fe National Bank, as the case may be.

        At March 31, 2002, the authorized legal lending limits were approximately $8.8 million for unsecured loans for Pacific Western and $3.9 million for unsecured loans for Rancho Santa Fe National Bank. Legal lending limits are calculated in conformance with applicable law, which prohibits a bank from lending to any one individual or entity or its related interests an aggregate amount which exceeds 15% of primary capital plus the allowance for loan and lease losses on an unsecured basis and 25% on a secured basis. Our primary capital plus allowance for loan and lease losses at March 31, 2002 totaled $117.9 million. Our largest borrower as of March 31, 2002 had an aggregate outstanding loan liability of approximately $8.5 million.

48

        We seek to mitigate the risks inherent in our loan portfolio by adhering to certain underwriting practices. These practices include analysis of prior credit histories, financial statements, tax returns and cash flow projections, valuation of collateral based on reports of independent appraisers and verification of liquid assets. Our lending practices are reviewed monthly by an outside loan review company to ensure that loans are made in compliance with our lending policies. Although we believe that our underwriting criteria are appropriate for the various kinds of loans we make, we may incur losses on loans which meet our underwriting criteria, and these losses may exceed the amounts set aside as reserves for such losses in the allowance for loan and lease losses.

Business Concentrations

        No individual or single group of related accounts is considered material in relation to our assets or the banks' assets or deposits, or in relation to the overall business of the banks or First Community. However, approximately 50% of our loan portfolio held for investment at March 31, 2002 consisted of real estate-related loans, including construction loans, miniperm loans, real estate mortgage loans and commercial loans secured by real estate. Moreover, our business activities are currently focused in Southern California, with the majority of our business concentrated in Los Angeles, San Diego, Riverside, Orange and San Bernardino Counties. Consequently, our results of operations and financial condition are dependent upon the general trends in the Southern California economies and, in particular, the residential and commercial real estate markets. In addition, the concentration of our operations in Southern California exposes us to greater risk than other banking companies with a wider geographic base in the event of catastrophes, such as earthquakes, fires and floods in this region.

Competition

        The banking business in California, specifically in the banks' primary service areas, is highly competitive with respect to both loans and deposits as well as other banking and mortgage banking services. The market is dominated by a relatively small number of major banks with a large number of offices and full-service operations over a wide geographic area. Among the advantages such major banks have in comparison to the banks are their ability to finance and engage in wide-ranging advertising campaigns and to allocate their investment assets to regions of higher yield and demand. Such banks offer certain services which are not offered directly by the banks. In addition, by virtue of their greater total capitalization, such banks have substantially higher lending limits than the banks. Other entities, in both the public and private sectors, seeking to raise capital through the issuance and sale of debt or equity securities also provide competition for the banks in the acquisition of deposits. Banks also compete with money market funds and other money market instruments which are not subject to interest rate ceilings. In recent years, increased competition has also developed from specialized finance and non-finance companies that offer wholesale finance, credit card and other consumer finance services (including on-line banking services and personal finance software). Competition for deposit and loan products remains strong from both banking and non-banking firms and this competition directly effects the rates of those products and the terms on which they are offered to consumers.

        Technological innovation continues to contribute to greater competition in domestic and international financial services markets. Technological innovation has, for example, made it possible for non-depository institutions to offer customers automated transfer payment services previously limited to traditional banking products. In addition, customers now expect a choice of several delivery systems and channels, including telephone, mail, home computer, ATMs, self-service branches and in-store branches.

        Mergers between financial institutions have placed additional pressure on banks within the industry to consolidate their operations, reduce expenses and increase revenues to remain competitive. In addition, competition has intensified due to federal and state interstate banking laws, which permit banking organizations to expand geographically with fewer restrictions than in the past. These laws

49

allow banks to merge with other banks across state lines, thereby enabling banks to establish or expand banking operations in our most significant markets. The competitive environment is also significantly impacted by federal and state legislation which make it easier for non-bank financial institutions to compete with us.

        Economic factors, along with legislative and technological changes, will have an ongoing impact on the competitive environment within the financial services industry. As an active participant in financial markets, we strive to anticipate and adapt to dynamic competitive conditions, but there can be no assurance as to their impact on our future business or results of operations or as to our continued ability to anticipate and adapt to changing conditions. In order to compete with other competitors in their primary service areas, the banks attempt to use to the fullest extent possible the flexibility which the banks' independent status permits, including an emphasis on specialized services, local promotional activity and personal contacts.

Limitations on Dividends

        Our ability to pay dividends is limited by federal law, state law and contractual provisions. California law provides that, in the event that sufficient retained earnings are not available for the proposed distribution, a corporation may nevertheless make a distribution to its shareholders if it meets two conditions:

•

the corporation's assets equal at least 1¹/4 times its liabilities and



•

the corporation's assets equal at least its liabilities or, alternatively, if the average of the corporation's earnings before taxes on income and interest expense for the two preceding fiscal years was less than the average of the corporation's interest expense for such fiscal years, the corporation's current assets equal at least 1¹/4 times its current liabilities.

        It is also possible, depending upon the financial condition of the bank in question and other factors that the Federal Reserve Board and/or the Office of the Comptroller of the Currency could assert that payment of dividends or other payments is an unsafe or unsound practice.

        In addition, our ability to pay dividends is limited by a Revolving Credit Agreement, dated as of June 26, 2000, between First Community and the Northern Trust Company, which provides that First Community may not declare or pay any dividend, other than dividends payable in our common stock or in the ordinary course of business exceeding 50% of net income per fiscal quarter of First Community before goodwill amortization and any restructuring charges incurred in connection with any merger, consolidation or other restructuring contemplated by transactions similar to a merger. Also, First Community would be prohibited from paying dividends on its common stock by the indentures, dated as of September 7, 2000, between First Community and the State Street Bank and Trust Company, December 18, 2001 between First Community and the State Street Bank and Trust Company, and November 28, 2001, between First Community and the Wilmington Trust Company, in the event that First Community defaults on certain obligations or defers interest payments under the indentures.

Employees

        As of March 31, 2002, First Community on a consolidated basis had a total of 327 full time equivalent employees, with 53 full time equivalent employees at Rancho Santa Fe National Bank, 232 full time equivalent employees at Pacific Western and 42 at the holding company.

50

Supervision and Regulation

General

        The banking and financial services businesses which we engage in are highly regulated. Such regulation is intended, among other things, to protect depositors insured by the Federal Deposit Insurance Corporation, or FDIC, and the entire banking system. The commercial banking business is also influenced by the monetary and fiscal policies of the federal government and the policies of the Federal Reserve Board. The Federal Reserve Board implements national monetary policies (with objectives such as curbing inflation and combating recession) by its open-market operations in U.S. Government securities, by adjusting the required level of reserves for financial intermediaries subject to its reserve requirements and by varying the discount rates applicable to borrowings by depository institutions. The actions of the Federal Reserve Board in these areas influence the growth of bank loans, investments and deposits and also affect interest rates charged on loans and paid on deposits. Indirectly such actions may also impact the ability of non-bank financial institutions to compete with the banks. The nature and impact of any future changes in monetary policies cannot be predicted.

        The laws, regulations and policies affecting financial services businesses are continuously under review by Congress and state legislatures and federal and state regulatory agencies. From time to time, legislation is enacted which has the effect of increasing the cost of doing business, limiting or expanding permissible activities or affecting the competitive balance between banks and other financial intermediaries. Proposals to change the laws and regulations governing the operations and taxation of banks, bank holding companies and other financial intermediaries are frequently made in Congress, in the California legislature and before various bank regulatory agencies and other professional agencies. Changes in the laws, regulations or policies that impact First Community cannot necessarily be predicted, but they may have a material effect on the business and earnings of First Community.

Bank Holding Company Regulation

        We, as a bank holding company, are subject to regulation under the Bank Holding Company Act, as amended, or the BHCA. As a bank holding company, we are registered with and are subject to regulation by the Federal Reserve Board under the BHCA. In accordance with Federal Reserve Board policy, we are expected to act as a source of financial strength to the banks and to commit resources to support the banks in circumstances where we might not otherwise do so. Under the BHCA, we are subject to periodic examination by the Federal Reserve Board. We are also required to file with the Federal Reserve Board periodic reports of our operations and such additional information regarding First Community and our subsidiaries as the Federal Reserve Board may require. Pursuant to the BHCA, we are required to obtain the prior approval of the Federal Reserve Board before we acquire all or substantially all of the assets of any bank or ownership or control of voting shares of any bank if, after giving effect to such acquisition, we would own or control, directly or indirectly, more than five percent of such bank.

        Under the BHCA, we may not engage in any business other than managing or controlling banks or furnishing services to our subsidiaries that the Federal Reserve Board deems to be so closely related to banking as "to be a proper incident thereto." We are also prohibited, with certain exceptions, from acquiring direct or indirect ownership or control of more than 5 percent of the voting shares of any company unless the company is engaged in banking activities or the Federal Reserve Board determines that the activity is so closely related to banking to be a proper incident to banking.

        Additionally, bank holding companies that meet certain eligibility requirements prescribed by the BHCA and elect to operate as financial holding companies may engage in, or own shares in companies engaged in, a wider range of nonbanking activities, including securities and insurance activities and any other activity that the Federal Reserve Board, in consultation with the Secretary of the Treasury, determines by regulation or order is financial in nature, incidental to any such financial activity or

51

complementary to any such financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally. The BHCA generally does not place territorial restrictions on the domestic activities of non-bank subsidiaries of bank holding companies. As of the date of this filing, we do not operate as a financial holding company.

        The BHCA and regulations of the Federal Reserve Board also impose certain constraints on the redemption or purchase by a bank holding company of its own shares of stock.

        Our earnings and activities are affected by legislation, by regulations and by local legislative and administrative bodies and decisions of courts in the jurisdictions in which we and the banks conduct business. For example, these include limitations on the ability of the banks to pay dividends to us and our ability to pay dividends to our shareholders. It is the policy of the Federal Reserve Board that bank holding companies should pay cash dividends on common stock only out of income available over the past year and only if prospective earnings retention is consistent with the organization's expected future needs and financial condition. The policy provides that bank holding companies should not maintain a level of cash dividends that undermines the bank holding company's ability to serve as a source of strength to its banking subsidiaries. Various federal and state statutory provisions limit the amount of dividends that subsidiary banks and savings associations can pay to their holding companies without regulatory approval. In addition to these explicit limitations, the federal regulatory agencies have general authority to prohibit a banking subsidiary or bank holding company from engaging in an unsafe or unsound banking practice. Depending upon the circumstances, the agencies could take the position that paying a dividend would constitute an unsafe or unsound banking practice.

        In addition, banking subsidiaries of bank holding companies are subject to certain restrictions imposed by federal law in dealings with their holding companies and other affiliates. Subject to certain exceptions set forth in the Federal Reserve Act, a bank can make a loan or extend credit to an affiliate, purchase or invest in the securities of an affiliate, purchase assets from an affiliate, accept securities of an affiliate as collateral for a loan or extension of credit to any person or company, issue a guarantee or accept letters of credit on behalf of an affiliate only if the aggregate amount of the above transactions of such subsidiary does not exceed 10% of such subsidiary's capital stock and surplus on an individual basis or 20% of such subsidiary's capital stock and surplus on an aggregate basis. Such transactions must be on terms and conditions that are consistent with safe and sound banking practices. A bank and its subsidiaries generally may not purchase a "low-quality asset," as that term is defined in the Federal Reserve Act, from an affiliate. Such restrictions also prevent a holding company and its other affiliates from borrowing from a banking subsidiary of the holding company unless the loans are secured by collateral.

        The Federal Reserve Board has cease and desist powers over parent bank holding companies and non-banking subsidiaries where the action of a parent bank holding company or its non-financial institutions represent an unsafe or unsound practice or violation of law. The Federal Reserve Board has the authority to regulate debt obligations, other than commercial paper, issued by bank holding companies by imposing interest ceilings and reserve requirements on such debt obligations.

Regulation of the Banks

        The banks are extensively regulated under both federal and state law.

        The banks are insured by the FDIC, which currently insures deposits of each insured bank to a maximum of $100,000 per depositor. For this protection, the banks, as is the case with all insured banks, pay a semi-annual statutory assessment and are subject to the rules and regulations of the FDIC. Rancho Santa Fe National Bank and Pacific Western are national banks and therefore regulated primarily by the Office of the Comptroller of the Currency.

52

        Various requirements and restrictions under the laws of the State of California and the United States affect the operations of the banks. State and federal statutes and regulations relate to many aspects of the banks' operations, including standards for safety and soundness, reserves against deposits, interest rates payable on deposits and loans, investments, mergers and acquisitions, borrowings, dividends, locations of branch offices, fair lending requirements, Community Reinvestment Act activities and loans to affiliates. Further, the banks are required to maintain certain levels of capital. The following are the regulatory capital guidelines and the actual capitalization levels for Rancho Santa Fe National Bank, Pacific Western and the consolidated company as of March 31, 2002:

	(greater than or equal to)				Actual
	Adequately Capitalized		Well Capitalized		Rancho Santa Fe National Bank		Pacific Western		Company Consolidated
Tier 1 leverage capital ratio	4.00	%	5.00	%	12.34	%	7.25	%	8.98	%
Tier 1 risk-based capital ratio	4.00	%	6.00	%	11.11	%	8.24	%	9.63	%
Total risk-based capital	8.00	%	10.00	%	12.19	%	9.67	%	10.96	%

        In the second quarter of 2002, we made a contribution of capital to Pacific Western of $4.0 million. If we had made this contribution on March 31, 2002, Pacific Western's total risk-based capital at March 31, 2002 would have been 10.43%.

Prompt Corrective Action and Other Enforcement Mechanisms

        The Federal Deposit Insurance Corporation Improvement Act, or FDICIA, requires each federal banking agency to take prompt corrective action to resolve the problems of insured depository institutions, including but not limited to those that fall below one or more prescribed minimum capital ratios. Pursuant to FDICIA, the Office of the Comptroller of the Currency promulgated regulations defining the following five categories in which an insured depository institution will be placed, based on the level of its capital ratios: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Under the prompt corrective action provisions of FDICIA, an insured depository institution generally will be classified as undercapitalized if its total risk-based capital is less than 8% or its Tier 1 risk-based capital or leverage ratio is less than 4%. An institution that, based upon its capital levels, is classified as "well capitalized," "adequately capitalized" or "undercapitalized" may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition or an unsafe or unsound practice warrants such treatment. At each successive lower capital category, an insured depository institution is subject to more restrictions and prohibitions, including restrictions on growth, prohibitions on payment of dividends and restrictions on the acceptance of brokered deposits. Furthermore, if a bank is classified in one of the undercapitalized categories, it is required to submit a capital restoration plan to the federal bank regulator, and the holding company must guaranty the performance of that plan.

        In addition to measures taken under the prompt corrective action provisions, commercial banking organizations may be subject to potential enforcement actions by the federal banking agencies for unsafe or unsound practices in conducting their businesses or for violations of any law, rule, regulation or any condition imposed in writing by the agency or any written agreement with the agency. Enforcement actions may include the imposition of a conservator or receiver, the issuance of a cease-and-desist order that can be judicially enforced, the termination of insurance of deposits (in the case of a depository institution), the imposition of civil money penalties, the issuance of directives to increase capital, the issuance of formal and informal agreements, the issuance of removal and prohibition orders against institution-affiliated parties and the enforcement of such actions through injunctions or restraining orders based upon a judicial determination that the agency would be harmed if such equitable relief was not granted.

53

Hazardous Waste Clean-Up

        Since we are not involved in any business that manufactures, uses or transports chemicals, waste, pollutants or toxins that might have a material adverse effect on the environment, our primary exposure to environmental laws is through our lending activities. Based on a general survey of the loan portfolios of the banks, conversations with local appraisers and the type of lending currently and historically done by the banks, we are not aware of any potential liability for hazardous waste contamination that would be reasonably likely to have a material adverse effect on us as of March 31, 2002.

USA Patriot Act

        On October 26, 2001, the President signed into law comprehensive anti-terrorism legislation known as the USA Patriot Act. Title III of the USA Patriot Act requires financial institutions, including the banks, to help prevent, detect and prosecute international money laundering and the financing of terrorism. The banks have augmented their systems and procedures to accomplish this. Although we cannot predict when and in what form additional regulations will be adopted, we believe that the cost of compliance with Title III of the USA Patriot Act is not likely to be material to us.

Federal Deposit Insurance

        Because of favorable loss experience and a healthy reserve ratio in the Bank Insurance Fund, or BIF, of the FDIC, well-capitalized and well-managed banks, including the banks, have in recent years paid minimal premiums for FDIC insurance. A number of factors suggest that as early as the second half of 2002, even well-capitalized and well-managed banks will be required to pay premiums for deposit insurance. The amount of any such premiums will depend on the outcome of legislative and regulatory initiatives as well as the BIF loss experience and other factors, none of which we are in position to predict at this time.

Basel Committee Guidelines

        The U.S. federal bank regulatory agencies' risk-capital guidelines are based upon the 1988 capital accord of the Basel Committee on Banking Supervision, or the Basel Committee. The Basel Committee is a committee of central banks and bank supervisors/regulators from the major industrialized countries that develops broad policy guidelines that each country's supervisors can use to determine the supervisory policies they apply. In January 2001, the Basel Committee released a proposal to replace the 1988 capital accord with a new capital accord that would set capital requirements for operational risk and refine the existing capital requirements for credit risk and market risk exposures. Operational risk is defined to mean the risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from external events. The 1988 capital accord does not include separate capital requirements for operational risk. The events of September 11, 2001 demonstrate the importance for financial institutions of managing operational risks. This Basel Committee proposal outlines several alternatives for capital assessment of operational risks, including two standardized approaches and an "internal measurement approach" tailored to individual institutions' circumstances. The Basel Committee has stated that its objective is to finalize a new capital accord in 2002 and for member countries to implement the new accord in 2006. The ultimate timing for the new accord and the specifics of capital assessments for addressing operational risk are uncertain. However, we expect that a new capital accord addressing operational risk will eventually be adopted by the Basel Committee and implemented by the U.S. federal bank regulatory agencies. We cannot determine whether new capital requirements that may arise out of a new Basel Committee capital accord will increase or decrease minimum capital requirements applicable to First Community and its banks.

54

VALIDITY OF COMMON STOCK

        The validity of the shares of common stock offered hereby will be passed upon for us by Sullivan & Cromwell, Los Angeles, California and will be passed upon for the underwriters by Morrison & Foerster LLP, Los Angeles, California.

EXPERTS

        The consolidated financial statements of First Community Bancorp and subsidiaries as of December 31, 2001 and 2000 and for each of the years in the three-year period ended December 31, 2001, are incorporated by reference in the registration statement and this prospectus in reliance upon the report of KPMG LLP, independent auditors, incorporated by reference in the registration statement and this prospectus, and upon the authority of said firm as experts in accounting and auditing.

        The consolidated financial statements of First National Bank and subsidiary as of December 31, 2001 and 2000 and for each of the years in the three-year period ended December 31, 2001 are incorporated by reference in the registration statement and this prospectus in reliance upon the report of KPMG LLP, independent auditors, incorporated by reference in the registration statement and this prospectus, and upon the authority of said firm as experts in accounting and auditing.

        The consolidated financial statements of W.H.E.C., Inc. and subsidiary as of December 31, 2001 and for the year ended December 31, 2001 are incorporated by reference in the registration statement and this prospectus in reliance upon the report of Vavrinek, Trine, Day & Co., LLP, independent auditors, incorporated by reference in the registration statement and this prospectus, and upon the authority of said firm as experts in accounting and auditing.

        The financial statements of Pacific Western National Bank as of December 31, 2001 and for the year ended December 31, 2001 are incorporated by reference in the registration statement and this prospectus in reliance upon the report of Vavrinek, Trine, Day & Co., LLP, independent auditors, incorporated by reference in the registration statement and this prospectus, and upon the authority of said firm as experts in accounting and auditing.

        The consolidated financial statements of Professional Bancorp, Inc. and subsidiary as of December 31, 2000 and for the year ended December 31, 2000 are incorporated by reference in the registration statement and this prospectus in reliance upon the report of KPMG LLP, independent auditors, incorporated by reference in the registration statement and this prospectus, and upon the authority of said firm as experts in accounting and auditing.

        The consolidated financial statements of Professional Bancorp, Inc. and subsidiary as of December 31, 1999 and for the year ended December 31, 1999 are incorporated by reference in the registration statement and this prospectus in reliance upon the report of Moss Adams LLP, independent auditors, incorporated by reference in the registration statement and this prospectus, and upon the authority of said firm as experts in accounting and auditing.

55

UNDERWRITING

        Friedman, Billings, Ramsey & Co., Inc., or FBR, Keefe, Bruyette & Woods, Inc. and Stifel, Nicolaus & Company, Incorporated are acting as representatives of the underwriters named below. Subject to the terms and conditions contained in the underwriting agreement, we have agreed to sell to each underwriter, and each underwriter has agreed to purchase from us, the number of shares set forth opposite its name below. The underwriting agreement provides that the obligation of the underwriters to pay for and accept delivery of our common stock is subject to approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all shares of our common stock offered (other than those covered by the over-allotment option described below) if any of the shares are taken.

Underwriters		Number of Shares
Friedman Billings Ramsey & Co., Inc.
Keefe, Bruyette & Woods, Inc.
Stifel, Nicolaus & Company, Incorporated
	Total

        We have granted the underwriters an option exercisable for 30 days after the date of this prospectus to purchase up to                        additional shares of common stock to cover over-allotments, if any, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus. If the underwriters exercise this option, the underwriters will have a firm commitment, subject to certain conditions, to purchase all of the shares for which the option is exercised.

        The following table shows the amount per share and total underwriting discounts and commissions we will pay to the underwriters. The amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase up to                        additional shares of our common stock to cover over-allotments.

	Per Share	No Exercise	Full Exercise
Public offering price	$	$	$
Underwriting discounts and commissions to be paid by us	$	$	$
Proceeds, before expenses, to us	$	$	$

        Each of our officers and directors has agreed with FBR, for a period of 90 days after the date of this prospectus, subject to certain exceptions, not to sell any shares of common stock or any securities convertible into or exchangeable for shares of common stock owned by them, without the prior written consent of FBR. However, FBR may, in its sole discretion and at any time without notice, release all or any portion of the securities subject to these agreements.

        The underwriters propose to offer our common stock directly to the public at $            per share and to certain dealers at this price less a concession not in excess of $            per share. The underwriters may allow, and the dealers may reallow, a concession not in excess of $            per share to certain dealers. We expect to incur expenses of approximately $600,000 in connection with this offering.

        We have agreed to reimburse the underwriters for their reasonable out-of-pocket expenses incurred in connection with this offering. In addition, we have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments the underwriters may be required to make in respect thereof.

56

        In connection with this offering, the underwriters are permitted to engage in certain transactions that stabilize the price of our common stock. These transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of our common stock. If the underwriters create a short position in our common stock in connection with this offering by selling more than                        shares of common stock, the underwriters may reduce that short position by purchasing our common stock in the open market. In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of those purchases. Neither the underwriters nor we make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither the underwriters nor we make any representation that the underwriters will engage in those transactions or that those transactions, once commenced, will not be discontinued without notice.

        The underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short-covering transactions.

        The underwriters have reserved for sale, at the initial public offering price, up to    % of the common stock offered hereby for certain individuals designated by us who have expressed an interest in purchasing those shares of common stock in the offering. The number of shares available for sale to the general public will be reduced to the extent the designated persons purchase the reserved shares. Any reserved shares not purchased by the designated persons will be offered by the underwriters to the general public on the same basis as other shares offered hereby.

        The underwriters have informed us that they do not intend to confirm sales of the common stock offered by this prospectus to any accounts over which they exercise discretionary authority.

        In the ordinary course of their respective businesses, certain of the underwriters and their respective affiliates have in the past provided, and may in the future from time to time provide, investment banking and general financing and banking services to us and certain of our affiliates, for which they have in the past received, and may in the future receive, customary fees. During the past 12 months, Keefe, Bruyette & Woods rendered services to First National for which Keefe received $50,000 in fees and entitled Keefe to receive $200,000 in additional fees upon the closing of our acquisition of First National. Also, in December 2001, Keefe rendered services to us in connection with our issuance of trust preferred securities, for which Keefe received $125,000 in fees from us.

57

WHERE TO FIND MORE INFORMATION

        We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission, or SEC. You may read and copy any document we file at the Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of the SEC's website is www.sec.gov. Our website is located at www.fcbp.com.

        This prospectus, which constitutes a part of a registration statement on Form S-3 we have filed with the SEC under the Securities Act of 1933, omits certain information set forth in the registration statement. Accordingly, for further information, you should refer to the registration statement and its exhibits on file with the SEC. Furthermore, statements contained in this prospectus concerning any document filed as an exhibit are not necessarily complete and, in each instance, we refer you to the copy of such document filed as an exhibit to the registration statement.

        The SEC allows us to incorporate by reference the information we file with it, which means that we can disclose important information to you by referring you to other documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file later with the SEC will automatically update and supersede the information in this prospectus. We incorporate by reference the documents listed below and, until this offering has been completed, any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended:

•

Our Annual Report on Form 10-K for the year ended December 31, 2001.



•

Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002.



•

Our Current Reports on Form 8-K filed February 15, 2002, as amended March 27, 2002; March 21, 2002, as amended May 14, 2002; and June 10, 2002.



•

The consolidated financial statements of Professional Bancorp, Inc. and subsidiary as of December 31, 2000 and for the year ended December 31, 2000 and as of December 31, 1999 and for the year ended December 31, 1999, included on pages F-77 through F-112 in Amendment No. 1 to our Form S-4, filed August 30, 2001.



•

The unaudited pro forma consolidated financial statements included in our Current Report on Form 8-K filed October 8, 2001.



•

The description of our common stock contained in our registration statement on Form 8-A filed on June 2, 2000, and any amendment or reports that update the description.

        You may request a copy of these filings at no cost, by writing or telephoning us at the address set forth below.

First Community Bancorp
275 N. Brea Avenue
Brea, California 92821
Attention: Lynn Hopkins
(714) 674-5330

58

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION

        The following tables present financial data for us after giving effect to the completion of:

•

the acquisitions of Pacific Western National Bank, W.H.E.C., Inc. and, with respect to the unaudited pro forma combined condensed consolidated statement of operations for the year ended December 31, 2001, First Charter Bank;



•

the proposed acquisitions of Upland Bank, Marathon Bancorp and First National Bank;



•

our rights offering that we completed in January 2002 and the application of the net proceeds from that rights offering;



•

the issuance of trust preferred securities in the fourth quarter of 2001, as described in note 3 to the unaudited pro forma combined condensed consolidated financial statements, and the application of the net proceeds from that issuance; and



•

a proposed additional issuance of trust preferred securities, as described in note 22 to the unaudited pro forma combined condensed consolidated financial statements, and the application of the net proceeds from that issuance.

The pro forma financial data gives effect to each of the acquisitions under the purchase accounting method in accordance with accounting principles generally accepted in the United States. The unaudited pro forma combined condensed consolidated financial statements combine the historical condensed consolidated financial statements of us, First Charter, Pacific Western, WHEC, Upland, Marathon and First National giving effect to these acquisitions as if they had been effective on March 31, 2002 with respect to the unaudited pro forma combined condensed consolidated balance sheet, and as of the beginning of the periods indicated with respect to the unaudited pro forma combined condensed consolidated statements of operations.

        The information for the year ended December 31, 2001 is derived from:

•

the audited consolidated financial statements, including the related notes, of each of Pacific Western, WHEC and First National incorporated by reference in this prospectus;



•

the audited financial statements of each of Upland and Marathon, including the related notes, which are not included or incorporated by reference in this prospectus;



•

the unaudited financial information for First Charter for the portion of 2001 prior to our acquisition of First Charter, which information is not included or incorporated by reference in this prospectus; and



•

our audited consolidated financial statements, including the related notes, incorporated by reference in this prospectus.

You should read our unaudited pro forma combined condensed consolidated statement of operations for the year ended December 31, 2001 in conjunction with the historical financial statements described above that have been incorporated by reference into this prospectus. The information as of and for the three months ended March 31, 2002 is derived from:

•

our unaudited condensed consolidated financial statements, including related notes, as of and for the three months ended March 31, 2002, incorporated by reference in this prospectus;



•

the unaudited consolidated financial statements, including related notes, of First National as of and for the three months ended March 31, 2002, incorporated by reference in this prospectus;

F-1

•

the unaudited financial information for each of Pacific Western and WHEC for the portions of the first quarter of 2002 prior to our acquisition of each of those entities, which information is not included or incorporated by reference in this prospectus; and



•

the unaudited financial statements of each of Upland and Marathon, including the related notes, which are not included or incorporated by reference in this prospectus.

You should read our unaudited pro forma combined condensed consolidated financial statements as of and for the three months ended March 31, 2002 in conjunction with the historical financial statements described above that have been incorporated by reference into this prospectus.

        We expect to incur reorganization and restructuring expenses as a result of combining First Charter, Pacific Western and WHEC and in connection with the pending acquisitions. The effect of the estimated merger and reorganization costs expected to be incurred in connection with the completed and proposed acquisitions has been reflected in the unaudited pro forma combined condensed consolidated balance sheet. We also anticipate that the acquisitions will provide the combined company with certain future financial benefits that include reduced operation expenses and opportunities to earn more revenue. However, we do not reflect any of these anticipated cost savings or benefits in the pro forma financial information. Finally, the pro forma financial information does not reflect any divestures of branches or deposits that may be required in connection with the acquisitions. Therefore, the pro forma financial 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 financial information also does not attempt to show how the combined company would actually have performed had the companies been combined throughout the periods presented. We have included in the pro forma financial statements all the adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of results of the historical periods.

        Given the information regarding the completed and proposed acquisitions, the actual consolidated financial position and results of operations will differ, perhaps significantly, from the pro forma amounts reflected herein because, among other reasons:

•

assumptions used in preparing the pro forma financial data may be revised in the future due to changes in values of assets, including finalization of the calculation of a core deposit intangible, and changes in operating results between the dates of the unaudited pro forma financial data and the date on which the respective acquisition takes place; and



•

adjustments may need to be made to the unaudited historical financial data upon which such pro forma data are based.

F-2

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
As of March 31, 2002

				First Community Bancorp			Upland			Upland Adjustments			Marathon			Marathon Adjustments			First National			First National Adjustments			Additional Adjustments			First Community Bancorp Pro Forma
				(in thousands, except per share data)
Assets:
Cash and due from banks				$	81,504		$	5,477		$	—		$	7,183		$	—		$	31,052		$	—		$	—		$	125,216
Federal funds sold					76,091			10,156			(6,731	)  f		675			(6,750	)  n		22,000			(71,805	)  v		75,286	dd		98,922
Money market mutual funds					—			—			—			—			—			32,027			—			—			32,027
			Total cash and cash equivalents		157,595			15,633			(6,731	)		7,858			(6,750	)		85,079			(71,805	)		75,286			256,165
Interest-bearing deposits in financial institutions					390			693			—			—			—			—			—			—			1,083
Federal Reserve Bank and Federal Home Loan Bank stock, at cost					2,263			—			—			443			—			5,446			—			—			8,152
Securities held to maturity					8,930			1,749			—			12,554			—			—			—			—			23,233
Securities available-for-sale					147,252			39			—			13,788			—			136,540			—			—			297,619
			Total securities		158,445			1,788			—			26,785			—			141,986			—			—			329,004
Gross loans					800,129			89,976			—			70,337			—			408,796			—			—			1,369,238
Deferred fees and costs					(1,415	)		(935	)		—			(140	)		—			(1,599	)		—			—			(4,089	)
			Loans, net of deferred fees and costs		798,714			89,041			—			70,197			—			407,197			—			—			1,365,149
Allowance for loan losses					(13,563	)		(1,215	)					(1,133	)		—			(10,239	)		—			—			(26,150	)
			Net loans		785,151			87,826			—			69,064			—			396,958			—			—			1,338,999
Property, plant and equipment					10,381			355			—			212			—			5,507			—			—			16,455
Other real estate owned					2,747			174			—			—			—			—			—			—			2,921
Goodwill					45,775			—			6,944	g		—			9,687	o		—			89,167	w		(4,540	)  ee		147,033
Core deposit intangible					—			—			2,872	g		—			2,852	o		—			15,749	w		7,828	ff		29,301
Other assets					39,333			3,367			707	h		5,385			768	p		19,601			3,562	x		—			72,723
			Total Assets	$	1,199,817		$	109,836		$	3,792		$	109,304		$	6,557		$	649,131		$	36,673		$	78,574		$	2,193,684
Liabilities and Shareholders' Equity:
Liabilities:
Non-interest bearing deposits				$	392,052		$	24,863		$	—		$	34,647		$	—		$	144,448		$	—		$	—		$	596,010
Interest bearing deposits					653,980			70,873			—			60,361			—			380,506			—			—			1,165,720
			Total deposits		1,046,032			95,736			—			95,008			—			524,954			—			—			1,761,730
Accrued interest payable and other liabilities					17,086			2,566			4,425	i		864			4,561	q		4,601			18,640	y		3,288	gg		56,031
Short-term borrowings					3,719			—			—			1,500			—			68,000			—			(4,614	)  hh		68,605
Convertible debt					654			—			—			—			—			—			—			—			654
Turst preferred securities					28,000			—			—			—			—			—			—			10,000	ii		38,000
			Total liabilities		1,095,491			98,302			4,425			97,372			4,561			597,555			18,640			8,674			1,925,020
Shareholders' Equity:
Common stock					90,933			5,836			5,065	j		3,000			10,928	r		9,804			59,805	z		69,900	jj		255,271
Preferred Stock					—			—			—			—			—			1,412			(1,412	)  z		—			—
Additional paid-in-capital					—			—			—			10,714			(10,714	)  s		45,947			(45,947	)  aa		—			—
Retained earnings (accumulated deficit)					13,432			5,695			(5,695	)  k		(1,770	)		1,770	s		(5,720	)		5,720	aa		—			13,432
Accumulated other comprehensive income (loss):
	Net unrealized gains (losses) on securities available-for-sale, net				(39	)		3			(3	)  k		(12	)		12	s		133			(133	)  aa		—			(39	)
		Total Shareholders' Equity			104,326			11,534			(633	)		11,932			1,996			51,576			18,033			69,900			268,664
			Total Liabilities and Shareholders' Equity	$	1,199,817		$	109,836		$	3,792		$	109,304		$	6,557		$	649,131		$	36,673		$	78,574		$	2,193,684
Shares outstanding					7,539			1,388			419			3,853			536			11,216			2,677			3,000			14,171
Book value per share				$	13.84		$	8.31					$	3.10					$	4.60								$	18.96

F-3

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 2002

			First Community Bancorp		Pacific Western (note 2)		WHEC (note 4)		Pacific Western & WHEC Adjustments		First Community Bancorp with Pacific Western & WHEC Pro Forma		Upland		Upland Adjustments		Marathon		Marathon Adjustments		First National		First National Adjustments		Additional Adjustments			First Community Bancorp Pro Forma
			(in thousands, except per share data)
Interest income:
	Interest and fees on loans		$	11,805	$	1,557	$	1,171	$	—	$	14,533	$	1,937	$	—	$	1,225	$	—	$	7,357	$	—	$	—		$	25,052
	Interest on interest-bearing deposits in other banks			2		—		2		—		4		7		—		—		—		8		—		—			19
	Interest on investment securities			1,855		93		218		—		2,166		22		—		374		—		1,490		—		—			4,052
	Interest on federal funds sold			239		42		38		—		319		14		—		20		—		165		—		—			518
		Total interest income		13,901		1,692		1,429		—		17,022		1,980		—		1,619		—		9,020		—		—			29,641
Interest expense:
	Interest expense on deposits			2,449		498		305		—		3,252		547		—		328		—		1,986		—		—			6,113
	Interest expense on short-term borrowings			7		—		—		—		7		—		—		1		—		954		—		—			962
	Interest expense on convertible debt			4		—		—		—		4		—		—		—		—		—		—		—			4
	Interest expense on trust preferred securities			528		—		—		—		528		—		—		—		—		—		—		78	bb		606
		Total interest expense		2,988		498		305		—		3,791		547				329				2,940		—		78			7,685
Net interest income				10,913		1,194		1,124		—		13,231		1,433		—		1,290		—		6,080		—		(78	)		21,956
	Less: provision for loan losses			—		110		5		—		115		—				30				900		—		—			1,045
		Net interest income after provision for loan losses		10,913		1,084		1,119		—		13,116		1,433		—		1,260		—		5,180		—		(78	)		20,911
Non-interest income:
	Service charges and fees on deposit accounts			1,118		91		200		—		1,409		161		—		132		—		564		—		—			2,266
	Merchant discount fees, net			84		4		19		—		107		18		—		—		—		39		—		—			164
	Other commissions and fees			346		—		77		—		423		—		—		—		—		639		—		—			1,062
	Gain on sale of loans			64		—		11		—		75		—		—		62		—		—		—		—			137
	Other income			328		5		83		—		416		46		—		86		—		613		—		—			1,161
		Total non-interest income		1,940		100		390		—		2,430		225		—		280		—		1,855		—		—			4,790

F-4

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 2002 (continued)

			First Community Bancorp		Pacific Western (note 2)		WHEC (note 4)		Pacific Western & WHEC Adjustments			First Community Bancorp with Pacific Western & WHEC Pro Forma		Upland		Upland Adjustments			Marathon		Marathon Adjustments			First National		First National Adjustments			Additional Adjustments			First Community Bancorp Pro Forma
			(in thousands, except per share data)
Non-interest expense:
	Salaries and employee benefits			4,714		387		554		—			5,655		644		—			573		—			3,327		—			—			10,199
	Occupancy			1,080		94		155		—			1,329		72		—			142		—			784		—			—			2,327
	Furniture and equipment			640		69		49		—			758		52		—			26		—			518		—			—			1,354
	Legal expenses			242		13		4		—			259		33		—			54		—			133		—			—			479
	Other professional services			974		42		76		—			1,092		118		—			114		—			158		—			—			1,482
	Stationery, supplies and printing			403		69		45		—			517		36		—			13		—			102		—			—			668
	FDIC assessment			67		4		4		—			75		4		—			4		—			65		—			—			148
	Cost of other real estate owned			65		—		—		—			65		1		—			—		—			—		—			—			66
	Advertising			157		28		44		—			229		63		—			6		—			163		—			—			461
	Insurance			79		6		16		—			101		31		—			29		—			83		—			—			244
	Other			796		91		67		—			954		100		—			135		—			1,162		—			—			2,351
	Intangible amortization			—		—		—		226	a		226		—		88	d		—		78	l		—		483	t		—			875
		Total non-interest expense		9,217		803		1,014		226			11,260		1,154		88			1,096		78			6,495		483			—			20,654
Income (loss) from continuing operations before income taxes				3,636		381		495		(226	)		4,286		504		(88	)		444		(78	)		540		(483	)		(78	)		5,047
Income taxes (benefit)				1,474		160		163		(95	)  c		1,702		204		(37	)  e		45		(33	)  m		228		(203	)  u		(33	)  cc		1,873
		Net income (loss) from continuing operations	$	2,162	$	221	$	332	$	(131	)	$	2,584	$	300	$	(51	)	$	399	$	(45	)	$	312	$	(280	)	$	(45	)	$	3,174
Per share information:
	Number of shares (weighted average):
		Basic		6,491		921		4,028		2,239			7,524				419			3,853		536			9,711		2,677			3,000			14,156
		Diluted		6,774		944		4,532		2,251			7,807				419			3,929		536			11,265		2,677			3,000			14,439
	Income from continuing operations per share:
		Basic	$	0.33	$	0.24	$	0.08				$	0.34						$	0.10				$	0.03							$	0.22
		Diluted	$	0.32	$	0.23	$	0.07				$	0.33						$	0.10				$	0.03							$	0.22

F-5

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2001

			First Community Bancorp		First Charter (note 1)		Pacific Western		WHEC		First Charter, Pacific Western & WHEC Adjustments			First Community Bancorp with First Charter, Pacific Western & WHEC Pro Forma		Upland		Upland Adjustments		Marathon		Marathon Adjustments		First National		First National Adjustments		Additional Adjustments			First Community Bancorp Pro Forma
			(in thousands, except per share data)
Interest income:
	Interest and fees on loans		$	33,052	$	4,384	$	18,606	$	7,115	$	—		$	63,157	$	8,748	$	—	$	5,152	$	—	$	37,805	$	—	$	—		$	114,862
	Interest on interest-bearing deposits in other banks			14		43		—		28		—			85		49		—		—		—		—		—		—			134
	Interest on investment securities			6,335		1,114		552		1,044		—			9,045		114		—		1,476		—		7,943		—		—			18,578
	Interest on federal funds sold			3,713		509		819		723		—			5,764		416		—		249		—		1,670		—		—			8,099
		Total interest income		43,114		6,050		19,977		8,910		—			78,051		9,327		—		6,877		—		47,418		—		—			141,673
Interest expense:
	Interest expense on deposits			9,860		2,844		7,606		2,493		—			22,803		3,340		—		2,056		—		16,073		—		—			44,272
	Interest expense on short-term borrowings			383		301		16		—		—			700		—		—		2		—		4,098		—		—			4,800
	Interest expense on convertible debt			46		—		—		—		—			46		—		—		—		—		—		—		—			46
	Interest expense on trust preferred securities			962		—		—		—		1,046	b		2,008		—		—		—		—		—		—		313	bb		2,321
		Total interest expense		11,251		3,145		7,622		2,493		1,046			25,557		3,340		—		2,058		—		20,171		—		313			51,439
Net interest income				31,863		2,905		12,355		6,417		(1,046	)		52,494		5,987		—		4,819		—		27,247		—		(313	)		90,234
	Less: provision for loan losses			639		—		1,260		95		—			1,994		130		—		45		—		10,675		—		—			12,844
		Net interest income after provision for loan losses		31,224		2,905		11,095		6,322		(1,046	)		50,500		5,857		—		4,774		—		16,572		—		(313	)		77,390
Non-interest income:
	Service charges and fees on deposit accounts			2,560		123		948		955		—			4,586		674		—		386		—		1,614		—		—			7,260
	Merchant discount fees net			327		—		—		—		—			327		—		—		—		—		202		—		—			529
	Other commissions and fees			1,367		—		16		—		—			1,383		—		—		—		—		3,122		—		—			4,505
	Gain on sale of loans			444		—		201		39		—			684		—		—		—		—		389		—		—			1,073
	Other income			479		1,495		191		623		—			2,788		13		—		322		—		1,969		—		—			5,092
		Total non-interest income		5,177		1,618		1,356		1,617		—			9,768		687		—		708		—		7,296		—		—			18,459

F-6

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2001 (continued)

			First Community Bancorp		First Charter (note 1)		Pacific Western		WHEC		First Charter, Pacific Western & WHEC Adjustments			First Community Bancorp with First Charter, Pacific Western & WHEC Pro Forma		Upland		Upland Adjustments			Marathon		Marathon Adjustments			First National			First National Adjustments			Additional Adjustments			First Community Bancorp Pro Forma
			(in thousands, except per share data)
Non-interest expense:
	Salaries and employee benefits			13,285		1,474		4,534		3,090		—			22,383		2,378		—			2,228		—			15,510			—			—			42,499
	Occupancy			3,365		476		947		642		—			5,430		308		—			575		—			3,455			—			—			9,768
	Furniture and equipment			1,438		277		889		290		—			2,894		212		—			89		—			2,177			—			—			5,372
	Legal expenses			605		775		266		21		—			1,667		104		—			317		—			672			—			—			2,760
	Other professional services			2,964		471		1,229		481		—			5,145		413		—			381		—			812			—			—			6,751
	Stationery, supplies and printing			662		35		501		243		—			1,441		164		—			51		—			539			—			—			2,195
	FDIC assessment			366		14		33		21		—			434		16		—			14		—			185			—			—			649
	Cost of other real estate owned			47		15		—		—		—			62		4		—			2		—			—			—			—			68
	Advertising			490		3		431		262		—			1,186		158		—			61		—			849			—			—			2,254
	Insurance			288		80		65		78		—			511		108		—			137		—			152			—						908
	Other			2,198		897		662		258		—			4,015		342		—			561		—			5,165			—			—			10,083
	Provision for restructuring/branch closures			—		—		—		—		—			—		—		—			—					1,100			—			—			1,100
	Intangibles amortization			207		—		86		2		894	a		1,189		—		349	d		—		308	l		—			1,913	t		—			3,759
		Total non-interest expense		25,915		4,517		9,643		5,388		894			46,357		4,207		349			4,416		308			30,616			1,913			—			88,166
Income (loss) from continuing operations before income taxes (benefit)				10,486		6		2,808		2,551		(1,940	)		13,911		2,337		(349	)		1,066		(308	)		(6,748	)		(1,913	)		(313	)		7,683
Income taxes (benefit)				4,376		1		1,155		919		(815	)  c		5,636		971		(147	)  e		19		(129	)  m		(2,699	)		(803	)  u		(132	)  cc		2,716
		Net income (loss) from continuing operations	$	6,110	$	5	$	1,653	$	1,632	$	(1,125	)	$	8,275	$	1,366	$	(202	)	$	1,047	$	(179	)	$	(4,049	)	$	(1,110	)	$	(181	)	$	4,967
Per share information:
	Number of shares (weighted average):
		Basic		4,696		2,290		921		4,028		2,239			7,442		1,340		419			3,849		536			9,316			2,677			3,000			14,074
		Diluted		4,958		2,290		944		4,532		2,251			7,704		1,362		419			3,881		536			9,316			2,677			3,000			14,336
	Income (loss) from continuing operations per share:
		Basic income per share	$	1.30	$	0.00	$	1.79	$	0.41				$	1.11	$	1.02				$	0.27				$	(0.43	)							$	0.35
		Diluted income per share	$	1.23	$	0.00	$	1.75	$	0.36				$	1.07	$	1.00				$	0.27				$	(0.43	)							$	0.35

F-7

NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION

NOTE 1: BASIS OF PRESENTATION OF FIRST CHARTER ACQUISITION

        On October 8, 2001, we completed the acquisition of First Charter and merged it into our wholly-owned subsidiary, Pacific Western, formerly called First Professional Bank. The First Charter merger was accounted for using purchase accounting. Therefore, our historical results of operations for the three months ended March 31, 2002 include the operations of First Charter, and our historical results of operations for the year ended December 31, 2001 include the operations of First Charter subsequent to October 8, 2001. Our historical balance sheet at March 31, 2002 includes the impact of the First Charter acquisition.

        The unaudited pro forma combined condensed consolidated statement of operations for the year ended December 31, 2001 is presented as if the First Charter acquisition occurred at the beginning of this period. The information is not intended to reflect the actual results that would have been achieved had the First Charter acquisition actually occurred on that date.

        Certain historical data of First Charter have been reclassified on a pro forma basis to conform to our classifications.

NOTE 2: BASIS OF PRESENTATION OF PACIFIC WESTERN ACQUISITION

        On January 31, 2002, we completed the acquisition of Pacific Western in a transaction accounted for using purchase accounting. Therefore, our historical results of operations for the three months ended March 31, 2002 include the operations of Pacific Western since January 31, 2002 and our historical results of operations for the year ended December 31, 2001 do not include the operations of Pacific Western. Our historical balance sheet at March 31, 2002 includes the impact of the Pacific Western acquisition.

        The unaudited pro forma combined condensed consolidated statements of operations for the three months ended March 31, 2002 and for the year ended December 31, 2001 are presented as if the Pacific Western acquisition occurred at the beginning of the respective periods. This information 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 incorporated by reference in this prospectus.

        Certain historical data of Pacific Western have been reclassified on a pro forma basis to conform to our classifications.

NOTE 3: PURCHASE PRICE AND FUNDING OF PACIFIC WESTERN

        The shareholders and option holders of Pacific Western were paid $36.6 million based on each share of common stock of Pacific Western issued and outstanding immediately prior to the acquisition of Pacific Western being converted into the right to receive $37.15 in cash. The purchase price was financed through a combination of:

•

funds of approximately $20.0 million raised in two separate trust preferred offerings, which closed during the fourth quarter of 2001;



•

additional funds of $23.0 million raised through a rights offering which resulted in the issuance of 1,194,805 shares of our common stock in the first quarter of 2002; and



•

a $6.6 million special dividend from cash available at Pacific Western.

F-8

        As a result of the issuance of the trust preferred securities, interest expense in our unaudited pro forma combined condensed consolidated statement of operations for year ended December 31, 2001 has been increased by $1.0 million representing the interest expense associated with those securities.

NOTE 4: BASIS OF PRESENTATION OF WHEC ACQUISITION

        On March 7, 2002, we completed the acquisition of WHEC, the holding company of Capital Bank of North County, in a transaction accounted for using purchase accounting. Therefore, our historical results of operations for the three months ended March 31, 2002 include the operations of WHEC since March 7, 2002 and our historical results of operations for the year ended December 31, 2001 do not include the operations of WHEC. Our historical balance sheet at March 31, 2002 includes the impact of the WHEC acquisition.

        The unaudited pro forma combined condensed consolidated statements of operations for the three months ended March 31, 2002 and for the year ended December 31, 2001 are presented as if the WHEC acquisition occurred at the beginning of the respective periods. This information is not intended to reflect the actual results that would have been achieved had the WHEC acquisition actually occurred on those dates, and it should be read in conjunction with the historical financial information incorporated by reference in this prospectus.

        Certain historical data of WHEC have been reclassified on a pro forma basis to conform to our classifications.

NOTE 5: PURCHASE PRICE AND FUNDING OF WHEC

        In the WHEC acquisition, we issued 1,043,799 shares of our common stock for an aggregate purchase price of $24.5 million based on each share of common stock of WHEC issued and outstanding immediately prior to the acquisition of WHEC being converted into 0.2353 of a share of our common stock.

NOTE 6: KEY TO PRO FORMA ADJUSTMENTS OF FIRST CHARTER, PACIFIC WESTERN AND WHEC ACQUISITIONS

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

a)

Amortization expense related to the estimated core deposit intangible. The annual amortization schedule is based on an estimated decline in the value of the acquired deposits over a 10-year period or a straight-line basis, whichever is higher.



b)

Interest expense related to the trust preferred securities issued in the fourth quarter of 2001 as if they were outstanding from January 1, 2001.



c)

Tax benefits associated with the additional interest expense and/or core deposit intangible amortization expense computed using a combined federal and state tax rate of 42%.

NOTE 7: BASIS OF PRESENTATION OF UPLAND ACQUISITION

        On April 18, 2002, we announced that we had executed a definitive agreement to acquire all of the outstanding common stock of Upland. It is expected that the Upland acquisition will close in the third

F-9

quarter of 2002. Therefore, our historical financial statements as of and for the three months ended March 31, 2002 and for the year ended December 31, 2001 do not include the financial position and results of Upland.

        The unaudited pro forma combined condensed consolidated statements of operations for the three months ended March 31, 2002 and for the year ended December 31, 2001 are presented as if the Upland acquisition occurred at the beginning of the respective periods. The unaudited pro forma combined condensed consolidated balance sheet as of March 31, 2002 is presented as if the Upland acquisition occurred as of that date. This information is not intended to reflect the actual results that would have been achieved had the Upland acquisition actually occurred on those dates.

        Certain historical data of Upland have been reclassified on a pro forma basis to conform to our classifications.

NOTE 8: PURCHASE PRICE AND FUNDING OF UPLAND

        Pursuant to the Upland merger agreement, shareholders of Upland will have the right to elect to receive for each share of Upland common stock either $11.73 in cash or 0.5034 of a share of our common stock. If the average price of our common stock is $19.80 or more over the twenty-day trading period ending on the fifth business day prior to the effective date of the merger, 60% of the total consideration will be in the form of our common stock and the remainder will be in cash. However, if the average price of our common stock is less than $19.80 and such decline is not proportionate to a decline in the Nasdaq Bank Index over the twenty-day averaging period, the merger agreement contains provisions that allow us to issue stock and/or cash at our option to ensure that the consideration Upland shareholders receive is at least equal to the consideration they would have received had the average closing price of our common stock been $19.80 and to ensure that at least 45% of the total consideration shall be in the form of our common stock.

        Based on an estimated share price of $26.00 for our common stock, determined pursuant to the Upland merger agreement, and 60% of the Upland shareholders electing to receive stock consideration, the estimated total consideration to be paid in connection with the Upland acquisition is $17.6 million and is calculated as follows:

	Purchase Price
	(in thousands)
Stock consideration	$	10,901
Cash consideration		6,731
Total estimated purchase price	$	17,632

        The cash portion of the purchase price is expected to be financed through a combination of the proceeds resulting from this offering, the proceeds from the proposed issuance of additional trust preferred securities (see note 22) and dividends from our banks.

F-10

NOTE 9: ALLOCATION OF PURCHASE PRICE OF UPLAND

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

Cash and cash equivalents	$	15,633
Interest bearing deposits in financial institutions		693
Securities		1,788
Net loans		87,826
Premises and equipment		355
Other assets		4,248
Goodwill		6,944
Core deposit intangible		2,872
Deposits		(95,736	)
Other liabilities		(6,991	)
Total purchase price	$	17,632

        In allocating the purchase price, the following adjustments were made to Upland's historical amounts:

•

other assets were increased by $707,000 representing the tax effects of the estimated merger costs; and



•

other liabilities were increased $4.4 million representing the estimated merger costs of $3.2 million and the deferred tax liability related to the core deposit intangible of $1.2 million.

All of the other asset and liability categories are either variable rate or short-term in nature and fair market value adjustments were considered to be immaterial to the financial presentation.

        The purchase price adjustments are subject to further refinement, including the determination of a core deposit intangible and its life for amortization purposes. For pro forma presentation purposes only, we have included an estimated core deposit intangible calculated as three percent of deposits. In accordance with Statement of Financial Accounting Standards No 141, "Business Combinations" and No. 142, "Goodwill and Other Intangible Assets," goodwill and intangible assets with indefinite lives are not amortized for acquisitions initiated after June 30, 2001; therefore, no goodwill amortization is presented in the pro forma financial statements. However, the core deposit intangible will be amortized over its estimated useful life and recorded as a charge to operations.

NOTE 10: MERGER COSTS OF UPLAND

        The table below reflects our current estimate, for purposes of pro forma presentation, of the aggregate estimated merger costs of $3.2 million ($2.5 million net of taxes, computed using a combined federal and state tax rate of 42%) expected to be incurred in connection with the Upland acquisition. While a portion of these costs may be required to be recognized over time, the current estimate of

F-11

these costs has been recorded in the pro forma combined costs, primarily comprised of anticipated cash charges, include the following (in thousands):

Employee costs (severance and retention costs)	$	1,013
Conversion costs		400
Other costs		270
Deductible merger costs		1,683
Tax benefits		707
Deductible merger costs, net of tax benefits		976
Investment banking and other professional fees		1,536
Total merger costs, net of tax benefits	$	2,512

        Our cost estimates are forward-looking. While the costs represent our current estimate of merger costs associated with the acquisition that will be incurred, the ultimate level and timing of recognition of these costs will be based on the final integration in connection with consummation of the Upland acquisition. Readers are cautioned that the completion of this integration and other actions that may be taken in connection with the Upland acquisition 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. For additional factors that may cause actual results to differ, please see "Cautionary Statement Regarding Forward-Looking Statements" on page 10.

NOTE 11: KEY TO PRO FORMA ADJUSTMENTS OF UPLAND ACQUISITION

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

d)

Amortization expense related to the estimated core deposit intangible. The annual amortization schedule is based on an estimated decline in the value of the acquired deposits over a 10-year period or a straight-line basis, whichever is higher.



e)

Tax benefits associated with the core deposit intangible amortization expense computed using a combined federal and state tax rate of 42%.



f)

Use of cash for the purchase price.



g)

Goodwill and core deposit intangible resulting from the purchase method of accounting. See note 9.



h)

Deferred tax asset related to the deductible merger costs. See note 10.



i)

Adjustment of liabilities for accrued merger costs and deferred tax liability related to the core deposit intangible. See notes 9 and 10.



j)

Issuance of common stock to Upland shareholders less the elimination of Upland common stock.



k)

Elimination of Upland retained earnings and unrealized gains on securities available for sale.

F-12

NOTE 12: BASIS OF PRESENTATION OF MARATHON ACQUISITION

        On May 14, 2002, we announced that we had executed a definitive agreement to acquire all of the outstanding common stock of Marathon. It is expected that the Marathon acquisition will close in the third quarter of 2002. Therefore, our historical financial statements as of and for the three months ended March 31, 2002 and for the year ended December 31, 2001 do not include the financial position and results of Marathon.

        The unaudited pro forma combined condensed consolidated statements of operations for the three months ended March 31, 2002 and for the year ended December 31, 2001 are presented as if the Marathon acquisition occurred at the beginning of the respective periods. The unaudited pro forma combined condensed consolidated balance sheet as of March 31, 2002 is presented as if the Marathon acquisition occurred as of that date. This information is not intended to reflect the actual results that would have been achieved had the Marathon acquisition actually occurred on those dates.

        Certain historical data of Marathon have been reclassified on a pro forma basis to conform to our classifications.

NOTE 13: PURCHASE PRICE AND FUNDING OF MARATHON

        Pursuant to the Marathon merger agreement, each Marathon shareholder will have the right to elect to receive for each share of Marathon common stock issued and outstanding immediately prior to the merger either cash or our common stock with a value that depends on the average price of our common stock over a 15-day averaging period ending on the third business day prior to the Marathon shareholders' meeting. The value is determined as follows:

•

if the average price of our common stock over the averaging period is between $19.50 and $23.30, Marathon shareholders will have the right to elect to receive, for each share of Marathon common stock they hold, either cash or First Community common stock with a value of $4.80;



•

if the average price of First Community common stock over the averaging period is greater than or equal to $23.30, Marathon shareholders will have the right to elect to receive an amount in cash or First Community common stock with a value that will be greater than $4.80 per share and that will be determined by multiplying the average price by 0.1339 and then adding $1.68; or



•

if the average price of First Community common stock over the averaging period is less than or equal to $19.50, Marathon shareholders will have the right to elect to receive an amount in cash or First Community common stock with a value that will be less than $4.80 per share and that will be determined by multiplying the average price by 0.1600 and then adding $1.68.

        Based on a share price of $26.00 for our common stock, the estimated total consideration to be paid in connection with the Marathon acquisition is $20.7 million, 67% of which will be in the form of First Community common stock and the remainder in the form of cash, and is calculated as follows:

	Purchase Price
	(in thousands)
Stock consideration	$	13,928
Cash consideration		6,750
Total estimated purchase price	$	20,678

F-13

        If the average price of First Community common stock is less than $19.50 over the fifteen-day averaging period, the definitive agreement contains provisions that allow First Community to ensure that at least 50% of the total consideration shall be in the form of First Community common stock.

        The cash portion of the purchase price is expected to be financed through a combination of the proceeds resulting from this offering, the proceeds from the proposed issuance of additional trust preferred securities (see note 22) and dividends from our banks.

NOTE 14: ALLOCATION OF PURCHASE PRICE OF MARATHON

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

Cash and cash equivalents	$	7,858
Securities		26,785
Net loans		69,064
Premises and equipment		212
Other assets		6,153
Goodwill		9,687
Core deposit intangible		2,852
Deposits		(95,008	)
Other liabilities		(6,925	)
Total purchase price	$	20,678

        In allocating the purchase price, the following adjustments were made to Marathon's historical amounts:

•

other assets were increased by $768,000 representing the tax effects of the estimated merger costs; and



•

other liabilities were increased $4.6 million representing the estimated merger costs of $3.4 million and the deferred tax liability related to the core deposit intangible of $1.2 million.

All of the other asset and liability categories are either variable rate or short-term in nature and fair market value adjustments were considered to be immaterial to the financial presentation.

        The purchase price adjustments are subject to further refinement, including the determination of a core deposit intangible and its life for amortization purposes. For pro forma presentation purposes only, we have included an estimated core deposit intangible calculated as three percent of deposits. In accordance with Statement of Financial Accounting Standards No 141, "Business Combinations" and No. 142, "Goodwill and Other Intangible Assets," goodwill and intangible assets with indefinite lives are not amortized for acquisitions initiated after June 30, 2001; therefore, no goodwill amortization is presented in the pro forma financial statements. However, the core deposit intangible will be amortized over its estimated useful life and recorded as a charge to operations.

NOTE 15: MERGER COSTS OF MARATHON

        The table below reflects our current estimate, for purposes of pro forma presentation, of the aggregate estimated merger costs of $3.4 million ($2.6 million net of taxes, computed using the

F-14

combined federal and state tax rate of 42%) expected to be incurred in connection with the acquisition. 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 costs, primarily comprised of anticipated cash charges, include the following (in thousands):

Employee costs (severance and retention costs)	$	1,158
Conversion costs		400
Other costs		270
Deductible merger costs		1,828
Tax benefits		768
Deductible merger costs, net of tax benefits		1,060
Investment banking and other professional fees		1,535
Total merger costs, net of tax benefits	$	2,595

        Our cost estimates are forward-looking. While the costs represent our current estimate of merger costs associated with the acquisition that will be incurred, the ultimate level and timing of recognition of these costs will be based on the final integration in connection with consummation of the acquisition. Readers are cautioned that the completion of this integration and other actions that may be taken in connection with the Marathon acquisition 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. For additional factors that may cause actual results to differ, please see "Cautionary Statement Regarding Forward-Looking Statements" on page 10.

NOTE 16: KEY TO PRO FORMA ADJUSTMENTS OF MARATHON ACQUISITION

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

l)

Amortization expense related to the estimated core deposit intangible. The annual amortization schedule is based on an estimated decline in the value of the acquired deposits over a 10-year period or straight-line, whichever is higher.



m)

Tax benefits associated with the core deposit intangible amortization expense computed using a combined federal and state tax rate of 42%.



n)

Use of cash for purchase price.



o)

Goodwill and core deposit intangible resulting from the purchase method of accounting. See note 14.



p)

Deferred tax asset related to the deductible merger costs. See note 15.



q)

Adjustment of liabilities for accrued merger costs and deferred tax liability related to the core deposit intangible. See notes 14 and 15.



r)

Issuance of common stock to Marathon shareholders less the elimination of Marathon common stock.

F-15

s)

Elimination of Marathon additional paid-in capital, accumulated deficit and unrealized losses on securities available for sale.

NOTE 17: BASIS OF PRESENTATION OF FIRST NATIONAL ACQUISITION

        On April 29, 2002, we announced that we had entered into an agreement to acquire all of the outstanding capital stock of First National. It is expected that the First National acquisition will close in the third quarter of 2002. Therefore, our historical financial statements as of and for the three months ended March 31, 2002 and for the year ended December 31, 2001 do not include the financial position and results of First National.

        The unaudited pro forma combined condensed consolidated statements of operations for the three months ended March 31, 2002 and for the year ended December 31, 2001 are presented as if the First National acquisition occurred at the beginning of the respective periods. The unaudited pro forma combined condensed consolidated balance sheet as of March 31, 2002 is presented as if the First National acquisition occurred as of that date. This information is not intended to reflect the actual results that would have been achieved had the First National acquisition actually occurred on those dates, and it should be read in conjunction with the historical financial information incorporated by reference in this prospectus.

        Certain historical data of First National have been reclassified on a pro forma basis to conform to our classifications.

NOTE 18: PURCHASE PRICE AND FUNDING OF FIRST NATIONAL

        Pursuant to the First National merger agreement, each First National shareholder will have the right to elect to receive for each share of First National common stock or First National preferred stock either $10.00 in cash or 0.5008 of a share of our common stock. The definitive agreement provides that at least and no more than 45% of the total consideration shall be in the form of our common stock.

        Based on a share price of $26.00 for our common stock, determined pursuant to the First National merger agreement, and 45% of the First National shareholders electing to receive stock consideration, the estimated total consideration to be paid in connection with the First National acquisition is $141.4 million and is calculated as follows:

	Purchase Price
	(in thousands)
Stock consideration	$	69,609
Cash consideration		71,805
Total estimated purchase price	$	141,414

        The cash portion of the purchase price is expected to be financed through a combination of the proceeds resulting from this offering, the proceeds from the proposed issuance of additional trust preferred securities (see note 22) and dividends from our banks.

F-16

NOTE 19: ALLOCATION OF PURCHASE PRICE OF FIRST NATIONAL

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

Cash and cash equivalents	$	85,079
Securities		141,986
Net loans		396,958
Premises and equipment		5,507
Other assets		23,163
Goodwill		89,167
Core deposit intangible		15,749
Deposits		(524,954	)
Other liabilities		(23,241	)
Borrowings		(68,000	)
Total purchase price	$	141,414

        In allocating the purchase price, the following adjustments were made to First National's historical amounts:

•

other assets were increased by $3.6 million representing the tax effects of the estimated merger costs; and



•

other liabilities were increased $18.6 million representing the estimated merger costs of $12.0 million and the deferred tax liability related to the core deposit intangible of $6.6 million.

All of the other asset and liability categories are either variable rate or short-term in nature and fair market value adjustments were considered to be immaterial to the financial presentation.

        The purchase price adjustments are subject to further refinement, including the determination of a core deposit intangible and its life for amortization purposes. For pro forma presentation purposes only, we have included an estimated core deposit intangible calculated as three percent of deposits. In accordance with Statement of Financial Accounting Standards No 141, "Business Combinations" and No. 142, "Goodwill and Other Intangible Assets," goodwill and intangible assets with indefinite lives are not amortized for acquisitions initiated after June 30, 2001; therefore, no goodwill amortization is presented in the pro forma financial statements. However, the core deposit intangible will be amortized over its estimated useful life and recorded as a charge to operations.

NOTE 20: MERGER COSTS OF FIRST NATIONAL

        The table below reflects our current estimate, for purposes of pro forma presentation, of the aggregate estimated merger costs of $12.0 million ($8.5 million net of taxes, computed using a combined federal and state tax rate of 42%) expected to be incurred in connection with the acquisition. While a portion of these costs may be required to be recognized over time, the current estimate of

F-17

these costs has been recorded in the pro forma combined costs, primarily comprised of anticipated cash charges, include the following (in thousands):

Employee costs (severance and retention costs)	$	3,170
Conversion costs		4,370
Other costs, including branch closure		940
Deductible merger costs		8,480
Tax benefits		3,562
Deductible merger costs, net of tax benefits		4,918
Investment banking and other professional fees		3,545
Total merger costs, net of tax benefits	$	8,463

        Our cost estimates are forward-looking. While the costs represent our 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 First National acquisition. Readers are cautioned that the completion of this integration and other actions that may be taken in connection with the First National acquisition 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. For additional factors that may cause actual results to differ, please see "Cautionary Statement Regarding Forward-Looking Statements" on page 10.

NOTE 21: KEY TO PRO FORMA ADJUSTMENTS OF FIRST NATIONAL ACQUISITION

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

t)

Amortization expense related to the estimated core deposit intangible. The annual amortization schedule is based on an estimated decline in the value of the acquired deposits over a 10-year period or a straight-line basis, whichever is higher.



u)

Tax benefits associated with the core deposit intangible amortization expense computed using a combined federal and state tax rate of 42%.



v)

Use of cash for purchase price.



w)

Goodwill and core deposit intangible resulting from the purchase method of accounting. See note 19.



x)

Deferred tax asset related to the deductible merger costs. See note 20.



y)

Adjustment of liabilities for accrued merger costs and deferred tax liability related to the core deposit intangible. See notes 19 and 20.



z)

Issuance of common stock to First National shareholders less the elimination of First National common stock and preferred stock.



aa)

Elimination of First National additional paid-in capital, accumulated deficit and unrealized gains on securities available for sale.

F-18

NOTE 22: KEY TO ADDITIONAL ADJUSTMENTS

bb)

Estimated interest expense related to proposed issuance of trust preferred securities at an assumed interest rate of 5.75% per annum offset by a reduction of interest expense related to the reduction of other borrowings from excess funds at an assumed interest rate of 5.67% per annum. If the interest rate on the additional trust preferred securities varies by ¹/2%, the effect on net income (loss) will be $29,000 after tax per annum.



cc)

Tax benefits associated with the additional interest expense computed using a combined federal and state tax rate of 42%.



dd)

Cash raised from this offering of shares of our common stock at an assumed offering price per share of $25.00, after deducting our estimated offering expenses and underwriting discount, and cash received from the issuance of additional trust preferred securities expected to close in the second quarter of 2002, offset by excess funds used to reduce other borrowings. This adjustment assumes no exercise of the underwriters' over-allotment option to purchase additional shares in this offering. We currently intend to issue additional trust preferred securities with an aggregate liquidation preference of $10.0 million. These securities will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.



ee)

Reclassification of goodwill to core deposit intangible and related deferred tax liability with respect to the acquisitions of Pacific Western and WHEC.



ff)

Core deposit intangibles related to the Pacific Western acquisition and WHEC acquisition of $3.6 million and $4.2 million. These amounts were not available at the time of filing our historical results and were therefore included as part of goodwill on March 31, 2002. The estimated amortization for the core deposit intangibles is included in the unaudited pro forma condensed combined consolidated statement of operations for the periods indicated in the columns titled First Charter, Pacific Western & WHEC Adjustments. See note 6.



gg)

Deferred tax liabilities related to the core deposit intangibles from the Pacific Western acquisition and WHEC acquisition.



hh)

Reduction of other borrowings with excess proceeds.



ii)

Proposed offering of trust preferred securities expected to close in the second quarter of 2002.



jj)

This offering.

F-19

            Shares

FIRST COMMUNITY BANCORP
Common Stock

PROSPECTUS

FRIEDMAN BILLINGS RAMSEY

KEEFE, BRUYETTE & WOODS, INC.

STIFEL, NICOLAUS & COMPANY
INCORPORATED

                        , 2002

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

        The following are the expenses of the issuance of the shares of common stock being registered, all of which will be paid by the Registrant:

Securities and Exchange Commission registration fee		$	7,935
Printing, postage, and mailing*		$	100,000
Legal fees and expenses*		$	350,000
Accounting fees and expenses*		$	100,000
Nasdaq National Market listing fee*		$	22,500
NASD filing fee		$	9,125
Miscellaneous*		$	10,440
	Total	$	600,000

*

Estimates

Item 15. Indemnification of Directors and Officers

        Article Five of First Community's articles of incorporation provides that First Community shall eliminate the liability of its directors for monetary damages to the fullest extent permissible under California law. Section 7.5 of First Community's by-laws provides that First Community shall indemnify each of its directors and officers for expenses, judgments, fines, settlements and other amounts incurred in connection with any proceeding arising by reason of the fact that such person was an "agent" of First Community to the fullest extent permissible under California law. First Community's articles of incorporation and by-laws also provide that First Community is authorized to provide indemnification for its agents to the extent permissible under California law. In both cases, indemnification for breach of duty may be in excess of that expressly permitted by Section 317 of the California General Corporation Law. Section 317 sets forth the provisions pertaining to the indemnification of corporate "agents." For purposes of this law, an agent is any person who is or was a director, officer, employee or other agent of a corporation, or is or was serving at the request of a corporation in such capacity with respect to any other corporation, partnership, joint venture, trust or other enterprise. Section 317 mandates indemnification of an agent for expenses where the agent's defense is successful on the merits. In other cases, Section 317 allows a corporation to indemnify an agent for expenses, judgments, fines, settlements and other amounts actually and reasonably incurred if the agent acted in good faith and in a manner the agent believed to be in the best interests of the corporation and its shareholders. Such indemnification must be authorized by (1) a majority vote of a quorum of the board of directors consisting of directors who are not parties to the proceedings, (2) approval of the shareholders, with the shares owned by the person to be indemnified not being entitled to vote thereon or (3) the court in which the proceeding is or was pending upon application by designated parties. Under certain circumstances, a corporation can indemnify an agent even when the agent is found liable. Section 317 also allows a corporation to advance expenses to an agent for certain actions upon receiving an undertaking by the agent that he or she will reimburse the corporation if it is later determined that he or she is not entitled to be indemnified.

II-1

Item 16. Exhibits.

Exhibit No.	Description
1.1	Form of Underwriting Agreement.*
2.1	Agreement and Plan of Merger, dated as of August 21, 2001, by and between First Community Bancorp and Pacific Western National Bank (Exhibit 2.1 to Registration Statement No. 333-72634 filed on From S-3 on November 1, 2001 and incorporated herein by this reference).
2.2	Agreement and Plan of Merger, dated as of November 12, 2001, by and between First Community Bancorp and W.H.E.C., Inc. (Annex A to Registration Statement No. 333-76106 filed on From S-4/A on January 16, 2002 and incorporated herein by this reference).
2.3	Agreement and Plan of Merger, by and among First Community Bancorp, Rancho Santa Fe National Bank and First National Bank, dated as of April 25, 2002. The registrant agrees to furnish supplementally a copy of Exhibits A-E to the SEC upon request.
4.1	Articles of Incorporation of First Community Bancorp (Exhibit 3.1 to a Form 8-A filed on June 2, 2000 and incorporated herein by this reference).
4.2	Bylaws of First Community Bancorp.
5.1	Opinion of Sullivan & Cromwell.*
23.1	Consent of KPMG LLP (with respect to First Community Bancorp).
23.2	Consent of KPMG LLP (with respect to First National Bank).
23.3	Consent of KPMG LLP (with respect to Professional Bancorp).
23.4	Consent of Moss Adams LLP (with respect to Professional Bancorp).
23.5	Consent of Vavrinek, Trine, Day & Co. LLP. (with respect to Pacific Western National Bank).
23.6	Consent of Vavrinek, Trine, Day & Co. LLP. (with respect to W.H.E.C., Inc.).
23.7	Consent of Sullivan & Cromwell (included within Exhibit 5.1).
24.1	Power of Attorney (included on page II-4).

*

To be filed by amendment.

II-2

Item 17. Undertakings.

        (a)  The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (b)  Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

        (c)  The undersigned registrant hereby undertakes that:

        (1)  For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

        (2)  For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Brea, state of California, on this 11th day of June, 2002.

FIRST COMMUNITY BANCORP
By:	/s/  LYNN M. HOPKINS Lynn M. Hopkins Executive Vice President and Chief Financial Officer

        We, the undersigned directors and officers of First Community Bancorp (the "Company"), do hereby constitute and appoint Matthew Wagner and Lynn Hopkins, and each and either of them, our true and lawful attorneys-in-fact and agents, to do any and all acts and things in our name and our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our name in the capacities indicated below, which said attorneys and agents, or either of them, may deem necessary or advisable to enable said Company to comply with the Securities Act of 1933 and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with this registration statement, including specifically, but without limitation, any and all amendments, including post-effective amendments, hereto and any registration statement filed pursuant to Rule 462(b) with respect to; and we hereby ratify and confirm all that said attorneys and agents, or either of them, shall do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/  JOHN M. EGGEMEYER, III John M. Eggemeyer, III	Director and Chairman of the Board	June 11, 2002
/s/  MATTHEW P. WAGNER Matthew P. Wagner	President, Chief Executive Officer and Director (Principal Executive Officer)	June 11, 2002
/s/  LYNN M. HOPKINS Lynn M. Hopkins	Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	June 11, 2002
/s/  TIMOTHY B. MATZ Timothy B. Matz	Director	June 11, 2002

II-4

/s/  TIMOTHY L. BLIXSETH Timothy L. Blixseth	Director	June 11, 2002
/s/  ROBERT E. HERRMANN Robert E. Herrmann	Director	June 11, 2002
/s/  ROBERT A. SCHOELLHORN Robert A. Schoellhorn	Director	June 11, 2002
/s/  ROBERT A. STINE Robert A. Stine	Director	June 11, 2002
/s/  DAVID S. WILLIAMS David S. Williams	Director	June 11, 2002
/s/  HAROLD W. CLARK Harold W. Clark	Director	June 11, 2002
/s/  STEPHEN M. DUNN Stephen M. Dunn	Director	June 11, 2002
/s/  BARRY C. FITZPATRICK Barry C. Fitzpatrick	Director	June 11, 2002

II-5

Exhibit Index

Exhibit No.	Description
1.1	Form of Underwriting Agreement.*
2.1	Agreement and Plan of Merger, dated as of August 21, 2001, by and between First Community Bancorp and Pacific Western National Bank (Exhibit 2.1 to Registration Statement No. 333-72634 filed on From S-3 on November 1, 2001 and incorporated herein by this reference).
2.2	Agreement and Plan of Merger, dated as of November 12, 2001, by and between First Community Bancorp and W.H.E.C., Inc. (Annex A to Registration Statement No. 333-76106 filed on From S-4/A on January 16, 2002 and incorporated herein by this reference).
2.3	Agreement and Plan of Merger, by and among First Community Bancorp, Rancho Santa Fe National Bank and First National Bank, dated as of April 25, 2002. The registrant agrees to furnish supplementally a copy of Exhibits A-E to the SEC upon request.
4.1	Articles of Incorporation of First Community Bancorp (Exhibit 3.1 to a Form 8-A filed on June 2, 2000 and incorporated herein by this reference).
4.2	Bylaws of First Community Bancorp.
5.1	Opinion of Sullivan & Cromwell.*
23.1	Consent of KPMG LLP (with respect to First Community Bancorp).
23.2	Consent of KPMG LLP (with respect to First National Bank).
23.3	Consent of KPMG LLP (with respect to Professional Bancorp).
23.4	Consent of Moss Adams LLP (with respect to Professional Bancorp).
23.5	Consent of Vavrinek, Trine, Day & Co. LLP. (with respect to Pacific Western National Bank).
23.6	Consent of Vavrinek, Trine, Day & Co. LLP. (with respect to W.H.E.C., Inc.).
23.7	Consent of Sullivan & Cromwell (included within Exhibit 5.1).
24.1	Power of Attorney (included on page II-4).

*

To be filed by amendment.

II-6

QuickLinks

TABLE OF CONTENTS
PROSPECTUS SUMMARY
Acquisitions
The Offering
Summary Consolidated Financial Information
RISK FACTORS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
CAPITALIZATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Supplemental Operational Information
Analysis of Net Income
Analysis of Average Rates and Balances
Analysis of Volume and Interest Rates
Loans Repricing or Maturing as of December 31, 2001
Nonperforming Assets
Analysis of Allowance for Loan Losses
Allocation of Allowance for Loan Losses
Investment Portfolio
Analysis of Investment Yields and Maturities
Analysis of Average Deposits
Maturity of Time Deposits of $100,000 or More
Sensitivity for Net Interest Income (dollars in thousands)
Market Value of Portfolio Equity (dollars in thousands)
BUSINESS
VALIDITY OF COMMON STOCK
EXPERTS
UNDERWRITING
WHERE TO FIND MORE INFORMATION
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION

PART II

SIGNATURES
Exhibit Index

EX-2.3

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 2.3

AGREEMENT AND PLAN OF MERGER

dated as of April 25, 2002

by and among

First Community Bancorp

Rancho Santa Fe National Bank

and

First National Bank

TABLE OF CONTENTS

RECITALS		1
ARTICLE I CERTAIN DEFINITIONS
1.01.	Certain Definitions	1
ARTICLE II THE MERGER
2.01.	The Merger	6
2.02.	Effective Date and Effective Time	7
ARTICLE III CONSIDERATION; EXCHANGE PROCEDURES
3.01.	Effect on Capital Stock	7
3.02.	Conversion of Company Stock.	7
3.03.	Election and Proration Procedures.	8
3.04.	Rights as Shareholders; Stock Transfers	11
3.05.	No Fractional Shares	11
3.06.	Exchange Procedures	11
3.07.	Anti-Dilution Provisions	12
3.08.	Dissenters' Rights	13
ARTICLE IV ACTIONS PENDING ACQUISITION
4.01.	Forebearances of the Company	14
4.02.	Forebearances of Parent	16
ARTICLE V REPRESENTATIONS AND WARRANTIES
5.01.	Disclosure Schedules	17
5.02.	Standard	17
5.03.	Representations and Warranties of the Company	17
5.04.	Representations and Warranties of Parent	25
ARTICLE VI COVENANTS
6.01.	Reasonable Best Efforts	28
6.02.	Shareholder Approval	28
6.03.	Registration Statement	28
6.04.	Press Releases	29
6.05.	Access; Information	29
6.06.	Affiliates	30
6.07.	Acquisition Proposals	30
6.08.	Certain Policies	31
6.09.	Nasdaq Listing	31
6.10.	Regulatory Applications	31
6.11.	Indemnification	32
6.12.	Benefit Plans	33
6.13.	Non-competition Agreements	33
6.14.	Notification of Certain Matters	33

i

6.15.	Parent Approval	33
6.16.	Human Resources Issues	33
6.17.	Assistance with Third-Party Agreements	33
6.18.	Shareholder Agreements	34
6.19.	Additional Agreements	34
6.20.	Pre-Closing Adjustments	34
6.21.	Company Stock Options.	35
6.22.	Rights	35
6.23.	Audited Company Financial Statements	36
6.24.	Tax Treatment of the Merger	36
6.25.	Due Diligence	36
6.26.	Diligence Fee	36
6.27.	Severance Arrangements	36
6.28.	Preferred Stock Dividends	37
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER
7.01.	Conditions to Each Party's Obligation to Effect the Merger	37
7.02.	Conditions to Obligation of the Company	38
7.03.	Conditions to Obligation of Parent	38
ARTICLE VIII TERMINATION
8.01.	Termination	40
8.02.	Effect of Termination and Abandonment	42
ARTICLE IX MISCELLANEOUS
9.01.	Survival	43
9.02.	Waiver; Amendment	43
9.03.	Counterparts	43
9.04.	Governing Law, Jurisdiction and Venue	43
9.05.	Expenses	43
9.06.	Notices	43
9.07.	Entire Understanding; No Third Party Beneficiaries	44
9.08.	Effect	44
9.09.	Severability	44
9.10.	Enforcement of the Agreement	45
9.11.	Interpretation	45

EXHIBIT A	Form of Shareholder Agreement
EXHIBIT A1	List of Shareholders
EXHIBIT B	Form of Company Affiliates Agreement
EXHIBIT C	Form of Non-Competition Agreement
EXHIBIT C1	List of Persons signing Non-Competition Agreements
EXHIBIT D	Form of Agreement to Merge
EXHIBIT E	Form of Severance Agreement
Disclosure Schedule

ii

AGREEMENT AND PLAN OF MERGER, dated as of April 25, 2002 (this "Agreement"), by and among First National Bank, a national banking association with its principal place of business in San Diego, California (the "Company"), First Community Bancorp, a California corporation ("Parent") and Rancho Santa Fe National Bank, a national banking association ("Parent Bank").

RECITALS

        A.    The Company.    The Company is a national banking association having its principal place of business in San Diego, California.

        B.    Parent.    Parent is a California corporation, having its principal place of business in Rancho Santa Fe, California.

        C.    Parent Bank.    Parent Bank is a national banking association, all of the outstanding capital stock of which is owned by Parent.

        D.    Intentions of the Parties.    It is the intention of the parties to this Agreement that the business combination contemplated hereby be accounted for under the purchase accounting method and be treated as a "reorganization" under Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").

        E.    Board Action.    The respective Boards of Directors of each of Parent, Parent Bank and the Company have determined that it is in the best interests of their respective companies and their shareholders to consummate the strategic business combination transaction provided for herein.

        F.    Shareholder Agreements.    As a condition to, and simultaneously with, the execution of this Agreement, each of the Persons listed on Exhibit A1 hereto (each, a "Shareholder") is entering into an agreement, in the form of Exhibit A hereto, (collectively, the "Shareholder Agreements") pursuant to which they have agreed, among other things, to vote their shares in favor of this Agreement and the Merger.

        G.    Non-Competition Agreements.    As a condition to, and simultaneously with, the execution of this Agreement each of the Persons listed on Exhibit C1 hereto are entering into non-competition agreements with Parent in the form of Exhibit C, hereto (collectively, the "Non-Competition Agreements").

NOW, THEREFORE, in consideration of the premises and of the mutual covenants, representations, warranties and agreements contained herein the parties agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

        1.01.    Certain Definitions.    The following terms are used in this Agreement with the meanings set forth below:

        "Acquisition Proposal" has the meaning set forth in Section 6.07.

        "Adjusted Shareholders' Equity" has the meaning set forth in Section 7.03(e).

        "Advisory Director" means a director on the Company's Board of Advisors.

        "Agreement" means this Agreement, as amended or modified from time to time in accordance with Section 9.02.

        "Agreement of Merger" has the meaning set forth in Section 2.01(b).

        "ALL" has the meaning set forth in Section 5.03(t).

        "Bank Insurance Fund" means the Bank Insurance Fund maintained by the FDIC.

1

        "Bank Merger Act" means the Bank Merger Act, as amended.

        "Bank Secrecy Act" means the Currency and Foreign Transaction Reporting Act (31 U.S.C Section 5311 et seq.) as amended.

        "Benefit Plans" has the meaning set forth in Section 5.03(m).

        "BHC Act" means the Bank Holding Company Act of 1956, as amended.

        "Business Combination" has the meaning set forth in Section 3.07.

        "Business Day" means Monday through Friday of each week, except a legal holiday recognized as such by the U.S. Government or any day on which banking institutions in the State of California are authorized or obligated to close.

        "California Secretary" means the California Secretary of State.

        "Cash Election" has the meaning set forth in Section 3.03.

        "Cash Proration Factor" has the meaning set forth in Section 3.03.

        "CGCL" means the California General Corporation Law.

        "Closing Financial Statements" has the meaning set forth in Section 7.03.

        "Closing Price" has the meaning set forth in Section 3.03.

        "Code" has the meaning set forth in the recitals to this Agreement.

        "Combination Cash Election" has the meaning set forth in Section 3.03.

        "Combination Stock Election" has the meaning set fort in Section 3.03.

        "Commissioner" means the California Commissioner of Financial Institutions.

        "Community Reinvestment Act" means the Community Reinvestment Act of 1977, as amended.

        "Company" has the meaning set forth in the preamble to this Agreement.

        "Company Affiliates" has the meaning set forth in Section 6.06.

        "Company Articles" means the Articles of Association of the Company, as amended.

        "Company Board" means the Board of Directors of the Company.

        "Company By-Laws" means the By-Laws of the Company.

        "Company Common Stock" means the common stock, par value $1.00 per share, of the Company.

        "Company Loan Property" has the meaning set forth in Section 5.03(o).

        "Company Meeting" has the meaning set forth in Section 6.02.

        "Company OCC Agreement" means the written agreement, dated as of January 18, 2001, between the Company and the OCC.

        "Company Preferred Stock" means the Series A Convertible Preferred Stock, par value $1.00 per share, of the Company.

        "Company Stock" means the Company Common Stock and the Company Preferred Stock.

        "Company Stock Options" means the options to acquire Company Common Stock issued under the Company's Stock Option Plan.

        "Costs" has the meaning set forth in Section 6.11(a).

2

        "Derivatives Contract" has the meaning set forth in Section 5.03(q).

        "Determination Date" shall mean the date on which the last required approval of a Governmental Entity is obtained with respect to the Merger, without regard to any requisite waiting period.

        "Disclosure Schedule" has the meaning set forth in Section 5.01.

        "Diligence Ending Time" has the meaning set forth in Section 6.25.

        "Diligence Check" has the meaning set forth in Section 6.26.

        "Diligence Fee" has the meaning set forth in Section 6.26.

        "Dissenters' Shares" means shares of Company Stock held by a Company shareholder with respect to which such shareholder, in accordance with the National Bank Act, perfects such shareholder's right to dissent to the Merger.

        "Dissenting Shareholder" means any holder of Dissenters' Shares.

        "Due Diligence Request List" means the list, previously provided by Parent to the Company, containing information requested of the Company by Parent.

        "Effective Date" has the meaning set forth in Section 2.02.

        "Effective Time" has the meaning set forth in Section 2.02.

        "Election" has the meaning set forth in Section 3.03.

        "Election Deadline" has the meaning set forth in Section 3.03.

        "Election Form" has the meaning set forth in Section 3.03

        "Election Form Record Date" has the meaning set forth in Section 3.03.

        "Eligible Participant" has the meaning set forth in Section 6.21.

        "Employees" has the meaning set forth in Section 5.03(m).

        "Environmental Laws" has the meaning set forth in Section 5.03(o).

        "Equal Credit Act" means the Equal Credit Act (15 U.S.C. Section 1691 et seq.) as amended.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

        "ERISA Affiliate" has the meaning set forth in Section 5.03(m).

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

        "Exchange Agent" has the meaning set forth in Section 3.03(a).

        "Exchange Fund" has the meaning set forth in Section 3.06(a).

        "Exchange Ratio" has the meaning set forth in Section 3.02.

        "Fair Housing Act" means the Fair Housing Act (420 U.S.C. Section 3601, et seq.), as amended.

        "FDIC" means the Federal Deposit Insurance Corporation.

        "Federal Reserve Act" means the Federal Reserve Act, as amended.

        "Federal Reserve Board" means the Board of Governors of the Federal Reserve System.

        "Floor Price" means $19.97 per share of Parent Common Stock, as quoted on Nasdaq.

        "GAAP" means generally accepted accounting principles.

3

        "GTB" means the Company's wholly owned subsidiary, Generations Trust Bank, N.A.

        "Governmental Authority" means any court, administrative agency or commission or other federal, state or local governmental authority or instrumentality.

        "GTB Transaction" has the meaning set forth in Section 4.01(a).

        "Hazardous Substance" has the meaning set forth in Section 5.03(o).

        "Home Mortgage Disclosure Act" means the Home Mortgage Disclosure Act (12 U.S.C. Section 2801 et seq.), as amended.

        "Indemnified Party" has the meaning set forth in Section 6.11(a).

        "Insurance Amount" has the meaning set forth in Section 6.11(b).

        "Insurance Policies" has the meaning set forth in Section 5.03(s).

        "Lien" means any charge, mortgage, pledge, security interest, restriction, claim, lien or encumbrance.

        "Mailing Date" has the meaning set forth in Section 3.03.

        "Material Adverse Effect" means, with respect to Parent or the Company any effect that (i) is material and adverse to the financial position, results of operations, business or prospects of Parent and its Subsidiaries taken as a whole or the Company, as the case may be, or (ii) would materially impair the ability of either Parent or the Company to perform its obligations under this Agreement or otherwise materially threaten or materially impede the consummation of the Merger and the other transactions contemplated by this Agreement; provided, however, that Material Adverse Effect shall not be deemed to include the impact of (a) changes in banking and similar laws of general applicability or interpretations thereof by Governmental Authorities, (b) changes in GAAP or regulatory accounting requirements applicable to banks and their holding companies generally, (c) changes in general economic conditions affecting banks and their holding companies generally, (d) any modifications or changes to valuation policies and practices in connection with the Merger or restructuring charges taken in connection with the Merger, in each case in accordance with GAAP and (e) with respect to the Company the effects of any action or omission taken with the prior consent of Parent.

        "Measuring Date" has the meaning set forth in Section 7.03(e)

        "Merger" has the meaning set forth in Section 2.01(a).

        "Merger Consideration" has the meaning set forth in Section 2.01(a).

        "Minimum Percentage" has the meaning set forth in Section 3.03(c).

        "Nasdaq" means The Nasdaq Stock Market, Inc.'s National Market System.

        "National Bank Act" means the National Bank Act, as amended.

        "National Labor Relations Act" means the National Labor Relations Act, as amended.

        "Non-Competition Agreements" has the meaning set forth in the recitals to this Agreement.

        "OCC" means the Office of the Comptroller of the Currency.

        "Parent Articles" means the Articles of Incorporation of Parent, as amended.

        "Parent Bank" has the meaning set forth in the preamble to this Agreement.

        "Parent Bank Board" means the Board of Directors of Parent Bank.

        "Parent Bank Stock" means the stock, par value $2.50 per share, of Parent Bank.

4

        "Parent Board" means the Board of Directors of Parent.

        "Parent By-Laws" means the By-Laws of Parent.

        "Parent Common Stock" means the common stock, no par value per share, of Parent.

        "Parent Loan Property" has the meaning set forth in Section 5.04(j).

        "Parent Meeting" has the meaning set forth in Section 6.02.

        "Pension Plan" has the meaning set forth in Section 5.03(m).

        "Per Share Cash Consideration" has the meaning set forth in Section 3.02.

        "Person" means any individual, bank, corporation, partnership, association, joint-stock company, business trust, limited liability company or unincorporated organization.

        "Proxy Statement" has the meaning set forth in Section 6.03(a).

        "Registration Statement" has the meaning set forth in Section 6.03(a).

        "Regulatory Authorities" has the meaning set forth in Section 5.03(i).

        "Regulatory Filings" has the meaning set forth in Section 5.03(g).

        "Replacement Option" has the meaning set forth in Section 6.21.

        "Rights" means, with respect to any Person, securities or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, or any options, calls or commitments relating to, or any stock appreciation right or other instrument the value of which is determined in whole or in part by reference to the market price or value of, shares of capital stock of such Person; provided, however, that Rights does not include any Company Stock Options.

        "SEC" means the United States Securities and Exchange Commission.

        "SEC Documents" has the meaning set forth in Section 5.04(g).

        "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

        "Senior Employee" has the meaning set forth in Section 6.27.

        "Shareholder" has the meaning set forth in the recitals to this Agreement.

        "Shareholder Agreements" has the meaning set forth in the recitals to this Agreement.

        "Stock Amount" has the meaning set forth in Section 3.03.

        "Stock Election" has the meaning set forth in Section 3.03.

        "Stock Option Plan" means the Company's 1998 Incentive Stock Option Plan and Nonqualified Stock Option Plan, as amended.

        "Stock Proration Factor" has the meaning set forth in Section 3.03.

        "Subsidiary" and "Significant Subsidiary" have the meanings ascribed to those terms in Rule 1-02 of Regulation S-X of the SEC.

        "Surviving Bank" has the meaning set forth in Section 2.01(a).

        "Tax" and "Taxes" mean all federal, state, local or foreign taxes, charges, fees, levies or other assessments, however denominated, including, without limitation, all net income, gross income, gains, gross receipts, sales, use, ad valorem, goods and services, capital, production, transfer, franchise, windfall profits, license, withholding, payroll, employment, disability, employer health, excise, estimated,

5

severance, stamp, occupation, property, environmental, unemployment or other taxes, custom duties, fees, assessments or charges of any kind whatsoever, imposed on the income, properties or operations of the Company or its Subsidiary by any taxing authority whether arising before, on or after the Effective Date, together with any interest, additions or penalties thereto and any interest in respect of such interest and penalties.

        "Tax Returns" means any return, amended return or other report (including elections, declarations, disclosures, schedules, estimates and information returns) required to be filed on or before the Effective Date with respect to any Taxes of the Company.

        "Termination Fee" has the meaning set forth in Section 8.02.

        "Treasury Shares" shall mean shares of Company Stock held by the Company or by Parent or any of its Subsidiaries, in each case other than in a fiduciary (including custodial or agency) capacity or as a result of debts previously contracted in good faith.

        "Trust Instruments" has the meaning set forth in Section 5.03(u).

        "Trust Relationships" has the meaning set forth in Section 5.03(u).

        "Undesignated Shares" has the meaning set forth in Section 3.03.

        "USA Patriot Act" means the USA Patriot Act (Pub. L. No. 107-56).

ARTICLE II

THE MERGER

        2.01.    The Merger    (a) The Combination. At the Effective Time, the Company shall merge with and into Parent Bank (the "Merger"), the separate corporate existence of the Company shall cease and Parent Bank shall survive and continue to exist as a bank, organized under the laws of the United States (Parent Bank, as the Surviving Bank in the Merger, sometimes being referred to herein as the "Surviving Bank"). Parent may, at any time prior to the Effective Time (including, to the extent permitted by applicable law, after the Company's shareholders have approved this Agreement), change the method of effecting the combination of Parent Bank with the Company (including, without limitation, the provisions of this Article 2 and including, without limitation, by electing not to merge the Company with any of its existing Subsidiaries, but rather with a merger subsidiary of Parent) if and to the extent it deems such change to be necessary, appropriate or desirable; provided, however, that no such change shall (i) alter or change the amount or kind of consideration to be issued to holders of Company Stock as provided for in this Agreement (the "Merger Consideration"), (ii) adversely affect the tax treatment of the Company's shareholders as a result of receiving the Merger Consideration, (iii) impede or delay consummation of the transactions contemplated by this Agreement or (iv) otherwise be materially prejudicial to the interests of the shareholders of the Company.

        (b)    Filings.    Subject to the satisfaction or waiver of the conditions set forth in Article 7, the Merger shall become effective upon the Effective Date, as specified in the notice filed with the OCC in accordance with OCC regulations. Prior to or contemporaneously with the filing of such notice, an executed agreement of merger ("Agreement of Merger") in form acceptable to the OCC shall be filed pending occurrence of the Effective Date.

        (c)    Articles of Association and By-Laws.    The articles of association and by-laws of the Surviving Bank immediately after the Merger shall be those of Parent Bank as in effect immediately prior to the Effective Time.

        (d)    Directors and Officers of the Surviving Bank.    The directors and officers of Parent Bank immediately after the Merger shall be the directors and officers of Parent Bank immediately prior to the Effective Time, until such time as their successors shall be duly elected and qualified.

6

        (e)    Effect of the Merger.    At the Effective Time, the effect of the Merger shall be as provided in 12 U.S.C. §215a, including any regulations or rules promulgated thereunder. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of the Company shall vest in the Surviving Bank, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Company shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Bank.

        2.02.    Effective Date and Effective Time.    Subject to the satisfaction or waiver of the conditions set forth in Article 7 (other than those conditions that by their nature are to be satisfied at the consummation of the Merger, but subject to the fulfillment or waiver of those conditions), the parties shall cause the filings contemplated by Section 2.01 to be made (i) no later than the third Business Day after such satisfaction or waiver or (ii) such other date to which the parties may agree in writing. The Merger provided for herein shall become effective upon such filing or filings or on such date as may be specified therein in accordance with OCC regulations. The date of such effectiveness is herein called the "Effective Date". The "Effective Time" of the Merger shall be the time as set forth in such filing.

ARTICLE III

CONSIDERATION; EXCHANGE PROCEDURES

        3.01.    Effect on Capital Stock.    Subject to the other provisions of this Article 3, at the Effective Time of the Merger, by virtue of the Merger and without any additional action on the part of the holders of shares of Parent Common Stock and Parent Bank Stock:

        (a)    Parent Common Stock.    Each share of Parent Common Stock, issued and outstanding immediately prior to the Effective Time of the Merger shall remain an issued and outstanding share of common stock of Parent, and shall not be affected by the Merger;

        (b)    Parent Bank Stock.    Each share of Parent Bank Stock, issued and outstanding immediately prior to the Effective Time of the Merger shall remain an issued and outstanding share of common stock of the Surviving Bank, and shall not be affected by the Merger;

        (c)    Company Common Stock.    Each share of Company Common Stock, issued and outstanding immediately prior to the Effective Time of the Merger (other than Dissenters' Shares and Treasury Shares, as defined below) shall be converted into the right to receive Parent Common Stock or cash as provided in Section 3.02(a);

        (d)    Company Preferred Stock.    Each share of Company Preferred Stock, issued and outstanding immediately prior to the Effective Time of the Merger (other than shares of Dissenters' Shares and Treasury Shares, as defined below) shall be converted into the right to receive Parent Common Stock or cash as provided in Section 3.02(a);

        (e)    Dissenter's Shares.    All shares of Company Stock that are "dissenting shares" within the meaning of 12 U.S.C. 215a ("Dissenters' Shares") shall not be converted into or represent a right to receive Parent Common Stock or cash hereunder unless and until such shares have lost their status as dissenting shares under 12 U.S.C. 215a, at which time such shares shall either be converted into cash or Parent Common Stock pursuant to Section 3.08; and

        (f)    Cancellation of Certain Shares.    Any shares of Company Stock held by Parent (or any of its Subsidiaries) or by the Company, other than those held in a fiduciary capacity or as a result of debts previously contracted ("Treasury Shares"), shall be canceled and retired at the Effective Time of the Merger and no consideration shall be issued in exchange therefore.

        3.02.    Conversion of Company Stock.

        (a)  Subject to the other provisions of this Article 3, each share of Company Stock issued and outstanding immediately prior to the Effective Time of the Merger (other than Dissenters' Shares and

7

Treasury Shares) shall, by virtue of the Merger, be converted into the right to receive, at the election of the holder thereof as provided in Section 3.03, either:

        (i)    0.5008 of a share of Parent Common Stock (the "Exchange Ratio"); or

        (ii)  cash in the amount of $10.00 (such amount, the "Per Share Cash Consideration");

        (b)  At the Effective Time of the Merger, the stock transfer books of the Company shall be closed as to holders of Company Stock immediately prior to the Effective Time of the Merger and no transfer of Company Stock by any such holder shall thereafter be made or recognized. If, after the Effective Time of the Merger, certificates are properly presented in accordance with Article 3 of this Agreement to the Exchange Agent (as defined in Section 3.03), such certificates shall be canceled and exchanged for certificates representing the number of whole shares of Parent Common Stock, if any, and/or a check representing the amount of cash, if any, into which the Company Stock represented thereby was converted in the Merger, plus any payment for a fractional share of Parent Common Stock.

        3.03.    Election and Proration Procedures.

        (a)    Election Forms and Types of Elections.    An election form and other appropriate and customary transmittal materials (which shall specify that delivery shall be effected, and risk of loss and title to the certificates theretofore representing shares of Company Stock shall pass, only upon proper delivery of such certificates to the Exchange Agent selected by Parent (the "Exchange Agent")) in such form as designated by Parent (the "Election Form") shall be mailed no less than forty days prior to the Effective Time of the Merger or on such other date as Parent and the Company shall mutually agree (the "Mailing Date") to each holder of record of Company Stock as of a date which is at least five Business Days prior to the Mailing Date (the "Election Form Record Date"). Parent shall make available one or more Election Forms as may be reasonably requested by all persons who become holders (or beneficial owners) of Company Stock after the Election Form Record Date and prior to the Election Deadline (as defined herein), and the Company shall provide to the Exchange Agent all information reasonably necessary for it to perform its obligations as specified herein. Each Election Form shall permit the holder (or the beneficial owner through appropriate and customary documentation and instructions) to elect (an "Election") to receive either (i) Parent Common Stock (a "Stock Election") with respect to all of such holder's Company Stock, or (ii) cash (a "Cash Election") with respect to all of such holder's Company Stock, or (iii) Parent Common Stock in exchange for a specified number of shares of Company Stock (a "Combination Stock Election") and cash in exchange for a specified number of shares of Company Stock (a "Combination Cash Election"). Any Company Stock (other than Dissenters' Shares or Treasury Shares) with respect to which the holder (or the beneficial owner, as the case may be) shall not have submitted to the Exchange Agent, an effective, properly completed Election Form received prior to the Election Deadline shall be deemed to be "Undesignated Shares" hereunder.

        (b)    Proper and Timely Election.    Any Election shall have been properly made and effective only if the Exchange Agent shall have actually received a properly completed Election Form by 5:00 P.M. on the later of the 30th day following the Mailing Date or such other time and date as the Company and Parent may mutually agree (the "Election Deadline"). An Election Form shall be deemed properly completed only if an Election is indicated for each share of Company Stock covered by such Election Form and if accompanied by one or more certificates (or customary affidavits and indemnification regarding the loss or destruction of such certificates or the guaranteed delivery of such certificates) representing all shares of Company Stock covered by such Election Form, together with duly executed transmittal materials included in or required by the Election Form. Any Election Form may be revoked or changed by the person submitting such Election Form at or prior to the Election Deadline. In the event an Election Form is revoked prior to the Election Deadline, the shares of Company Stock represented by such Election Form shall automatically become Undesignated Shares unless and until a new Election is properly made with respect to such shares on or before the Election Deadline, and

8

Parent shall cause the certificates representing such shares of Company Stock to be promptly returned without charge to the person submitting the revoked Election Form upon written request to that effect from the holder who submitted such Election Form. Subject to the terms of this Agreement and of the Election Form, the Exchange Agent shall have reasonable discretion to determine whether any election, revocation or change has been properly or timely made and to disregard immaterial defects in the Election Forms, and any decisions of Parent and Company required by the Exchange Agent and made in good faith in determining such matters shall be binding and conclusive. Neither Parent nor the Exchange Agent shall be under any obligation to notify any person of any defect in an Election Form.

        (c)    Payment and Proration.    As promptly as practicable but not later than five Business Days after the Effective Time of the Merger, Parent shall cause the Exchange Agent to effect the allocation among the holders of Company Stock of rights to receive Parent Common Stock or cash in the Merger in accordance with the Election Forms as follows:

        (i)    if the aggregate number of shares of Company Stock as to which Stock Elections and Combination Stock Elections shall have effectively been made results in the issuance of 2,762,662 shares of Parent Common Stock (the "Stock Amount") in exchange for shares of Company Stock (assuming all other shares of Company Stock other than Treasury Shares receive the Per Share Cash Consideration), then:

        (A)  Each holder of Company Stock who made an effective Stock Election or Combination Stock Election shall receive the number of shares of Parent Common Stock equal to the product of the Exchange Ratio multiplied by the number of shares of Company Stock covered by such Stock Election or Combination Stock Election; and

        (B)  Each holder of Company Stock who made an effective Cash Election or Combination Cash Election, and each holder of Undesignated Shares shall receive the Per Share Cash Consideration.

        (ii)  if the aggregate number of shares of Company Stock as to which Stock Elections and Combination Stock Elections shall have effectively been made exceeds, and is not approximately equal to the Stock Amount (assuming all other shares of Company Stock other than Treasury Shares receive the Per Share Cash Consideration), then:

        (A)  Each holder of Company Stock who made an effective Cash Election or Combination Cash Election shall receive the Per Share Cash Consideration;

        (B)  All Undesignated Shares shall be deemed to have made Cash Elections; and

        (C)  A stock proration factor (the "Stock Proration Factor") shall be determined by dividing (1) the Stock Amount by (2) the number of shares of Parent Common Stock which would be issued based on the product of the Exchange Ratio and the number of shares of Company Stock with respect to which effective Stock Elections and Combination Stock Elections were made. Each holder of Company Stock who made an effective Stock Election or Combination Stock Election shall be entitled to:

        (I)  the number of shares of Parent Common Stock equal to the product of (x) the Exchange Ratio, multiplied by (y) the number of shares of Company Stock covered by such Stock Election or Combination Stock Election, multiplied by (z) the Stock Proration Factor, and

        (II)  cash in an amount equal to the product of (x) the Per Share Cash Consideration, multiplied by (y) the number of shares of Company Stock covered by such Stock Election or Combination Stock Election, multiplied by (z) one minus the Stock Proration Factor.

9

        (iii)  if the aggregate number of shares of Company Stock as to which Stock Elections and Combination Stock Elections shall have effectively been made shall be less than the Stock Amount (assuming all other shares of Company Stock other than Treasury Shares receive the Per Share Cash Consideration), then:

        (A)  Each holder of Company Stock who made an effective Stock Election or Combination Stock Election shall receive the number of shares of Parent Common Stock equal to the product of the Exchange Ratio multiplied by the number of shares of Company Stock covered by such Stock Election or Combination Stock Election;

        (B)  The Exchange Agent shall select by lot such number of holders of Undesignated Shares (other than holders of Undesignated Shares who voted against the Merger or gave notice in writing that the holder dissents as required by 12 U.S.C. 215a prior to the meeting of shareholders to be held pursuant to Section 6.02) to receive Parent Common Stock as shall be necessary so that the shares of Parent Common Stock to be received by those holders, when combined with the number of shares for which a Stock Election or Combination Stock Election has been made shall be equal to the Stock Amount. If all of said Undesignated Shares plus all shares as to which Stock Elections and Combination Stock Elections have been made together are less than, and not approximately equal to, the Stock Amount, then:

        (C)  A cash proration factor (the "Cash Proration Factor") shall be determined by dividing (1) the amount which is the difference between (x) the Stock Amount and (y) the number of shares of Parent Common Stock which would be issued based on the product of the Exchange Ratio and the sum of the number of shares of Company Stock with respect to which effective Stock Elections and Combination Stock Elections were made and the number of Undesignated Shares selected pursuant to subparagraph (ii)(B) above by (2) the product of the Exchange Ratio and the number of shares of Company Stock with respect to which effective Cash Elections and Combination Cash Elections were made. Each holder of Company Stock who made an effective Cash Election or Combination Cash Election shall be entitled to:

        (I)  cash equal to the product of (x) the Per Share Cash Consideration, multiplied by (y) the number of shares of Company Stock covered by such Cash Election or Combination Cash Election, multiplied by (z) one minus the Cash Proration Factor, and

        (II)  the number of shares of Parent Common Stock equal to the product of (x) the Exchange Ratio, multiplied by (y) the number of shares of Company Stock covered by such Cash Election or Combination Cash Election, multiplied by (z) the Cash Proration Factor.

        (iv)  Notwithstanding any other provision of this Agreement, if after applying the allocation rules set forth in the preceding subsections of this Section 3.03, the aggregate value of the Parent Common Stock that would be issued pursuant to the Merger (valued at the closing price (excluding after-market trading) of Parent Common Stock on the date on which the Effective Time of the Merger occurs (the "Closing Price")) is less than 45% of the aggregate value of the total consideration (which total consideration shall include cash paid or anticipated to be paid to Dissenting Shareholders) to be paid in exchange for Company Stock (the "Minimum Percentage"), Parent shall be authorized to reallocate, in good faith and in such a manner as it reasonably determines to be fair and equitable, shares of Parent Common Stock and cash among the holders of Company Stock, or to vary the number of shares of Parent Common Stock to be issued in the Merger, in a manner such that the number of shares of Parent Common Stock to be issued in the Merger shall not be less than the Stock Amount and such Stock Amount shall not represent less than the Minimum Percentage.

10

        (d)    Calculations.    Any calculation of a portion of a share of Parent Common Stock shall be rounded to the nearest ten-thousandth of a share, and any cash payment shall be rounded to the nearest cent. For purposes of this Section 3.03, the shares of Parent Common Stock issued for Company Stock as consideration in the Merger shall be deemed to be "approximately equal" to the Stock Amount if such number is within 1,000 shares of Parent Common Stock of such amount.

        3.04.    Rights as Shareholders; Stock Transfers.    At the Effective Time, holders of Company Stock shall cease to be, and shall have no rights as, shareholders of the Company other than to receive the consideration provided under this Article 3. After the Effective Time, there shall be no transfers on the stock transfer books of the Company or the Surviving Bank of shares of Company Stock.

        3.05.    No Fractional Shares.    Notwithstanding any other provision hereof, no fractional shares of Parent Common Stock and no certificates or scrip therefore, or other evidence of ownership thereof, will be issued in the Merger; instead, Parent shall pay to each holder of Company Stock who would otherwise be entitled to a fractional share of Parent Common Stock (after taking into account all certificates of Company Stock delivered by such holder) an amount in cash (without interest) determined by multiplying such fraction by the Closing Price. No holder will be entitled to dividends, voting rights or any other rights as a shareholder in respect of any fractional share of Parent Common Stock.

        3.06.    Exchange Procedures.    (a) Exchange Agent. No later than the Effective Time of the Merger, Parent shall deposit with the Exchange Agent the number of shares of Parent Common Stock issuable in the Merger and the amount of cash payable in the Merger (the "Exchange Fund"). The Exchange Agent shall not be entitled to vote or exercise any rights of ownership with respect to Parent Common Stock held by it from time to time hereunder, except that it shall receive and hold all dividends or other distributions paid or distributed with respect to such shares for the account of the persons entitled thereto.

        (b)    Exchange of Certificates and Cash.    After completion of the allocation procedure set forth in Section 3.03, each holder of a certificate formerly representing Company Stock (other than Dissenters' Shares or Treasury Shares) who surrenders or has surrendered such certificate (or customary affidavits and indemnification regarding the loss or destruction of such certificate), together with duly executed transmittal materials included in or required by the Election Form, to the Exchange Agent shall, upon acceptance thereof be entitled to a certificate representing Parent Common Stock and/or cash into which the shares of Company Stock shall have been converted pursuant hereto, as well as cash in lieu of any fractional shares of Parent Common Stock to which such holder would otherwise be entitled. The Exchange Agent shall accept such Company certificate upon compliance with such reasonable and customary terms and conditions as the Exchange Agent may impose to effect an orderly exchange thereof in accordance with normal practices. Until surrendered as contemplated by this Section 3.06, each certificate representing Company Stock shall be deemed from and after the Effective Time of the Merger to evidence only the right to receive cash and/or Parent Common Stock, as the case may be, upon such surrender. Parent shall not be obligated to deliver the consideration to which any former holder of Company Stock is entitled as a result of the Merger until such holder surrenders his certificate or certificates representing such shares of Company Stock for exchange as provided in this Article 3. If any certificate for shares of Company Stock, or any check representing cash and/or declared but unpaid dividends, is to be issued in a name other than that in which a certificate surrendered for exchange is issued, the certificate so surrendered shall be properly endorsed and otherwise in proper form for transfer and the person requesting such exchange shall affix any requisite stock transfer tax stamps to the certificate surrendered or provide funds for their purchase or establish to the satisfaction of the Exchange Agent that such taxes are not payable.

        (c)    Affiliates.    Certificates surrendered for exchange by any person constituting an "affiliate" of Parent for purposes of Rule 145 under the Securities Act of 1933, as amended (the "Securities Act"),

11

shall not be exchanged for certificates representing whole shares of Parent Common Stock until Parent has received a written agreement from such person as provided in Section 6.06.

        (d)    No Liability.    Notwithstanding the foregoing, neither the Exchange Agent nor any party hereto shall be liable to any former holder of Company Stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.

        (e)    Voting and Dividends.    Former shareholders of record of the Company shall not be entitled to vote after the Effective Time of the Merger at any meeting of Parent shareholders until such holders have exchanged their certificates representing Company Stock for certificates representing Parent Common Stock in accordance with the provisions of this Agreement. Until surrendered for exchange in accordance with the provisions of this Section 3.06, each certificate theretofore representing shares of Company Stock (other than Dissenters' Shares and Treasury Shares) shall from and after the Effective Time of the Merger represent for all purposes only the right to receive shares of Parent Common Stock, cash in lieu of fractional shares and/or cash, as set forth in this Agreement. No dividends or other distributions declared or made after the Effective Time of the Merger with respect to Parent Common Stock with a record date after the Effective Time of the Merger shall be paid to the holder of any unsurrendered certificate of Company Stock with respect to the shares of Parent Common Stock represented thereby, until the holder of such certificate of Company Stock shall surrender such certificate. Subject to the effect of applicable laws, following surrender of any such certificates of Company Stock for which shares of Parent Common Stock are to be issued, there shall be paid to the holder of the certificates without interest, (i) the amount of any cash payable with respect to a fractional share of Parent Common Stock to which such holder is entitled pursuant to Section 3.05 and the amount of dividends or other distributions with a record date after the Effective Time of the Merger theretofore paid with respect to such whole shares of Parent Common Stock, and (ii) at the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time of the Merger but prior to surrender and a payment date subsequent to surrender payable with respect to such whole shares of Parent Common Stock.

        (f)    Unclaimed Portion of Exchange Fund.    Any portion of the Exchange Fund that remains unclaimed by the shareholders of the Company for six months after the Effective Time shall be paid to Parent. Any shareholders of the Company who have not theretofore complied with this Article 3 shall thereafter look only to Parent for payment of the shares of Parent Common Stock, cash in lieu of any fractional shares and unpaid dividends and distributions on Parent Common Stock deliverable in respect of each share of Company Stock such shareholder holds as determined pursuant to this Agreement, in each case, without any interest thereon.

        (g)    Withholding Rights.    Parent or the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Stock such amounts as Parent or the Exchange Agent is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign tax law. To the extent that amounts are so withheld by Parent or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Stock in respect of which such deduction and withholding was made by Parent or the Exchange Agent.

        3.07.    Anti-Dilution Provisions.    In the event Parent or the Company changes (or establishes a record date for changing) the number of shares of Parent Common Stock or Company Stock issued and outstanding prior to the Effective Date as a result of a stock split, stock dividend, recapitalization or similar transaction with respect to the outstanding Parent Common Stock or Company Stock, as the case may be, and the record date therefore shall be prior to the Effective Date, the Exchange Ratio shall be proportionately adjusted. If, between the date hereof and the Effective Time, Parent shall merge, be acquired or consolidate with, by or into any other corporation (a "Business Combination")

12

and the terms thereof shall provide that Parent Common Stock shall be converted into or exchanged for the shares of any other corporation or entity, then provision shall be made as part of the terms of such Business Combination so that shareholders of the Company who would be entitled to receive shares of Parent Common Stock pursuant to this Agreement shall be entitled to receive, in lieu of each share of Parent Common Stock issuable to such shareholders as provided herein, the same kind and amount of securities or assets as shall be distributable upon such Business Combination with respect to one share of Parent Common Stock (provided that nothing herein shall be construed so as to release the acquiring entity in any such Business Combination from its obligations under this Agreement as the successor to Parent).

        3.08.    Dissenters' Rights.    (a) Any Dissenting Shareholder who shall be entitled to be paid the value of such shareholder's shares of Company Stock, as provided in 12 U.S.C. 215a, shall not be entitled to the Merger Consideration in respect thereof provided for under Section 3.01 unless and until such Dissenting Shareholder shall have failed to perfect or shall have effectively withdrawn or lost such Dissenting Shareholder's right to dissent from the Merger under the National Bank Act, and shall be entitled to receive only the payment provided for by 12 U.S.C. 215a with respect to such Dissenters' Shares.

        (b)  If any Dissenting Shareholder shall fail to perfect or shall have effectively withdrawn or lost such right to dissent, each share of Company Stock of such Dissenting Shareholder shall be deemed to be an Undesignated Share and shall be converted at Parent's discretion into the right to receive the Per Share Cash Consideration or such number of shares of Parent Common Stock calculated pursuant to Subsection 3.03(c)(iii) by Parent to be necessary or appropriate to preserve the status of the Merger as a reorganization within the meaning of Section 368(a) of the Code.

13

ARTICLE IV

ACTIONS PENDING ACQUISITION

        4.01.    Forebearances of the Company.    From the date hereof until the Effective Time, except as expressly contemplated by this Agreement, without the prior written consent of Parent, the Company will not and will cause each of its Subsidiaries not to:

        (a)    Ordinary Course.    Except as set forth in Schedule 4.01(a) of the Disclosure Schedule, and pursuant to the terms of Section 6.17 hereof, conduct the business of the Company other than in the ordinary and usual course or fail to use its best efforts to preserve intact its business organizations and assets and maintain its rights, franchises and existing relations with customers, suppliers, employees and business associates, take any action that would adversely affect or delay the ability of the Company, Parent or any Subsidiaries of Parent to perform any of their obligations on a timely basis under this Agreement, or take any action that would be reasonably likely to have a Material Adverse Effect on the Company. Notwithstanding anything to the contrary, the Company shall be entitled to sell all or substantially all of the trust and fiduciary assets of GTB and the Company to a third party (the "GTB Transaction"), provided that Parent shall be entitled to review in advance of the execution thereof the final, written terms and agreement for the GTB Transaction and neither the Company nor GBT shall proceed with the GTB Transaction or execute any definitive agreement therefor without the prior consent of Parent. The Company shall not enter into any Item Processing Services Agreement between Union Bank of California and the Company or any similar agreement without prior written consent of Parent.

        (b)    Capital Stock.    Other than pursuant to the Rights and Company Stock Options set forth in Schedule 4.01(b) of the Disclosure Schedule and outstanding on the date hereof (i) issue, sell or otherwise permit to become outstanding, or authorize the creation of, any additional shares of stock or any Rights, (ii) enter into any agreement with respect to the foregoing or (iii) permit any additional shares of stock to become subject to grants of employee or director stock options, other Rights or similar stock-based employee rights. Notwithstanding the foregoing, the Company shall be entitled to amend any agreements existing prior to the date hereof covering such Rights which are outstanding and exercisable (as of the date hereof or pursuant to the terms of this Agreement) to provide for the cashless exercise of such Rights, provided, that no other material provisions of such agreements are amended except to the extent necessary to effectuate such cashless exercise provision.

        (c)    Dividends; Etc.    (i) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of stock or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock.

        (d)    Compensation; Employment Agreements; Etc.    Enter into or amend or renew any employment, consulting, severance or similar agreements or arrangements with any director, officer or employee of the Company or grant any salary or wage increase or increase any employee benefit (including incentive or bonus payments), except (i) for normal individual increases in compensation to employees in the ordinary course of business consistent with past practice, provided that no such increase shall result in an annual adjustment of more than 5%, (ii) for other changes that are required by applicable law, (iii) to satisfy contractual obligations existing as of the date hereof and set forth in Schedule 4.01(d) of the Disclosure Schedule, (iv) for grants of awards to newly hired employees consistent with past practice, or (v) notwithstanding anything listed on Schedule 5.03(m)(vii) to the Disclosure Schedule, make any payments that could be categorized a "parachute payment" (as described in Section 5.03(m)(vii)). The Company shall not terminate the employment of any Senior Employee without the prior consent of Parent.

        (e)    Hiring.    Hire any person as an employee of the Company or promote any employee, except (i) to satisfy contractual obligations existing as of the date hereof and set forth in Schedule 4.01(e) of

14

the Disclosure Schedule and (ii) persons hired to fill any vacancies arising after the date hereof and whose employment is terminable at the will of the Company, other than any person to be hired who would have a base salary, including any guaranteed bonus or any similar bonus, considered on an annual basis of more than $50,000.

        (f)    Benefit Plans.    Enter into, establish, adopt or amend (except (i) as may be required by applicable law or (ii) to satisfy contractual obligations existing as of the date hereof and set forth in Schedule 4.01(f) of the Disclosure Schedule) any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement, or any trust agreement (or similar arrangement) related thereto, in respect of any director, officer or employee of the Company or take any action to accelerate the vesting or exercisability of stock options, restricted stock or other compensation or benefits payable thereunder.

        (g)    Dispositions.    Except as set forth in Schedule 4.01(g) of the Disclosure Schedule, as permitted by Section 4.01(a) and in accordance with Section 6.17, sell, transfer, mortgage, encumber or otherwise dispose of or discontinue any of its assets, deposits, business or properties except in the ordinary course of business and in a transaction that, together with all other such transactions, is not material to the Company.

        (h)    Acquisitions.    Acquire (other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary and usual course of business consistent with past practice) all or any portion of the assets, business, deposits or properties of any other entity except in the ordinary course of business consistent with past practice and in a transaction that, together with all other such transactions, is not material to the Company.

        (i)    Capital Expenditures.    Except as set forth in Schedule 4.01(i) of the Disclosure Schedule, make any capital expenditures other than capital expenditures in the ordinary course of business consistent with past practice in amounts not exceeding $20,000 individually or $100,000 in the aggregate.

        (j)    Governing Documents.    Amend the Company Articles or Company By-Laws or amend the charter or other organizational documents of any Subsidiary of the Company.

        (k)    Accounting Methods.    Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP.

        (l)    Contracts.    Except as set forth in Schedule 4.01(l) of the Disclosure Schedule, as permitted under Section 4.01(a) or in accordance with Section 6.16, enter into, renew or terminate, or make any payment not then required under, any contract or agreement that calls for aggregate annual payments of $25,000 or more and which is not terminable at will or with 60 days or less notice without payment of a premium or penalty, other than loans and other transactions made in the ordinary course of the banking business.

        (m)    Claims.    Enter into any settlement or similar agreement with respect to, or take any other significant action with respect to the conduct of, any action, suit, proceeding, order or investigation to which the Company or any of its Subsidiaries is or becomes a party after the date of this Agreement, which settlement, agreement or action involves payment by the Company or any of its Subsidiaries of an amount, individually or for all such settlements, that is material to the Company and/or would impose any material restriction on the business of the Surviving Bank or create precedent for claims that are reasonably likely to be material to the Company.

        (n)    Adverse Actions.    (a) Take any action which could result in (i) any of its representations and warranties set forth in this Agreement being or becoming untrue at any time at or prior to the

15

Effective Time, (ii) any of the conditions to the Merger set forth in Article 7 not being satisfied or (iii) a material violation of any provision of this Agreement except as may be required by applicable law or regulation.

        (o)    Risk Management.    Except as required by applicable law or regulation or the OCC, (i) implement or adopt any material change in its interest rate and other risk management policies, procedures or practices, (ii) fail to follow its existing policies or practices with respect to managing its exposure to interest rate and other risk or (iii) fail to use commercially reasonable means to avoid any material increase in its aggregate exposure to interest rate risk.

        (p)    Indebtedness.    Incur any indebtedness for borrowed money (other than deposits, Federal Funds borrowings and borrowings from the Federal Home Loan Bank of San Francisco) or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person.

        (q)    Loans.    Make any loan, loan commitment or renewal or extension thereof to any Person which would, when aggregated with all outstanding loans, commitments for loans or renewals or extensions thereof made to such Person and any affiliate or immediate family member of such Person, exceed $500,000 (or $1,000,000 in the case of renewals of existing, passed rated credit) without submitting complete loan package information to the chief credit officer of Parent for review with a right of comment at least two full Business Days prior to taking such action.

        (r)    Investments.    (i) Other than in the ordinary course of business consistent with past practice in individual amounts not to exceed $500,000 or in securities transactions as provided in (ii) below, make any investment either by contributions to capital, property transfers or purchase of any property or assets of any Person or (ii) other than purchases of direct obligations of the United States of America or obligations of U.S. government agencies which are entitled to the full faith and credit of the United States of America, in any case with a remaining maturity at the time of purchase of two years or less, purchase or acquire securities of any type; provided, however, that in the case of investment securities, the Company may purchase investment securities if, within five Business Days after the Company requests in writing (which shall describe in detail the investment securities to be purchased and the price thereof) that Parent consent to making of any such purchase, Parent has approved such request in writing or has not responded in writing to such request.

        (s)    Taxes.    Take any action which would materially adversely affect the tax position of the Company or its successor after the Merger.

        (t)    Commitments.    Agree or commit to do any of the foregoing.

        4.02.    Forebearances of Parent.    From the date hereof until the Effective Time, except as expressly contemplated by this Agreement, without the prior written consent of the Company, Parent will not, and will cause each of its Subsidiaries not to:

        (a)    Ordinary Course.    Take any action reasonably likely to have an adverse effect on Parent's ability to perform any of its material obligations under this Agreement.

        (b)    Adverse Actions.    Knowingly take any action that is intended or is reasonably likely to result in (i) any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time at or prior to the Effective Time, (ii) any of the conditions to the Merger set forth in Article 7 not being satisfied or (iii) a material violation of any provision of this Agreement except as may be required by applicable law or regulation.

16

        (c)    Commitments.    Agree or commit to do any of the foregoing.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

        5.01.    Disclosure Schedules.    At least three Business Days prior to the date hereof, the Company shall have delivered to Parent a schedule (the "Disclosure Schedule") setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 5.03 or to one or more of its covenants contained in Article 4. Items listed on the Disclosure Schedule shall only be considered exceptions to the specific Sections for which such item is scheduled.

        5.02.    Standard.    No representation or warranty of the Company, Parent or Parent Bank contained in Sections 5.03 or 5.04, respectively, shall be deemed untrue or incorrect, and no party hereto shall be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, event or circumstance unless such fact, circumstance or event, individually or taken together with all other facts, events or circumstances inconsistent with any representation or warranty contained in Section 5.03 or 5.04, has had or is reasonably likely to have a Material Adverse Effect on the party making such representation or warranty.

        5.03.    Representations and Warranties of the Company.    Subject to Sections 5.01 and 5.02 and except as set forth in the Disclosure Schedule with respect to a particular Section, the Company hereby represents and warrants to Parent and Parent Bank:

        (a)    Organization, Standing and Authority.    The Company is a nationally chartered banking association. The Company is duly licensed by the OCC as a commercial bank and its deposits are insured by the FDIC through the Bank Insurance Fund in the manner and to the fullest extent provided by law. GTB is a wholly owned subsidiary of the Company and a national banking association. GTB is duly licensed by the OCC to engage in trust activities. The Company and each Subsidiary of the Company is duly qualified to do business in the State of California and any other foreign jurisdictions where its ownership or leasing of property or assets or the conduct of its business requires it to be so qualified.

        (b)    Company Capital Stock.    As of the date hereof, the authorized capital stock of the Company consists of 60,000,000 shares of Company Common Stock, of which 9,982,298 shares are issued and outstanding (which amount includes certain Bank of Southern California shares of common stock convertible into 19,300 shares of Company Common Stock and 139,260 shares of Company Common Stock issued on March 31, 2002 as a result of a dividend on the Company Preferred Stock), and 5,000,000 shares of preferred stock, of which 1,412,202 shares of Company Preferred Stock are issued and outstanding. As of the date hereof, no shares of the Company Stock were held in treasury by the Company or otherwise owned by the Company. The outstanding shares of Company Stock have been duly authorized and are validly issued and outstanding, and subject to no preemptive rights (and were not issued in violation of any preemptive rights). Section 5.03(b) of the Disclosure Schedule sets forth for each Company Stock Option the name of the grantee, the date of the grant, the expiration date of such Company Stock Options, the type of grant, the status of the option grant as qualified or non-qualified under Section 422 of the Code, the number of shares of Company Stock subject to each option, the number and type of shares subject to options that are currently exercisable and the exercise price per share. Section 5.03(b) of the Disclosure Schedule sets forth for each outstanding Right the name of the holder of the Right, the number of shares of Company Stock subject to such Right, the number and type of shares subject to such Right and the exercise price per share. Except as set forth in this Section 5.03(b), as of the date hereof, there are no shares of Company Stock authorized and reserved for issuance, the Company does not have any Rights issued or outstanding with respect to

17

Company Stock, and the Company does not have any commitment to authorize, issue or sell any Company Stock or Rights, except pursuant to this Agreement. Each share of Company Preferred Stock is convertible into one share of Company Common Stock. The Company Preferred Stock, without any action on the part of a holder of Company Preferred Stock, is not automatically convertible into Company Common Stock as a result of the Merger and the transactions contemplated hereby.

        (c)    Subsidiaries.

        (i)    Other than GTB, Bankshares Service Corporation, and F.N. Financial Services, the Company has no Subsidiaries. Each Subsidiary is a wholly owned Subsidiary of the Company.

        (ii)  The Company does not own beneficially, directly or indirectly, any equity securities or similar interests of any Person or any interests of any Person or any interest in a partnership or joint venture of any kind.

        (d)    Corporate Power.    The Company and each Subsidiary of the Company has the corporate power and authority to carry on its business as it is now being conducted and to own all its properties and assets; and the Company has the corporate power and authority and has taken all corporate action necessary to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby.

        (e)    Corporate Authority.    As of the date hereof, with respect to each of clauses (i), (ii) and (iii) below, the Company's board of directors, by resolutions duly adopted by unanimous vote at a meeting duly called and held, has duly (i) determined that this Agreement and the Merger are advisable and fair to and in the best interests of the Company and its shareholders, (ii) approved this Agreement the Merger and (iii) recommended that its shareholders approve this Agreement and the Merger and that such matter be submitted for consideration by its shareholders at a meeting of such shareholders. The Company has duly executed and delivered this Agreement and this Agreement is a valid and legally binding obligation of the Company, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors' rights or by general equity principles). The Company Board has received the written opinion of Keefe, Bruyette & Woods, Inc. to the effect that as of the date hereof the Merger Consideration is fair to the holders of Company Stock from a financial point of view.

        (f)    Regulatory Approvals; No Violations.    (i) No consents or approvals of, or waivers by, or filings or registrations with, any Governmental Authority or with any third party are required to be made or obtained by the Company or any Subsidiary of the Company in connection with the execution, delivery or performance by the Company of this Agreement or to consummate the Merger except for (A) filings of applications or notices with, and approvals or waivers by, the Federal Reserve Board, the FDIC, the OCC and any other Regulatory Authority, as may be required (including as may be required under the Company OCC Agreement), (B) filings with state securities authorities and (C) the approval of this Agreement by the holders of two-thirds of the outstanding shares of the Company Stock, voting as a single class on an as-converted basis. As of the date hereof, the Company is not aware of any reason why the approvals set forth in Section 7.01(b) will not be received without the imposition of a condition, restriction or requirement of the type described in Section 7.01(b).

        (ii)  Subject to receipt of the approvals referred to in the preceding paragraph, and the expiration of related waiting periods, and required filings under federal and state securities laws, the execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby and thereby do not and will not (A) constitute a breach or violation of, or a default under, or give rise to any Lien, any acceleration of remedies or any right of termination under, any law, rule or regulation or any judgment, decree, order, governmental permit or license, or agreement, indenture or instrument of the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries or any

18

of its respective properties is subject or bound, (B) constitute a breach or violation of, or a default under, the articles of association or by-laws (or similar governing documents) of the Company or any of its Subsidiaries or (C) subject to any requirements or conditions as a result of the Company OCC Agreement, require any consent or approval under any such law, rule, regulation, judgment, decree, order, governmental permit or license, agreement, indenture or instrument.

        (g)    Financial Reports; Undisclosed Liabilities.    (i) The consolidated balance sheet of the Company as of December 31, 2001, and the related consolidated statements of income, cash flow and changes in financial position of the Company for the three years then ended, audited by KPMG, LLP, fairly present the financial position of the Company and its Subsidiaries as of such dates and the results of the operations of the Company for the periods then ended, all in accordance with GAAP consistently applied (or in accordance with regulatory accounting principles to the extent different from GAAP and required by a Regulatory Authority to which the Company is subject). The books and records of the Company have been, and are being, maintained in accordance with GAAP and any other applicable legal and accounting requirements.

        (ii)  The Company and each Subsidiary of the Company has timely filed all reports, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file since December 31, 2001 with (A) the FDIC (in the case of any Subsidiary of the Company, if applicable) and (B) any other Regulatory Authority (collectively, the "Regulatory Filings") and all other material report and statements required to be filed by it since December 31, 1999, including, without limitation, any report or statement required to be filed pursuant to the laws of the United States and the rules and regulations of the FDIC and any other Regulatory Authority, and has paid all fees and assessments due and payable in connection therewith. As of their respective dates, such reports, registrations and statements complied in all material respects with all the laws, rules and regulations of the applicable Regulatory Agency with which they were filed.

        (iii)  Since December 31, 2001, the Company has not incurred any liability other than in the ordinary course of business consistent with past practice.

        (iv)  Since December 31, 2001, (A) the Company and each Subsidiary of the Company has conducted its business in the ordinary and usual course consistent with past practice (excluding the incurrence of expenses related to this Agreement and the transactions contemplated hereby) and (B) no event has occurred or circumstance arisen that, individually or taken together with all other facts, circumstances and events (described in any paragraph of this Section 5.03 or otherwise), has had or could be reasonably likely to have a Material Adverse Effect with respect to the Company.

        (h)    Litigation.    Except as set forth on Schedule 5.03(h) to the Disclosure Schedule, no litigation, claim or other proceeding before any court or governmental agency is pending against the Company or any of its Subsidiaries and, to the Company's knowledge, no such litigation, claim or other proceeding has been threatened and there are no facts which could reasonably give rise to such litigation, claim or other proceeding.

        (i)    Regulatory Matters.    (i) Except as set forth on Schedule 5.03(i) to the Disclosure Schedule, neither the Company nor any Subsidiary of the Company is, directly or indirectly, party to or subject to any order, decree, agreement, memorandum of understanding or similar arrangement with, or a commitment letter or similar submission to, or extraordinary supervisory letter from, any federal or state governmental agency or authority charged with the supervision or regulation of financial institutions or issuers of securities or engaged in the insurance of deposits (including, without limitation, the FDIC) or the supervision or regulation of it (collectively, the "Regulatory Authorities"). The Company has paid all assessments made or imposed by any Regulatory Authority.

        (ii)  Neither the Company nor any Subsidiary of the Company has been advised by, nor does it have any knowledge of facts which could give rise to an advisory notice by, any Regulatory

19

Authority that such Regulatory Authority is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such order, decree, agreement, memorandum of understanding, commitment letter, supervisory letter or similar submission.

        (j)    Compliance With Laws.    Except as set forth on Schedule 5.03(j) to the Disclosure Schedule, the Company and each Subsidiary of the Company:

        (i)    is in compliance with all applicable federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable thereto or to the employees conducting such businesses, including, without limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home Mortgage Disclosure Act, the Bank Secrecy Act, Title III of the USA Patriot Act and all other applicable fair lending laws and other laws relating to discriminatory business practices;

        (ii)  has all permits, licenses, authorizations, orders and approvals of, and has made all filings, applications and registrations with, all Governmental Authorities that are required in order to permit it to own or lease its properties and to conduct its businesses as presently conducted; all such permits, licenses, certificates of authority, orders and approvals are in full force and effect and, to the Company's knowledge, no suspension or cancellation of any of them is threatened; and

        (iii)  has received, since December 31, 1999, no notification or communication from any Governmental Authority (A) asserting that the Company or any of its Subsidiaries is not in compliance with any of the statutes, regulations or ordinances which such Governmental Authority enforces or (B) threatening to revoke any license, franchise, permit or governmental authorization (nor, to the Company's knowledge, do any grounds for any of the foregoing exist).

        (k)    Material Contracts; Defaults.    Except as set forth on Schedule 5.03(k) to the Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to, bound by or subject to any agreement, contract, arrangement, commitment or understanding (whether written or oral) (i) that is a "material contract" within the meaning of Item 601(b)(10) of the SEC's Regulation S-K or (ii) that materially restricts the conduct of business by the Company. Except as set forth on Schedule 5.03(k) to the Disclosure Schedule, neither the Company nor any of its Subsidiaries is in default under any contract, agreement, commitment, arrangement, lease, insurance policy or other instrument to which it is a party, by which its assets, business, or operations may be bound or affected, or under which it or its assets, business, or operations receives benefits, and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a default. No power of attorney or similar authorization given directly or indirectly by the Company or any of its Subsidiaries is currently outstanding. Schedule 5.03(k) of the Disclosure Schedule also sets forth a true and complete list of all third party consents or waivers required to be obtained so as not to be in default under any contract, agreement, commitment, arrangement, lease, insurance policy or other instrument to which the Company or any of its Subsidiaries is a party as a result of the transaction contemplated hereby.

        (l)    No Brokers.    No action has been taken by the Company or any of its Subsidiaries that would give rise to any valid claim against any party hereto for a brokerage commission, finder's fee or other like payment with respect to the transactions contemplated by this Agreement, except as set forth in Schedule 5.03(l) to the Disclosure Schedule.

        (m)    Employee Benefit Plans.    (i) All benefit and compensation plans, contracts, policies or arrangements covering current or former employees of the Company (the "Employees") and current or former directors of the Company or any of its Subsidiaries including, but not limited to, "employee benefit plans" within the meaning of Section 3(3) of ERISA, and deferred compensation, stock option, stock purchase, stock appreciation rights, stock based, incentive and bonus plans (the "Benefit Plans"), are set forth in Schedule 5.03(m) to the Disclosure Schedule. True and complete copies of all Benefit Plans including, but not limited to, any trust instruments and insurance contracts forming a part of any Benefit Plans and all amendments thereto have been provided or made available to Parent.

20

        (ii)  All Benefits Plans, to the extent subject to ERISA, are in substantial compliance with ERISA. Except as set forth on Schedule 5.03(m)(ii) to the Disclosure Schedule, each Benefit Plan which is an "employee pension benefit plan" within the meaning of Section 3(2) of ERISA ("Pension Plan") and which is intended to be qualified under Section 401(a) of the Code does so qualify, and the Company has received a favorable determination letter from the Internal Revenue Service with respect to such qualification, and neither the Company nor any of its Subsidiaries is aware of any circumstances likely to result in revocation of any such favorable determination letter or the loss of the qualification of such Pension Plan under Section 401(a) of the Code. There is no material pending or threatened litigation relating to the Benefits Plans. Neither Company nor any of its Subsidiaries has engaged in a transaction with respect to any Benefit Plan or Pension Plan that, assuming the taxable period of such transaction expired as of the date hereof, could subject the Company or any of its Subsidiaries to a tax or penalty imposed by either Section 4975 of the Code or Section 502(i) of ERISA in an amount which would be material.

        (iii)  No liability under Subtitle C or D of Title IV of ERISA has been or is expected to be incurred by the Company or any of its Subsidiaries with respect to any ongoing, frozen or terminated "single-employer plan", within the meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by it, or the single-employer plan of any entity which is considered one employer with the Company or any of its Subsidiaries under Section 4001 of ERISA or Section 414 of the Code (an "ERISA Affiliate"). Neither the Company nor any of its Subsidiaries has incurred, and nor does it expect to incur, any withdrawal liability with respect to a multiemployer plan under Subtitle E of Title IV of ERISA (regardless of whether based on contributions of an ERISA Affiliate). No notice of a "reportable event," within the meaning of Section 4043 of ERISA for which the 30-day reporting requirement has not been waived, has been required to be filed for any Pension Plan or by any ERISA Affiliate within the 12-month period ending on the date hereof or will be required to be filed in connection with the transactions contemplated by this Agreement.

        (iv)  All contributions required to be made under the terms of any Benefit Plan have been timely made. Neither any Pension Plan nor any single-employer plan of an ERISA Affiliate has an "accumulated funding deficiency" (whether or not waived) within the meaning of Section 412 of the Code or Section 302 of ERISA and no ERISA Affiliate has an outstanding funding waiver. Neither the Company nor any of its Subsidiaries has provided, nor is it required to provide, security to any Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the Code.

        (v)  Under each Pension Plan which is a single-employer plan, as of the last day of the most recent plan year ended prior to the date hereof, the actuarially determined present value of all "benefit liabilities," within the meaning of Section 4001(a)(16) of ERISA (as determined on the basis of the actuarial assumptions contained in the Pension Plan's most recent actuarial valuation), did not exceed the then current value of the assets of such Pension Plan, and there has been no material change in the financial condition of such Plan since the last day of the most recent plan year.

        (vi)  Neither Company nor or any of its Subsidiaries has any obligations for retiree health and life benefits under any Benefit Plan. The Company or any of its Subsidiaries, as the case may be, may amend or terminate any such Benefit Plan at any time without incurring any liability thereunder.

        (vii) Except as set forth on Schedule 5.03(m)(vii) to the Disclosure Schedule, none of the execution of this Agreement, shareholder approval of this Agreement or consummation of the transactions contemplated by this Agreement will (A) entitle any employees of the Company or any of its Subsidiaries to severance pay or any increase in severance pay upon any termination of employment after the date hereof, (B) accelerate the time of payment or vesting or trigger any

21

payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or trigger any other material obligation pursuant to, any of the Benefit Plans, (C) result in any breach or violation of, or a default under, any of the Benefit Plans or (D) result in any payment that would be a "parachute payment" to a "disqualified individual" as those terms are defined in Section 280G of the Code, without regard to whether such payment is reasonable compensation for personal services performed or to be performed in the future. Schedule 5.03(m)(vii) to the Disclosure Schedule categorizes any such exceptions according to the categories above and sets forth the amounts of any such payments to the persons listed thereon.

        (n)    Labor Matters.    Neither the Company nor any Subsidiary of the Company is a party to nor bound by any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of a proceeding asserting that it has committed an unfair labor practice (within the meaning of the National Labor Relations Act) or seeking to compel the Company or any Subsidiary of the Company to bargain with any labor organization as to wages or conditions of employment, nor is there any strike or other labor dispute involving it or, to the Company's knowledge, threatened, nor is the Company or any Subsidiary of the Company aware of any activity involving its employees seeking to certify a collective bargaining unit or engaging in other organizational activity.

        (o)    Environmental Matters.    (i) The Company and each Subsidiary of the Company has complied at all times with applicable Environmental Laws; (ii) no real property (including buildings or other structures) currently or formerly owned or operated by the Company or any Subsidiary of the Company, or any property in which the Company or any of its Subsidiaries has held a security interest, Lien or a fiduciary or management role ("Company Loan Property"), has been contaminated with, or has had any release of, any Hazardous Substance that could reasonably be expected to result in liability to the Company or any of its Subsidiaries arising out of any Environmental Law; (iii) neither the Company nor any Subsidiary of the Company could be deemed the owner or operator of any Company Loan Property under any Environmental Law which such Company Loan Property has been contaminated with, or has had any release of, any Hazardous Substance; (iv) neither the Company nor any Subsidiary of the Company is subject to liability for any Hazardous Substance disposal or contamination on any third party property; (v) neither the Company nor any Subsidiary of the Company has received any notice, demand letter, claim or request for information alleging any violation of, or liability under, any Environmental Law; (vi) neither the Company nor any Subsidiary of the Company is subject to any order, decree, injunction or other agreement with any Governmental Authority or any third party relating to any Environmental Law; (vii) there are no circumstances or conditions (including the presence of asbestos, underground storage tanks, lead products, polychlorinated biphenyls, prior manufacturing operations, dry-cleaning, or automotive services) involving the Company or any Subsidiary of the Company, any currently or formerly owned or operated property, or any Company Loan Property, that could reasonably be expected to result in any claims, liability or investigations against the Company or any Subsidiary of the Company, result in any restrictions on the ownership, use, or transfer of any property pursuant to any Environmental Law, or adversely affect the value of any Company Loan Property and (viii) the Company has made available to Parent copies of all environmental reports, studies, sampling data, correspondence, filings and other environmental information in its possession or reasonably available to it relating to the Company and each Subsidiary of the Company, and any currently or formerly owned or operated property or any Company Loan Property.

        As used herein, the term "Environmental Laws" means any federal, state or local law, regulation, order, decree, permit, authorization, opinion, common law or agency requirement relating to: (A) the protection or restoration of the environment, health, safety, or natural resources, (B) the handling, use, presence, disposal, release or threatened release of any Hazardous Substance or (C) noise, odor, wetlands, indoor air, pollution, contamination or any injury or threat of injury to persons or property in connection with any Hazardous Substance and the term "Hazardous Substance" means any substance

22

in any concentration that is: (A) listed, classified or regulated pursuant to any Environmental Law, (B) any petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive materials or radon or (C) any other substance which is or may be the subject of regulatory action by any Governmental Authority in connection with any Environmental Law.

        (p)    Tax Matters.    (i) (A) All Tax Returns that are required to be filed on or before the Effective Date (taking into account any extensions of time within which to file which have not expired) by or with respect to the Company or any Subsidiary of the Company, have been or will be timely filed on or before the Effective Date, (B) all such Tax Returns are or will be true and complete in all material respects, (C) all Taxes shown to be due on the Tax Returns referred to in clause (A) have been or will be timely paid in full, (D) the Tax Returns referred to in clause (A) have been examined by the Internal Revenue Service or the appropriate Tax authority or the period for assessment of the Taxes in respect of which such Tax Returns were required to be filed has expired, (E) all deficiencies asserted or assessments made as a result of such examinations have been paid in full, (F) no issues that have been raised by the relevant taxing authority in connection with the examination of any of the Tax Returns referred to in clause (A) are currently pending and (G) no waivers of statutes of limitation have been given by or requested with respect to any Taxes of the Company or any Subsidiary of the Company.

        (ii)  The Company has made available to Parent true and correct copies of the United States federal income Tax Returns filed by the Company and any Subsidiary of the Company for each of the three most recent fiscal years ended on or before December 31, 2001.

        (iii)  Neither the Company nor any Subsidiary of the Company has any liability with respect to income, franchise or similar Taxes that accrued on or before the end of the most recent period covered by the Regulatory Filings filed prior to the date hereof in excess of the amounts accrued with respect thereto that are reflected in the financial statements included in the Regulatory Filings filed on or prior to the date hereof.

        (iv)  Neither the Company nor any Subsidiary of the Company is a party to any Tax allocation or sharing agreement, is not and has never been a member of an affiliated group filing consolidated or combined Tax Returns (other than a group the common parent of which is or was the Company) or otherwise has any liability for the Taxes of any Person.

        (v)  No closing agreements, private letter rulings, technical advice memoranda or similar agreement or rulings have been entered into or issued by any taxing authority with respect to the Company or any Subsidiary of the Company.

        (vi)  As of the date hereof, the Company has no reason to believe that any conditions exist that might prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

        (vii) (A) No Tax is required to be withheld pursuant to Section 1445 of the Code as a result of the transaction contemplated by this Agreement and (B) all Taxes that the Company or any Subsidiary of the Company is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required by applicable law, have been paid to the proper Governmental Authority or other Person.

        (q)    Risk Management Instruments.    Neither the Company nor any Subsidiary of the Company is a party to nor has it agreed to enter into an exchange traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is not included on the balance sheet and is a derivatives contract (including various combinations thereof) (each, a "Derivatives Contract") or owns securities that (i) are referred to generically as "structured notes," "high risk mortgage derivatives," "capped floating rate notes" or "capped floating rate mortgage derivatives" or (ii) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate

23

changes, except for those Derivatives Contracts and other instruments legally purchased or entered into in the ordinary course of business, consistent with safe and sound banking practices and regulatory guidance. All of such Derivatives Contracts or other instruments, are legal, valid and binding obligations of the Company or a Subsidiary of the Company, as the case may be, enforceable in accordance with their terms (except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency and similar laws affecting creditors' rights and remedies generally), and are in full force and effect. The Company and each Subsidiary of the Company has duly performed in all material respects all of their material obligations thereunder to the extent that such obligations to perform have accrued; and, to the Company's knowledge, there are no breaches, violations or defaults or allegations or assertions of such by any party thereunder which have had or could reasonably be expected to have a Material Adverse Effect on the Company.

        (r)    Books and Records.    The books and records of the Company and each Subsidiary of the Company have been fully, properly and accurately maintained in all material respects, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein, and they fairly present the financial position of the Company and each Subsidiary of the Company, as the case may be.

        (s)    Insurance.    Schedule 5.03(s) to the Disclosure Schedule sets forth a true and complete list of all of the insurance policies, binders, or bonds maintained by the Company or any Subsidiary of the Company ("Insurance Policies"). The Company and each Subsidiary of the Company is insured with reputable insurers against such risks and in such amounts as the management of the Company reasonably has determined to be prudent in accordance with industry practices. All the Insurance Policies are in full force and effect; neither the Company nor any Subsidiary of the Company is not in material default thereunder; and all claims thereunder have been filed in due and timely fashion.

        (t)    Allowance For Loan Losses.    The Company's Allowance for Loan Losses ("ALL") is, and shall be as of the Effective Date, in compliance with the Company's existing methodology for determining the adequacy of its ALL as well as the standards established by applicable Governmental Authorities and the Financial Accounting Standards Board and is and shall be adequate under all such standards.

        (u)    Trust Business.    Except as set forth in Schedule 5.03(u) to the Disclosure Schedule, (i) each of the relationships between the Company and/or GTB and another Person which constitute the trust business conducted by GTB or any other the trust business of the Company (whether GTB or the Company acts or has acted as trustee, agent, fiscal agent, escrow agent, custodian or in another similar capacity) (the "Trust Relationships") is governed by a written agreement, contract, indenture, instrument of trust or other similar document (the "Trust Instruments") and all of the Trust Instruments that are presently in effect are in the possession of the Company and have been made, or are, available to Parent and no Trust Instrument has been amended except by an instrument in writing; (ii) each Trust Relationship has been conducted, operated and managed by the Company in accordance with the terms of the governing Trust Instrument and applicable law.

        (v)    Real Property.    (i) Schedule 5.03(v) to the Disclosure Schedule contains a complete and correct list of (A) all real property or premises owned on the date hereof, in whole or in part by the Company or any Subsidiary of the Company and all indebtedness secured by any encumbrance thereon, and (B) all real property or premises leased in whole or in part by the Company or any Subsidiary of the Company and together with a list of all applicable leases and the name of the lessor. None of such premises or properties have been condemned or otherwise taken by any public authority and no condemnation or taking is threatened or contemplated and none thereof is subject to any claim, contract or law which might affect its use or value for the purposes now made of it. None of the premises or properties of the Company or any Subsidiary of the Company is subject to any current or potential interests of third parties or other restrictions or limitations that would impair or be

24

inconsistent in any material respect with the current use of such property by the Company or any Subsidiary of the Company, as the case may be.

        (ii)  Each of the leases referred to in the Disclosure Schedule is valid and existing and in full force and effect, and no party thereto is in default and no notice of a claim of default by any party has been delivered to the Company or any Subsidiary of the Company or is now pending, and there does not exist any event that with notice or the passing of time, or both, would constitute a default or excuse performance by any party thereto, provided that with respect to matters relating to any party other than the Company or any Subsidiary of the Company, the foregoing representation is based on the knowledge of the Company and the knowledge of each Subsidiary of the Company.

        (w)    Title.    The Company and each Subsidiary of the Company has good title to its properties and assets (other than (i) property as to which it is lessee and (ii) real estate owned as a result of foreclosure, transfer in lieu of foreclosure or other transfer in satisfaction of a debtor's obligation previously contracted) except (1) statutory liens not yet delinquent which are being contested in good faith by appropriate proceedings, and liens for taxes not yet due, (2) pledges of assets in the ordinary course of business to secure public deposits, (3) for those assets and properties disposed of for fair value in the ordinary course of business since the date of the Company's call report dated as of and for the year ended December 31, 2001 and (4) defects and irregularities of title and encumbrances that do not materially impair the use thereof for the purposes for which they are held.

        5.04.    Representations and Warranties of Parent.    Subject to Section 5.02, Parent hereby represents and warrants to the Company as follows:

        (a)    Organization, Standing and Authority.    Parent is duly organized, validly existing and in good standing under the laws of the State of California. Parent is duly qualified to do business and is in good standing in the states of the United States and foreign jurisdictions where its ownership or leasing of property or assets or the conduct of its business requires it to be so qualified. Parent has in effect all federal, state, local, and foreign governmental authorizations necessary for it to own or lease its properties and assets and to carry on its business as it is now conducted.

        (b)    Parent Stock.    (i) As of the date hereof, the authorized capital stock of Parent consists solely of 15,000,000 shares of Parent Common Stock, of which no more than 7,600,000 shares are issued and outstanding, and 5,000,000 shares of Parent Preferred Stock, of which no shares are issued and outstanding.

        (ii)  As of the date hereof, the authorized capital stock of Parent Bank consists of 3,350,000 shares of Parent Bank Stock, of which 2,488,800 are issued and outstanding.

        (iii)  The shares of Parent Common Stock to be issued in exchange for shares of Company Stock in the Merger, when issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and the issuance thereof is not subject to any preemptive right. The shares of Parent Common Stock to be issued in exchange for shares of Company Stock in the Merger will be issued (x) pursuant to an effective registration statement and (y) pursuant to effective registrations or exemptions under state securities laws, as applicable.

        (c)    Subsidiaries.    Each of Parent's Significant Subsidiaries has been duly organized and is validly existing in good standing under the laws of the jurisdiction of its organization, and is duly qualified to do business and in good standing in the jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and it owns, directly or indirectly, all the issued and outstanding equity securities of each of its Significant Subsidiaries. Each of the Parent's Significant Subsidiaries is duly licensed by the OCC, and each of their deposits are insured by the Bank Insurance Fund in the manner and to the fullest extent provided by law.

25

        (d)    Corporate Power.    Parent and each of its Significant Subsidiaries has the corporate power and authority to carry on its business as it is now being conducted and to own all its properties and assets; each of Parent and Parent Bank has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby; and Parent has the corporate power and authority to execute, deliver and perform its obligations to consummate the transactions contemplated thereby.

        (e)    Corporate Authority.    This Agreement and the transactions contemplated hereby have been authorized by all necessary corporate action of Parent, the Parent Board, Parent Bank and the Parent Bank Board. This Agreement has been duly executed and delivered by each of Parent and Parent Bank and this Agreement is a valid and legally binding agreement of Parent and Parent Bank enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors' rights or by general equity principles).

        (f)    Regulatory Approvals; No Violations.    (i) No consents or approvals of, or waivers by, or filings or registrations with, any Governmental Authority or with any third party are required to be made or obtained by Parent or any of its Subsidiaries in connection with the execution, delivery or performance by Parent or Parent Bank of this Agreement or to consummate the Merger except for (A) filings of applications or notices with and approvals or waivers by the Federal Reserve Board, the FDIC, the OCC, the California Secretary and the Commissioner, as may be required, (B) filings with the SEC and state securities authorities, (C) the approval of the listing on Nasdaq of the Parent Common Stock to be issued in the Merger, (D) such filings as are required to be made or approvals as are required to be obtained under the securities or "Blue Sky" laws of various states in connection with the issuance of Parent Common Stock in the Merger, and (E) the filing of the executed Agreement of Merger with the OCC. As of the date hereof, Parent is not aware of any reason why the approvals set forth in Section 7.01(b) will not be received in a timely manner and without the imposition of a condition, restriction or requirement of the type described in Section 7.01(b).

        (ii)  Subject to receipt, or the making, of the consents, approvals and filings referred to in the preceding paragraph and expiration of the related waiting periods, the execution, delivery and performance of this Agreement by Parent and Parent Bank and the consummation of the transactions contemplated hereby do not and will not (A) constitute a breach or violation of, or a default under, or give rise to any Lien, any acceleration of remedies or any right of termination under, any law, rule or regulation or any judgment, decree, order, governmental permit or license, or Agreement, indenture or instrument of Parent or of any of its Subsidiaries or to which Parent or any of its Subsidiaries or properties is subject or bound, (B) constitute a breach or violation of, or a default under, the articles of incorporation or by-laws (or similar governing documents) of Parent or any of its Subsidiaries or (C) require any consent or approval under any such law, rule, regulation, judgment, decree, order, governmental permit or license, agreement, indenture or instrument.

        (g)    Financial Reports and SEC Documents; Material Adverse Effect.    (i) Parent's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 and all other reports, registration statements, definitive proxy statements or information statements filed or to be filed by it subsequent to December 31, 2001 under the Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act in the form filed or to be filed (collectively, Parent's "SEC Documents") with the SEC, as of the date filed or to be filed, (A) complied or will comply in all material respects as to form with the applicable requirements under the Securities Act or the Exchange Act, as the case may be and (B) did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each of the balance sheets contained in or incorporated by reference into any such SEC Document (including the related notes and

26

schedules thereto) fairly presents, or will fairly present, the financial position of Parent and its Subsidiaries as of its date, and each of the statements of income and changes in shareholders' equity and cash flows or equivalent statements in such SEC Documents (including any related notes and schedules thereto) fairly presents, or will fairly present, the results of operations, changes in shareholders' equity and changes in cash flows, as the case may be, of Parent and its Subsidiaries for the periods to which they relate, in each case in accordance with GAAP consistently applied during the periods involved, except in each case as may be noted therein.

        (ii)  Since December 31, 2001, Parent and its Subsidiaries have conducted their respective businesses in the ordinary and usual course consistent with past practice (excluding the incurrence of expenses related to this Agreement and the transactions contemplated hereby) and no event has occurred or circumstance arisen that, individually or taken together with all other facts, circumstances and events (described in any paragraph of this Section 5.04 or otherwise), is reasonably likely to have a Material Adverse Effect with respect to Parent or its Subsidiaries.

        (h)    Litigation.    No litigation, claim or other proceeding before any court or governmental agency is pending against Parent or its Subsidiaries and, to Parent's knowledge, no such litigation, claim or other proceeding has been threatened and there are no facts which could reasonably give rise to such litigation, claim or other proceeding.

        (i)    No Brokers.    Except for a fee paid to Castle Creek Financial LLC, no action has been taken by Parent or its Subsidiaries that would give rise to any valid claim against any party hereto for a brokerage commission, finder's fee or other like payment with respect to the transactions contemplated by this Agreement.

        (j)    Environmental Matters.    (i) Parent and its Subsidiaries have complied at all times with applicable Environmental Laws; (ii) no real property (including buildings or other structures) currently or formerly owned or operated by Parent or any of its Subsidiaries, or any property in which Parent or any of its Subsidiaries has held a security interest, Lien or a fiduciary or management role ("Parent Loan Property"), has been contaminated with, or has had any release of, any Hazardous Substance; (iii) neither Parent nor any of its Subsidiaries could be deemed the owner or operator of any Parent Loan Property under any Environmental Law which such Parent Loan Property has been contaminated with, or has had any release of, any Hazardous Substance; (iv) neither Parent nor any of its Subsidiaries is subject to liability for any Hazardous Substance disposal or contamination on any third party property; (v) neither Parent nor any of its Subsidiaries has received any notice, demand letter, claim or request for information alleging any violation of, or liability under, any Environmental Law; (vi) neither Parent nor any of its Subsidiaries is subject to any order, decree, injunction or other agreement with any Governmental Authority or any third party relating to any Environmental Law; and (vii) to Parent's knowledge, there are no circumstances or conditions (including the presence of asbestos, underground storage tanks, lead products, polychlorinated biphenyls, prior manufacturing operations, dry-cleaning, or automotive services) involving Parent or its Subsidiaries, any currently or formerly owned or operated property, or any Parent Loan Property, that could reasonably be expected to result in any claims, liability or investigations against Parent or its Subsidiaries, result in any restrictions on the ownership, use, or transfer of any property pursuant to any Environmental Law, or adversely affect the value of any Parent Loan Property.

        (k)    Insurance.    Parent and its Subsidiaries are insured with reputable insurers against such risks and in such amounts as the management of Parent reasonably has determined to be prudent in accordance with industry practices.

27

ARTICLE VI

COVENANTS

        6.01.    Reasonable Best Efforts.    Subject to the terms and conditions of this Agreement, each of the Company, Parent and Parent Bank agrees to use its reasonable best efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable laws, so as to permit consummation of the Merger as promptly as practicable and otherwise to enable consummation of the transactions contemplated hereby, including the satisfaction of the conditions set forth in Article 7 hereof, and shall cooperate fully with the other party hereto to that end.

        6.02.    Shareholder Approval.    Each of Parent and the Company agrees to take, in accordance with applicable law and the Parent Articles and Parent By-laws or Company Articles and Company By-Laws, as the case may be, all action necessary to convene as soon as reasonably practicable a meeting of its respective shareholders to consider and vote upon (i) in the case of Parent, the approval of the issuance of Parent Common Stock as contemplated by this Agreement, and (ii) in the case of Parent and the Company, the approval of this Agreement and the Merger and any other matters required to be approved by such entity's shareholders for consummation of the Merger (including any adjournment or postponement, the "Parent Meeting" and the "Company Meeting", respectively), in the case of both the Parent Meeting and the Company Meeting, and in no event later than 45 calendar days after the Registration Statement is declared effective. Except with the prior approval of Parent, no other matters shall be submitted for the approval of the Company shareholders. The Company Board shall at all times prior to and during the Company Meeting recommend such approval and shall take all reasonable lawful action to solicit such approval by its shareholders; provided that nothing in this Agreement shall prevent the Company Board from withholding, withdrawing, amending or modifying its recommendation if the Company Board determines, after consultation with its outside counsel, that such action is legally required in order for the directors to comply with their fiduciary duties to the Company shareholders under applicable law; provided, further, that Section 6.07 shall govern the withholding, withdrawing, amending or modifying of such recommendation in the circumstances described therein. The Company covenants and agrees that the Company Meeting shall be held and shall conclude prior to the occurrence of the Parent Meeting.

        6.03.    Registration Statement.    (a) Parent agrees to prepare a registration statement on Form S-4 or other applicable form (the "Registration Statement") to be filed by Parent with the SEC in connection with the issuance of Parent Common Stock in the Merger (including the proxy statement and prospectus and other proxy solicitation materials of the Company constituting a part thereof (the "Proxy Statement") and all related documents). The Company shall prepare and furnish such information relating to it and its directors, officers and shareholders as may be reasonably required in connection with the above-referenced documents based on its knowledge of and access to the information required for said documents, and the Company shall have the right to review such Registration Statement not less than five days prior to its filing. The Company agrees to cooperate with Parent and Parent's counsel and accountants in requesting and obtaining appropriate opinions, consents and letters from its financial advisor and independent auditor in connection with the Registration Statement and the Proxy Statement. Provided that the Company has cooperated as described above, Parent agrees to file, or cause to be filed, the Registration Statement and the Proxy Statement with the SEC as promptly as reasonably practicable but in no event later than 60 days after the date hereof. Each of the Company and Parent agrees to use all reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as reasonably practicable after filing thereof. Parent also agrees to use all reasonable efforts to obtain all necessary state securities law or "Blue Sky" permits and approvals required to carry out the transactions contemplated by this Agreement. After the Registration Statement is declared effective under the Securities Act, the Company shall promptly mail at its expense the Proxy Statement to its shareholders.

28

        (b)  Each of the Company and Parent agrees that none of the information supplied or to be supplied by it for inclusion or incorporation by reference in the Registration Statement shall, at the time the Registration Statement and each amendment or supplement thereto, if any, becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and the Proxy Statement and any amendment or supplement thereto shall, at the date of mailing to shareholders and at the time of the Company Meeting contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. Each of the Company and Parent further agrees that if such party shall become aware prior to the Effective Date of any information furnished by such party that would cause any of the statements in the Registration Statement or the Proxy Statement to be false or misleading with respect to any material fact, or to omit to state any material fact necessary to make the statements therein not false or misleading, to promptly inform the other parties thereof and to take the necessary steps to correct the Registration Statement or the Proxy Statement

        (c)  Parent agrees to advise the Company, promptly after Parent receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, of the issuance of any stop order or the suspension of the qualification of Parent Common Stock for offering or sale in any jurisdiction, of the initiation or, to the extent Parent is aware thereof, threat of any proceeding for any such purpose, or of any request by the SEC for the amendment or supplement of the Registration Statement or for additional information.

        6.04.    Press Releases.    The Company and Parent shall consult with each other before issuing any press release with respect to the Merger or this Agreement and shall not issue any such press release or make any such public statements without the prior consent of the other party, which shall not be unreasonably withheld; provided, however, that a party may, without the prior consent of the other party (but after such consultation, to the extent practicable in the circumstances), issue such press release or make such public statements as may upon the advice of outside counsel be required by law or the rules or regulations of Nasdaq. The Company and Parent shall cooperate to develop all public announcement materials and make appropriate management available at presentations related to the transactions contemplated by this Agreement as reasonably requested by the other party. Each of Parent, Parent Bank and the Company agree that the Closing of this Agreement is subject to a number of contingencies, including, among other conditions, the completion of additional due diligence which until such time makes the probability of such Closing uncertain. The parties hereto covenant and agree that, subject to the conditions and exceptions set forth above, no announcement, via press release or otherwise, shall be made regarding the execution of this Agreement until the Diligence Ending Time has occurred.

        6.05.    Access; Information.    (a) The Company agrees that upon reasonable notice and subject to applicable laws relating to the exchange of information, it shall afford Parent and Parent's officers, employees, counsel, accountants and other authorized representatives such access during normal business hours throughout the period prior to the Effective Time to the books, records (including, without limitation, Tax Returns and work papers of independent auditors), properties and personnel and to such other information as Parent may reasonably request and, during such period, it shall furnish promptly to Parent all information concerning its business, properties and personnel as Parent may reasonably request.

        (b)  Without limiting the generality of Section 6.05(a), prior to the Effective Time, Parent, Parent Bank and their respective representatives shall have the right to conduct a review to determine (i) that the assets, books, records and operations of the Company are in satisfactory condition and will not in a material way adversely impact Parent or Parent Bank after consummation of the transactions contemplated hereby and (ii) the accuracy of the representations and warranties and the satisfaction of the conditions to closing as provided hereunder.

29

        (c)  The Company agrees that, subject to applicable laws, it shall cooperate in good faith with Parent on mutually agreed operating issues which the parties agree have priority.

        (d)  Parent agrees that, upon reasonable notice and subject to applicable laws relating to the exchange of information, it shall afford the Company and its authorized representatives such access to Parent's personnel as the Company may reasonably request.

        (e)  Each party agrees that it will not, and will cause its representatives not to, use any information obtained pursuant to this Section 6.05 (as well as any other information obtained prior to the date hereof in connection with the entering into of this Agreement) for any purpose unrelated to the consummation of the transactions contemplated by this Agreement. Subject to the requirements of law, each party shall keep confidential, and shall cause its representatives to keep confidential, all information and documents obtained pursuant to this Section 6.05 (as well as any other information obtained prior to the date hereof in connection with the entering into of this Agreement) unless such information (i) was already known to such party, (ii) becomes available to such party from other sources not known by such party to be bound by a confidentiality obligation, (iii) is disclosed with the prior written approval of the party to which such information pertains or (iv) is or becomes readily ascertainable from publicly available sources. In the event that this Agreement is terminated or the transactions contemplated by this Agreement shall otherwise fail to be consummated, (i) each party shall promptly cause all copies of documents or extracts thereof containing information and data as to another party hereto to be returned to the party which furnished the same; (ii) neither the Company on the one hand, nor Parent or Parent Bank on the other hand, shall, and each of the parties shall cause its respective Subsidiaries and representatives not to, use any confidential information to solicit customers of the other party; and (iii) for one year after such termination, neither the Company on the one hand, nor Parent or Parent Bank on the other shall, and each of the parties shall cause its respective Subsidiaries and representatives not to, solicit the services of any employee of such other party for purposes of engaging them as an employee, agent, consultant or independent contractor of such soliciting party, provided, however, that neither party will be barred from retaining the services, in any capacity, of any current employee of the other party in the event such employee approaches such party with the intent of securing employment with such party. Notwithstanding the foregoing, nothing herein shall prevent the parties hereto from any general advertising or recruitment activities not directed specifically at the employees of the other party hereto. No investigation by any party of the business and affairs of any other party shall affect or be deemed to modify or waive any representation, warranty, covenant or agreement in this Agreement, or the conditions to any party's obligation to consummate the transactions contemplated by this Agreement.

        6.06.    Affiliates.    The Company shall cooperate to use its reasonable best efforts to identify those Persons who may be deemed to be "affiliates" of the Company within the meaning of Rule 145 promulgated by the SEC under the Securities Act or SEC Accounting Releases 130 and 135 (such Persons being "Company Affiliates"). The Company shall use its reasonable best efforts to cause each Person so identified to deliver to Parent, no later than 40 days prior to the Effective Date, a written agreement (which agreement shall be substantially in the form of Exhibit B).

        6.07.    Acquisition Proposals.    The Company agrees that its officers or directors shall not, and that it shall direct and use its reasonable best efforts to cause its employees, agents and representatives not to, directly or indirectly, initiate, solicit or otherwise encourage any inquiries or the making of any proposal or offer with respect to a merger, reorganization, share exchange, consolidation or similar transaction involving, or any purchase of all or substantially all of the assets of the Company or more than 10% of the outstanding equity securities, of the Company (any such proposal or offer being hereinafter referred to as an "Acquisition Proposal"). The Company further agrees that neither the Company nor any of its officers and directors shall, and that it shall direct and use its reasonable best efforts to cause its employees, agents and representatives not to, directly or indirectly, engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions

30

with, any Person relating to an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal; provided, however, that nothing contained in this Agreement shall prevent the Company or the Company Board from (A) complying with its disclosure obligations under federal or state law; (B) providing information in response to a request therefore by a Person who has made an unsolicited bona fide written Acquisition Proposal if the Company Board receives from the Person so requesting such information an executed confidentiality agreement; (C) engaging in any negotiations or discussions with any Person who has made an unsolicited bona fide written Acquisition Proposal; or (D) recommending such an Acquisition Proposal to the shareholders of the Company, if and only to the extent that, (i) in each such case referred to in clause (B), (C) or (D) above, the Company Board determines in good faith (after consultation with outside legal counsel) that such action would, in the absence of the foregoing proscriptions, be legally required in order for its directors to comply with their respective fiduciary duties under applicable law and (ii) in the case referred to in clause (D) above, the Company Board determines in good faith (after consultation with its financial advisor) that such Acquisition Proposal, if accepted, is reasonably likely to be consummated, taking into account all legal, financial and regulatory aspects of the proposal and the Person making the proposal and would, if consummated, result in a transaction more favorable to the Company's shareholders from a financial point of view than the Merger. The Company agrees that it will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted heretofore with respect to any Acquisition Proposals. The Company agrees that it will notify Parent immediately if any such inquiries, proposals or offers are received by, any such information is requested from, or any such discussions or negotiations are sought to be initiated or continued with, any of its representatives.

        6.08.    Certain Policies.    Prior to the Effective Date, the Company shall, consistent with GAAP, the rules and regulations of the SEC and applicable banking laws and regulations, modify or change its loan, OREO, accrual, reserve, tax, litigation and real estate valuation policies and practices (including loan classifications and levels of reserves) so as to be applied on a basis that is consistent with that of Parent.

        6.09.    Nasdaq Listing.    Parent agrees to use its reasonable best efforts to list, prior to the Effective Date, on the Nasdaq the shares of Parent Common Stock to be issued to the holders of Company Stock in the Merger.

        6.10.    Regulatory Applications.    (a) Each of Parent, Parent Bank and the Company shall cooperate and use their respective reasonable best efforts to prepare all documentation, to effect all filings and to obtain all permits, consents, approvals and authorizations of all third parties and Governmental Authorities necessary to consummate the transactions contemplated by this Agreement (including the consolidation of any Company branches with Parent Bank branches or branches of any other Subsidiary of Parent or the closure of any Company branches, in each case as Parent in its sole discretion shall deem necessary); and any initial filings with Governmental Authorities (other than the Registration Statement) shall be made by Parent as soon as reasonably practicable after the execution hereof but, provided that the Company has cooperated as described above, in no event later than 60 days after the date hereof. Each of Parent and the Company shall have the right to review in advance, and to the extent practicable each shall consult with the other, in each case subject to applicable laws relating to the exchange of information, with respect to all material written information submitted to any third party or any Governmental Authority in connection with the transactions contemplated by this Agreement. In exercising the foregoing right, each of such parties agrees to act reasonably and as promptly as practicable. Each party hereto agrees that it shall consult with the other parties hereto with respect to the obtaining of all material permits, consents, approvals and authorizations of all third parties and Governmental Authorities necessary or advisable to consummate the transactions contemplated by this Agreement and each party shall keep the other parties apprised of the status of material matters relating to completion of the transactions contemplated hereby.

31

        (b)  Each party agrees, upon request, to furnish the other parties with all information known to it (which knowledge shall be deemed to include knowledge which could be acquired after reasonable due inquiry) concerning itself, its Subsidiaries, directors, advisory directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with any filing, notice or application made by or on behalf of such other parties to any third party or Governmental Authority.

        6.11.    Indemnification.    (a) Following the Effective Time, Parent shall indemnify, defend and hold harmless each present and former director and officer of the Company (each, an "Indemnified Party") against all costs or expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, damages or liabilities (collectively, "Costs") incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of actions or omissions occurring at or prior to the Effective Time (including, without limitation, the transactions contemplated by this Agreement, or any related agreement, but excluding any Costs arising out of any violation or alleged violation of the Exchange Act or the rules and regulations thereunder with respect to insider trading) to the fullest extent that the Company is permitted to indemnify (and advance expenses to) its directors or officers under the CGCL, the Company Articles and the Company By-Laws as in effect on the date hereof; provided that any determination required to be made with respect to whether an officer's or director's conduct complies with the standards set forth under the CGCL, the Company Articles and the Company By-Laws shall be made by independent counsel selected by Parent; and provided, further, that in the absence of judicial precedent to the contrary, such counsel, in making such determination, shall presume such officer's or director's conduct complied with such standard and Parent shall have the burden to demonstrate that such officer's or director's conduct failed to comply with such standard.

        (b)  For a period of three years from the Effective Time, Parent shall use its commercially reasonable efforts to provide that portion of director's and officer's liability insurance that serves to reimburse the present and former officers and directors (determined as of the Effective Time) of the Company (as opposed to the portion that serves to reimburse the Company) with respect to claims against such directors and officers arising from facts or events which occurred before the Effective Time, which insurance shall contain at least the same coverage and amounts, and contain terms and conditions no less advantageous, as that coverage currently provided by the Company. In order to obtain such coverage, Parent shall use commercially reasonable efforts to obtain tail insurance via an "extended reporting option" from the Company's current insurance provider or "run off coverage" from Parent's insurance provider for such coverage period and to purchase as of the Effective Time such coverage for the entire coverage period; provided, however, that in no event shall Parent be required to expend for each year of coverage more than the current amount expended on an annual basis by the Company (the "Insurance Amount") to maintain, keep-in-force or procure such directors and officers insurance coverage; provided, further, that if Parent is unable to maintain or obtain the insurance called for by this Section 6.11(b), Parent shall use its commercially reasonable efforts to obtain as much comparable insurance as is available for the Insurance Amount; provided, further, that officers and directors of the Company may be required to make application and provide customary representations and warranties to Parent's insurance carrier for the purpose of obtaining such insurance.

        (c)  Any Indemnified Party wishing to claim indemnification under Section 6.11(a), upon learning of any claim, action, suit, proceeding or investigation described above, shall promptly notify Parent thereof; provided that the failure so to notify shall not affect the obligations of Parent under Section 6.11(a) unless and to the extent that Parent is actually prejudiced as a result of such failure.

        (d)  If Parent or any of its successors or assigns shall consolidate with or merge into any other entity and shall not be the continuing or surviving entity of such consolidation or merger or shall transfer all or substantially all of its assets to any other entity, then and in each case, proper provision

32

shall be made so that the successors and assigns of Parent shall assume the obligations set forth in this Section 6.11.

        6.12.    Benefit Plans.    (a) From and after the Effective Time, Parent shall provide former employees of the Company who remain as employees of Parent or any of its Subsidiaries with employee benefit plans no less favorable in the aggregate than those provided to similarly situated employees of Parent and its Subsidiaries. Parent shall cause each employee benefit plan, program, policy or arrangement of Parent in which employees of the Company are eligible to participate to take into account for purposes of eligibility and vesting thereunder the service of such employees with the Company to the same extent as such service was credited for such purpose by the Company. Nothing herein shall limit the ability of Parent to amend or terminate any of the Benefit Plans in accordance with their terms at any time.

        (b)  If employees of the Company become eligible to participate in a medical, dental or health plan of Parent, Parent shall cause each such plan to (i) waive any preexisting condition limitations to the extent such conditions were covered under the applicable medical, health or dental plans of the Company, (ii) honor under such plans any deductible, co-payment and out-of-pocket expenses incurred by the employees and their beneficiaries during the portion of the calendar year prior to such participation and (iii) waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to such employee on or after the Effective Time to the extent such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time.

        6.13.    Non-competition Agreements.    Each of the Persons listed on Exhibit C1 shall, simultaneously with the execution and delivery hereof, execute and deliver to Parent non-competition agreements (or such other agreement as indicated on Exhibit C1) substantially in the form of Exhibit C hereto.

        6.14.    Notification of Certain Matters.    Each of the Company and Parent shall give prompt notice to the other of any fact, event or circumstance known to it that (i) is reasonably likely, individually or taken together with all other facts, events and circumstances known to it, to result in any Material Adverse Effect with respect to it or (ii) would cause or constitute a material breach of any of its representations, warranties, covenants or agreements contained herein.

        6.15.    Parent Approval.    The Company shall keep Parent reasonably informed as to the status of the transactions contemplated in Schedules 4.01(a), 4.01(g) and 4.01(l) of the Disclosure Schedule and shall not enter into any additional agreements with respect to such transactions without the prior approval of Parent, which approval shall not be unreasonably withheld.

        6.16.    Human Resources Issues.    The Company agrees to cooperate with Parent with respect to any formal meetings or interviews with one or more employees called or arranged by the Company and held for the purpose of discussing the transactions contemplated by this Agreement or their effect on such employees, with Parent given the opportunity to participate in such meetings or interviews. This section is not intended to apply to casual conversations about the transaction or informal meetings initiated by employees, or to prohibit discussion in general, but rather to allow Parent a role in the formal presentation of the transaction to employees, and an opportunity to participate in the significant, formal meetings at which the transaction is explained and discussed.

        6.17.    Assistance with Third-Party Agreements.    (a) The Company shall cooperate with and use all commercially reasonable efforts to assist Parent in (i) gaining access to and obtaining any required consents from all of its third-party vendors, landlords of all of their leased properties and other parties to material agreements, promptly after the date of this Agreement, and (ii) obtaining the cooperation of such third parties in a smooth transition in accordance with Parent's timetable at or after the Effective Time of the Merger. The Company shall cooperate with Parent in minimizing the extent to

33

which any contracts will continue in effect following the Effective Time of the Merger, in addition to complying with the prohibition of Section 4.01(l) hereof.

        (b)  Without limiting Section 6.17(a), the Company shall use all reasonable efforts to provide data processing and other processing support, outside contractors, to assist Parent in performing all tasks reasonably required to result in a successful conversion of their data and other files and records to Parent's production environment, when requested by Parent and sufficient to ensure that a successful conversion can occur at such time as Parent requests or after the Effective Time of the Merger. Among other things, the Company shall:

        (i)    cooperate with the Company to establish a mutually agreeable project plan to effectuate the conversion;

        (ii)  use their commercially reasonable efforts to have the Company's outside contractors continue to support both the conversion effort and its needs until the conversion can be established;

        (iii)  provide, or use its commercially reasonable efforts to obtain from any outside contractors, all data or other files and layouts requested by Parent for use in planning the conversion, as soon as reasonably practicable;

        (iv)  provide reasonable access to personnel at corporate headquarters, data and other processing centers, all branches and, with the consent of outside contractors, at outside contractors, to enable the conversion effort to be completed on schedule; and

        (v)  to the extent reasonably practicable, give notice of termination, conditioned upon the completion of the transactions contemplated hereby, of the contracts of outside data and other processing contractors or other third-party vendors when directed to do so by Parent.

        (vi)  Parent agrees that all actions taken pursuant to this Section 6.17 shall be taken in a manner intended to minimize disruption to the customary business activities of the Company,

        6.18.    Shareholder Agreements.    Each Shareholder shall execute and deliver to Parent simultaneously with the execution of this Agreement a shareholder agreement (each, a "Shareholder Agreement") substantially in the form of Exhibit A hereto, committing each such person, among other things, to vote his or her shares of Company Stock in favor of this Agreement and the Merger at the Company Meeting, granting a proxy for such shares to Parent, and to certain representations and covenants.

        6.19.    Additional Agreements.    In case at any time after the Effective Time of the Merger any further action is necessary or desirable to carry out the purposes of this Agreement or to vest Parent or Parent Bank with full title to all properties, assets, rights, approvals, immunities and franchises of the Company, the proper officers and directors of each party to this Agreement shall take all necessary or appropriate action.

        6.20.    Pre-Closing Adjustments.    At or before the Effective Time of the Merger, the Company shall make such accounting entries or adjustments, including additions to its ALL and charge-offs of loans as Parent shall direct as a result of its on-going review of the Company (including its review of the information provided to it pursuant to Sections 6.05 and 6.14) or in order to implement its plans following the Closing or to reflect expenses and costs related to the Merger; provided, however, that unless the adjustment would otherwise be required by applicable law, rule or regulation, or by regulatory accounting principles and GAAP applied on a basis consistent with the Financial Statements of the Company, (a) the Company shall not be required to take such actions more than one day prior to the Effective Time of the Merger or prior to the time Parent agrees in writing that all of the conditions to its obligation to close as set forth in Section 7.02 have been satisfied or waived and each of the approvals in Section 7.01(b) have been received, and (b) no such adjustment shall (i) require any

34

filing with any Governmental Authority, (ii) violate any law, rule or regulation applicable to Parent, (iii) otherwise materially disadvantage the Company if the Merger was not consummated or (iv) constitute or be deemed to be a breach, violation of or failure to satisfy any representation, warranty, covenant, condition or other provision of this Agreement or otherwise be considered in determining whether any such breach, violation or failure to satisfy shall have occurred.

        6.21.    Company Stock Options.

        (a)  The Company shall take such actions as may be necessary such that immediately prior to the Effective Time, each Company Stock Option that was outstanding immediately prior to the Effective Time, whether or not then exercisable, shall be cancelled and only entitle the holder thereof, as soon as reasonably practicable after surrender thereof, to receive an amount in cash from the Company equal to the product of the total number of shares of Company Common Stock as to which such holder has vested options and the excess of the Per Share Cash Consideration over the exercise price of Company Stock Option, less any applicable taxes withheld. At the Effective Time, unless Parent elects to take any action pursuant to paragraph (b) with respect to some (as permitted under applicable law) or all of the Company Stock Options, each option to purchase a share of Company Stock whether or not vested shall terminate and be of no further effect and any rights thereunder to purchase shares of Company Stock shall also terminate and be of no further force or effect. To the extent that the Stock Option Plan does not permit such a termination of the Company Stock Options subject to such Stock Option Plan, the Company shall take all actions necessary to obtain the consents of the Persons who holds such Company Stock Options to be terminated.

        (b)  At the Effective Time, each Company Stock Option which (i) was outstanding immediately prior to the Effective Time, whether or not then exercisable, and (ii) Parent has elected to assume, shall be deemed to constitute an option to acquire (each such option, a "Replacement Option"), on the same terms and conditions as were applicable under such Company Stock Option, the same number of shares of Parent Common Stock as the holder of such Company Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such option in full immediately prior to the Effective Time (rounded down to the nearest whole number), at a price per share (rounded up to the nearest whole cent) equal to (y) the aggregate exercise price for the Company Common Stock otherwise purchasable pursuant to such Company Stock Option divided by (z) the number of full shares of Parent Common Stock deemed purchasable pursuant to such Company Stock Option in accordance with the foregoing. As soon as practicable after the Effective Time, Parent shall file a registration statement on Form S-8 (or amend an existing statement, as may be permitted) with respect to the shares of Parent Common Stock issuable in connection with the Replacement Options.

        (c)  The Board of Directors of the Company and Parent shall, prior to the Effective Time, take all such actions as may be necessary or appropriate pursuant to Rule 16b-3(d) and Rule 16b-3(e) to exempt (x) the conversion of Company Stock Options into options to purchase Parent Common Stock and (y) the acquisition of options to purchase Parent Common Stock pursuant to the terms of this Agreement by directors, officers and employees of the Company who may become an officer or director of Parent subject to the reporting requirements of Section 16(a) of the Exchange Act. Parent and the Company shall provide to counsel to the other party for its review copies of the resolutions to be adopted by the respective Boards of Directors to implement the foregoing, if necessary, prior to such adoption.

        6.22.    Rights.    At the Effective Time, each Right which is outstanding and is unexercised immediately prior to the Effective Time, shall be adjusted so as to entitle the holder of such Right to receive, in lieu of the shares of Company Stock that would otherwise have been issuable upon the exercise thereof, an amount in cash computed by multiplying (i) the difference between (x) the Cash Consideration and (y) the per share exercise price applicable to such Right by (ii) the number of such shares of Company Stock subject to such Right. As soon as practicable after the Effective Time (but in

35

any event prior to the seventh day after the Effective Time), Parent will make the payments required to be made to holders of Rights under this Section 6.22.

        6.23.    Audited Company Financial Statements.    No later than two Business Days after receipt thereof, the Company shall provide Parent with a copy of its financial statements presenting the financial condition of the Company for the year ended December 31, 2001, as audited by KPMG, LLP.

        6.24.    Tax Treatment of the Merger.    Parent and the Company intend the Agreement to qualify as a tax-free reorganization for all U.S. federal income tax purposes. Each party will (and will cause each of its Subsidiaries to) both before and after the Effective Time (i) use reasonable efforts to cause the Agreement to so qualify; (ii) refrain from taking any action that would reasonably be expected to cause the Agreement to fail to so qualify; and (iii) take the position for all purposes that the Agreement so qualifies.

        6.25.    Due Diligence.    Without limiting the covenants and obligations pursuant to Section 6.05 hereof, Parent shall be entitled to conduct further due diligence on the Company to the extent of information and documents requested on the Due Diligence Request List, and to the extent of any further information and documents reasonably requested by Parent of which it learned during the review of such information and documents. Parent shall be required to complete such due diligence by 5:00 P.M. on the third full business day following the receipt of all information requested by Parent (such time, the "Diligence Ending Time"). The Company shall notify Parent at such time as it believes in good faith that it has delivered all requested information and documents. If Parent and the Company are in agreement, the final three full day period for review of Company information shall begin (it being understood that should Parent learn of any information and documents during such review and reasonably request further information, Parent and the Company shall mutually agree on any extension of the Diligence Ending Time, as necessary).

        6.26.    Diligence Fee.    Upon the execution of this Agreement, Parent agrees to deliver simultaneously to the Company a check (the "Diligence Check") for five hundred thousand dollars ($500,000) (the "Diligence Fee"). The Company shall hold the check in trust, without delivery to any other Person, without permitting or causing a Lien thereon and without facilitating, permitting or causing the cashing thereof, until the earlier of (i) the Diligence Ending Time or (ii) termination by Parent pursuant to Section 8.01(h).

        (a)  If the Diligence Ending Time shall have occurred without Parent having terminated the Agreement pursuant to Section 8.01(h), the Company shall, upon receipt from Parent of a certificate signed by an executive officer or the Chairman of Parent indicating that Parent has waived its termination rights pursuant to Section 8.01(h), promptly deliver to Parent the uncashed Diligence Check. Should the Company not be able to return promptly to Parent the uncashed Diligence Check, the Company shall indemnify and hold harmless Parent for the entire amount of the Diligence Fee and any costs and fees associated with the cancellation and stop-payment of the Diligence Check or the cashing thereof prior to its return to Parent, as the case may be.

        (b)  If Parent shall have terminated this Agreement pursuant to Section 8.01(h), the Company shall be entitled to the entirety of the Diligence Fee as set forth in Section 8.02 below.

        6.27.    Severance Arrangements.    Parent shall offer severance arrangements to individuals employed by the Company and each Subsidiary of the Company immediately prior to the Effective Time on the following basis:

        (a)  Parent shall offer to each of the individuals identified as Senior Employees in Section A of Schedule 5.03(m)(vii) to the Disclosure Schedule (each, a "Senior Employee"), a severance agreement substantially in the form attached hereto as Exhibit E providing for severance payments equal to the amount set forth next to such Senior Employee's name on Schedule 5.03(m)(vii) to the Disclosure Schedule (except in the case of Daniel Mathis, whose executive employment agreement, as amended,

36

sets forth his severance arrangements), or such other amount with respect to any Senior Employee as Parent and such Senior Employee may mutually agree. Notwithstanding the foregoing, Parent shall not be required to make any payment to a Senior Employee which would constitute a "parachute payment" (as defined in Section 280G of the Code), except in the case of Daniel Mathis, pursuant to the terms of his executive employment agreement, as amended.

        (b)  For a period of twelve months after the Effective Time, Parent shall offer all employees of the Company (other than Senior Employees) whose employment is terminated at or after the Effective Time (or prior to the Effective Time, if such termination is at the request of Parent) severance benefits pursuant to the terms of the severance benefit arrangements of either the Company or Parent which provide the greater cash severance payment to similarly situated employees.

        6.28.    Preferred Stock Dividends.    At least five business days prior to Closing, Parent shall contribute to the Exchange Fund an amount in cash necessary to pay in full an amount equal to dividends on the Company's Preferred Stock which could have been declared based on an accrual from March 31, 2002 through the Closing Date. Parent shall take such actions as may be necessary to cause the Exchange Agent to pay, in accordance with Section 3.06 hereof, to record holders of Company Preferred Stock such amounts due on the Company's Preferred Stock held by such holders upon delivery of certificates representing such shares of Company Preferred Stock.

ARTICLE VII

CONDITIONS TO CONSUMMATION OF THE MERGER

        7.01.    Conditions to Each Party's Obligation to Effect the Merger.    The respective obligation of each of the parties hereto to consummate the Merger is subject to the fulfillment or written waiver by the parties hereto prior to the Effective Time of each of the following conditions:

        (a)    Shareholder Approvals.

        (i)    This Agreement shall have been duly approved by the affirmative vote of holders of not less than two-thirds of the outstanding shares of Company Stock, in accordance with applicable law.

        (ii)  The principal terms of this Agreement shall have been approved by the affirmative vote of the holders of not less than a majority of the outstanding shares of Parent Common Stock at the Parent Meeting, in accordance with applicable law.

        (b)    Regulatory Approvals.    All regulatory approvals required to consummate the transactions contemplated hereby shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired and no such approvals shall contain any conditions, restrictions or requirements which the Parent Board reasonably determines in good faith would (i) following the Effective Time, have a Material Adverse Effect on Parent and its Subsidiaries taken as a whole or (ii) reduce the benefits of the transactions contemplated hereby to such a degree that Parent would not have entered into this Agreement had such conditions, restrictions or requirements been known at the date hereof.

        (c)    No Injunction.    No Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, judgment, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and prohibits consummation of the transactions contemplated by this Agreement.

        (d)    Registration Statement.    The Registration Statement shall have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been initiated by the SEC and not withdrawn.

37

        (e)    Listing.    The shares of Parent Common Stock to be issued in the Merger shall have been approved for quotation on Nasdaq.

        7.02.    Conditions to Obligation of the Company.    The obligation of the Company to consummate the Merger is also subject to the fulfillment or written waiver prior to the Effective Time of each of the following additional conditions:

        (a)    Representations and Warranties.    The representations and warranties of Parent set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Effective Date as though made on and as of the Effective Date (except that representations and warranties that by their terms speak as of the date of this Agreement or some other date shall be true and correct as of such date). For purposes of this paragraph, such representations and warranties shall be deemed to be true and correct in all material respects unless the failure or failures of such representations and warranties to be true and correct in all material respects, either individually or in the aggregate, and without giving effect to any materiality, material adverse effect or similar qualifications set forth in such representations and warranties, will have or would reasonably be expected to have a Material Adverse Effect on Parent. Parent shall have performed, in all material respects, each of its covenants and agreements contained in this Agreement. The Company shall have received a certificate, dated the Effective Date, signed on behalf of Parent by the Chief Executive Officer and the Chief Financial Officer of Parent to such effect.

        (b)    Performance of Obligations of Parent.    Parent and Parent Bank shall have performed in all material respects all obligations required to be performed by them under this Agreement at or prior to the Effective Time, and the Company shall have received a certificate, dated the Effective Date, signed on behalf of Parent by the Chief Executive Officer and the Chief Financial Officer of Parent to such effect.

        (c)    Receipt of Opinions.

        (i)    The Company shall have received the written opinion of Keefe, Bruyette & Woods, Inc. to the effect that, as of date of the mailing of the Proxy Statement to the shareholders of the Company in connection with the Company Meeting, the Merger Consideration to be paid to the holders of Company Stock is fair from a financial point of view to such holders.

        (ii)  The Company shall have received the opinion of Blanchard, Krasner & French, A Professional Corporation, or other tax counsel reasonably acceptable to the Company and to Parent, as counsel to the Company, dated the Effective Time, in form and substance reasonably satisfactory to the Company, to the effect that, on the basis of facts, representations and assumptions set forth in such opinion, which are consistent with the state of facts existing at the Effective Time of the Merger, the Merger more likely than not will be treated for federal income tax purposes as a reorganization under Section 368(a) of the Code. In rendering its opinion, Blanchard, Krasner & French, A Professional Corporation, may require and rely upon representations contained in letters from the Company, Parent, Parent Bank and/or their officers or principal shareholders as are customary for such opinions.

        (d)    No Litigation.    No litigation or proceeding shall be pending against Parent or Parent Bank brought by any Governmental Authority seeking to prevent consummation of the transactions contemplated thereby.

        7.03.    Conditions to Obligation of Parent.    The obligation of Parent and Parent Bank to consummate the Merger is also subject to the fulfillment or written waiver prior to the Effective Time of each of the following conditions:

        (a)    Representations and Warranties.    The representations and warranties of the Company set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Effective

38

Date as though made on and as of the Effective Date (except that representations and warranties that by their terms speak as of the date of this Agreement or some other date shall be true and correct as of such date). For purposes of this paragraph, such representations and warranties shall be deemed to be true and correct in all material respects unless the failure or failures of such representations and warranties to be true and correct in all material respects, either individually or in the aggregate, and without giving effect to any materiality, material adverse effect or similar qualifications set forth in such representations and warranties, will have or would reasonably be expected to have a Material Adverse Effect on the Company. The Company shall have performed, in all material respects, each of its covenants and agreements contained in this Agreement and Parent and Parent Bank shall have received a certificate, dated the Effective Date, signed on behalf of the Company by the Chief Executive Officer and the Chief Financial Officer of the Company to such effect.

        (b)  The Disclosure Schedule shall be updated and made current as of the day prior to the Effective Time of the Merger and a draft of the updated Disclosure Schedule shall have been delivered to Parent no later than 72 hours prior to the Effective Time of the Merger; such update of the Disclosure Schedule shall not in any way affect the representations and warranties set forth in Section 5.03. The Company shall have performed in all material respects, each of its covenants and agreements contained in this Agreement and Parent shall have received a certificate signed by the Chief Executive Officer and the Chief Financial Officer of Parent, at the Effective Time of the Merger, to the foregoing effect.

        (c)    Performance of Obligations of Company.    The Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Effective Time, and Parent and Parent Bank shall have received a certificate, dated the Effective Date, signed on behalf of the Company by the Chief Executive Officer and the Chief Financial Officer of the Company to such effect.

        (d)    Performance of Obligations of the Shareholders.    Parent shall have received Shareholder's Agreements executed and delivered by each of the directors and executive officers of the Company as contemplated by Section 6.18, each of which shall remain in full force and effect. The Shareholders shall have performed in all material respects all obligations required to be performed by them under the Shareholder Agreements, provided, however, that this condition shall be deemed to be satisfied notwithstanding any failure to perform such obligations unless any such failure or failures, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect on the Company and, if requested by Parent, Parent shall have received a certificate, dated the Effective Date, signed by each Shareholder to such effect with respect to such Shareholder.

        (e)    Stockholders' Equity and Reserves.    As of the end of the month immediately preceding the Effective Date (the "Measuring Date"), (i) the Adjusted Shareholders' Equity of the Company shall not be less than $50,000,000 and (ii) the Company's ALL shall not be less than the amount which is 70% of the value of all non-performing assets (as defined in accordance with GAAP) held by the Company valued as of Measuring Date, in each case (i) and (ii) as determined in accordance with GAAP. For purposes of this Section 7.03(e), "Adjusted Shareholders' Equity" means the equity of the Company as set forth on the Closing Financial Statements (as defined in Section 7.03(g) below) plus (x) the sum of all amounts paid or accrued in connection with any actions taken pursuant to Section 6.20 to the extent that such actions were not necessary to bring the Company into conformity with GAAP or any rule or regulation of any Regulatory Authority, and (y) any accruals, made after the date hereof, required to be made under GAAP or regulatory accounting policies with respect to any payments owed to Leon Reinhart or Daniel Mathis and which accruals in the case of Daniel R. Mathis are for payments triggered solely as a consequence of the Merger, and less the aggregate amount of any cash, securities or other consideration received in connection with the GTB Transaction.

39

        (f)    No Litigation.    No litigation or proceeding shall be pending against the Company brought by any Governmental Authority seeking to prevent consummation of the transactions contemplated hereby.

        (g)    Closing Financial Statements.    At least four Business Days prior to the Effective Time of the Merger, the Company shall provide Parent with the Company's financial statements presenting the financial condition of the Company as of the close of business on the last day of the last month ended prior to the Effective Time of the Merger and the Company's results of operations for the following periods: (i) January 1, 2001 through December 31, 2001 (this condition shall have been met if the Company shall have previously provided Parent audited financial statements pursuant to Section 6.23 and there shall have been no adjustments thereto) and (ii) January 1, 2002 through the close of business on the last day of the last month ended prior to the Effective Time of the Merger (the "Closing Financial Statements"); provided, however, that if the Effective Time of the Merger occurs on or before the fifth Business Day of the month, the Company shall have provided consolidated financial statements as of and through the second month preceding the Effective Time of the Merger. Such financial statements shall have been prepared in all material respects in accordance with GAAP and regulatory accounting principles consistently applied and other applicable legal and accounting requirements, and reflect all period-end accruals and other adjustments. Such financial statements shall be accompanied by a certificate of the Company's chief financial officer, dated as of a date no earlier than two Business Days prior to the Effective Time of the Merger, to the effect that such financial statements continue to reflect accurately, as of the date of the certificate, the financial condition of Parent in all material respects.

        (h)    Opinion of Parent's Counsel.    Parent shall have received the opinion of Sullivan & Cromwell or other reasonably acceptable tax counsel, as counsel to Parent, dated the Effective Time, in form and substance reasonably satisfactory to Parent, to the effect that, on the basis of facts, representations and assumptions set forth in such opinion, which are consistent with the state of facts existing at the Effective Time of the Merger, the Merger will be treated for federal income tax purposes as a reorganization under Section 368(a) of the Code. In rendering its opinion, Sullivan & Cromwell may require and rely upon representations contained in letters from the Company, Parent, Parent Bank and/or their officers or principal shareholders as are customary for such opinions.

        (i)    Non-competition Agreements.    Parent shall have received Non-competition Agreements executed and delivered by each of the persons listed on Exhibit C1 (or such other agreement as specified on Exhibit C1) as contemplated by Section 6.13, each of which shall remain in full force and effect.

        (j)    Consents.    Parent shall have obtained each of the material consents listed in Schedule 5.03(k) of the Disclosure Schedule as well as each consent for a material contract which was required to be listed on the Disclosure Schedule but not so listed.

        (k)    Company Stock.    The outstanding shares of Company Stock shall not be greater than the sum of (i) shares of Company Stock outstanding as set forth in Section 5.03(b) and (ii) the number of shares of Company Common Stock issued, if any, after the date hereof, upon the exercise of Rights and Company Stock Options set forth on Schedule 5.03(b) to the Disclosure Schedule.

ARTICLE VIII

TERMINATION

        8.01.    Termination.    This Agreement may be terminated, and the Merger may be abandoned:

        (a)    Mutual Consent.    At any time prior to the Effective Time, by the mutual consent of Parent and the Company if the Board of Directors of each so determines by vote of a majority of the members of its entire Board.

40

        (b)    Breach.    At any time prior to the Effective Time, by Parent or the Company if its Board of Directors so determines by vote of a majority of the members of its entire Board, in the event of: (i) a breach by Parent and Parent Bank or the Company, as the case may be, of any representation or warranty contained herein (subject to the standard set forth in Section 5.02), which breach cannot be or has not been cured within 30 days after the giving of written notice to the breaching party or parties of such breach; (ii) a breach by Parent and Parent Bank or the Company, as the case may be, of any of the covenants or agreements contained herein, which breach cannot be or has not been cured within 30 days after the giving of written notice to the breaching party or parties of such breach or (iii) in the case of a termination by Parent, a breach by a Shareholder or Shareholders of any of the covenants or agreements contained in the Shareholder Agreements, which breach cannot be or has not been cured within 30 days after the giving of written notice to the breaching party or parties of such breach, provided that such breach (whether under (i), (ii) or (iii)) would be reasonably likely, individually or in the aggregate with other breaches, to result in a Material Adverse Effect with respect to Parent or the Company, as the case may be.

        (c)    Delay.    At any time prior to the Effective Time, by Parent or the Company if its Board of Directors so determines by vote of a majority of the members of its entire Board, in the event that the Merger is not consummated by December 31, 2002 except that Parent or the Company, as the case may be, shall not have the right to terminate pursuant to this Section 8.01(c) to the extent that the failure of the Merger then to be consummated arises out of or results from the knowing action or inaction of (i) the party seeking to terminate pursuant to this Section 8.01(c), (ii) Parent Bank (if Parent is the party seeking to terminate) or (iii) any of the Shareholders (if the Company is the party seeking to terminate), which action or inaction is in violation of its obligations under this Agreement or, in the case of the Shareholders, his, her or its obligations under the relevant Shareholder Agreement.

        (d)    No Approval.    By the Company or Parent, as the case may be, if the respective Board of Directors so determines by a vote of a majority of the members of its entire Board, in the event (i) the approval of any Governmental Authority required for consummation of the Merger and the other transactions contemplated by this Agreement shall have been denied (x) by final nonappealable action of such Governmental Authority or (y) an application therefore shall have been permanently withdrawn at the invitation, request or suggestion of a Governmental Authority; or (ii) in the case of the Company, if the holders of Parent Common Stock fail to approve the transaction as set forth in Section 7.01(a)(ii); or (iii) in the case of Parent, if the holders of Company Stock fail to approve the transaction as set forth in Section 7.01(a)(i).

        (e)    Acquisition Proposal.    By Parent, if (i) the Company shall have exercised a right specified in the provision set forth in Section 6.07 with respect to any Acquisition Proposal and shall, directly or through agents or representatives, continue discussion with any third party concerning such Acquisition Proposal for more than 15 Business Days after the date of receipt of such Acquisition Proposal; or (ii) a Acquisition Proposal that is publicly disclosed shall have been commenced, publicly proposed or communicated to the Company which contains a proposal as to price (without regard to the specificity of such price proposal) and the Company shall not have rejected such proposal within 15 Business Days of (x) its receipt or (y) the date its existence first becomes publicly disclosed, if earlier; or (iii) if shareholder approval referred to in Section 7.01(a) herein is not obtained at the Company Meeting following announcement of any bona fide Acquisition Proposal.

        (f)    Failure to Recommend.    At any time prior to the Company Meeting, by Parent if the Company shall have breached Section 6.07 or the Company Board shall have failed to make its recommendation referred to in Section 6.02, withdrawn such recommendation or modified or changed such recommendation in a manner adverse in any respect to the interests of Parent.

        (g)  Change in Price of Parent Common Stock. By the Company, if at the time that the Closing Price is determined, the Closing Price is less than the Floor Price; provided, however, that the Company

41

shall have no right to terminate under this Section 8.02(g) if Parent exercises its right under Section 3.03(c)(iv) to increase the Stock Amount so that the aggregate value of the Parent Common Stock, valued as of the Closing Price, to be received by holders of Company Stock is not less than the amount such holders of Company Stock would have received had the Closing Price been equal to the Floor Price.

        (h)    Due Diligence.    By Parent, if at or prior to the Diligence Ending Time, Parent notifies the Company that it has decided not to pursue the transactions contemplated by this Agreement.

        (i)    Contracts.    By Parent, if Company shall not have delivered the consents required under Section 7.03(j) and the failure to obtain such consents would be reasonably likely to have a Material Adverse Effect on Parent or the Surviving Bank.

        8.02.    Effect of Termination and Abandonment.    (a) In the event of termination of this Agreement and the abandonment of the Merger pursuant to this Article 8, no party to this Agreement shall have any liability or further obligation to any other party hereunder except (i) as set forth in paragraphs (b) and (c) below and Section 9.01, (ii) that termination will not relieve a breaching party from liability if not provided for herein for any willful breach of any covenant, agreement, representation or warranty of this Agreement giving rise to such termination and (iii) any other provision of this Agreement which expressly survives the termination of this Agreement.

        (b)  If this Agreement is terminated by the Company pursuant to Section 8.01, paragraphs (b), (c), (d)(ii) or (g) or for willful breach by Parent of Section 6.10, upon such termination Parent shall pay to the Company a termination fee of $5,000,000 (the "Termination Fee"); if this Agreement is terminated by the Company or by Parent pursuant to Section 8.01(d)(i) and the failure to receive such approval was not based predominately upon an identified problem or condition at the Company or any of its Subsidiaries, Parent shall pay to the Company the Termination Fee; and if this Agreement is terminated by Parent pursuant to Section 8.01(h), the Company shall be entitled to the Diligence Fee. Notwithstanding anything contained herein to the contrary, if Parent exercises its right of termination pursuant to Section 8.01(c) on or after December 31, 2002 and at such time of termination the Company was also entitled to terminate pursuant to Section 8.01(c), Parent shall pay the Termination Fee to the Company.

        (c)  If this Agreement is terminated (i) by the Company pursuant to Section 6.07 after a bona fide Acquisition Proposal for the Company shall have been publicly disclosed, or any person or entity shall have publicly disclosed a bona fide intention (whether or not conditional) to make an Acquisition Proposal, or (ii) by Parent pursuant to Section 8.01, paragraphs (b), (c), (d)(iii), (e) or (f), upon any of such termination set forth in (i) or (ii), the Company shall pay to Parent the Termination Fee. Notwithstanding anything contained herein to the contrary, if the Company exercises its right of termination pursuant to Section 8.01(c) on or after December 31, 2002 and at such time of termination Parent was also entitled to terminate pursuant to Section 8.01(c), the Company shall pay the Termination Fee to Parent.

        (d)  Any Termination Fee that becomes payable to Parent or the Company pursuant to this Section 8.02 shall be paid by wire transfer of immediately available funds to an account designated by the Company or Parent, as the case may be, if this Agreement is terminated and the termination meets the conditions set forth in this Section 8.02 at or prior to such termination.

        (e)  The Company and Parent agree that the agreements contained in paragraphs (b), (c) and (d) above are an integral part of the transactions contemplated by this Agreement, that without such agreements the Company and Parent would not have entered into this Agreement, and that such amounts do not constitute a penalty. If the Company or Parent fails to pay the amounts due under paragraph (b) or (c) above within the time periods specified in paragraph (d) above, the party obligated to pay the Termination Fee shall pay all costs and expenses incurred by the other party in

42

connection with any action, including the filing of any lawsuit, taken to collect payment of such amounts, together with interest on the amount of any such unpaid amounts at the publicly announced prime rate of Bank of America, N.A. from the date such amounts were required to be paid.

ARTICLE IX

MISCELLANEOUS

        9.01.    Survival.    No representations, warranties, agreements and covenants contained in this Agreement shall survive the Effective Time (other than Sections 6.09, 6.11, 6.12 and 6.17 and this Article 9, which shall survive the Effective Time) or the termination of this Agreement if this Agreement is terminated prior to the Effective Time (other than Sections 6.05(e), 8.02 and this Article 9, which shall survive any such termination).

        9.02.    Waiver; Amendment.    Prior to the Effective Time, any provision of this Agreement may be (i) waived in whole or in part by the party benefited by the provision or by both parties or (ii) amended or modified at any time, by an agreement in writing between the parties hereto executed in the same manner as this Agreement, except that after the Company Meeting, this Agreement may not be amended if it would reduce the consideration to be received by the Company shareholders in the Merger without any subsequent approval by such shareholders or be in violation of applicable law.

        9.03.    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed to constitute an original but all of which together shall constitute one and the same instrument.

        9.04.    Governing Law, Jurisdiction and Venue.    This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of California (however, not to the exclusion of any applicable Federal law), without regard to California statutes or judicial decisions regarding choice of law questions. The parties hereby irrevocably submit to the jurisdiction of the courts of the State of California and the federal courts of the United States of America located in the Southern District of the State of California solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated herein and therein, and hereby waive, and agree to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such documents, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such California state or federal court. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 9.06 or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.

        9.05.    Expenses.    Each party hereto will bear all expenses incurred by it in connection with this Agreement and the transactions contemplated hereby.

        9.06.    Notices.    All notices, requests and other communications hereunder to a party shall be in writing and shall be deemed given if personally delivered, telecopied (with confirmation) or mailed by registered or certified mail (return receipt requested) to such party at its address set forth below or such other address as such party may specify by notice to the parties hereto.

43

If to the Company to:

First National Bank
401 West "A" Street
San Diego, CA 92101-7917
Attention: Daniel R. Mathis
Telephone: (619) 235-1293
Facsimile: (619) 235-1268

With copies to:

Blanchard, Krasner & French
800 Silverado Street, 2d Floor
La Jolla, CA 92037
Attention: Robert W. Blanchard, Esq.
Telephone: (858) 551-2440
Facsimile: (858) 551-2434

If to Parent or Parent Bank to:

First Community Bancorp
1160 El Tordo Road
Rancho Santa Fe, California 92067
Attention: Matthew P. Wagner
Telephone: (310) 458-1521
Facsimile: (310) 394-1544

With a copy to:

Sullivan & Cromwell
1888 Century Park East, Suite 2100
Los Angeles, California 90067-1725
Attention: Stanley F. Farrar, Esq.
Telephone: (310) 712-6600
Facsimile: (310) 712-8800

        9.07.    Entire Understanding; No Third Party Beneficiaries.    This Agreement (including the Disclosure Schedule attached hereto and incorporated herein), the Shareholder Agreements and the Non-Competition Agreements represent the entire understanding of the parties hereto and thereto with reference to the transactions contemplated hereby and thereby and this Agreement, the Shareholder Agreements and the Non-Competition Agreements supersede any and all other oral or written agreements heretofore made. Except for Section 6.11, nothing in this Agreement, expressed or implied, is intended to confer upon any Person, other than the parties hereto or their respective successors, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

        9.08.    Effect.    No provision of this Agreement shall be construed to require the Company, Parent, Parent Bank or any Subsidiaries, affiliates or directors of any of them to take any action or omit to take any action which action or omission would violate applicable law (whether statutory or common law), rule or regulation.

        9.09.    Severability.    Except to the extent that application of this Section 9.09 would have a Material Adverse Effect on the Company, Parent or Parent Bank, any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any

44

provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

        9.10.    Enforcement of the Agreement.    The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

        9.11.    Interpretation.    When a reference is made in this Agreement to Sections, Exhibits or Schedules, such reference shall be to a Section of, or Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and are not part of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation".

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in counterparts by their duly authorized officers, all as of the day and year first above written.

FIRST COMMUNITY BANCORP
By:	/s/  MATTHEW P. WAGNER Name: Matthew P. Wagner Title: President and Chief Executive Officer
RANCHO SANTA FE NATIONAL BANK
By:	/s/  MATTHEW P. WAGNER Name: Matthew P. Wagner Title: Chairman
FIRST NATIONAL BANK
By:	/s/  DANIEL R. MATHIS Name: Daniel R. Mathis Title: President and Chief Executive Officer

45

QuickLinks

Exhibit 2.3

TABLE OF CONTENTS
RECITALS
ARTICLE I CERTAIN DEFINITIONS
ARTICLE II THE MERGER
ARTICLE III CONSIDERATION; EXCHANGE PROCEDURES
ARTICLE IV ACTIONS PENDING ACQUISITION
ARTICLE V REPRESENTATIONS AND WARRANTIES
ARTICLE VI COVENANTS
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER
ARTICLE VIII TERMINATION
ARTICLE IX MISCELLANEOUS

EX-4.2

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 4.2

By-Laws
of
First Community Bancorp

ARTICLE I

Shareholders

        Section 1.1.    Annual Meetings.    An annual meeting of shareholders shall be held for the election of directors on a date and at a time and place either within or without the State of California fixed by resolution of the Board of Directors. Any other proper business may be transacted at the annual meeting, except as limited by the notice requirements of subdivisions (a) and (d) of Section 601 of the California General Corporation Law.

        Section 1.2.    Special meetings.    Special meetings of the shareholders may be called at any time by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the holders of shares entitled to cast not less than ten percent of the votes at the meeting, such meeting to be held on a date and at a time and place either within or without the State of California as may be stated in the notice of the meeting.

        Section 1.3.    Notice of Meetings.    Whenever shareholders are required or permitted to take any action at a meeting a written notice of the meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each shareholder entitled to vote thereat. Such notice shall state the place, date and hour of the meeting, and (i) in the case of a special meeting, the general nature of the business to be transacted, and no other business may be transacted, or (ii) in the case of the annual meeting, those matters which the Board, at the time of the mailing of the notice, intends to present for action by the shareholders. The notice of any meeting at which directors are to be elected shall include a list of the names of the nominees intended at the time of the mailing of the notice to be presented by the Board for election.

        Notice of a shareholders' meeting or any report shall be given either personally or by first-class mail or other means of written communication, addressed to the shareholder at the address of such shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice; or if no such address appears or is given, at the place where the principal executive office of the corporation is located or by publication at least once in a newspaper of general circulation in the county in which the principal executive office is located. The notice or report shall he deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication. An affidavit of mailing of any notice or report in accordance with the provisions of this by-law, executed by the Secretary, Assistant Secretary or any transfer agent, shall be prima facie evidence of the giving of the notice or report.

        If any notice or report addressed to the shareholder at the address of such shareholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice or report to the shareholder at such address, all future notices or reports shall be deemed to have been duly given without further mailing if the same shall be available for the shareholder upon written demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of the notice or report to all other shareholders.

        Except as otherwise prescribed by the Board of Directors in particular instances and except as otherwise provided by subdivision (c) of section 601 of the California General Corporation Law, the Secretary shall prepare and give, or cause to be prepared and given, the notice of meetings of shareholders.

        Section 1.4.    Adjournments.    When a shareholders' meeting is adjourned to another time or place, except as otherwise provided in this Section 1.4, notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 45 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.

        Section 1.5.    Validating Meeting of Shareholders; Waiver of Notice.    The transactions of any meeting of shareholders, however called and noticed, and wherever held, are as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Attendance of a person at a meeting shall constitute a waiver of notice of and presence at such meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required by law to be included in the notice but not so included, if such objection is expressly made at the meeting. Neither the business to be transacted at nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice, consent to the holding of the meeting or approval of the minutes thereof, except as required by subdivision (f) of Section 601 of the California General Corporation Law.

        Section 1.6.    Quorum.    A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of the shareholders. If a quorum is present, the affirmative vote of a majority of the shares represented and voting at the meeting (which shares voting affirmatively also constitute a majority of the required quorum) shall be the act of the shareholders, unless the vote of a majority or higher percentage of all outstanding shares is required by law or by the articles of incorporation, and except as otherwise provided in this Section 1.6. The shareholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. In the absence of a quorum, any meeting of shareholders may be adjourned from time to time by the vote of a majority of the shares represented either in person or by proxy, but no other business may be transacted, except as provided in this Section 1.6.

        Section 1.7.    Organization.    Meetings of shareholders shall be presided over by the Chairman of the Board of Directors, if any, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board by the Chief Executive Officer, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary, an Assistant Secretary, shall act as secretary of the meeting, or in their absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

        Section 1.8.    Voting.    Subject to the provisions of Sections 702 through 704 of the California General Corporation Law (relating to voting of shares held by a fiduciary, in the name of a corporation, or in joint ownership), only persons in whose names shares entitled to vote stand on the stock records of the corporation at the close of business on the business day next preceding the day on which notice of the meeting is given or if such notice is waived, at the close of business on the business day next preceding the day on which the meeting of shareholders is held, shall be entitled to vote at such meeting, and such day shall be the record date for such meeting. Such vote may be oral or by ballot; provided, however, that all elections for directors must be by ballot upon demand made by a

2

shareholder at any election and before the voting begins. If a quorum is present, except with respect to election of directors, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on any matter shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the General Corporation Law or the articles of incorporation. Subject to the requirements of the next sentence, every shareholder entitled to vote at any election for directors shall have the right to cumulate his votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which his shares are entitled, or to distribute his votes on the same principal among as many candidates as he shall think fit. No shareholder shall be entitled to cumulate votes unless the name of the candidate or candidates for whom such votes would be cast has been placed in nomination prior to the voting and at least one shareholder has given notice at the meeting prior to the voting, of such shareholder's intention to cumulate his votes. The candidates receiving the highest number of votes of shares entitled to be voted for them, up to the number of directors to be elected, shall be elected.

        Any holder of shares entitled to vote on any matter may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, other than elections to office, but, if the shareholder fails to specify the number of shares such shareholder is voting affirmatively, it will be conclusively presumed that the shareholder's approving vote is with respect to all shares such shareholder is entitled to vote.

        Any other action which, under any provision of the California General Corporation Law, may be taken at a meeting of the shareholders, may be taken without a meeting, and without notice except as hereinafter set forth, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Unless the consents of all shareholders entitled to vote have been solicited in writing:

        (a)  Notice of any proposed shareholder approval of, (i) a contract or other transaction with an interested director, (ii) indemnification of an agent of the corporation as authorized by Section 7.5 of these By-Laws, (iii) a reorganization of the corporation as defined in Section 181 of the California General Corporation Law, or (iv) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares, if any, without a meeting by less than unanimous written consent, shall be given at least ten (10) days before the consummation of the action authorized by such approval; and

        (b)  Prompt notice shall be given of the taking of any other corporate action approved by shareholders without a meeting by less than unanimous written consent, to those shareholders entitled to vote who have not consented in writing. Such notices shall be given in the manner and shall be deemed to have been given as provided in Section 1.3 of these By-Laws.

        Unless, as provided in Section 1.11 of these By-Laws, the board of directors has fixed a record date for the determination of shareholders entitled to notice of and to give such written consent, the record date for such determination shall be the day on which the first written consent is given. All such written consents shall be filed with the Secretary of the corporation.

        Any shareholder giving a written consent, or the shareholder's proxyholders, or a transferee of the shares, or a personal representative of the shareholder, or their respective proxyholders, may revoke the consent by a writing received by the corporation prior to the time that written consents by the number of shares required to authorize the proposed action have been filed with the Secretary of the corporation, but may not do so thereafter. Such revocation is effective upon its receipt by the Secretary of the corporation.

        Section 1.9.    Shareholder's Proxies.    Every person entitled to vote shares may authorize another person or persons to act by proxy with respect to such shares. Any proxy purporting to be executed in

3

accordance with the provisions of Section 705 of the California General Corporation Law shall be presumptively valid. No proxy shall be valid after the expiration of eleven months from the date thereof unless otherwise provided in the proxy. Every proxy continues in full force and effect until revoked by the person executing it prior to the vote pursuant thereto, except as otherwise provided in this Section 1.9. Such revocation may be effected by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy executed by the person executing the prior proxy and presented to the meeting, or as to any meeting by attendance at such meeting and voting in person by the person executing the proxy. A proxy is not revoked by the death or incapacity of the maker unless, before the vote is counted, written notice of such death or incapacity is received by the corporation. A proxy may be made irrevocable under the circumstances set forth in subdivision (e) of Section 705 of the California General Corporation Law. Any form of proxy distributed to ten or more shareholders shall conform to the requirements of Section 604 of the California General Corporation Law.

        Section 1.10.    Inspectors.    In advance of any meeting of shareholders the Board of Directors may appoint inspectors of election to act at the meeting and any adjournment thereof. If inspectors of election are not so appointed, or if any persons so appointed fail to appear or refuse to act, the chairman of any meeting of shareholders may, and on the request of any shareholder or a shareholder's proxy shall, appoint inspectors of election (or persons to replace those who so fail or refuse) at the meeting. The number of inspectors shall be either one or three. If appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares represented in person or by proxy shall determine whether one or three inspectors are to be appointed. The inspectors of election shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum and the authenticity, validity and effect of proxies, receive votes, ballots or consents, hear and determine all challenges and questions in any way arising in connection with the right to vote, count and tabulate all votes or consents, determine when the polls shall close, determine the result and do such acts as may be proper to conduct the election or vote with fairness to all shareholders.

        The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If there are three inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.

        Section 1.11.    Fixing Date for Determination of Shareholders of Record.    In order that the corporation may determine the shareholders entitled to notice of any meeting or to vote or to express consent to corporate action in writing without a meeting or entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days prior to the date of such meeting nor more than sixty days prior to any other action. If no record date is fixed: (1) the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held; (2) the record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the Board has been taken, shall be the day on which the first written consent is given; and (3) the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto or the sixtieth day prior to the date of such other action, whichever is later. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting, but the Board shall fix a new record date if the meeting is adjourned for more than 45 days from the date set for the original meeting.

4

        Section 1.12.    Advanced Notice of Nomination of Directors.    At any annual or special meeting of shareholders, persons nominated for election as directors by shareholders shall be considered only if advance notice thereof has been timely given as provided herein and such nominations are otherwise proper for consideration under applicable law and the articles of incorporation and bylaws of the corporation. Notice of the name of any person to be nominated by any shareholders for election as a director of the corporation at any meeting of shareholders shall be delivered to the Secretary of the Corporation at its principal executive office not less than 60 nor more than 90 days prior to the date of the meeting; provided, however, that if the date of the meeting is first publicly announced or disclosed (in a public filing or otherwise) less than 70 days prior to the date of the meeting, such advance notice shall be given not more than ten days after such date is first so announced or disclosed. Public notice shall be deemed to have given more than 70 days in advance of the annual meeting if the corporation shall have previously disclosed, in these by-laws or otherwise, that the annual meting in each year is to be held on a determinable date, unless and until the Board determines to hold the meeting on a different date. Any shareholder desiring to nominate any person for election as a director of the corporation shall deliver with such notice a statement in writing setting forth the name of the person to be nominated, the number and class of all shares of each class of stock of the corporation beneficially owned by such person, the information regarding such person required by paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted by the Securities and Exchange Commission (or the corresponding provisions of any regulation subsequently adopted by the Securities and Exchange Commission applicable to the corporation, such person's signed consent to serve as a director of the corporation if elected, such shareholder's name and address and the number and class of all shares of each class of stock of the corporation beneficially owned by such shareholder. As used herein, shares "beneficially owned" shall mean all shares as to which such person, together with such person's affiliates and associates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934), may be deemed to be beneficially owned pursuant to rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as well as all shares as to which such person, together with such person's affiliates and associates, has the right to become the beneficial owner pursuant to any agreement or understanding, or upon the exercise of warrants, options or rights to convert or exchange (whether such rights are exercisable immediately or only after the passage of time or the occurrence of conditions). The person presiding at the meet in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall determine whether such notice has been duly given and shall direct that nominees not be considered if such notice has not been given.

ARTICLE II

Board of Directors

        Section 2.1    Powers; Number; Qualifications.    The business and affairs of the corporation shall be managed by, and all corporate powers shall be exercised by or under, the direction of the Board of Directors, except as otherwise provided in these By-Laws or in the articles of incorporation.

        The number of directors of the corporation shall be five (5) until the effective date of the corporation's acquisition of First Community Bank of the Desert, on which date the number of directors of the corporation shall be not less than seven (7) nor more than twelve (12) until changed by amendment of the articles of incorporation or by a by-law amending this Section 2.1 duly adopted by the vote or written consent of the holders of a majority of the outstanding shares entitled to vote, provided that a proposal to reduce the authorized number or the minimum number of directors below five (5) within the limits specified in the articles of incorporation or in this Section 2.1: (i) by resolution duly adopted by the vote of a majority of the shares entitled to vote represented at a duly held meeting at which a quorum is present, or (ii) by a by-law or amendment thereof duly adopted by the vote of a majority of the shares entitled to vote represented at a duly held meeting at which a quorum is present, or by a written consent of the holders of a majority of the outstanding shares entitled to vote, or by the

5

board of directors; or (iii) by approval of the shareholders (as defined in Section 153 of the California General Corporation Law).

        Subject to the foregoing provisions for changing the number of directors, effective upon the date of the corporation's acquisition of First Community Bank of the Desert the number of directors of this corporation shall be fixed at nine (9).

        Section 2.2    Election; Term of Office; Resignation; Removal; Vacancies.    At each annual meeting of shareholders, directors shall be elected to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified. Any director may resign effective upon giving written notice to the Chairman of the Board, the Secretary or the Board of Directors of the corporation, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.

        Any or all of the directors may be removed without cause if such removal is approved by a majority of the outstanding voting shares, except that no director may be removed (unless the entire Board of Directors is removed) when the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written consent, all shares entitled to vote were voted) and the entire number of directors authorized at the time of the director's most recent election were then being elected.

        Any reductions in the authorized number of directors does not remove any director prior to the expiration of such director's term in office.

        A vacancy in the Board of Directors shall be deemed to exist (a) if a director dies, resigns, or is removed by the shareholders or an appropriate court, as provided in sections 303 or 304 of the California General Corporation Law; (b) if the Board of Directors declares vacant the office of a director who has been convicted of a felony or declared of unsound mind by an order of court; (c) if the authorized number of directors is increased; or (d) if at any shareholders, meeting at which one or more directors are elected the shareholders fail to elect the full authorized number of directors to be voted for at that meeting. Unless otherwise provided in the articles of incorporation or these by-laws and except for a vacancy caused by the removal of a director, vacancies on the Board may be filled by appointment by the Board. A vacancy on the Board caused by the removal of a director may be filled only by the shareholders, except that a vacancy created by the Board declaring an office of a director vacant because a director has been convicted of a felony or declared of unsound mind by an order of court may be filled by the Board.

        The shareholders may elect a director at any time to fill a vacancy not filled by the Board of Directors.

        If the number of directors then in office is less than a quorum, vacancies on the Board of Directors may be filled by the unanimous written consent of the directors then in office, the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice complying with Section. 2.4 hereof or a sole remaining director.

        Section 2.3.    Regular Meetings.    Regular meetings of the Board of Directors may be held without notice at such places within or without the State of California and at such times as the Board may from time to time determine.

        Section 2.4.    Special meetings; Notice of Meetings; Waiver of Notice.    Special meetings of the Board of Directors may be held at any time or place within or without the State of California whenever called by the Chairman of the Board, by the Vice Chairman of the Board, if any, or by any two directors.

6

Special meetings shall be held on four days, notice by mail or 48 hours' notice delivered personally or by telephone, telegraph or any other means of communication authorized by Section 307 of the California General Corporation Law. Notice delivered personally or by telephone may be transmitted to a person at the director's office who can reasonably be expected to deliver such notice promptly to the director.

        Notice of a meeting need not be given to any director who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such director, All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. A notice, or waiver of notice, need not specify the purpose of any regular or special meeting of the Board.

        Section 2.5.    Participation in Meetings by Conference Telephone Permitted.    Members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or of such committee, as the case may be, through the use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another, and participation in a meeting pursuant to this Section 2.5 shall constitute presence in person at such meeting.

        Section 2.6.    Quorum; Adjournment; Vote Required for Action.    At all meetings of the Board of Directors one-third of the authorized number of directors or three directors, whichever is larger, shall constitute a quorum for the transaction of business. Subject to the provisions of Sections 310 and 317(e) of the California General Corporation Law, every act or decision done or made by a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board unless the articles of incorporation or these by-laws shall require a vote of a greater number.

        A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. If the meeting is adjourned for more than 24 hours, notice of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of the adjournment.

        Section 2.7.    Organization.    Meetings of the Board of Directors shall be presided over by the Chairman of the Board, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in their absence by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting.

        Section 2.8.    Action by Directors Without a Meeting.    Any action required or permitted to be taken by the Board of Directors, or any committee thereof, may be taken without a meeting if all members of the Board or of such committee, as the case may be, shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board. Such action by written consent shall have the same force and effect as a unanimous vote of such directors.

        Section 2.9.    Compensation of Directors.    The Board of Directors shall have the authority to fix the compensation of directors for services in any capacity.

ARTICLE III

Executive and Other Committees

        Section 3.1.    Executive and Other Committees of Directors.    The Board of Directors, by resolution adopted by a majority of the authorized number of directors, may designate an executive committee

7

and other committees, each consisting of two or more directors, to serve at the pleasure of the Board, and each of which, to the extent provided in the resolution, shall have all the authority of the Board, except that no such committee shall have power or authority with respect to the following matters:

        (1)  The approval of any action for which the California General Corporation Law also requires the approval of the shareholders or of the outstanding shares;

        (2)  The filling of vacancies in the Board or in any committee thereof;

        (3)  The fixing of compensation of the directors for serving on the Board or on any committee thereof;

        (4)  The amendment or repeal of the by-laws, or the adoption of new by-laws;

        (5)  The amendment or repeal of any resolution of the Board which, by its terms, shall not be so amendable or repealable;

        (6)  The making of distributions to shareholders, except at a rate or in a periodic amount or within a price range set forth in the articles or determined by the Board of Directors;

        (7)  The appointment of other committees of the Board or the members thereof;

        (8)  The removal or indemnification of any director; or

        (9)  The changing of the number of authorized directors on the Board.

The Board of Directors may designate one or more directors as alternate members of any such committee, who may replace any absent member or members at any meeting of such committee.

        Unless the Board of Directors otherwise provides, each committee designated by the Board may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board of Directors or a provision in the rules of such committee to the contrary, each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article II of these by-laws.

ARTICLE IV

Officers

        Section 4.1.    Officers; Election.    As soon as practicable after the annual meeting of shareholders in each year, the Board of Directors shall elect a Chairman of the Board, a Secretary and a Chief Financial Officer, and it may, if it so determines, elect from among its members a Vice Chairman of the Board. The Board may also elect one or more Managing Directors, one or more Assistant Secretaries, and such other officers as the Board may deem desirable or appropriate and may give any of them such further designations or alternate titles as it considers desirable. Any number of offices may be held by the same person.

        Section 4.2.    Term of Office: Resignation; Removal; Vacancies.    Except as otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until the first meeting of the Board after the annual meeting of shareholders next succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Board or to the Chairman of the Board or the Secretary of the corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. The Board may remove any officer with or without cause at any time. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of

8

the corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board at any regular or special meeting.

        Section 4.3.    Powers and Duties.    The officers of the corporation shall have such powers and duties in the management of the corporation as shall he stated in these by-laws or in a resolution of the Board of Directors which is not inconsistent with these by-laws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the Board. The Secretary shall have the duty to record the proceedings of the meetings of the shareholders, the Board of Directors and any committees in a book to be kept for that purpose. The Board may require any officer, agent or employee to give security for the faithful performance of his or her duties.

ARTICLE V

Forms of Certificates; Loss
and Transfer of Shares

        Section 5.1.    Forms of Certificates.    Every holder of shares in the corporation shall be entitled to have a certificate signed in the name of the corporation by the Chairman or Vice Chairman of the Board of Directors, if any, and by the Chief Financial Officer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the corporation, certifying the number of shares and the class or series of shares owned by such shareholder. If such certificate is manually signed by one officer or manually countersigned by a transfer agent or by a registrar, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to he such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same affect as if such person were such officer, transfer agent or registrar at the date of issue.

        Section 5.2.    Lost, Stolen or Destroyed Stock Certificates: Issuance of New Certificates.    The corporation may issue a new share certificate or a new certificate for any other security in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it (including any expense or liability) an account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

ARTICLE VI

Records and Reports

        Section 6.1.    Shareholder Records.    The corporation shall keep at its principal executive office or at the office of its transfer agent or registrar a record of the names and addresses of all shareholders and the number and class of shares held by each shareholder.

        A shareholder or shareholders holding at least five percent in the aggregate of the outstanding voting shares of the corporation, or a shareholder who otherwise is authorized by subdivision (a) of Section 1600 of the California General Corporation Law, may inspect and copy the record of shareholders, names and addresses and shareholdings during usual business hours, on five days, prior written demand on the corporation, or obtain from the corporation's transfer agent, on written demand and tender of the transfer agent's usual charges for this service, a list of the names and addresses of shareholders who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which a list has been compiled or as of a specified date later than the date of demand. This list shall be made available within five days after the demand is received or the date specified therein as the date as of which the list is to be compiled. The record of shareholders shall also be open to inspection on the written demand of any shareholder or holder of a voting trust

9

certificate, at any time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or holder of a voting trust certificate. Any inspection and copying under this section may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making the demand.

        Section 6.2.    By-laws.    The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in this state, the original or a copy of the by-laws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours. If the principal executive office of the corporation is outside the State of California and the corporation has no principal business office in this state, the Secretary shall, upon the written request of any shareholder, furnish to that shareholder a copy of the by-laws as amended to date.

        Section 6.3.    Minutes and Accounting Records.    The minutes of proceedings of the shareholders, the Board of Directors, and committees of the Board, and the accounting books and records shall be kept at the principal executive office of the corporation, or at such other place or places as designated by the Board of Directors. The minutes shall be kept in written form, and the accounting books and records shall be kept either in written form or in a form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or holder of a voting trust certificate. The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary of the corporation.

        Section 6.4.    Inspection by Directors.    Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.

        Section 6.5.    Annual Report to Shareholders.    Inasmuch as, and for as long as, there are fewer than 100 shareholders, the requirement of an annual report to shareholders referred to in Section 1501 of the California General Corporation Law is expressly waived. However, nothing in this provision shall be interpreted as prohibiting the Board of Directors from issuing annual or other periodic reports to the shareholders, as the Board considers appropriate.

        If at any time and for as long as, the number of shareholders shall exceed 100, the Board of Directors shall cause an annual report to be sent to the shareholders not later than 120 days after the close of the fiscal year adopted by the corporation. This report shall be sent at least 15 days (if third-class mail is used, 35 days) before the annual meeting of shareholders to be held during the next fiscal year and in the manner specified for giving notice to shareholders in these by-laws. The annual report shall contain a balance sheet as of the end of the fiscal year and an income statement and a statement of changes in financial position for the fiscal year prepared in accordance with generally accepted accounting principles applied on a consistent basis and accompanied by any report of independent accountants, or, if there is no such report, the certificate of an authorized officer of the corporation that the statements were prepared without audit from the corporation's books and records.

        Section 6.6.    Financial Statements.    The corporation shall keep a copy of each annual financial statement, quarterly or other periodic income statement, and accompanying balance sheets prepared by the corporation on file in the corporation's principal office for 12 months; these documents shall be exhibited at all reasonable times, or copies provided, to any shareholder on demand.

10

        If no annual report for the last fiscal year has been sent to shareholders, on written request of any shareholder made more than 120 days after the close of the fiscal year the corporation shall deliver or mail to the shareholder, within 30 days after receipt of the request, a balance sheet as of the end of that fiscal year and an income statement and statement of changes in financial condition for that fiscal year.

        A shareholder or shareholders holding five percent or more of the outstanding shares of any class of the corporation may request in writing an income statement for the most recent three-month, six-month, or nine-month period (ending more than 30 days before the date of the request) of the current fiscal year, and a balance sheet of the corporation as of the end of that period. If such documents are not already prepared, the Chief Financial Officer shall cause them to be prepared and shall deliver the documents personally or mail them to the requesting shareholders within 30 days after receipt of the request. A balance sheet, income statement, and statement of changes in financial position for the last fiscal year shall also be included, unless the corporation has sent the shareholders an annual report for the last fiscal year.

        Quarterly income statements and balance sheets referred to in this Section 6.6 shall be accompanied by the report thereon, if any, of any independent accountant engaged by the corporation or the certificate of an authorized corporate officer stating that the financial statements were prepared without audit from the corporation's books and records.

        Section 6.7.    Form of Records.    Any records maintained by the corporation in the regular course of its business, with the exception of minutes of the proceedings of the shareholders, and of the Board of Directors and its committees, but including the corporation's stock ledger and books of account, may be kept on, or be in the form of magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.

ARTICLE VII

Miscellaneous

        Section 7.1.    Principal Executive or Business Offices.    The Board of Directors shall fix the location of the principal executive office of the corporation at any place either within or without the State of California. If the principal executive office is located outside California and the corporation has one or more business offices in California, the Board shall designate one of these offices as the corporation's principal business office in California.

        Section 7.2.    Fiscal Year.    The fiscal year of the corporation shall be determined by the Board of Directors.

        Section 7.3.    Seal.    The corporation may have a corporate seal which shall have the name of the corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

        Section 7.4.    Interested Directors; Quorum.    No contract or transaction between the corporation and one or more of its directors or between the corporation and any other corporation, firm or association in which one or more of its directors are directors, or have a financial interest, shall be void or voidable solely for this reason, or solely because such director or directors are present at the meeting of the Board of Directors or committee thereof which authorizes, approves or ratifies the contract or transaction, or solely because his or her or their votes are counted for such purpose, if: (1) the material facts as to his or her relationship or interest and as to the contract or transaction are fully disclosed or are known to the shareholders and such contract or transaction is approved by the

11

shareholders in good faith with the shares owned by the interested director or directors not being entitled to vote thereon; (2) the material facts as to his or her relationship or interest and as to the contract or transaction are fully disclosed or are known to the Board or the committee, and the Board or committee authorizes, approves or ratifies the contract or transaction in good faith by a vote sufficient without counting the vote of the interested director or directors and the contract or transaction is just and reasonable as to the corporation at the time it was authorized, approved or ratified; or (3) the contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction.

        Section 7.5.    Indemnification.    The corporation shall, to the maximum extent and in the manner permitted by the California General Corporation Law (the "Code"), indemnify each of its directors and officers against expenses (as defined in subdivision (a) of Section 317 of the Code), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding (as defined in subdivision (a) of Section 317 of the Code), arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 7.5, a "director" or "officer" of the corporation includes any person (i) who is or was a director or officer of the corporation, (ii) who is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

        The corporation shall have the power, to the extent and in the manner permitted by the Code, to indemnify each of its employees and agents (other than directors and officers) against expenses (as defined in subdivision (a) of Section 317 of the Code), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding (as defined in subdivision (a) of Section 317 of the Code), arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 7.5, an "employee" or "agent" of the corporation includes any person (i) who is or was an employee or agent of the corporation, (ii) who is or was serving at the request of the corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was an employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

        Section 7.6.    Amendment of By-Laws.    To the extent permitted by law these by-laws may be amended or repealed, and new by-laws adopted, by the Board of Directors. The shareholders entitled to vote, however, retain the right to adopt additional by-laws and may amend or repeal any by-law whether or not adopted by them.

12

CERTIFICATE OF SECRETARY

I, the undersigned, do hereby certify:

        1.    That I am duly elected, qualified, and acting Assistant Secretary of FIRST COMMUNITY BANCORP, a California corporation (the "corporation"); and

        2.    That these By-Laws, comprising 16 pages, including this page, constitute the By-laws of the corporation as duly adopted by action of the board of directors of the corporation duly taken on December 8, 1999.

        IN WITNESS HEREOF, I have hereunto subscribed my name and affix the seal of said corporation this 8th day of December, 1999.

/s/  RICHARD E. KNECHT Richard E. Knecht
Assistant Secretary

13

QuickLinks

By-Laws of First Community Bancorp

EX-23.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 23.1

Independent Auditors' Consent

The Board of Directors
First Community Bancorp:

We consent to incorporation by reference in the registration statement on Form S-3 of First Community Bancorp of our report dated February 8, 2002, except as to Note 24 of the notes to the consolidated financial statements, which is as of March 7, 2002, relating to the consolidated balance sheets of First Community Bancorp and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of earnings, shareholders' equity and comprehensive income and cash flows for each of the years in the three-year period ended December 31, 2001, which report appears in the December 31, 2001, annual report on Form 10-K of First Community Bancorp and to the reference to our firm under the heading "Experts" in the prospectus.

/s/ KPMG LLP

San Diego, California
June 11, 2002

QuickLinks

Independent Auditors' Consent

EX-23.2

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 23.2

Independent Auditors' Consent

The Board of Directors
First National Bank:

We consent to incorporation by reference in the registration statement on Form S-3 of First Community Bancorp of our report dated February 8, 2002, except for the date with respect to Notes 18 and 19 to the consolidated financial statements, which are as of June 6, 2002, relating to the consolidated balance sheets of First National Bank and subsidiary as of December 31, 2001 and 2000, and the related consolidated statements of operations, changes in shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 2001, which report appears in the June 10, 2002 Form 8-K of First Community Bancorp and to the reference to our firm under the heading "Experts" in the prospectus.

/s/ KPMG LLP

San Diego, California
June 11, 2002

QuickLinks

Independent Auditors' Consent

EX-23.3

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 23.3

Independent Auditors' Consent

The Board of Directors
Professional Bancorp, Inc.:

We consent to incorporation by reference in the registration statement on Form S-3 of First Community Bancorp of our report dated August 8, 2001, relating to the consolidated balance sheet of Professional Bancorp, Inc. and subsidiary as of December 31, 2000, and the related consolidated statements of operations and comprehensive income (loss), changes in shareholders' equity and cash flows for the year ended December 31, 2000, which report appears in the registration statement (No. 333-65582) on Form S-4 of First Community Bancorp and to the reference to our firm under the heading "Experts" in the prospectus.

/s/ KPMG LLP

San Diego, California
June 11, 2002

QuickLinks

Independent Auditors' Consent

EX-23.4

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 23.4

CONSENT OF INDEPENDENT ACCOUNTANTS

        We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 (registration No. 333-            ) of our report dated January 28, 2000 (except for Note 8 as to which the date was February 1, 2000 and Note 11 as to which the date was March 22, 2000) on the consolidated balance sheet of Professional Bancorp, Inc. and Subsidiary as of December 31, 1999 and the related consolidated statements of operations comprehensive income (loss), changes in stockholders' equity, and cash flows for the year then ended, which report appears in the Registration Statement on Form S-3 (registration No. 333-            ) of First Community Bancorp. We also consent to the reference to our Firm under the heading "Experts" in this Registration Statement.

/s/  MOSS ADAMS LLP

Los Angeles, California
June 7, 2002

QuickLinks

CONSENT OF INDEPENDENT ACCOUNTANTS – Ex 23.4

EX-23.5

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 23.5

CONSENT OF INDEPENDENT ACCOUNTANTS

        We hereby consent to the incorporation by reference of our Independent Auditors' Report dated January 23, 2002 regarding the statements of financial condition of Pacific Western National Bank as of December 31, 2001 and 2000, 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, 2001, incorporated by reference in the Registration Statement on Form S-3 of First Community Bancorp, filed with the Securities and Exchange Commission, and the reference to our firm as experts.

/s/  VAVRINEK, TRINE, DAY & CO., LLP

Laguna Hills, California
June 6, 2002

QuickLinks

CONSENT OF INDEPENDENT ACCOUNTANTS – Ex 23.5

EX-23.6

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 23.6

CONSENT OF INDEPENDENT ACCOUNTANTS

        We hereby consent to the incorporation by reference of our Independent Auditors' Report dated January 15, 2002 regarding the consolidated balance sheets of W.H.E.C., Inc. and Subsidiary as of December 31, 2001 and 2000, and the related consolidated statements of income, changes in shareholders' equity, and cash flows for each of the years then ended in the Registration Statement on Form S-3 of First Community Bancorp, filed with the Securities and Exchange Commission, and the reference to our firm as experts.

/s/  VAVRINEK, TRINE, DAY & CO., LLP

Laguna Hills, California
June 6, 2002

QuickLinks

CONSENT OF INDEPENDENT ACCOUNTANTS – Ex 23.6