SB-2

As filed with the Securities and Exchange Commission on  February 5, 2007

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM SB-2

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

MANHATTAN BANCORP

(Name of Small Business Issuer in Its Charter)

United States	6021	20-5344927
(State or Other Jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
Incorporation or Organization)	Classification Code Number)	Identification No.)

2221 E. Rosecrans Avenue, Suite 131

El Segundo, California 90245

(310) 321-6164

(Address and Telephone Number of Organizational Offices)

2141 Rosecrans Avenue, Suite 1160

El Segundo, California  90245

 (Address of Principal Place of Business or Intended Principal Place of Business)

Jeffrey M. Watson

President and Chief Executive Officer

2221 E.  Rosecrans Avenue, Suite 131

El Segundo, California 90245

(310) 321-6164

(310) 321-6168(fax)

(Name, Address and Telephone Number of Agent for Service)

With a copy to:

Madge S. Beletsky, Esq.

King, Holmes, Paterno & Berliner, LLP

1900 Avenue of the Stars, 25th Floor

Los Angeles, California 90067

(310) 282-8911

(310) 282-8903 (fax)

Approximate Date of Proposed Sale to the Public:

As soon as practicable after the Registration Statement becomes effective.

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, check the following box.  x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of 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 this Form is a post-effective amendment filed pursuant to Rule 462(d) 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	Amount to be  Registered(1)	Proposed  Maximum  Offering Price Per  Share		Proposed  Maximum  Aggregate  Offering Price		Amount of  Registration Fee
Common Stock, no par value	3,000,000	$	10.00	$	30,000,000	$	3,210.00

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 which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

(1) Includes the maximum number of shares that may be issued in connection with this offering.

The information in this prospectus is not complete and may be changed.  These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective.  This prospectus is not an offer to sell these securities nor does it solicit an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION –DATED FEBRUARY 5, 2007

    PROSPECTUS

[LOGO] MANHATTAN BANCORP

2221 E. Rosecrans Avenue, Suite 131

El Segundo, California 90245

(310) 321-6164

(Organizational Office)

COMMON STOCK

$10.00 Per Share

2,150,000 to 3,000,000 Shares

We are a newly-formed holding company organized to own the shares of Bank of Manhattan, N.A., a proposed national bank in El Segundo, California.  We have filed an application to organize a national bank with the Comptroller of the Currency but have not yet received preliminary approval to organize.

We are offering up to 3,000,000 shares of common stock for sale on a best efforts basis.  We must sell a minimum of 2,150,000 shares to complete the offering.  The offering is expected to terminate on [Expiration Date].  We may extend this expiration date without notice to you until [Extended Expiration Date].  The minimum amount you may purchase is 2,500 shares.  Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [Extended Expiration Date].  If the offering is extended beyond [Extended Expiration Date], subscribers will have the right to modify or rescind their purchase orders.  Funds received during the offering will be held in an escrow account at Pacific Coast Bankers’ Bank.  If we terminate the offering, or if we do not receive final approval from the Comptroller of the Currency to open Bank of Manhattan, the escrow agent will promptly return your funds, without penalty, and with any interest earned.

This is our initial public offering, and no public market currently exists for our shares.  The offering price may not reflect the market price of our shares after the offering.  We have no present plans to list our shares on any national or regional trading exchange.

Seapower Carpenter Capital, Inc., dba Carpenter & Company, will assist us in selling our shares of common stock on a best efforts basis and is not required to purchase any shares of the common stock that are being offered for sale.  Our officers and directors will also assist in the sale of our shares.  Purchasers will not pay a commission to purchase shares of common stock in the offering. 

	Per Share		Minimum			Maximum
Public offering price	$	10.00	$	21,500,000		$	30,000,000
Estimated commission(1)	$	0.50	$	1,135,000	(2)	$	1,135,000	(2)
Proceeds to Manhattan Bancorp before offering expenses	$	9.50	$	20,365,000		$	28,865,000

(1)  We are offering our shares of common stock to the public on a “best efforts” basis through our officers and directors who are not entitled to receive any discounts or commissions for selling such shares.  Carpenter & Company may place up to a maximum of 2,000,000 shares in the offering.  Carpenter will be paid (i) a sales management and financial advisory fee equal to the lesser of 1% of the gross sales proceeds of all shares sold in the offering or $125,000, (ii) a placement agent fee equal to 5.0% of the aggregate gross proceeds of sales made through Carpenter’s efforts (resulting in a maximum fee of $1,000,000 if Carpenter places 2,000,000 shares), and (iii) a maximum of $10,000 in reimbursable expenses.  See “The Offering and Plan of Distribution—The Selling Agent” for a description of the commission and other fees to be paid by Manhattan Bancorp in connection with this offering.

(2)  Assumes Carpenter & Company places 2,000,000 shares in the event of either the minimum or the maximum offering.

This investment involves a high degree of risk, including a possible loss of your investment.

Please read “Risk Factors” beginning on page 5.

These securities are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.  None of the Securities and Exchange Commission, the Office of the Comptroller of the Currency or any state securities regulator has approved or disapproved these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is                            , 2007

TABLE OF CONTENTS

SUMMARY

The following summary highlights material information from this document and may not contain all the information that is important to you.  You should read this entire document carefully, including the section entitled “Risk Factors,” before making a decision to invest in our common stock.

In this prospectus, unless we specify otherwise, “Manhattan Bancorp,” “we,” “us,” or “our” mean Manhattan Bancorp, a California corporation.  “Bank of Manhattan” refers to Bank of Manhattan, N.A., (Proposed).

Our Company

Manhattan Bancorp is a California corporation recently formed for the purpose of owning all of the stock of Bank of Manhattan to be located in El Segundo, California.  Our principal activity will be the ownership of all of the outstanding common stock of Bank of Manhattan.  Following the receipt of preliminary approval of the Comptroller of the Currency to organize Bank of Manhattan, we will apply to the Federal Reserve System for authority to become a bank holding company.

Our corporate headquarters, and the main office of Bank of Manhattan, will be located at a leased facility at 2141 Rosecrans Avenue, Suite 1160, El Segundo, California 90245.

Bank of Manhattan

Upon issuance of its charter by the Comptroller of the Currency, Bank of Manhattan will operate as a typical community bank, offering general commercial banking services to small and medium-sized businesses and professionals in the South Bay, the Westside and the Los Angeles airport areas of Los Angeles County.

On December 12, 2006 we filed an application to organize Bank of Manhattan with the Comptroller of the Currency and an application with the FDIC for insurance of deposits.  We have not yet received preliminary charter approval from the Comptroller of the Currency or conditional approval for the insurance of our deposits from the FDIC.  We hope to secure these preliminary approvals no later than April 2007.

We believe we will obtain all final regulatory approvals to open the Bank of Manhattan by the third quarter of 2007.  We intend to open Bank of Manhattan as soon as we have the regulatory approvals and sell enough stock to appropriately capitalize the bank.

Our Organizers and Management

Manhattan Bancorp was organized by a group of businesspersons with significant ties in the communities in which Bank of Manhattan proposes to conduct business.  All nine of our organizers are directors of Manhattan Bancorp and have agreed to serve as directors of Bank of Manhattan.  Our directors have also provided the initial capital of Manhattan Bancorp in order to provide funds for our organizational and offering expenses as well as for the organizational and pre-opening expenses of Bank of Manhattan.  For the names of and biographical information about our directors, see “Management — Background and Business Experience of Executive Officers and Directors.”

Jeffrey Watson, our President and Chief Executive Officer, has 23 years of banking experience.  He served most recently as the Executive Vice President and Chief Operating Officer for 1st Century Bank, N.A., Century City, California, a de novo national bank organized in 2003 which he joined in its organizational stage.  Previously, Mr. Watson served as the Executive Vice President—Chief Administrative Officer & Chief Lending Officer for Commercial Capital Bank, Irvine, California.  We have also identified individuals to serve as our Chief Credit Officer and our Chief Financial Officer.  Each of these individuals plans to join us following the receipt of preliminary approval to form Bank of Manhattan.  Our proposed Chief Credit Officer has served as the Executive

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Vice President and Chief Credit Officer of a financial institution in Los Angeles County for more than the past two years and previously spent more than ten years as a consultant to commercial banking clients in credit administration and loan review.  Our proposed Chief Financial Officer has served as the Chief Financial Officer of several financial institutions in Southern California since 1982.  Since 2001, he has served as the Executive Vice President and Chief Financial Officer of a publicly-reporting bank.

Our nine-member board of directors provides a unique blend of professional experience that we believe will serve us well in meeting our goals of business development, community involvement and regulatory compliance.  Two of our directors, Harry “Duke” Chenoweth and Stephen P. Yost, have had careers in banking totaling 70 years.  One of our directors, Patrick E. Greene, has 13 years of experience as a director of a community bank in the South Bay of Los Angeles.  Other areas of expertise on our board include investment banking, real estate investment and development and accounting.  Our directors intend to provide their insights into the banking needs within the community we will serve and are anticipated to be a major source of customer referrals.

Our Business Strategy

Our goal is to operate and grow Bank of Manhattan into a profitable community-oriented financial institution serving primarily small and medium-sized businesses, business service professionals and owners/owner-users of commercial, industrial and multi-family properties in the Los Angeles County market area.   To implement this business strategy, we will strive to:

·capitalize on the knowledge of our outside directors and executive management on the local banking market;

·maintain a strong asset quality by knowing our customers in order to minimize credit risk;

·maintain a marketing culture by empowering our customer relationship managers;

·leverage contacts of directors to support early stage growth;

·hands on management—both in our bank and within our target market;

·develop customer relationships to attract new core deposits with a low cost of funds; and

·meet the needs of our customers through a service-oriented approach to banking, which emphasizes delivering a consistent and quality level of professional service in the communities that we serve.

HIGHLIGHTS OF THE OFFERING

Securities offered	Between 2,150,000 and 3,000,000 shares of common stock, without par value
Shares outstanding at January 31, 2006	45,000 shares purchased by our directors in a private placement conducted prior to this offering in order to raise funds for our organizational and offering expenses as well as for the organizational and pre-opening expenses of Bank of Manhattan
Shares to be outstanding after the offering	2,195,000 in the event of the minimum offering and up to 3,045,000 in the event of the maximum offering

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Total public price	$21,500,000 if the minimum offering is sold and up to $30,000,000 if the maximum offering is sold
Minimum investment	2,500 shares ($25,000)
Expiration date	The offering will expire at 5:00 p.m., Pacific Time, on                , 2007, unless extended by us in our sole discretion to no later than [Extended Expiration Date].
Estimated offering expenses	A total of $1,273,175 in the event of both the minimum and maximum offering which includes $1,135,000 payable to our selling agent in commissions and sales management fee (assuming the selling agent places 2,000,000 shares of our common stock in both the minimum and maximum offering) and $138,175 in other offering expenses.
Net proceeds	$20,226,825 if the minimum offering is sold and up to $28,726,825 if the maximum offering is sold
Plan of distribution	Our executive officers and directors will solicit sales of shares in the offering. We have also retained Seapower Carpenter Capital, Inc., dba Carpenter & Company as our selling agent to place up to 2,000,000 shares in the offering.
Intention of our directors to buy shares	Our directors intend to buy a total of 225,000 shares in this offering, or 10.5% of the shares available in the minimum offering and 7.5% of the shares available in the maximum offering. This is in addition to an aggregate of 45,000 shares which they purchased at $10.00 per share in a private placement which preceded this offering.
Terms of the offering	You will subscribe for shares by sending the purchase price to an escrow agent retained by us. The offering will terminate and all subscription funds will be returned by the escrow agent to subscribers, together with any interest earned on the funds, if we have not sold a minimum of 2,150,000 shares by [Expiration Date]; however, we may extend this date to [Extended Expiration Date] in our sole discretion. The minimum investment by one subscriber is 2,500 shares; however, we may waive this minimum in our sole discretion . The maximum investment by one subscriber is 9.9% of our total shares outstanding following completion of the offering; however, the maximum may be waived in our sole discretion for insiders and others as may be necessary to meet the minimum offering requirements.

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Use of Proceeds	We will use the proceeds of the offering as follows: ·Capitalize Bank of Manhattan with $20,000,000 in the event of the minimum offering and up to $28,250,000 in the event of the maximum offering, to be used for general corporate purposes, including to fund loans and investments and to repay pre-opening expenses advanced by Manhattan Bancorp. ·Provide working capital to Manhattan Bancorp to be used for general corporate purposes, including payment of organizational costs and operating expenses. See “How we Intend to Use the Proceeds from the Offering”.
Dividends	We do not anticipate paying cash dividends in the foreseeable future. The only source of such dividends would be dividends paid by Bank of Manhattan. Bank of Manhattan does not anticipate paying any cash dividends to us in the foreseeable future because of the need to retain capital to support its growth and development. See “Our Policy Regarding Dividends.”
Risk Factors	You should read the “Risk Factors” section beginning on page 5 before deciding to purchase any of the shares offered.

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RISK FACTORS

Investing in Manhattan Bancorp stock is risky.  You should invest only if you determine that you can bear a complete loss of your investment.  In your determination, you should consider carefully the following factors:

You may have difficulty selling your shares should you desire to do so.  Our common stock will not, initially, be eligible for listing on any national or regional exchange or on the National Association of Securities Dealers Automated Quotation System, and we do not intend to seek any such listing.  However, we will seek the assistance of securities brokers in matching buyers and sellers of our common stock after Bank of Manhattan opens for business and we anticipate that our shares will be quoted on the OTC Bulletin Boardwithin several months after we open for business, although there can be no assurance that this will be the case.  While your shares will be freely transferable, we are a new company without a public market for shares, and we do not anticipate that an active trading market in our common stock will develop as a result of this offering, and no assurance can be given that an active trading market will develop in the future.  As a result, if you decide to sell your shares you may not be able to do so.

You may be overpaying for the shares because the offering price cannot be supported by value of assets or earnings.  We fixed the offering price at $10.00 per share on the basis of the offering prices of other newly-organized banks and bank holding companies.  This price bears no relationship to assets, book value, earnings or other established criteria of value.  As a result, you may be overpaying for the shares.

We will be a new banking business in a competitive environment; losses are likely to occur for at least the first two full years of operations. Manhattan Bancorp, the issuer of your shares, is a new business whose success will depend on Bank of Manhattan’s operations.  Bank of Manhattan also is a new business that will be successful only if the income earned on loans and investment securities and from fees is greater than the interest paid on deposits and other sources of funds and general operating expenses.  We do not expect to be profitable on a current basis for an entire year until at least the third full year of operations, if at all.

We could be at a disadvantage when competing for deposits and loans with larger institutions that have larger lending limits and established customer contacts.  As a new bank in an established market, Bank of Manhattan will be competing with other financial institutions for deposits, which will be our primary source of funds, and originating loans.  Our competition for deposits will come primarily from savings and commercial banks in the South Bay, Westside and the Los Angeles airport areas of Los Angeles County, and our competition for loans will come principally from commercial banks, savings institutions, mortgage banking firms, credit unions, finance companies, mutual funds, insurance companies and brokerage and investment banking firms.  We also will face additional competition from internet-based institutions.  These institutions may have competitive advantages over Bank of Manhattan because they have greater capitalization and other resources.  They also can offer potential depositors more convenient depository facilities and borrowers higher lending limits and certain other customer services which Bank of Manhattan may not be able to offer.   Bank of Manhattan may have to pay more to attract deposits.  This would hurt our earnings.  We can offer you no assurances that Bank of Manhattan will be successful in attracting the deposits or originating the loans it will need to sustain its growth.

Community banking is our business model, and we may not be successful in attracting customers as a “community” bank.  Bank of Manhattan will be a so-called “community” bank.  In other words, we will exploit personal contacts by our directors, officers and our shareholders, as well as appropriately focused advertising and promotional activities, to appeal to businesses and individuals in search of personalized services likely to be offered by an independent, locally-owned and headquartered commercial bank.  Our overall identity as a community financial institution is our main selling point to our community.  However, ultimately we may not be successful in establishing Bank of Manhattan as the local community bank, and even if we do establish the bank, changes in how people bank, due primarily to technology, may make community banking less attractive than it has been in the past.

We are dependent on key employees, including Mr. Watson, and losing him could make it difficult to manage a new bank successfully, because qualified bank presidents are hard to find.  The success of Bank of

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Manhattan depends on our ability to attract and keep quality employees.  We are particularly dependent in the early years on the leadership of Jeffrey Watson, our President and Chief Executive Officer.  If Mr. Watson or any key employee does not perform as expected or suddenly quits, the bank’s operations could be adversely affected, possibly to the point of causing the bank to fail.   We will have an employment agreement with Jeffrey Watson, as well as with our Chief Credit Officer and our Chief Financial Officer.  We also anticipate identifying and employing a Chief Operating Officer prior to the opening of Bank of Manhattan, and anticipate that we will have an employment agreement with this individual as well.

We may not be able to attract good employees because we will be competing for personnel with larger financial institutions.  Success in a commercial banking business is particularly dependent on employing experienced and service-oriented personnel at all levels.  We intend and are already making efforts to hire experienced lending and operations officers, but have no assurance that we can staff Bank of Manhattan with appropriate personnel when Bank of Manhattan opens for business.  Qualified employees will command competitive salaries

If Bank of Manhattan fails to open when anticipated, it will incur additional costs, which will make it more difficult to recoup your investment.  If we do not receive approval to open Bank of Manhattan, your investment will be returned to you, with interest.  There is a risk that Bank of Manhattan will not open as soon as expected or will not open at all.  We cannot open until we receive the required regulatory approvals and sell the minimum number of shares.  If our opening is delayed past the third quarter of 2007, we will incur unplanned expenses, which will make it more difficult for us to become profitable and will reduce the value of our stock.  This will make it harder for you to recover your investment.  If we do not receive approval to open Bank of Manhattan, either due to regulatory problems or a failure to sell sufficient shares of common stock, your entire investment will be returned to you, together with any interest earned on your subscription funds.  You will have lost the possible value of another venture that might have earned you a profit.

Manhattan Bancorp’s management may have interests that may be different from yours, and management controls Manhattan Bancorp.  Your interest as an investor in Manhattan Bancorp may be different from management, because management may want to continue to control the company, even if it means foregoing an attractive offer you might prefer.  Yet, management will exercise significant control over the selection of the Board of Directors and company policies.  They will be able to exercise control because after the offering, the executive officers and directors will own between 8.9% and 12.3% of the total shares outstanding, depending on the number of shares sold in the offering, and the executive officers and directors could, through the exercise of options anticipated to be granted to them upon Bank of Manhattan’s opening, acquire an additional 408,275 shares in the event of the minimum offering and 529,275 shares in the event of the maximum offering, which would give them between 22.4% and 26.1% of the total shares outstanding.

Your investment may be diluted because of stock options and the ability of management to offer stock to others.  The shares of Manhattan Bancorp do not have preemptive rights.  This means that you may not be entitled to buy additional shares if shares are offered to others.  Nothing restricts management’s ability to offer additional shares of stock for fair value to others in the future.  As a result, when the directors, executive officers and key employees exercise their stock options, your ownership interest in Manhattan Bancorp will be diluted

We do not expect to pay cash dividends in the foreseeable future.  Our management presently intends to follow a policy of retaining earnings, if any, for the purpose of increasing our net worth and reserves during our initial years of operations.  Accordingly, it is anticipated that no cash dividends will be declared during the early stages of our development, and no assurance can be given that our earnings will permit the payment of dividends of any kind.  Further, we can only pay dividends if we receive dividends from Bank of Manhattan and there will be regulatory restrictions on the amount of dividends the Bank of Manhattan can pay to us.

We may experience loan losses in excess of our allowance for loan losses.  We will try to limit the risk that borrowers will fail to repay loans by carefully underwriting the loans we make, nevertheless losses can and do

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occur.  We will create an allowance for estimated loan losses in our accounting records, based on estimates of the following.

·industry standards;

·evaluation of economic conditions;

·regular reviews of the quality, mix and size of our overall loan portfolio;

·regular review of delinquencies;

·the quality of the collateral underlying our loans; and

·our experience with our loans once we have a history of operations.

We will maintain an allowance for loans losses at a level that we believe to be adequate to absorb any specifically identified losses as well as any other losses inherent in our loan portfolio However, changes in economic, operating and other conditions, including changes in interest rates, that are beyond our control, may cause our actual loan losses to exceed our future allowance estimates.  If the actual loan losses which we experience in the future exceed the amount that we reserve, it will hurt our business.  In addition, the Comptroller of the Currency, as part of its supervisory function, will periodically review Bank of Manhattan’s allowance for loan losses, and may require Bank of Manhattan to increase its provision for loan losses or to recognize further loan losses, based on its judgment, which may be different from that of our management.  Any increase in the allowance required by the Comptroller of the Currency could also hurt our business.

Poor economic conditions in Southern California may cause us to suffer higher default rates on our loans and decreased value of the assets we will hold as collateral.  A substantial majority of our assets and deposits will be generated in Southern California.  As a result, poor economic conditions in Southern California may cause us to incur losses associated with higher default rates and decreased collateral values in our loan portfolio.  In the early 1990s, the entire State of California experienced an economic recession that resulted in increases in the levels of delinquencies and losses for many of the state’s financial institutions.  In addition, economic activity slowed significantly immediately following the September 11, 2001 terrorist attacks.  A future decline in the Southern California economy would adversely affect our business.

Interest rate fluctuations and other conditions which are out of our control could harm profitability.  Our net interest income before provision for loan losses and net income will depend to a great extent on “rate differentials,” i.e., the difference between the income we receive from our loans, securities and other earning assets, and the interest expense we pay on our deposits and other liabilities.  These rates will be highly sensitive to many factors which will be beyond our control, including general economic conditions, both domestic and foreign, and the monetary and fiscal policies of various governmental and regulatory authorities, in particular, the Board of Governors of the Federal Reserve System.  It is impossible to predict the nature or extent of the effect on our operations of monetary policy changes or other economic trends over which we have no control, such as unemployment and inflation.  In addition, factors like natural resource prices, international conflicts and terrorist attacks and other factors beyond our control may adversely affect our business.

Our business may be adversely affected by the highly regulated environment in which we operate.  Our operations will be subject to extensive governmental supervision, regulation and control and recent legislation has substantially affected the banking business.  It cannot presently be predicted whether or in what form any pending or future legislation may be adopted or the extent to which the banking industry and the operations of Bank of Manhattan would be affected. Some of the legislative and regulatory changes may benefit us.  However, other changes could increase our costs of doing business or reduce our ability to compete in certain markets.

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FORWARD-LOOKING STATEMENTS

This prospectus includes “forward-looking statements” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated” and “potential.  Examples of forward-looking statements include, but are not limited to, estimates with respect to our financial condition, results of operations and business that are subject to various factors which could cause actual results to differ materially from these estimates.  These factors include, but are not limited to:

·changes in the real estate market and local economy;

·changes in interest rates;

·changes in laws and regulations to which we are subject, and

·competition in our primary market area.

Any or all of our forward-looking statements in this prospectus and in any other public statements we make may turn out to be wrong.  They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties.  Consequently, no forward-looking statement can be guaranteed

THE OFFERING AND PLAN OF DISTRIBUTION

Terms of the Offering

The expiration date of the offering is                     , 2007.  We may extend the expiration date to [Extended Expiration Date], without notice to subscribers.

The offering will terminate if by the expiration date at least 2,150,000 shares, representing the minimum offering, have not been subscribed for.  We reserve the right to terminate the offering before the expiration date even if the maximum offering of 3,000,000 shares has not been subscribed for as long as at least the minimum number of shares are subscribed for.

All subscription proceeds will be deposited in an escrow account with Pacific Coast Bankers’ Bank, who will act as escrow agent.  Subscribers’ checks will be transmitted to Pacific Coast Bankers’ Bank by noon of the next business day after receipt by any broker/dealer.  The funds held in the escrow account shall be invested in short-term certificates of deposit issued by the escrow agent.  If we do not sell at least 2,150,000 shares prior to the expiration date, or extended expiration date of this offering, or if we fail to close this offering for any reason, or if we do not receive final approval from the Comptroller of the Currency to open Bank of Manhattan, subscribers will receive a return of their subscription funds, plus any interest earned on those funds.  If we do close the offering, any interest earned on subscription funds will go to Manhattan Bancorp.

Our directors and executive officers intend to subscribe for at least 225,000 shares in this offering.  The directors and executive officers may, but are not obligated to, purchase additional shares if necessary to complete the minimum offering.  No subscriber will be permitted to purchase in the offering an amount of shares which would exceed 9.9% of the total number of shares outstanding upon completion of the offering, unless this limitation is waived by Manhattan Bancorp, in our sole discretion.  We may waive the 9.9% maximum subscription if necessary to sell the minimum offering amount in order to open Bank of Manhattan.

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Plan of Distribution; The Selling Agent

To assist in the marketing of our common stock, we have retained Seapower Carpenter Capital, Inc., dba Carpenter & Company, a broker/dealer registered with the National Association of Securities Dealers, Inc., who will assist us in the offering by:

·acting as our financial advisor for the stock offering;

·attending meetings with potential investors;

·managing our marketing and sales efforts in conjunction with our officers and directors; and

·using its best efforts to place up to $20 million of our common stock.

For these services, Carpenter & Company will receive a sales management fee equal to the lesser of (i) 1% of the gross proceeds from the offering or (ii) $125,000.  In addition, Carpenter & Company will receive a sales and placement fee of 5% of the gross proceeds from the offering derived from common stock placed by Carpenter & Company or a selected dealer engaged by Carpenter & Company, provided that Carpenter & Company and any selected dealer engaged by Carpenter & Company may not place more than an aggregate of 2,000,000 shares in this offering, for a total commission to Carpenter & Company and such selected dealers not to exceed $1,000,000.  Carpenter & Company will also be reimbursed for its reasonable out-of-pocket expenses in an amount not to exceed $10,000, without the consent of Manhattan Bancorp.

We will indemnify Carpenter & Company against certain liabilities, including liabilities under the Securities Act of 1933, as amended.  We will also indemnify Carpenter & Company against all claims, losses, actions, judgments, damages or expenses, including but not limited to reasonable attorneys’ fees, arising out of Carpenter & Company’s engagement, except that such indemnification shall not apply to Carpenter & Company’s own bad faith, willful misconduct or gross negligence.

All shares not placed by Carpenter & Company or selected dealer will be placed by our executive officers and directors.  Our directors and executive officers will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with the solicitation of offers to purchase our common stock.  None of our officers, directors or employees will be compensated in connection with their participation in the offering.

Method of Subscription

The minimum subscription is 2,500 shares or $25,000, but we reserve the right to accept subscriptions for less than the minimum subscription.  We may waive the minimum investment requirement in our sole discretion.

In order to purchase shares, you must:

·Complete and sign the subscription agreement accompanying this prospectus; and

·Make full payment for the purchase price for the shares in United States currency by check, bank draft or money order payable to “Manhattan Bancorp – Escrow Account” or make full payment of the purchase price for the shares in United States currency by wire transfer of funds to the escrow account maintained at the office of the escrow agent for the purposes of accepting subscriptions, at Pacific Coast Bankers’ Bank, ABA No. 121042484, Account No.                        , Attention:  Impound Account FBO Manhattan Bancorp; and

·Deliver the subscription agreement, in person or by mail, together with full payment for the purchase price in the manner described above to Pacific Coast Bankers’ Bank, 340 Pine Street, Suite 401, San Francisco, California 94104, Attention:  Impound Account.

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The escrow agent, by accepting appointment, in no way endorses the purchase of shares by any person.  Pacific Coast Bankers’ Bank is acting only as an escrow agent in connection with the offering of securities described in this prospectus, and has not endorsed, recommended or guaranteed the purchase, value or repayment of these securities.  No assurance can be given that subscription funds can or will be invested at the highest rate of return available.

Subscription Acceptance

Subscriptions are not binding until accepted by us.  Deposit of funds in the escrow account until the satisfaction of the conditions listed above will not be considered an acceptance of the subscription to which the funds relate.  We reserve the right to accept or reject subscriptions, in whole or in part, in our sole discretion.  This permits us to refuse to sell shares to any person submitting a subscription agreement or to accept part but not all of a subscription so that a subscriber might ultimately be issued fewer than the full number of shares for which he or she subscribes.  In determining which subscriptions to accept, in whole or in part, we may take into account the order in which subscriptions are received and a subscriber’s potential to do business with, or to refer customers to, Bank of Manhattan.

In the event we reject all or a part of your subscription, the escrow agent will refund by mail all or the appropriate portion of the amount paid in by you with the subscription, together with any interest earned thereon, promptly after the rejection.  This offering will be terminated, no shares will be issued and no subscription proceeds will be released from escrow to us unless we have accepted subscriptions and received payment for at least 2,150,000 shares, and we have received final approval from the Comptroller of the Currency to open Bank of Manhattan.  If these conditions don’t occur by                   , 2007 or by [Extended Expiration Date] or the offering is terminated early for other reasons, all subscription proceeds will be returned promptly by mail in full together with any interest earned thereon.  All costs and expenses of the offering and of organizing Manhattan Bancorp and Bank of Manhattan will be borne by our directors if all subscriptions are canceled.

We will issue and mail certificates representing the shares as soon as practicable after subscription proceeds are released from the escrow account.

Determination of Offering Price

The offering price is arbitrary in terms of value. Our directors chose a $10.00 per share offering price because that is consistent with the price set for other de novo community banks and bank holding companies in California in recent years.  The price bears no relationship to our assets, book value, earnings or other established criteria of value.

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HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING

The amount of net proceeds will depend on the total number of shares of common stock sold in the offering and the expenses incurred in connection with the offering.  We estimate the net proceeds to be between $20.2 million in the event of the minimum offering and $28.7 million in the event of the maximum offering.

We intend to (i) infuse most of the net proceeds to capitalize Bank of Manhattan, (ii) to pay our organizational expenses and (iii) to retain the rest of the proceeds at the holding company level for capital needs that arise in the future.  We intend to capitalize Bank of Manhattan with $20 million in the event of the minimum offering and up to $28.25 million in the event of the maximum offering, provided we may maintain more working capital at the holding company level at the discretion of our Board of Directors as long as we capitalize Bank of Manhattan with at least $20 million.  Out of the net proceeds which we use to capitalize Bank of Manhattan, Bank of Manhattan will repay to us any amounts that we advance on behalf of Bank of Manhattan for its organizational and pre-opening expenses, including amounts we advance for tenant improvements and for furniture, fixtures and equipment. We estimate that after repayment to us of advances we have made to Bank of Manhattan, Bank of Manhattan will have working capital of approximately $18.4 million in the event of the minimum offering and $26.6 million in the event of the maximum offering.  We expect Bank of Manhattan to use the working capital primarily to fund loans and investments.

Total organizational and pre-opening expenses for Bank of Manhattan are estimated at $1,642,468.  Of these total organizational and pre-opening expenses, we anticipate that approximately $400,000 of such amount will be spent on tenant improvements, $443,250 of such amount will be spent on furniture, fixture and equipment and $799,218 will be spent on other organizational and pre-opening expenses for Bank of Manhattan.  These other organizational and pre-opening expenses include payment of consulting and legal fees, pre-opening rent, pre-opening personnel compensation and benefits and computer equipment and software.

To date, we have been funding our organizational and offering expenses and the organizational and pre-opening expenses of Bank of Manhattan from the $450,000 capital contribution made by our directors.  We expect our total organizational and offering expenses (not including commissions and marketing fees) to be about $173,175, and Bank of Manhattan’s total organizational and pre-opening expenses, to be about $799,218 (not including furniture, fixtures and equipment and tenant improvements).  We will continue to incur these expenses through the date of the completion the offering and release of the subscription proceeds from the escrow account. In order to fund these expenses we intend to obtain a working capital line of $500,000 from an unaffiliated third party lender to cover any shortfall in funding our organizational and offering expenses, and the organizational and pre-opening expenses of Bank of Manhattan, prior to the closing of the offering.  We anticipate that Kyle Ransford, our Chairman, and if required by our lender, certain of our other directors, will personally guarantee this line of credit.  We also anticipate that our directors would make further advances of funds, as needed, to cover our organizational and offering expenses and to cover any organizational and pre-opening expenses of the Bank of Manhattan.  Any third party loans and any advances made by our directors would be repaid to them upon the closing of the offering and repayment by Bank of Manhattan of any advances we have made.  See “Management’s Plan of Operation,” and “Executive Compensation — Transactions.”

The following presentation of use of proceeds of the offering assumes that all of the regulatory approvals are received by us and the offering proceeds are released from the escrow account and Bank of Manhattan is fully capitalized by July 2007.

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	Minimum Shares			Maximum Shares
Offering Proceeds	$	21,500,000		$	30,000,000
Less:
Commissions, sales management fee and expenses (1)	$	1,135,000		$	1,135,000
Offering expenses(2)	$	138,175		$	138,175
Net offering proceeds	$	20,226,825		$	28,726,825
Anticipated use of proceeds by Manhattan Bancorp:
Capitalization of Bank of Manhattan through purchase of common stock	$	20,000,000		$	28,250,000
Organizational expenses Manhattan Bancorp (3)	$	35,000		$	35,000
Working capital	$	191,825		$	441,825
Total	$	20,226,825		$	28,726,825
Anticipated use of capital by Bank of Manhattan:
Organizational and pre-opening expenses	$	799,218	(4)	$	799,218	(4)
Furniture, fixtures and equipment	$	443,250	(4)	$	443,250	(4)
Tenant Improvements	$	400,000	(4)	$	400,000	(4)
Working capital	$	18,357,532		$	26,607,532
Total	$	20,000,000		$	28,250,000

(1)  Assumes Carpenter & Company places 2,000,000 shares in the event of both the minimum offering and the maximum offering.

(2)  Offering expenses consist of various filing fees, printing expenses, escrow agent fees, transfer agent fees and accounting and legal fees and expenses.

(3)  These expenses consist primarily of accounting fees and legal fees other than in connection with the offering.

(4)  These expenses will be advanced by Manhattan Bancorp prior to the opening of Bank of Manhattan, and will be reimbursed by Bank of Manhattan to Manhattan Bancorp following the capitalization of Bank by Manhattan Bancorp.

OUR POLICY REGARDING DIVIDENDS

Initially, our only source of dividends will be dividends paid to us by Bank of Manhattan.  Bank of Manhattan does not intend to pay any dividends to us during the early years of its operations so that it can retain capital to support its growth.  Payment of dividends by Bank of Manhattan is also limited by regulatory requirements and limitations.  See “Description of Capital Stock of Manhattan Bancorp—Common Stock—Dividends.”   Our future dividend policy will be subject to the discretion of our Board of Directors and will depend

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upon a number of factors, including future earnings, financial condition, liquidity and general business conditions.  No assurance can be given that our earnings will permit the payment of cash dividends in any amount in the future.

MARKET FOR OUR COMMON STOCK

As a recently organized company, we have never issued capital stock except for the shares issued to our directors in order to fund our organizational and offering expenses and to fund the advance of organizational and pre-opening expenses for Bank of Manhattan.  Accordingly, there is no established market for our stock.  Following the completion of the offering, we do not anticipate that our common stock will be actively traded for some time.  We have no current plans to list our shares on any exchange or to have them quoted on the National Association of Securities Dealers Automated Quotation System.

However, we will seek the assistance of securities brokers in matching buyers and sellers of our common stock after Bank of Manhattan opens for business, and we anticipate that our shares will be quoted on the OTC Bulletin Board within several months after we open for business, although there can be no assurance that this will be the case.

The development of an active trading market, whether or not a stock is reported on an exchange or listed for quotation on an inter-dealer quotation system, or the OTC Bulletin Board, depends on the existence of willing buyers and sellers.  Although we do not know the number of shareholders who will purchase shares in the offering, because we have a minimum offering requirement of 2,500 shares, we do not believe we will initially have enough shareholders for an active trading market to develop.  Only investors who have a long term interest should take part in this offering because investors may not be able to sell their shares when they desire or at a price equal to or above their original purchase price.

OUR BUSINESS

Manhattan Bancorp

Manhattan Bancorp was incorporated in the State of California on August 8, 2006 under the name Cardinal Bancorp.   On September 6, 2006 we filed a Certificate of Amendment to our Articles of Incorporation to change our name to First Manhattan Bancorp, and subsequently, on October 31, 2006, we filed a Certificate of Amendment to our Articles of Incorporation to change our name to Manhattan Bancorp.

Manhattan Bancorp has not yet engaged in any business activity.  Our initial business will be to own 100% of the shares of Bank of Manhattan.  We will file an application with the Federal Reserve for authority to become a bank holding company after we receive preliminary approval from the Comptroller of the Currency to organize Bank of Manhattan.  While we don’t know of any reason that we would not obtain this preliminary approval, or that we would not be able to comply with any conditions that might be contained in such approval, we cannot be certain that we will be able to obtain such approval or meet any condition that may be contained in any such approval.

At the present time, Manhattan Bancorp has no plans to engage in any activities other than acting as a bank holding company for Bank of Manhattan, although in the future, Manhattan Bancorp may consider engaging in other activities which are permissible for a bank holding company provided that engaging in such activities is deemed by the Board of Directors to be in the best interest of Manhattan Bancorp and its shareholders.

Initially, we will neither own nor lease any property, but will instead use the premises, equipment and furniture of Bank of Manhattan. At the present time, we intend to employ only persons who are officers of Bank of Manhattan to serve as our officers. These persons will not be separately compensated by us.

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Bank of Manhattan

On December 12, 2006 we filed an Application for Authority to Organize Bank of Manhattan with the Comptroller of the Currency.  We have not yet received preliminary approval to organize the Bank.  Once we receive preliminary approval to organize, our directors, who are also the organizers of Bank of Manhattan, will execute and file with the Comptroller of the Currency Bank of Manhattan’s Articles of Association and Organization Certificate, thereby establishing our corporate existence under the laws of the United States.

Bank of Manhattan also filed an Application for Insurance of Accounts with the Federal Deposit Insurance Corporation on December 12, 2006.  We have not yet received conditional approval of this application.

While we do not know any reason why we would not obtain approval from the Comptroller of the Currency to organize Bank of Manhattan, or from the FDIC to insure our accounts, or that we would not be able to comply with any condition that might be contained in these approvals, we cannot be certain that we will be able to obtain these approvals or meet any conditions that might be contained in these approvals.

We intend to commence operations in the third quarter of 2007 or as soon as reasonably practicable thereafter.  Licensing of Bank of Manhattan to commence operations is dependent upon compliance with certain conditions and procedures in accordance with federal banking laws, including the contribution to Bank of Manhattan of capital of at least $20,000,000 from this offering.   Any delay in the commence­ment of operations is likely to increase our estimated organization and pre-opening expenses.  See “How we Intend to Use the Proceeds from this Offering.”

As of the date of this prospectus, we have not conducted or been authorized to conduct a banking business.  Upon issuance of our charter by the Comptroller of the Currency, we will engage in the general commercial banking business.

Our Business Strategy

Our goal is to operate and grow Bank of Manhattan into a profitable community-oriented financial institution serving primarily small and medium-sized businesses, business service professionals and owners/owner-users of commercial, industrial, and multi-family properties in the Los Angeles County market areas, with particular emphasis on the South Bay, Westside and Los Angeles airport areas of Los Angeles County in Southern California.  To implement this business strategy, we will strive to:

·         capitalize on the knowledge of our outside directors and executive management on the local banking market;

·         maintain a strong asset quality by knowing our customers in order to minimize credit risk;

·         maintain a marketing culture by empowering our customer relationship managers;

·         leverage contacts of directors to support early stage growth;

·         hands on management—both in our bank and within our target market;

·         develop customer relationships to attract new core deposits with a low cost of funds; and

·         meet the needs of our customers through a service-oriented approach to banking, which emphasizes delivering a consistent and quality level of professional service in the communities that we serve.

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Banking Services Generally

We intend to establish deposit relationships with small and medium-sized businesses, their owners and key executives.  Our deposit generation efforts will be concentrated in seeking business checking and money market accounts.  In addition, we will market our deposit products to the local community and will offer a full range of deposit accounts, including non-interest bearing demand deposit accounts, interest bearing checking accounts, regular savings accounts, and certificates of deposit.  We will offer cash management services to our commercial checking account customers.  We will also offer other customary banking products and services, including, among other things, wire transfers, electronic bill presentment and payment and overdraft protection.

We will use the deposits we generate, as well as the proceeds from this offering and other sources of funds to originate loans.  We anticipate that the substantial majority of our loans will be loans secured by commercial real estate.  We will also make construction loans to support the construction and conversion of commercial and residential properties.   In addition to this commercial real estate orientation, we will extend traditional commercial and industrial loans.  To a much lesser extent, we will make home equity loans and installment loans.  We intend to hire loan officers and relationship managers on the basis of their previous experience serving the credit needs of the business community.  Our business plan does not contemplate transaction only loans, such as SBA financing, rather, we intend to generate loans reflective of comprehensive relationship banking.  We will not originate loans that are deemed sub-prime credits or predatory lending.  We will not conduct credit card operations.

We will also offer Internet banking service which will allow customers to review their account information, transact account transfers, issue stop payment orders, pay bills, transfer funds, order checks and inquire regarding credit products electronically through the Internet.  While we will not have an automated teller machine at our premises, we will offer debit cards to our customers which allow them access to a nationwide network of automated teller machines.  We do not presently anticipate operating a trust department for the foreseeable future.  Our deposits will be insured by the FDIC up to the applicable limits thereof, subject to approval of our application for insurance of accounts by the FDIC.  Additionally, like all national banks, we will be a member of the Federal Reserve System.

Lending Activities

We intend to have a loan portfolio comprised of quality credits and to achieve a diversification in our loan portfolio through a broad composition of product type, borrower characteristics, secondary collateral and industrial composition.  The underwriting criteria we will use, such as loan-to-value, debt service coverage, loan covenants and credit ratios will be comparable to that used by commercial banks with consistently high quality loan portfolios.  Further, our President and Chief Executive Officer, our proposed Chief Credit Officer and two of our directors have strong backgrounds in credit which should assist us in our goal of achieving a high quality loan portfolio.

Under national banking laws, Bank of Manhattan is limited in the amount it can loan to a single borrower to no more than 15% of the bank’s statutory capital base, unless the entire amount of the loan is secured by readily marketable collateral.  In no event, however, may the loan be greater than 25% of a bank’s statutory capital base.  We anticipate that our lending limit, assuming the minimum offering, will be approximately $3 million for unsecured loans and $5 million for loans fully secured by readily marketable collateral.

Commercial Real Estate Loans.    Our lending staff will originate and underwrite commercial real estate loans primarily on Los Angeles County properties.  We intend to hold the substantial majority of commercial real estate loans in our portfolio; however, we may chose to sell participations in loans when the financing requested by a customer exceeds our legal lending limit or presents an unwanted concentration.  We will establish maximum loan-to-value ratios in line with regulatory guidelines for the categories of real property.

A commercial project financed must be supported by a market analysis or appraisal that evidences a viable purpose.  Underwriting standards for commercial real estate loans will vary depending upon the type of collateral.  The underwriting will be subject to an analysis of the ratio of net operating income to current debt service, vacancy

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rates of the relevant market, projected new commercial space coming on stream, leasing history and lease rate and the length of property ownership of the borrower.

We will finance both owner-occupied and non-owner—occupied properties and offer both fixed and floating rate loans.  Non-owner occupied commercial real estate loans are likely to be more prevalent in our initial years of operations as an initial source of earning assets as we seek to develop the borrowing relationships associated with commercial and industrial loans and loans on owner-occupied properties.

Construction Loans.  We will originate and underwrite loans to facilitate the financing of construction projects, including residential, small residential tract, multi-family and commercial properties.  Construction loans will adjust with changes in the commercial prime rate or comparable short-term market indices.  The average maturity of construction loans is estimated to be between 12 and 18 months.  Third-party inspectors, hired by Bank of Manhattan at the borrower’s cost, will conduct construction inspections before financing draws are extended.

Commercial and Industrial Loans.  In addition to real estate loans, Bank of Manhattan will also extend unsecured and equipment-secured (non secured by real estate) loans and lines of credit for commercial and industrial uses.  The primary use of the commercial and industrial loans will be to provide cash flow and working capital, fund equipment purchases, tenant improvements or inventories and to finance accounts receivable.  As a secondary source of repayment, commercial and industrial loans may also be secured by real estate or other collateral.  Commercial loans may be secured (other than by real estate) by equipment, compensating balances, UCC filings, letters of credit and trade credit.  We will also extend unsecured, deposit-related, single-payment or installment commercial loans.

 We anticipate that a majority of our commercial loans, including working capital and other unsecured loans, will re-price based upon changes in market rates.  Commercial loans will also include equipment financing, secured by UCC filings.  Equipment loans will generally be structured as fixed-rate loans with stated maturities, probably ranging from five to seven years.  Term loans will be extended to finance the acquisition of business entities, equipment and/or leasehold improvements.  Such term loans will be made to borrowers with a demonstrated history of profitable operations, a diverse customer base, with a typical term of three to five years.    Commercial loans carry more risk than real estate based loans.  Small to medium sized businesses generally have less capacity than large businesses or wealthy individual to repay loans in the event of an economic downturn or other adversity.   We will seek to mitigate these risks through careful underwriting.

Consumer Loans.  To a limited extend, Bank of Manhattan will provide credit to retail customers and for the personal needs of the principals and key employees of our business customers.  This consumer lending program will fit our strategy of becoming a relationship bank with our customer base.  Consumer loans typically will be home equity loans and home equity lines of credit.  The home equity loans typically will re-price with changes in market interest rates, typically with the commercial bank prime rate.  We may also extend installment lending, such as automobile or recreational vehicle financing as a special accommodation to a valued customer.

Competition

The banking business in California generally, and specifically in the market area which we will serve, is highly competitive with respect to virtually all products and services and has become increasingly so in recent years.  The industry continues to consolidate and strong, unregulated competitors have entered banking markets with focused products targeted at highly profitable customer segments.  Many largely unregulated competitors are able to compete across geographic boundaries and provide customers increasing access to meaningful alternatives to banking services in nearly all significant products.  These competitive trends are likely to continue.  We will compete for loans and deposits with other commercial banks, as well as with savings and loan associations, credit unions, thrift and loan companies, and other financial and non-financial institutions.  With respect to commercial bank competitors, the business is largely dominated by a relatively small number of major banks with many offices operating over a wide geographical area, which banks have, among other advantages, the ability to finance wide-ranging and effective advertising campaigns and to allocate their investment resources to regions of highest yield

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and demand.  Many of the major banks operating in the area offer certain services which we will not offer directly (but some of which we intend to offer through correspondent institutions.)  By virtue of their greater total capitalization, such banks also have substantially higher lending limits than we will have.

In addition to other banks, our competitors will include savings institutions, credit unions, and numerous non-banking institutions, such as finance companies, leasing companies, insurance companies, brokerage firms, and investment banking firms.  In recent years, increased competition has also developed from specialized finance and non-finance companies that offer money market and mutual funds, wholesale finance, credit card, and other consumer finance services, including on-line banking services and personal finance software.  Strong competition for deposit and loan products affects the rates of those products as well as the terms on which they are offered to customers.  Mergers between financial institutions have placed additional pressure on banks within the industry to streamline their operations, reduce expenses, and increase revenues to remain competitive.  Competition has also intensified due to federal and state interstate banking laws, which permit banking organizations to expand geographically, and the California market has been particularly attractive to out-of-state institutions.  The Financial Modernization Act, which became effective March, 2000, made it possible for full affiliations to occur between banks and securities firms, insurance companies, and other financial companies, has also intensified competitive conditions.  (See “Regulation and Supervision – Financial Modernization Act” herein.)

Technological innovation has also resulted in increased competition in the financial services market.  Such innovation has, for example, made it possible for non-depository institutions to offer customers automated transfer payment services that previously have been considered traditional banking products.  In addition, many customers now expect a choice of several delivery systems and channels, including telephone, mail, home computer, ATMs, self-service branches, and/or in-store branches. In addition to other banks, the sources of competition for such products include savings associations, credit unions, brokerage firms, money market and other mutual funds, asset management groups, finance and insurance companies, and mortgage banking firms.  Further, the rise of “internet banking” may require us to compete with remote entities soliciting customers in our market areas via web based advertising and product delivery.

In order to compete effectively, we intend to create a sales and service culture that combines the experience of our senior officers, which includes the extensive sales orientation of larger financial institutions, with the commitment to service and a focus on the individual needs of our business customers that is found at the best community banks.  We will seek to provide a level of service and decision-making responsiveness not generally offered by larger institutions while at the same time providing a management sophistication not universally contained at local community banks.

Our primary service area consists of the County of Los Angeles, with a particular emphasis on the Westside, South Bay and Los Angeles airport areas.  As in most major U.S. cities, large banks dominate the banking industry in Los Angles County.  However, rather than these large financial institutions, we believe our primary competitors for the small and medium-sized business customer will be the community banks that can provide the service and responsiveness attractive to small and medium-sized business customers.

Within Los Angeles County, based on data from the FDIC as of June 30, 2006, there were 75 headquartered banks.  Of these 75 banks, 19 banks reported assets in excess of $1 billion bringing the count of “community-like” banks to 56.  Of these 56 banks with less than $1 billion in assets, there were eight banks owned by large out-of-state holding companies, and there were two industrial banks.  Of the remaining 46 banks, 19 had an Asian-American focus and one is Hispanic-owned.  Eliminating those banks, there are 26 traditionally-mainstream community banks in Los Angeles County.  Of those 26 banks, 11 are geographically distant not to be competitive with Bank of Manhattan, leaving a relevant competition of 15 banks within a 20 mile radius of Bank of Manhattan.  Of these 15 institutions, we believe that only seven are comparable to us in their small to medium-sized business lending concentration.

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Premises

We are currently negotiating a lease for Bank of Manhattan’s main office and our corporate headquarters to be located at 2141 Rosecrans Avenue, Suite 1160, in the City of El Segundo.  The lease will be for a term of seven years, with one option to renew for five years, commencing upon the completion of tenant improvements to the premises, which we currently estimate to be completed about June 1, 2007.  We will occupy approximately 7,600 square feet on the ground floor of a six-story multi-tenant building complex known as The Plaza at Continental Park.  The initial base rental will be $19,807 per month, with annual increases of 3% per year.  The lease will provide that the landlord will provide us with an allowance of approximately $293,000 for tenant improvements and we anticipate that we will contribute an additional approximately $400,000 toward tenant improvements.  The lease will also require that we obtain a letter of credit in favor of our landlord in the amount of approximately $293,000 to secure our obligations under the lease.  We also anticipate spending an additional $443,250 towards furniture, fixtures and equipment at these premises.  The lease will also provide that if we do not receive approval to open the Bank of Manhattan the lease will be terminated without any further cost to us.  We anticipate that Manhattan Bancorp will be the initial tenant under the lease, and that the lease will be assigned by us to Bank of Manhattan after the bank’s organization.

Until our new offices are completed, we have leased, from the same landlord who will lease to us our main office, organizational offices at a rate of $3,500 per month, on a month-to-month basis, at 2221 Rosecrans Avenue, Suite 131, El Segundo, California.

Employees

As of the date of this prospectus, Jeffrey Watson, our President and Chief Executive Officer and 3 other persons assisting in our organization are the only persons receiving compensation from us.  Mr. Watson has been retained pursuant to the terms of a consulting agreement until such time as the Bank of Manhattan opens for business.  Thereafter, Mr. Watson will be paid by the Bank of Manhattan pursuant to the terms of an employment agreement. See “Executive Compensation – Future Employment Agreements.”  At the time Bank of Manhattan opens for business we anticipate that we will have a total of 24 full time equivalent employees, including our executive officers.

MANAGEMENT’S PLAN OF OPERATION

Manhattan Bancorp was incorporated under the laws of the State of California on August 8, 2006 for the purpose of becoming a bank holding company that would own all of the outstanding shares of capital stock of Bank of Manhattan, a proposed national bank.  We anticipate that we will receive regulatory approval to open Bank of Manhattan during the third quarter of 2007, assuming this offering is successful, and open the bank shortly after that.  There can be no assurance however, that we will receive approval to open Bank of Manhattan or that the bank will open.

Prior to this offering the only material source of funds for Manhattan Bancorp has been the investment by our directors in our shares for the purpose of providing organizational and offering expenses for Manhattan Bancorp and for advancing the organizational and pre-opening expenses for Bank of Manhattan.  Prior to this offering we sold an aggregate of 45,000 shares of our common stock to our 9 directors ($50,000 per director) in a private placement at the purchase price of $10.00 per share for total gross proceeds to us of $450,000.  In order to fund additional organizational and offering expenses for Manhattan Bancorp, and organizational and pre-opening expenses for Bank of Manhattan, we intend to obtain a working capital line of $500,000 from an unaffiliated third party lender to cover any shortfall in funding these expenses prior to the closing of the offering.  We anticipate that our Chairman, Kyle Ransford, and, if required by the lender, certain of our other directors, will personally guarantee this line of credit.  We also anticipate that our directors would make further advances of funds, as needed, to cover our organizational and offering expenses and to cover any organizational and pre-opening expenses of the Bank of Manhattan prior to the opening of the Bank of Manhattan.  Any third party loans and any advances made by our directors would be repaid to them upon the closing of the offering.  Further, we anticipate obtaining an

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approximately $293,000 standby letter of credit from an unaffiliated bank to secure our obligations to our prospective landlord under the lease for our main office.

Once Bank of Manhattan receives preliminary approval to organize from the Comptroller of the Currency, we will focus on completing the steps necessary to enable Bank of Manhattan to open for business, including preparing our site, our information systems, our computer software and hardware, our internal controls, and our policies and procedures.  We anticipate that we will spend approximately $400,000 for tenant improvements to our main office as well as an additional $443,250 for furniture, fixtures and equipment.  Other pre-opening expenses are anticipated to total $799,218, and include, among other things, occupancy expense, personnel expense, legal and consulting fees and computer equipment and software.  Jeffrey Watson, our President and Chief Executive Officer, is currently retained by us pursuant to the terms of a consulting agreement to provide his services with respect to the organization of Bank of Manhattan.  See “Executive Compensation – Consulting Agreement.”  We anticipate that our Chief Credit Officer and our Chief Financial Officer, will be retained by us as consultants soon after we receive preliminary approval to organize so that they can assist us with pre-opening matters for Bank of Manhattan.  These two individuals will be employed by us pursuant to employment agreements which will commence when the Bank of Manhattan opens for business.  We also anticipate identifying a Chief Operating Officer prior to the opening of Bank of Manhattan who would also be employed by us pursuant to an employment agreement.  See “Executive Compensation – Future Employment Agreements.”

Manhattan Bancorp is newly formed and it has, and the Bank of Manhattan when it is formed will have, no prior operating history.  Our operating results will depend on the operating results of the Bank of Manhattan.  Bank of Manhattan’s success and profitability will depend in large part on our ability to attract a customer base.   Initially, we will rely heavily on our directors as a source of customer referrals.  We will ask each of our directors to identify at least five quality client referrals per year over our initial three years of operations.  We intend to hire proven business development relationship managers and loan officers with marketing experience to contact these customers and generate loans and deposits.    However, there can be no assurance that we will be successful in attracting the quality customers that we will need to achieve profitability.  In addition to our four executive officers, when we commence operations we anticipate that we will have an additional 21 employees, including seven relationship managers (lending officers) and two credit analysts, for a total of 24 full time equivalent employees.

Bank of Manhattan will incur substantial operating expenses, and there are no assurances as to when, if ever, Bank of Manhattan will make a profit.  Assuming that we raise the minimum net proceeds from this offering, we presently believe that we will have sufficient capital resources to meet our commitments for at least the next twelve months of operations.

REGULATION AND SUPERVISION

Both federal and state law extensively regulate bank holding companies.  This regulation is intended primarily for the protection of depositors and the deposit insurance fund and not for the benefit of shareholders of Manhattan Bancorp.  The following is a summary of particular statutes and regulations affecting Manhattan Bancorp and Bank of Manhattan.  This summary is qualified in its entirety by the statutes and regulations.

Regulation of Manhattan Bancorp

Manhattan Bancorp will be a registered bank holding company under the Bank Holding Company Act of 1956, as amended, and will be regulated by the Federal Reserve Board.  Manhattan Bancorp will be required to file periodic reports with the Federal Reserve Board and such additional information as the Federal Reserve Board may require pursuant to the Bank Holding Company Act.  The Federal Reserve Board may conduct examinations of Manhattan Bancorp and its subsidiaries, which will include Bank of Manhattan.

The Bank Holding Company Act requires every bank holding company to obtain the prior approval of the Federal Reserve Board before acquiring substantially all the assets of any bank or bank holding company or

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ownership or control of any voting shares of any bank or bank holding company, if, after the acquisition, it would own or control, directly or indirectly, more than 5% of the voting shares of the bank or bank holding company.

Manhattan Bancorp will be prohibited by the Bank Holding Company Act, except in statutorily prescribed instances, from acquiring direct or indirect ownership or control of more than 5% of the outstanding voting shares of any company that is not a bank or bank holding company and from engaging directly or indirectly in activities other than those of banking, managing or controlling banks or furnishing services to its subsidiaries.  However, Manhattan Bancorp, subject to notification or the prior approval of the Federal Reserve Board, as applicable in each specific case, may engage in any, or acquire shares of companies engaged in, activities that are deemed by the Federal Reserve Board to be “so closely related to banking” or managing or controlling banks as to be a “proper incident thereto.”

In approving acquisitions by bank holding companies of companies engaged in banking-related activities, the Federal Reserve Board considers whether the performance of any activity by a subsidiary of the holding company reasonably can be expected to produce benefits to the public, including greater convenience, increased competition, or gains in efficiency, which outweigh possible adverse effects, including over-concentration of resources, decrease of competition, conflicts of interest, or unsound banking practices.

The Federal Reserve Board has adopted capital adequacy guidelines for bank holding companies on a consolidated basis substantially similar to those of the Comptroller of the Currency which will be applicable to Bank of Manhattan.  Regulations and policies of the Federal Reserve Board also require a bank holding company to serve as a source of financial and managerial strength to its subsidiary banks.  It is the Federal Reserve Board’s policy that a bank holding company should stand ready to use available resources to provide adequate capital funds to a subsidiary bank during periods of financial stress or adversity and should maintain the financial flexibility and capital-raising capacity to obtain additional resources for assisting a subsidiary bank.  Under certain conditions, the Federal Reserve Board may conclude that certain actions of a bank holding company, such as a payment of a cash dividend, would constitute an unsafe and unsound banking practice.

Manhattan Bancorp will be required to give the Federal Reserve Board prior written notice of any repurchase of its outstanding equity securities which (for a period of 12 months) is equal to 10% or more of Manhattan Bancorp’s consolidated net worth, unless certain conditions are met.

Bank holding company transactions with subsidiaries and other affiliates are restricted, including qualitative and quantitative restrictions on extensions of credit and similar transactions.

The securities of Manhattan Bancorp will also be subject to the requirements of the Securities Act, and matters related thereto will be regulated by the Securities and Exchange Commission.  Certain issuances may also be subject to the California’s corporate securities law as administered by the California Commissioner of Corporations.  Manhattan Bancorp, upon effectiveness of the registration statement of which this prospectus constitutes a part, will be subject to the public reporting requirements of the Securities and Exchange Act of 1934, as amended generally applicable to publicly held companies, under Section 15(d) of the Exchange Act.  Companies which file a registration statement under the Securities Act are required under Section 15(d) of the Exchange Act for at least a 12-month period after the effectiveness of such registration statement to file periodic quarterly and annual reports under the Securities Act.  If and when Manhattan Bancorp has more than 500 shareholders of record, it will be required to register its securities with the Securities and Exchange Commission under Section 12(g) of the Exchange Act at which time its filing of periodic reports, as well as certain other reporting obligations, will become mandatory.

Regulation of Bank of Manhattan

As a national banking association, Bank of Manhattan will be subject to regulation, supervision and examination by the Comptroller of the Currency.  It will also be a member of the Federal Reserve System and, as such, will be subject to applicable provisions of the Federal Reserve Act and the regulations promulgated thereunder

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by the Board of Governors of the Federal Reserve System.  In addition, the deposits of Bank of Manhattan will be insured by the Federal Deposit Insurance Corporation to a maximum of $100,000 per depositor, and up to a maximum of $250,000 with respect to certain retirement accounts.  For this protection, Bank of Manhattan will pay a quarterly assessment to the FDIC and will be subject to the rules and regulations of the FDIC pertaining to deposit insurance and other matters.  The regulations of those agencies will govern most aspects of Bank of Manhattan’s business, including the making of periodic reports by Bank of Manhattan, and Bank of Manhattan’s activities relating to dividends, investments, loans, borrowings, capital requirements, certain check-clearing activities, branching, mergers and acquisitions, reserves against deposits, the issuance of securities and numerous other areas.

The earnings and growth of Bank of Manhattan will largely be dependent on its ability to maintain a favorable differential or “spread” between the yield on its interest-earning assets and the rate paid on its deposits and other interest-bearing liabilities.  As a result, Bank of Manhattan’s performance will be influenced by general economic condi­tions, both domestic and foreign, the monetary and fiscal policies of the federal government, and the policies of the regulatory agencies, particularly the Federal Reserve Board.  The Federal Reserve Board implements national monetary policies (such as seeking to curb inflation and combat recession) by its open-market operations in United States Government securities, by adjusting the required level of reserves for financial institutions subject to its reserve requirements and by varying the discount rate applicable to borrowings by banks which are members of the Federal Reserve System.  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 deposits.  The nature and impact of any future changes in monetary policies cannot be predicted.

Capital Adequacy Requirements

Bank of Manhattan will be subject to the regulations of the Comptroller of the Currency governing capital adequacy.  Those regulations incorporate both risk-based and leverage capital requirements.  The Comptroller has established risk-based and leverage capital guidelines for the banks it regulates, which set total capital requirements and define capital in terms of “core capital elements,” or Tier 1 capital and “supplemental capital elements,” or Tier 2 capital.  Tier 1 capital is generally defined as the sum of the core capital elements less goodwill and certain intangibles.  The following items are defined as core capital elements:  (i) common stockholders’ equity; (ii) qualifying non-cumulative perpetual preferred stock and related surplus; and (iii) minority interests in the equity accounts of consolidated subsidiaries.  Supplementary capital elements include:  (i) allowance for loan and lease losses (but not more than 1.25% of an institution’s risk-weighted assets); (ii) perpetual preferred stock and related surplus not qualifying as core capital; (iii) hybrid capital instruments, perpetual debt and mandatory convertible debt instruments; and (iv) term subordinated debt and intermediate-term preferred stock and related surplus.  The maximum amount of supplemental capital elements which qualifies as Tier 2 capital is limited to 100% of Tier 1 capital, net of goodwill.

Bank of Manhattan will be required to maintain a minimum ratio of qualifying total capital to total risk-weighted assets of 8.0% (“Total Risk-Based Capital Ratio”), at least one-half of which must be in the form of Tier 1 capital (“Tier 1 Risk-Based Capital Ratio”).  Risk-based capital ratios are calculated to provide a measure of capital that reflects the degree of risk associated with a banking organization’s operations for both transactions reported on the balance sheet as assets, and transactions, such as letters of credit and recourse arrangements, which are recorded as off-balance sheet items.  Under the risk-based capital guidelines, the nominal dollar amounts of assets and credit-equivalent amounts of off-balance sheet items are multiplied by one of several risk adjustment percentages, which range from 0% for assets with low credit risk, such as certain U. S. Treasury securities, to 100% for assets with relatively high credit risk, such as business loans.

The risk-based capital standards also take into account concentrations of credit and the risks of “non-traditional” activities (those that have not customarily been part of the banking business). The regulations require institutions with high or inordinate levels of risk to operate with higher minimum capital standards, and authorize the regulators to review an institution’s management of such risks in assessing an institution’s capital adequacy.

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The risk-based capital regulations also include exposure to interest rate risk as a factor that the regulators will consider in evaluating a bank’s capital adequacy, although interest rate risk does not impact the calculation of a bank’s risk-based capital ratios.  Interest rate risk is the exposure of a bank’s current and future earnings and equity capital arising from adverse movements in interest rates.  While interest risk is inherent in a bank’s role as financial intermediary, it introduces volatility to bank earnings and to the economic value of the bank.

Banks are also required to maintain a leverage capital ratio designed to supplement the risk-based capital guidelines.  Banks that have received the highest rating of the five categories used by regulators to rate banks and are not anticipating or experiencing any significant growth must maintain a ratio of Tier 1 capital (net of all intangibles) to adjusted total assets (“Leverage Capital Ratio”) of at least 3%.  All other institutions are required to maintain a leverage ratio of at least 100 to 200 basis points above the 3% minimum, for a minimum of 4% to 5%.  Pursuant to federal regulations, banks must maintain capital levels commensurate with the level of risk to which they are exposed, including the volume and severity of problem loans, and federal regulators may set higher capital requirements when a bank’s particular circumstances warrant.

Prompt Corrective Action Provisions

Federal law requires each federal banking agency to take prompt corrective action to resolve the problems of insured financial institutions, including but not limited to those that fall below one or more prescribed minimum capital ratios.  The federal banking agencies have by regulation defined the following five capital categories: “well capitalized” (Total Risk-Based Capital Ratio of 10%; Tier 1 Risk-Based Capital Ratio of 6%; and Leverage Capital Ratio of 5%); “adequately capitalized” (Total Risk-Based Capital Ratio of 8%; Tier 1 Risk-Based Capital Ratio of 4%; and Leverage Capital Ratio of 4%) (or 3% if the institution receives the highest rating from its primary regulator); “undercapitalized” (Total Risk-Based Capital Ratio of less than 8%; Tier 1 Risk-Based Capital Ratio of less than 4%; or Leverage Capital Ratio of less than 4%) (or 3% if the institution receives the highest rating from its primary regulator); “significantly undercapitalized” (Total Risk-Based Capital Ratio of less than 6%; Tier 1 Risk-Based Capital Ratio of less than 3%; or Leverage Capital Ratio less than 3%); and “critically undercapitalized” (tangible equity to total assets less than 2%).  A bank may be treated as though it were in the next lower capital category if after notice and the opportunity for a hearing, the appropriate federal agency finds an unsafe or unsound condition or practice so warrants, but no bank may be treated as “critically undercapitalized” unless its actual capital ratio warrants such treatment.

At each successively lower capital category, an insured bank is subject to increased restrictions on its operations.  For example, a bank is generally prohibited from paying management fees to any controlling persons or from making capital distributions if to do so would make the bank “undercapitalized.”  Asset growth and branching restrictions apply to undercapitalized banks, which are required to submit written capital restoration plans meeting specified requirements (including a guarantee by the parent holding company, if any).  “Significantly undercapitalized” banks are subject to broad regulatory authority, including among other things, capital directives, forced mergers, restrictions on the rates of interest they may pay on deposits, restrictions on asset growth and activities, and prohibitions on paying bonuses or increasing compensation to senior executive officers without FDIC approval.  Even more severe restrictions apply to critically undercapitalized banks.  Most importantly, except under limited circumstances, not later than 90 days after an insured bank becomes critically undercapitalized, the appropriate federal banking agency is required to appoint a conservator or receiver for the bank.

In addition to measures taken under the prompt corrective action provisions, insured banks may be subject to potential actions by the federal regulators 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 issuance of cease and desist orders, termination of insurance of deposits (in the case of a bank), the imposition of civil money penalties, the issuance of directives to increase capital, formal and informal agreements, or removal and prohibition orders against “institution-affiliated” parties.

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Safety and Soundness Standards

The federal banking agencies have also adopted guidelines establishing safety and soundness standards for all insured depository institutions.  Those guidelines relate to internal controls, information systems, internal audit systems, loan underwriting and documentation, compensation and interest rate exposure.  In general, the standards are designed to assist the federal banking agencies in identifying and addressing problems at insured depository institutions before capital becomes impaired.  If an institution fails to meet these standards, the appropriate federal banking agency may require the institution to submit a compliance plan and institute enforcement proceedings if an acceptable compliance plan is not submitted.

Premiums for Deposit Insurance

Bank of Manhattan will be a member of the Deposit Insurance Fund, maintained by the FDIC, and will pay deposit insurance assessments to the Deposit Insurance Fund.  The Deposit Insurance Fund was formed on March 31, 2006 following the merger of the Bank Insurance Fund and the Savings Association Insurance Fund in accordance with the Federal Deposit Insurance Reform Act of 2005.

In order to maintain the Deposit Insurance Fund, member institutions are assessed an insurance premium.  The amount of each institution’s premium is currently based on the balance of insured deposits and the degree of risk the institution poses to the Deposit Insurance Fund.  Under the assessment system, the FDIC assigns an institution to one of nine risk categories using a two-step process based first on capital ratios (the capital group assignment) and then on other relevant information (the supervisory subgroup assignment).  Each risk category is assigned an assessment rate.  Assessment rates currently range from 0% of deposits for an institution in the highest category (i.e., well-capitalized and financially sound, with no more than a few minor weaknesses) to 0.27% of deposits for an institution in the lowest category (i.e., undercapitalized and substantial supervisory concerns).

In addition to merging the insurance funds, the Federal Deposit Insurance Reform Act also granted the FDIC additional flexibility in establishing reserves in the Deposit Insurance Fund.  The Federal Deposit Insurance Corporation has issued proposed rules regarding the provisions of the Deposit Insurance Fund.  The finalization and implementation of these rules will likely affect the insurance premiums paid by all members of the Deposit Insurance Fund, including Bank of Manhattan.

In addition, all Federal Deposit Insurance Corporation-insured institutions are required to pay assessments to the Federal Deposit Insurance Corporation at an annual rate of approximately 0.0122% of insured deposits to fund interest payments on bonds issued by the Financing Corporation to fund the closing and disposal of failed thrift institutions by the Resolution Trust Corporation.  These assessments will continue until the Financing Corporation bonds mature in 2017.

Community Reinvestment Act

Bank of Manhattan will be subject to certain requirements and reporting obligations involving Community Reinvestment Act (“CRA”) activities.  The CRA generally requires the federal banking agencies to evaluate the record of a financial institution in meeting the credit needs of its local communities, including low and moderate income neighborhoods. The CRA further requires the agencies to take a financial institution’s record of meeting its community credit needs into account when evaluating applications for, among other things, domestic branches, consummating mergers or acquisitions, or holding company formations.  In measuring a bank’s compliance with its CRA obligations, the regulators now utilize a performance-based evaluation system which bases CRA ratings on the bank’s actual lending service and investment performance, rather than on the extent to which the institution conducts needs assessments, documents community outreach activities or complies with other procedural requirements.  In connection with its assessment of CRA performance, the agencies assign a rating of “outstanding,” “satisfactory,” “needs to improve” or “substantial noncompliance.”

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Other Consumer Protection Laws and Regulations

The bank regulatory agencies have been increasingly focusing attention on compliance with consumer protection laws and regulations.  Examination and enforcement has become intense, and banks have been advised to carefully monitor compliance with various consumer protection laws and their implementing regulations. The federal Interagency Task Force on Fair Lending issued a policy statement on discrimination in home mortgage lending describing three methods that federal agencies will use to prove discrimination: overt evidence of discrimination, evidence of disparate treatment, and evidence of disparate impact.  In addition to CRA and fair lending requirements, Bank of Manhattan will be subject to numerous other federal consumer protection statutes and regulations.  Due to heightened regulatory concern related to compliance with consumer protection laws and regulations generally, Bank of Manhattan may incur substantial compliance costs or be required to expend additional funds for investments in the local communities it serves.

Interstate Banking and Branching

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 regulates the interstate activities of banks and bank holding companies and establishes a framework for nationwide interstate banking and branching.  Since June 1, 1997, a bank in one state has generally been permitted to merge with a bank in another state without the need for explicit state law authorization.  However, states were given the ability to prohibit interstate mergers with banks in their own state by “opting-out” (enacting state legislation applying equality to all out-of-state banks prohibiting such mergers) prior to June 1, 1997.

Since 1995, adequately capitalized and managed bank holding companies have been permitted to acquire banks located in any state, subject to two exceptions: first, any state may still prohibit bank holding companies from acquiring a bank which is less than five years old; and second, no interstate acquisition can be consummated by a bank holding company if the acquiror would control more then 10% of the deposits held by insured depository institutions nationwide or 30% percent or more of the deposits held by insured depository institutions in any state in which the target bank has branches.

In 1995 California enacted legislation to implement important provisions of the Riegle-Neal Act discussed above and to repeal California’s previous interstate banking laws, which were largely preempted by the Riegle-Neal Act.

A bank may establish and operate de novo branches in any state in which the bank does not maintain a branch if that state has enacted legislation to expressly permit all out-of-state banks to establish branches in that state.  However, California law expressly prohibits an out-of-state bank which does not already have a California branch office from (i) purchasing a branch office of a California bank (as opposed to purchasing the entire bank) and thereby establishing a California branch office or (ii) establishing a de novo branch in California.

The changes effected by the Riegle-Neal Act and California laws have increased competition in the environment in which Bank of Manhattan will operate to the extent that out-of-state financial institutions may directly or indirectly enter Bank of Manhattan’s market areas.  It appears that the Riegle-Neal Act has contributed to the accelerated consolidation of the banking industry.  While many large out-of-state banks have already entered the California market as a result of this legislation, it is not possible to predict the precise impact of this legislation on Bank of Manhattan and the competitive environment in which it will operate.

Financial Modernization Act

Effective March 11, 2000, the Gramm-Leach-Bliley Act, also known as the “Financial Modernization Act”, enabled full affiliations to occur between banks and securities firms, insurance companies and other financial service providers.  This legislation permits bank holding companies to become “financial holding companies” and thereby acquire securities firms and insurance companies and engage in other activities that are financial in nature.  A bank holding company may become a financial holding company if each of its subsidiary banks is “well capitalized” and

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“well managed” under applicable definitions, and has at least a satisfactory rating under the CRA by filing a declaration that the bank holding company wishes to become a financial holding company. 

The Financial Modernization Act defines “financial in nature” to include securities underwriting, dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting and agency; merchant banking activities; and activities that the Board has determined to be closely related to banking.  A national bank also may engage, subject to limitations on investment, in activities that are financial in nature, other than insurance underwriting, insurance company portfolio investment, real estate development and real estate investment, through a financial subsidiary of the bank, if the bank is well capitalized, well managed and has at least a satisfactory CRA rating.  Subsidiary banks of a financial holding company or national banks with financial subsidiaries must continue to be well capitalized and well managed in order to continue to engage in activities that are financial in nature without regulatory actions or restrictions, which could include divestiture of financial subsidiaries.  In addition, a financial holding company or a bank may not acquire a company that is engaged in activities that are financial in nature unless each of the subsidiary banks of the financial holding company or the bank has a CRA rating of satisfactory or better. The Gramm-Leach-Bliley Act also imposes significant requirements on financial institutions with respect to the privacy of customer information, and modifies other existing laws, including those related to community reinvestment.

USA Patriot Act of 2001

The USA Patriot Act of 2001 was enacted in October 2001 in response to the terrorist attacks on September 11, 2001.  The Patriot Act is intended to strengthen United States law enforcement’s and the intelligence communities’ ability to work cohesively to combat terrorism on a variety of fronts.  The impact of the Patriot Act on financial institutions of all kinds has been significant and wide ranging.  The Patriot Act substantially enhanced existing anti-money laundering and financial transparency laws, and required appropriate regulatory authorities to adopt rules to promote cooperation among financial institutions, regulators, and law enforcement entities in identifying parties that may be involved in terrorism or money laundering.  Under the Patriot Act, financial institutions are subject to prohibitions regarding specified financial transactions and account relationships, as well as enhanced due diligence and “know your customer” standards in their dealings with foreign financial institutions and foreign customers.  For example, the enhanced due diligence policies, procedures, and controls generally require financial institutions to take reasonable steps:

·to conduct enhanced scrutiny of account relationships to guard against money laundering and report any suspicious transactions;

·to ascertain the identity of the nominal and beneficial owners of, and the source of funds deposited into, each account as needed to guard against money laundering and report any suspicious transactions;

·to ascertain for any foreign bank, the shares of which are not publicly traded, the identity of the owners of the foreign bank, and the nature and extent of the ownership interest of each such owner; and

·to ascertain whether any foreign bank provides correspondent accounts to other foreign banks and, if so, the identity of those foreign banks and related due diligence information.

The Patriot Act also requires all financial institutions to establish anti-money laundering programs, which must include, at minimum:

·the development of internal policies, procedures, and controls;

·the designation of a compliance officer;

·an ongoing employee training program; and

·an independent audit function to test the programs.

Bank of Manhattan intends to adopt comprehensive policies and procedures, and take all necessary actions, to ensure compliance with all financial transparency and anti-money laundering laws, including the Patriot Act.

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Sarbanes-Oxley Act of 2002

As a public company, we will be subject to the Sarbanes-Oxley Act of 2002, which implements a broad range of corporate governance and accounting measures for public companies designed to promote honesty and transparency in corporate America and better protect investors from corporate wrongdoing.  The Sarbanes-Oxley Act’s principal legislation and the derivative regulation and rule making promulgated by the Securities and Exchange Commission includes:

·the creation of an independent accounting oversight board;

·auditor independence provisions that restrict non-audit services that accountants may provide to their audit clients;

·additional corporate governance and responsibility measures, including the requirement that the chief executive officer and chief financial officer certify financial statements;

·a requirement that companies establish and maintain a system of internal control over financial reporting and that a company’s management provide an annual report regarding its assessment of the effectiveness of such internal control over financial reporting to the company’s independent accountants;

·a requirement that the company’s independent accountants provide an attestation report with respect to management’s assessment of the effectiveness of the company’s internal control over financial reporting (this requirement is currently proposed to become effective for companies like Bank of Manhattan which will not be an accelerated SEC filer for the bank’s fiscal year ending on or after December 15, 2008);

·the forfeiture of bonuses or other incentive-based compensation and profits from the sale of an issuer’s securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement;

·an increase in the oversight of, and enhancement of certain requirements relating to audit committees of public companies and how they interact with the company’s independent auditors;

·the requirement that audit committee members must be independent and are absolutely barred from accepting consulting, advisory or other compensatory fees from the issuer;

·the requirement that companies disclose whether at least one member of the committee is a “financial expert” (as such term is defined by the SBC) and if not, why not;

·expanded disclosure requirements for corporate insiders, including accelerated reporting of stock transactions by insiders and a prohibition on insider trading during pension blackout periods;

·a prohibition on personal loans to directors and officers, except certain loans made by insured financial institutions;

·disclosure of a code of ethics and the requirement of filing of a Form 8-K for a change or waiver of such code;

·mandatory disclosure by analysts of potential conflicts of interest; and

·a range of enhanced penalties for fraud and other violations.

MANAGEMENT

Executive Officers and Directors

The table below shows our directors’ and executive officers’ names, relationship to Manhattan Bancorp and Bank of Manhattan, age and occupation.  More detailed descriptions of the background and experience of our directors and executive officers are set forth below.  Each of our directors has been a director of Manhattan Bancorp since its inception and will become a director of Bank of Manhattan after we receive approval to organize Bank of Manhattan.

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Name	Relationship to Manhattan Bancorp and Bank of Manhattan	Age	Occupation
Peter J. Boyes	Director	35	Investment Banker
Chris W. Caras, Jr.	Director	33	Real Estate Broker
Harry “Duke” W. Chenoweth	Director	65	Retired Banker
Patrick E. Greene	Director	61	Business Owner
Christopher J. Growney	Director	34	Marketing
Larry S. Murphy	Director	63	Accountant
Kyle S. Ransford	Chairman	35	Real Estate Investment and Development
Jeffrey M. Watson	President and Chief Executive Officer and a Director	47	Banking
Stephen P. Yost	Director	61	Retired Banker

The Comptroller of the Currency has the authority to disallow any of the above persons from assuming his designated position at Bank of Manhattan.

In addition, we have identified individuals to serve as our Chief Credit Officer and as our Chief Financial Officer.  We expect these individuals to start with us in April 2007, following receipt of preliminary approval from the Comptroller of the Currency to charter the Bank of Manhattan.  Our proposed Chief Credit Officer has served as the Executive Vice President and Chief Credit Officer of a financial institution in Los Angeles County for more than the past two years and previously spent more than ten years as a consultant to commercial banking clients in credit administration and loan review.   Our proposed Chief Financial Officer has served as the Chief Financial Officer of several financial institutions in Southern California since 1982, serving most recently as the Executive Vice President and Chief Financial Officer of a publicly reporting bank since 2001.  Our proposed Chief Financial Officer is a certified public accountant.  In addition, we intend to employ a Chief Operating Officer prior to the opening of Bank of Manhattan, but have not yet identified this individual.

Background and Business Experience of Executive Officers and Directors

The following discussion provides information concerning the backgrounds and business experience of our executive officers and directors. 

Peter J. Boyes has served as the Managing Director and Co-Head of the Technology, Media & Telecommunications investment banking practice of Avondale Partners, an investment banking firm located in San Diego California, since March 2004.  Previously, from 2001 through March 2004 he was a Director of Trumpet Partners, an investment banking firm located in San Diego, California which merged with Avondale Partners in 2004.  From 2000 to 2001 Mr. Boyes was Vice President--Business Development and Chief Financial Officer of Mohomine, Inc., a San Diego based software company and from 1998 to 2000 Mr. Boyes was Vice President, Investment Banking in the San Francisco office of the investment banking firm of Volpe Brown Whelan & Company, LLC.  Mr. Boyes began his career in the financial advisory services department for the Los Angeles and San Diego offices of Coopers & Lybrand LLP as a staff auditor and a financial advisory services consultant.  Mr. Boyes earned a Bachelor of Arts degree in International Relations and a Masters in Business Administration from the University of Southern California, Los Angeles Mr. Boyes is a Certified Public Accountant.  He holds Series 24, 62 and 63 licenses from the National Association of Securities Dealers.  Mr. Boyes serves as a director of Manhattan Bancorp and is a proposed director of Bank of Manhattan. 

Chris W. Caras, Jr. has served as a Vice President for the real estate brokerage firm of Grubb & Ellis in Los Angeles, California since July 2005, specializing in commercial real estate brokerage services.  He also serves as the President of Caras Homes, Inc., Hermosa Beach, California, a residential real estate development company which he founded in 2000.  Mr. Caras also is a Property Manager for Car-Gin Property Management, Inc. in Palos

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Verdes Estates, California, which position he has held since 1996.  From 2002 through July 2005 Mr. Caras served as a Principal of Newmark of Southern California, Inc., a real estate brokerage firm, and from 1999 to 2002 he served as an Associate in the Los Angeles office of Studley, a commercial real estate brokerage company.  Mr. Caras is a California Licensed Salesperson and a State Licensed Contractor.  He earned a Bachelor of Arts degree in Urban Development and City Planning from the University of California, Berkley.  Mr. Caras serves as a director of Manhattan Bancorp and is a proposed director of Bank of Manhattan. 

Harry (“Duke”) W. Chenoweth is a retired commercial banker.  From 2001 to 2004 he was the President and Chief Operating Officer of Barrister Executive Suites, Inc, of Los Angeles, which company provided executive office space for lease.  Prior to that he had over 30 years of commercial banking experience, serving as an Executive Vice President of Imperial Bank of Los Angeles from 1996 to 2001 and serving with Union Bank from 1969 through 1996, where he was most recently the Regional Vice President and Manager for the Los Angles Middle Market Banking and Southern California Corporate Banking divisions from 1993 to 1996.  Mr. Chenoweth earned a Bachelor of Science degree from Wittenberg University, Springfield, Ohio and a Masters in Business Administration degree from Bowling Green University, Bowling Green, Ohio.  Mr. Chenoweth serves as a director of Manhattan Bancorp and is a proposed director of Bank of Manhattan.  Mr. Chenoweth will serve as Chairman of our Compensation Committee.

Patrick E. Greene has been the President and owner of Greene’s Ready Mixed Concrete in Torrance, California since 1960.  Mr. Greene also served as a director of Bay Cities National Bank, Redondo Beach, California from 1982 to 1995.  He earned a Bachelor of Science degree in Business Administration from Loyola University, Los Angeles, California.  Mr. Greene serves as a director of Manhattan Bancorp and is a proposed director of Bank of Manhattan. 

Christopher J. Growney has been a principal in the New York office of Clearwater Advisors, LLC,  an investment advisory firm, since 2001.   Previously, he was an Investment Manager at Cisco Systems Investments, San Jose, California, from 1999 to 2001.  From 1997 to 1999 Mr. Growney was a fixed income trader and cash manager at The Patterson Capital Corporation, Los Angeles, California, and from 1995 to 1997 was an Assistant Fixed Income Trader/Marketer with Morgan Stanley Dean Witter, Inc., in New York, New York.  He earned a Bachelor of Arts degree in Finance from Southern Methodist University, Dallas, Texas.  He holds a Series 63 license from the National Association of Securities Dealers and is a Chartered Financial Analyst.  Mr. Growney serves as a director of Manhattan Bancorp and is a proposed director of Bank of Manhattan.  Mr. Growney will serve as Chairman of Bank of Manhattan’s Asset Liability Committee.

Larry S. Murphy has more than thirty-five years of experience evaluating accounting, auditing and business practices, including more than twenty-five years as a consultant.  He has been a Vice President of Freeman & Mills, Inc., a litigation consulting firm since 2000, and also served as a Vice President of this firm from 1994 to 1998.  Previously, he was with the consulting firm of Putnam Hayes & Bartless from 1994 to 1998.  Mr. Murphy holds a Bachelor of Science degree in accounting from San Diego State University.  He is a Certified Public Accountant and has been a member of the American Institute of CPAs and the California Society of CPAs since 1970.  Mr. Murphy serves as a director of Manhattan Bancorp and is a proposed director of Bank of Manhattan.  He serves as the Chairman of our Audit Committee.

Kyle A. Ransford has been the General Partner of Cardinal Real Estate Investments, a real estate acquisition company in El Segundo, California, since 2001.  He has also been the General Partner of Powerscourt Partners, a financial consulting firm, since 2000.  Previously, he was an Associate at the investment banking firm of Houlihan, Lokey, Howard & Zukin in Century City, California, from 1998 to 2000.  He was also the founder and general partner of KyMar, LLC, a real estate investment company from 1994 to 1996. Mr. Ransford earned a Bachelor of Science degree in Business Administration from Southern Methodist University, Dallas, Texas, and a Masters in Business Administration degree with a specialization in finance from the University of Southern California, Los Angeles.  Mr. Ransford is the Chairman of the Board of Manhattan Bancorp and is the proposed Chairman of the Board of Bank of Manhattan.

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Jeffrey M. Watson is the President and Chief Executive Officer and a director of Manhattan Bancorp.  He will also serve as the President and Chief Executive Officer and a director of Bank of Manhattan upon the completion of its organization.  Mr. Watson has a 23 year career in banking, having served most recently as the Executive Vice President and Chief Operating Officer of 1st Century Bank, N.A. of Century City, California, starting with that bank as its Executive Vice President and Chief Operating Officer in its formation stage in 2003 and continuing with that bank until starting the formation process for Bank of Manhattan in 2006.  Previously, from 1999 to 2003, Mr. Watson served as the Executive Vice President—Chief Administrative Officer & Chief Lending Officer of Commercial Capital Bank and Chief Administrative Officer for Commercial Capital Bancorp, Irvine, California.  Prior to joining Commercial Capital Bank, Mr. Watson served as the Senior Vice President—Lending Manager at Hemet Federal Savings from 1998 to 1999 and from 1988  to 1998 Mr. Watson filled various positions at California United Bank, Encino, California, most recently serving as that bank’s Senior Vice President—Merger and Acquisitions Manager.   Mr. Watson earned a Bachelor of Science degree in Business Administration from San Diego State University and a Masters in Business Administration from California State University, Los Angeles.

Stephen P. Yost is a retired banker.  He served as the Executive Vice President/Manager of Special Credits and Credit Administrator at Comerica Bank, Long Beach, California from January 2001 until his retirement in March 2006.  Previously he was the Executive Vice President and Chief Credit Officer of Imperial Bank, Inglewood, California from 1998 through January 2001, and served as the Senior Vice President and Credit Officer at Mellon Bank, Los Angeles California from 1996 to 1998.  From 1970, until its merger will Wells Fargo in 1996, he held various positions at First Interstate Bank, San Francisco, California, serving as a Senior Vice President and Senior Credit Officer of that institution from 1989 until 1996.  Mr. Yost earned a Bachelor of Science degree in Economics from St. Mary’s College, Moraga, California and a Masters in Business Administration from the University of Santa Clara.  Mr. Yost serves as a director of Manhattan Bancorp and is a proposed director of Bank of Manhattan.  Mr. Yost will serve as Chairman of the Bank’s Loan Committee.

Board Committees

From time to time the Board appoints and empowers committees to carry out specific functions on behalf of the Board.  The following describes the current committees of the Board and their members: 

The Audit Committee:  Our Audit Committee oversees our financial reporting.  It appoints and evaluates our independent auditors and determines the compensation for our independent auditors.  The Audit Committee reviews with the independent auditors the proposed scope of, fees for, and results of, the annual audit.  It reviews the system of internal accounting controls and the scope and results of internal audits with the independent auditors and our management.  It pre-approves the audit and permissible non-audit services provided by the independent auditors.  Our Audit Committee consists of directors Murphy (chairman), Boyes and Yost. 

The Board of Directors had determined that each member of the Audit Committee has sufficient accounting or related financial management expertise to serve on the Committee and that Larry Murphy meets the qualifications of an “audit committee financial expert” as such term is defined in the rules and regulations of the Securities and Exchange Commission.  The members of the Audit Committee are all independent directors.  In determining the independence of the members of the Audit Committee we used the definition of independence set forth in the listing standards of the National Association of Securities Dealers, Inc.  

Compensation Committee:  The Compensation Committee of the Board of Directors approves the employment of executive officers, and recommends the compensation for all executive officers and considers and makes recommendations to the Board of Directors concerning incentive compensation plans and equity-based plans in which directors and executive officers may be participants.  The Compensation Committee consists of directors Chenoweth (Chairman), Caras, Greene, Growney and Ransford.  The members of the Audit Committee are all independent directors.  In determining the independence of the members of the Compensation Committee we used the definition of independence set forth in the listing standards of the National Association of Securities Dealers, Inc.

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EXECUTIVE COMPENSATION

Consulting Agreements

Mr. Watson is a party to a consulting agreement with Manhattan Bancorp effective October 1, 2006 and continuing to the first to occur of (i) the final licensing of Bank of Manhattan, (ii) the date on which Mr. Watson is employed by Bank of Manhattan as an executive officer, or (iii)  the date on which Manhattan Bancorp terminates the consulting agreement.  The consulting agreement provides that in consideration for consulting services rendered in connection with the formation and organization of Bank of Manhattan, Mr. Watson will receive $11,167 per month commencing January 1, 2007.  In addition, upon the final licensing of the Bank of Manhattan and the execution of Mr. Watson’s employment agreement with the Bank of Manhattan, Mr. Watson will receive a final consulting payment of $49,998 (representing consulting fees of $16,667 per month for each of the three months ending December 31, 2006), plus an additional $5,500 per month for each month of the term of the consulting agreement beginning on or after January 1, 2007 and through the licensing of Bank of Manhattan.  Mr. Watson has agreed to defer receipt of all payments due to him under his consulting agreement until the Bank of Manhattan opens for business, at which time Mr. Watson would receive all payments due to him under the consulting agreement in one lump sum payment.

In addition, following the receipt of preliminary approval to charter the Bank of Manhattan, which we expect to receive by April 2007, we intend to retain each of our proposed Chief Credit Officer and our Chief Financial Officer on a consulting basis until they are employed by Bank of Manhattan upon its opening.  Prior to the opening of the Bank of Manhattan, each of our proposed Chief Credit Officer and Chief Financial Officer would provide consulting services at a rate of $9,166 per month (two-thirds of the officer’s proposed base salary once Bank of Manhattan opens).

Future Employment Agreements

Following its organization, Bank of Manhattan will enter into an employment agreement, the terms of which are subject to the approval of the Comptroller of the Currency, with Jeffrey M. Watson, who will be employed as Bank of Manhattan’s President and Chief Executive Officer, for a term of three (3) years commencing on the date Bank of Manhattan opens for business.  The employment agreement will provide for an initial annual base salary of $200,000, with annual increases in the discretion of Bank of Manhattan’s Compensation Committee, and bonuses, if any, to be determined in the Board’s sole discretion The employment agreement will also provide for the grant to Mr. Watson of an option to purchase a number of shares of the common stock of Manhattan Bancorp equal to 5% of the amount of shares of Manhattan Bancorp issued and outstanding immediately prior to the opening of the Bank of Manhattan at the fair market value of the stock on the date of grant.  The option will be for a term of ten years and will vest in equal installments over a period of three years, with the first installment to vest on the one year anniversary from the date of grant, the second installment to vest on the two year anniversary from the date of grant and the third installment to vest on the three year anniversary from the date of grant.  In addition, the employment agreement will provide that Mr. Watson will receive an additional option to purchase a number of shares of the authorized and unissued common stock of Manhattan Bancorp equal to 5% of the issued and outstanding shares of Manhattan Bancorp sold in our first subsequent non-underwritten public offering (which would include an offering where the underwriters participate on a best efforts basis) following this offering.  The option will be for a term of ten years and will vest over a period of three years in equal installments with the first installment to vest on the one year anniversary of the date of grant, the second installment to vest on the two year anniversary from the date of grant and the third installment to vest on the three year anniversary from the date of grant.  The right to receive this additional option will terminate on the commencement of an underwritten public offering by Manhattan Bancorp sold on a firm commitment basis.  Mr. Watson’s employment agreement will further provide that Mr. Watson will be entitled to an automobile allowance of $1,000 per month and payment of membership dues at a country club.  In the event Bank of Manhattan terminates the employment of Mr. Watson without cause, Mr. Watson will be entitled to receive a lump sum payment equal to 12 months’ base salary, plus continuation of his medical benefits for a period of 12 months.

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It is anticipated that our Chief Credit Officer and our Chief Financial Officer will enter into employment agreements with Bank of Manhattan, subject to approval by the Comptroller of the Currency, effective upon the opening of the Bank of Manhattan.  Each of these employment agreements will be for a term of three years and will provide for compensation to each of our Chief Credit Officer and our Chief Financial Officer of $165,000, per year, with annual increases in the discretion of the Bank of Manhattan’s Compensation Committee, and bonuses, if any, to be in the sole discretion of our board of directors.  These employment agreements will also provide for the grant to each of these individuals of an option to purchase a number of shares of the common stock of Manhattan Bancorp equal to 1.5% of the amount of shares of Manhattan Bancorp issued and outstanding immediately prior to the opening of the Bank of Manhattan at the fair market value of the stock on the date of grant.  The option will be for a term of ten years and will vest in equal installments over a period of three years with the first installment to vest on the one year anniversary from the date of grant, the second installment to vest on the two year anniversary from the date of grant and the third installment to vest on the three year anniversary from the date of grant.  Each of their respective employment agreements will also provide that our Chief Credit Officer and our Chief Financial Officer will be entitled to an automobile allowance of $1,000 per month.  In addition, in the event Bank of Manhattan terminates the employment of either of these officers without cause, each will be entitled to receive a lump sum payment equal to 6 months’ base salary, plus continuation of his medical benefits for a period of 6 months.  We also anticipate that we will enter into an employment agreement with a Chief Operating Officer for the Bank, subject to approval of the Comptroller of the Currency, which employment agreement would be on substantially similar terms as the employment agreements for each of our Chief Credit Officer and our Chief Financial Officer.  We have not yet identified a suitable Chief Operating Officer, and there can be no assurance that we will be able to do so prior to or after the opening of Bank of Manhattan.

Director Compensation

The directors of Manhattan Bancorp and organizing directors of Bank of Manhattan are not presently receiving any fees for their attendance at board meetings and committee meetings or for performing other services in connection with the organization and operation of Bank of Manhattan.  Furthermore, they will not receive such fees prior to our commencement of operations.  However, the Board of Directors may authorize the payment of directors’ fees after we have commenced operations if such fees appear to be appropriate.  In addition, we anticipate that we will grant options to our directors to purchase our common stock following the opening of Bank of Manhattan.  See “Proposed Director and Executive Officer Stock Purchases and Option Grants.”

Future Stock Option Plan

Our board of directors intends to adopt a stock option plan for our officers, directors and employees,  subject to approval of our shareholders, the Comptroller of the Currency and the FDIC.  Under the proposed plan, we may grant options covering up to 30% of the shares sold in this offering.   All options must be granted at an exercise price of not less than 100% of the fair market value of the shares on the date of grant, with an exercise period of not longer than ten years. 

The plan will permit us to grant either incentive stock options that qualify for special federal income tax treatment or non-qualified stock options that do not qualify for special treatment.  Incentive stock options may be granted only to employees and will not create federal income tax consequences when they are granted.  If they are exercised during employment or within three months after termination of employment, the exercise will not create federal income tax consequences.  When the shares acquired on exercise of an incentive stock option are resold, the seller must pay federal income taxes on the amount by which the sales price exceeds the purchase price.  This amount will be taxed at capital gain rates if the sale occurs at least two years after the option was granted and at least one year after the option was exercised.  Otherwise, it is taxed as ordinary income.

Non-qualified stock options may be granted to either employees or non-employees such as outside directors.  Incentive stock options that are exercised more than three months after termination of employment are treated as non-qualified stock options.  Non-qualified stock options will not create federal income tax consequences when they are granted.  When they are exercised federal income taxes must be paid by the individual on the amount

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by which the fair market value of the shares acquired by exercising the option exceeds the exercise price.  When the shares acquired on exercise of a non-qualified stock options are sold, the seller must pay federal income taxes on the amount by which the sales price exceeds the purchase price plus the amount included in ordinary income when the option was exercised.  This amount may be taxed at capital gains rates provided the individual holds the stock for a minimum of one year, which will vary depending upon the time that has elapsed since the exercise of the option. 

When a non-qualified stock option is exercised, we may be allowed a federal income tax deduction for the same amount that the option holder includes in his or her ordinary income.  When an incentive stock option is exercised, there is no tax deduction unless the shares acquired are resold sooner than two years after the option was granted or one year after the option was exercised.

 For any optionee, the aggregate fair market value (determined at the time of grant) of stock with respect to which incentive stock options are first exercisable by such optionee during any one calendar year may not exceed $100,000.  Options in excess of this amount, or which otherwise do not meet statutory requirements, will be deemed “non-qualified” options.

Proposed Director and Executive Officer Stock Purchases and Option Grants

The table below sets forth the total stock ownership of our directors prior to the opening of the Bank of Manhattan, and option grants to be made to our directors and executive officers following the opening of Bank of Manhattan, assuming both the minimum offering and the maximum offering.  FDIC policy does not permit us to grant options to our outside directors to purchase a number of shares in excess of the number of shares purchased by the outside directors prior to the opening of the Bank of Manhattan.  Each outside director, other than Kyle S. Ransford who serves as our Chairman and has contributed and will contribute substantial amounts of his time in connection with the organization of Bank of Manhattan, is to receive options to purchase the lesser of (i) 15,000 shares or (ii) the number of shares of our common stock the director purchases prior to the opening of Bank of Manhattan.  It is anticipated that all options will be granted for a term of ten years and will vest in equal installments, one-third on the first anniversary of the date of grant, one-third on the second anniversary of the date of grant and one third on the third anniversary of the date of grant.  All options will be granted at the fair market value of our common stock on the date of grant.

Name	Total Shares to be  Owned Prior to  Opening	Option Shares to be Granted Minimum  Offering	Option Shares to be Granted Maximum Offering
Directors
Peter J. Boyes	5,000	5,000	5,000
Chris W. Caras, Jr.	10,000	10,000	10,000
Harry “Duke” W. Chenoweth	15,000	15,000	15,000
Patrick E. Greene	20,000	15,000	15,000
Christopher J. Growney	15,000	15,000	15,000
Larry S. Murphy	15,000	15,000	15,000
Kyle S. Ransford	150,000	109,750	150,000
Jeffrey M. Watson	25,000	109,750	152,250
Stephen P. Yost	15,000	15,000	15,000
Directors as a group	270,000	309,500	392,250
Other Executive Officers
Chief Operating Officer	0	32,925	45,675
Chief Credit Officer	0	32,925	45,675
Chief Financial Officer	0	32,925	45,675
Directors and Executive Officers as a Group	270,000	408,275	529,275

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Indemnification

Manhattan Bancorp’s Articles of Incorporation and Bylaws provide, among other things, for the indemnification of Manhattan Bancorp’s directors, officers and agents, and authorize the Board to pay expenses incurred by, or to satisfy a judgment or fine rendered or levied against, such agents in connection with any personal legal liability incurred by that individual while acting for the corporation within the scope of his or her employment.  Such provisions of Manhattan Bancorp’s Articles of Incorporation and Bylaws are subject to certain limitations imposed under state and federal law.  It is the policy of the Board of Directors that Manhattan Bancorp’s executive officers and directors shall be indemnified to the maximum extent permitted under applicable law and Manhattan Bancorp’s Articles of Incorporation and Bylaws. 

Manhattan Bancorp’s Articles of Incorporation also currently provide for the limitation or elimination of personal liability of the corporation’s directors to the corporation or its shareholders for monetary damages, to the extent permitted by California law.  However, under federal law, the Comptroller of the Currency may seek monetary damages from bank or bank holding company directors in cases involving gross negligence or any greater disregard of the duty of care, notwithstanding any provisions of state law which may permit limitations on director liability in such circumstances.

Manhattan Bancorp has obtained liability insurance covering all of its officers and directors and Bank of Manhattan expects to have similar insurance in force before the opening of Bank of Manhattan.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling Manhattan Bancorp under the provisions in Manhattan Bancorp’s Articles of Incorporation and Bylaws, Manhattan Bancorp has been informed that, in the opinion of the Securities and Exchange Commission, this kind of indemnification is against public policy as expressed in the Securities Act, and is therefore unenforceable.

Certain Transactions

There are no existing or proposed material inter­ests or transactions between us and any of our officers or directors outside the ordinary course of business, except as indicated herein.  Each of our directors has purchased shares of our common stock at a purchase price of $10.00 per share in a private placement conducted prior to this offering in order to provide organizational and offering expenses for Manhattan Bancorp and to advance pre-opening and organizational expenses to Bank of Manhattan.  Each of our nine directors has purchased 5,000 shares for an aggregate of 45,000 shares and aggregate proceeds to us of $450,000.  In addition, certain of our directors may advance funds prior to the conclusion of this offering if necessary to pay for our organizational and offering expenses as well as the organizational and pre-opening expenses of Bank of Manhattan.  Any funds advanced by the directors prior to the conclusion of this offering, will be repaid to the directors promptly following the conclusion of this offering.  In addition, our Chairman, Kyle Ransford and certain others of our directors, if required by the lender, will provide a guarantee to enable us to obtain a $500,000 working capital line to fund our organizational and offering expenses, and the organizational and pre-opening expenses of Bank of Manhattan prior to the conclusion of this offering.  See “Management’s Plan of Operation.”  In addition, each of our directors will be granted stock

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options in consideration for services rendered to us during our organizational stage.   See “Executive Compensation — Proposed Director and Executive Officer Stock Purchases and Option Grants.”

We anticipate that our directors and officers and the companies with which they are associated, will have banking transactions with the Bank of Manhattan in the ordinary course of business.  It is the firm intention of the Board of Directors that any loans and commitments to lend included in such transactions will be made in accordance with all applicable laws and regulations and on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons of similar creditworthiness.  

All future affiliated transition will be made or entered into on terms that are no less favorable to us than those that can be obtained from an unaffiliated third party. 

SECURITY OWNERSHIP OF MANAGEMENT

The following table presents, for each of our directors and executive officers, (i) the number of shares beneficially owned by each such person as of February 1, 2007; (ii) the percentage of shares of our common stock beneficially owned by each such person as of the date of February 1, 2007; (iii) the number of shares each such person is anticipated to purchase in this offering, (iv) the total anticipated share ownership of such person following this offering (v) the percentage of our outstanding shares such person would own after the minimum offering assuming all anticipated shares purchases are made, and (vi) the percentage of our outstanding shares such person would own after the maximum offering assuming all anticipated share purchases are made.  The amounts that are anticipated to be purchased in this offering include shares that may be purchased through individual retirement accounts and by affiliates of our directors and executive officers.

Name	Share  Ownership  February 1,  2007	% Share  Ownership  February 1,  2007		Shares to be  Purchased  in Offering	Total Share  Ownership  Following  Offering	% Share  Ownership— Minimum  Offering		% Share  Ownership— Maximum  Offering
Directors
Peter J. Boyes	5,000	11.1	%	0	5,000	0.23	%	0.16	%
Chris W. Caras, Jr.	5,000	11.1	%	5,000	10,000	0.46	%	0.33	%
Harry “Duke” W. Chenoweth	5,000	11.1	%	10,000	15,000	0.68	%	0.49	%
Patrick E. Greene	5,000	11.1	%	15,000	20,000	0.91	%	0.66	%
Christopher J. Growney(2)	5,000	11.1	%	10,000	15,000	0.68	%	0.49	%
Larry S. Murphy	5,000	11.1	%	10,000	15,000	0.68	%	0.49	%
Kyle S. Ransford	5,000	11.1	%	145,000	150,000	6.83	%	4.93	%
Jeffrey M. Watson	5,000	11.1	%	20,000	25,000	1.14	%	0.82	%
Stephen P. Yost	5,000	11.1	%	10,000	15,000	0.68	%	0.49	%
Other Executive Officers
Chief Credit Officer	0	0		0	0	0		0
Chief Financial Officer	0	0		0	0	0		0
Chief Operating Officer	0	0		0	0	0		0
All directors and executive officers as a group (12 persons)	45,000	100.0	%	225,000	270,000	12.30	%	8.87	%

(2)           These shares are held in the name of Canbeu Holdings, LLC of which Mr. Growney and his spouse are sole owners.

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DESCRIPTION OF CAPITAL STOCK OF MANHATTAN BANCORP

We are authorized to issue ten million (10,000,000) shares of common stock, without par value, and ten million (10,000,000) shares of preferred stock, without par value.  We currently expect to sell up to 3,000,000 shares of our common stock to purchasers of common stock in the offering.  An aggregate of 45,000 shares of our common stock have previously been issued to our directors in connection with their funding our organizational expenses and the organizational and pre-opening expenses of Bank of Manhattan. We will not issue any shares of preferred stock in the offering.  Each share of our common stock will have the same relative rights as, and will be identical in all respect with, every other share of common stock, except that shares purchased by our directors prior to this offering will be “restricted shares” subject to certain resale limitations.  Upon payment of the purchase price for the common stock in this offering, all shares sold in this offering will be duly authorized, fully paid and non-assessable.

The shares of common stock:

·      are not deposit accounts and are subject to investment risk;

·      are not insured or guaranteed by the FDIC or any other government agency; and

·      are not guaranteed by Manhattan Bancorp or Bank of Manhattan

Common Stock

Voting Rights.  All voting rights are vested in the holders of our common stock.  Our shareholders have cumulative voting rights for the election of directors.  This means that a shareholder has the right to vote the number of shares owned by him or her for as many candidates as there are directors to be elected, or to cumulate his or her shares and give one candidate as many votes as the number of directors multiplied by the number of shares owned shall equal, or to distribute them on the same principle among as many candidates as he or she deems appropriate.

Each share has the same rights, preferences and privileges as every other share.  Each shareholder is entitled to one vote per share on any issue requiring a vote at any meeting (except as described above in connection with the election of directors), and will be entitled to participate in any liquidation, dissolution, or winding up on the basis of his or her pro rata share holdings. 

Dividends.  As a bank holding company that will initially have no significant assets other than our equity interest in Bank of Manhattan, our ability to declare dividends will depend primarily upon dividends we receive from Bank of Manhattan.  The dividend practice of Bank of Manhattan, like our dividend practice, will depend upon its earnings, financial position, current and anticipated cash requirements and other factors deemed relevant by the Bank of Manhattan’s Board of Directors at the time.  Bank of Manhattan does not intend to pay any cash dividends in its early years of operations.  See “Our Policy Regarding Dividends.” 

Bank of Manhattan’s ability to pay cash dividends to us is also subject to certain legal limitations.  No national bank may, pursuant to 12 U.S.C. Section 56, pay divi­dends from its capital; all dividends must be paid out

35

of net profits then on hand, after deducting for expenses including losses and bad debts.  The payment of dividends out of net profits of a national bank is further limited by 12 U.S.C. Section 60(a) which prohibits a bank from declaring a dividend on its shares of common stock until the surplus fund equals the amount of capital stock, or if the surplus fund does not equal the amount of capital stock, until one-tenth of the bank’s net profits of the preceding half-year in the case of quarterly or semiannual dividends, or the preceding two consecutive half-year periods are transferred to the surplus fund before each dividend is declared. 

Pursuant to 12 U.S.C. Section 60(b), the approval of the Comptrol­ler of the Currency is required if the total of all dividends declared by Bank of Manhattan in any calendar year shall exceed the total of its net profits for that year combined with its net profits for the two preceding years, less any required transfers to surplus or a fund for the retirement of any preferred stock.  The Comptroller has adopted guidelines, which set forth factors which are to be considered by a national bank in determining the payment of dividends.  A national bank, in assessing the payment of dividends, is to evaluate the bank’s capital position, its maintenance of an adequate allowance for loan and lease losses, and the need to review or develop a comprehensive capital plan, complete with financial projections, budgets and dividend guidelines.  Therefore, the payment of dividends by Bank of Manhattan is also governed by its ability to maintain minimum required capital levels and an adequate allowance for loan and lease losses.  Additionally, pursuant to 12 U.S.C. Section 1818(b), the Comptrol­ler may prohibit the payment of any dividend which would constitute an unsafe and unsound banking practice.

Manhattan Bancorp’s ability to pay dividends is also limited by state corporation law.  The California General Corporation Law prohibits Manhattan Bancorp from paying dividends on the common stock unless: (i) its retained earnings, immediately prior to the dividend payment, equals or exceeds the amount of the dividend or (ii) immediately after giving effect to the dividend the sum of Manhattan Bancorp’s assets (exclusive of goodwill and deferred charges) would be at least equal to 125% of its liabilities and the current assets of Manhattan Bancorp would be at least equal to its current liabilities, or, if the average of its earnings before taxes on income and before interest expense of the two preceding fiscal years was less than the average of its interest expense of the two preceding fiscal years, at least equal to 125% of its current liabilities.

Shareholders are entitled to receive dividends only when and if declared by our Board of Directors.  Manhattan Bancorp presently intends to follow a policy of retaining earnings, if any, for the purpose of increasing the net worth and reserves of Manhattan Bancorp.  According­ly, it is anticipated that no cash dividends will be declared in the foreseeable future, and no assurance can be given that Manhattan Bancorp’s earnings will permit the payment of dividends of any kind in the future.   The future dividend policy of Manhattan Bancorp will be subject to the discretion of the Board of Directors and will depend upon a number of factors, including future earnings, financial condition, liquidity, and general business conditions.

Preferred Stock

 We will not issue any preferred stock in this offering and we have no current plans to issue any preferred stock after this offering.  Preferred stock may be issued with designations, powers, preferences and rights as the Board of Directors may from time to time determine.  The Board of Directors can, without shareholder approval, issue preferred stock with voting, dividend, liquidation and conversion rights that could dilute the voting strength of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in control.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock will be U.S. Stock Transfer Corporation, Glendale, California.

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EXPERTS

The financial statements as of December 31, 2006 and for the period from June 19, 2006 (inception) to December 31, 2006 included in this prospectus and registration statement have been so included in reliance on the report of Hutchinson & Bloodgood, LLP, an independent registered pubic accounting firm, as set forth in their report appearing herein and has been so included in reliance upon such report given upon the authority of such firm as experts in auditing and accounting.

Hutchinson & Bloodgood, LLP has consented to the use of its name and statements with respect to it appearing in this prospectus.  

LEGAL MATTERS

The legality of our common stock has been passed upon for us by King, Holmes, Paterno & Berliner, LLP, 1900 Avenue of the Stars, 25th Floor, Los Angeles, California 90067.  King, Holmes, Paterno & Berliner has consented to the references to their opinion in this prospectus.

INDEX TO FINANCIAL STATEMENTS

Statement of Shareholders’ Equity for the Period from June 19, 2006 (inception) to December 31, 2006

Statement of Cash Flows for the Period from June 19, 2006 (inception) to December 31, 2006

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed a registration statement with the Securities and Exchange Commission under the Securities Act of 1933, as amended, with respect to the common stock offered in this prospectus.  As permitted by the rules and regulations of the Securities and Exchange Commission, this prospectus does not contain all the information set forth in the registration statement.  You may examine this information without charge at the public reference facilities of the Securities and Exchange Commission located at 100 F Street, NE, Washington, D.C.  20549.  You may obtain copes of this material from the Securities and Exchange Commission at prescribed rates.  You may obtain information on the operations of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330.  The Securities and Exchange Commission also maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and Exchange Commission.  The address for this website is www.sec.gov.  Upon the effectiveness of the registration statement of which this prospectus is a part, we will be required to file reports electronically with the Securities and Exchange Commission as required by Section 15(d) of the Exchange Act of 1934, as amended.

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Report of Independent Registered Public Accounting Firm

Board of Directors

Manhattan Bancorp

(A Development Stage Company)

El Segundo, California

We have audited the accompanying balance sheet of Manhattan Bancorp (the Company) as of December 31, 2006, and the related statements of operations, stockholders’ equity, and cash flows for the period from June 19, 2006 (inception) to December 31, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2005, and the results of its operations and its cash flows for the period from June 19, 2006 (inception) to December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

/s/ Hutchinson & Bloodgood, LLP

Glendale, California

January 17, 2007

F-1

Manhattan Bancorp

(A Development Stage Company)

Balance Sheet

December 31, 2006

Assets
Cash	$	206,423
Property and equipment, net (Note 3)	23,031
Deposits (Note 7)	39,277
Total assets	$	268,731
Liabilities and Stockholders’ Equity
Accrued expenses	$	113,123
Commitments and contingencies (Note 7)
Stockholders’ equity (Note 4)
Common stock - no par value; 10,000,000 shares authorized; 42,500 shares issued and outstanding	425,000
Accumulated deficit	(269,392		)
Total stockholders’ equity	155,608
Total liabilities and stockholders’ equity	$	268,731

The accompanying notes are an integral part of this financial statement.

F-2

Manhattan Bancorp

(A Development Stage Company)

Statement of Operations

Period from June 19, 2006 (Inception) to December 31, 2006

Pre-opening expenses
Compensation and benefits	71,836
Occupancy and equipment	9,673
Legal and professional fees	152,252
Regulatory filing fee	25,000
General and administrative	10,631
Total pre-opening expenses	269,392
Loss before income taxes	(269,392		)
Provision for income taxes	—
Net loss	$	(269,392	)
Basic and diluted loss per share	$	(14.03	)

The accompanying notes are an integral part of this financial statement.

F-3

Manhattan Bancorp

(A Development Stage Company)

Statement of Stockholders’ Equity

Period from June 19, 2006 (Inception) to December 31, 2006

	Number of
	Shares	Common		Accumulated
	Outstanding	Stock		Deficit			Total
Balance at June 19, 2006 (Inception)	—	$	—	$	—		$	—
Issuance of common stock for cash to founders	42,500	425,000		—			425,000
Net loss	—	—		(269,392		)	(269,392		)
Balance, December 31, 2006	42,500	$	425,000	$	(269,392	)	$	155,608

The accompanying notes are an integral part of this financial statement.

F-4

Manhattan Bancorp

(A Development Stage Company)

Statement of Cash Flows

Period from June 19, 2006 (Inception) to December 31, 2006

Cash Flows from Operating Activities
Net loss	$	(269,392	)
Adjustments to reconcile net loss to net cash used in operating activities:
Net change in:
Depreciation	1,174
Deposits	(39,277		)
Accrued expenses	113,123
Net cash used in operating activities	(194,372		)
Cash Flows from Investing Activities
Purchase of premises and equipment	(24,205		)
Cash Flows from Financing Activities
Proceeds from issuance of common stock to founders	425,000
Net increase in cash and cash equivalents	206,423
Cash and Cash Equivalents at Beginning of Period	—
Cash and Cash Equivalents at End of Period	$	206,423
Supplementary Information
Interest paid on deposits	$	—
Income taxes paid	$	—

The accompanying notes are an integral part of this financial statement.

F-5

Manhattan Bancorp

(A Development Stage Company)

Notes to Financial Statements

December 31, 2006

Note 1.Nature of Business

Manhattan Bancorp (the Company) is a California corporation incorporated on August 8, 2006 for the purpose of becoming a bank holding company and owning all of the stock of Bank of Manhattan N.A. (proposed) to be located in El Segundo, California. Bank of Manhattan N.A. will operate as a community bank, offering general commercial banking services to small and medium-sized businesses and professionals in the South Bay, the Westside and the Los Angeles airport areas of Los Angeles County.  On December 12, 2006, the Company filed an application with the Comptroller of the Currency (OCC) to organize Bank of Manhattan N.A. and an application with the Federal Deposit Insurance Corporation (FDIC) for insurance of deposits.

The Company is targeting gross offering proceeds in the range of $21,500,000 to $25,000,000 and anticipates the bank opening in the third quarter of 2007.   The Company has assembled a strong management team and group of outside directors to lead the proposed bank in a healthy and affluent business community. The Company has also engaged a strong team of outside professionals who are very experienced and highly regarded for their services to the banking community especially with start-up banks. The Company’s ability to operate as a going concern could be negatively impacted in the event the event regulatory approvals are delayed or not obtained or in the event the Company is unable to raise the required capital on a timely basis.

Note 2.           Summary of Significant Accounting Policies

Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the balance sheet, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. Cash consists of cash on deposit with Pacific Coast Bankers’ Bank.

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Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives. The straight-line method of depreciation is followed for financial reporting purposes, while both accelerated and straight-line methods are followed for income tax purposes.

Earnings (Loss) Per Share

The Company follows Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per Share. Basic earnings (loss) per share represents income available to common stock divided by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed conversion. There were no dilutive potential common shares outstanding at December 31, 2006. The weighted-average number of shares outstanding for the period ended December 31, 2006 was 19,196 for basic and diluted loss per share.

Income Taxes

Deferred income taxes are recognized for estimated future tax effects attributable to income tax carry forwards as well as temporary differences between income tax and financial reporting purposes. Valuation allowances are established when necessary to reduce the deferred tax asset to the amount expected to be realized.  Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted accordingly through the provision for income taxes.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.

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Note 3.Property and Equipment

Property and equipment consisted of the following at December 31, 2006:

Computer equipment	$	24,205
Less accumulated depreciation	(1,174		)
	$	23,031

Depreciation expense for the period from June 19, 2006 (inception) to December 31, 2006 was $1,174.

Note 4.Stockholders’ Equity

The Company has authorized 10,000,000 shares of common stock and 10,000,000 shares of serial preferred stock.  During the period ended December 31, 2006, the Company issued 42,500 shares of common stock to its nine founders at $10 per share totaling $425,000. There was no serial preferred stock issued during the period ended December 31, 2006. Capital raising costs incurred through December 31, 2006 are insignificant.

Note 5.Stock Based Compensation

The Company intends to have a stock option plan adopted for its officers, directors and employees subject to approval by its shareholders, OCC and FDIC.  Under the proposed plan, the Company may grant options covering up to 30% of the shares outstanding at the close of the offering.   All options must be granted at an exercise price of not less than 100% of the fair market value of the shares on the date of grant, with a vesting period of three years and an exercise period of not longer than ten years.

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Note 6.Income Taxes

The Bank had no income tax expense or benefit for the period ended December 31, 2006, as net operating losses were incurred and deferred tax assets remain unrecorded, since their realization is dependent on future taxable income.

The components of the net deferred tax asset are as follows at December 31, 2006:

Deferred tax assets:
Pre-opening expenses	$	110,945
Valuation allowance	(110,945		)
Net deferred tax asset	$	—

Note 7.Commitments and Contingencies

Operating Lease Commitments – Temporary Office

The Company leases temporary office space under an operating lease agreement through February 2007 and on a month-to-month basis thereafter. At December 31, 2006, the remaining future minimum rental payments under the lease amount to $7,000 for 2007.  Total rental expense for the period ended December 31, 2006 was $5,600.

Operating Lease Commitments – Permanent Office

At the December 31, 2006, the Company was in negotiations for a permanent office facility for the proposed banking operation. The proposed lease agreement includes a term of seven years with one renewal option of five years and minimum lease payments as follows:

Commencement through 12th month	$	237,682
From 13th to 24th month	244,812
From 25th to 36th month	252,156
From 37th to 48th month	259,721
From 49th to 60th month	267,513
From 61st to 72nd month	275,538
From 73rd to 84th month	283,804
	$ 1,821,226

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The proposed lease agreement also requires a standby letter of credit to be issued in favor of the lessor to be drawn on by the lessor in the event of default as described in the proposed lease agreement. The initial amount of the letter of credit is approximately $293,000 ($45 per usable square foot of premises) and is reduced to approximately $147,000 upon completion of the ninth month of rental from the commencement date and expiring at the completion of the eighteenth month as prescribed under the lease agreement.

Capitalization Services Commitment

The Company has a financial advisory and consulting agreement with a consulting firm for the application services for Bank of Manhattan N.A. as well as offering services to raise capital. The agreement requires a sales management fee equal to the lesser of 1% of the gross offering proceeds or $125,000, and a sales and placement fee of 5% of the gross offering proceeds collected from investors identified by the consulting firm. At December 31, 2006, these costs have not yet been incurred.

Data Network Products/Services Purchase Agreement Commitment

The Company has an agreement with a vendor to provide the proposed bank’s information technology network products and services. The products and services under the agreement are valued at approximately $155,000. At December 31, 2006, the Company has $22,651 on deposit towards this agreement. In the event the Company is unsuccessful in formation of the proposed bank, costs in excess of the deposit may be incurred for products and services provided through the cessation date as described in the agreement.

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MANHATTAN BANCORP

COMMON STOCK

Minimum of 2,150,000 Shares

Maximum of 3,000,000 Shares

Offering Price $10.00 per share

(2,500 Share Minimum Investment)

PROSPECTUS

Dealer Prospectus Delivery Obligation

Until the later of                 2007 or 90 days after commencement of the offering, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus.

                              , 2007

PART II:  INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24.  Indemnification of Directors and Officers

Section 317 of the California Corporations Code governs indemnification of the directors and officers of Manhattan Bancorp.  Under this section, officers and directors may be indemnified against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with proceedings other than derivative suits, in which such persons were parties or threatened to be made parties.  In order for the corporation to make indemnification, there must be a determination by (a) a majority vote of a quorum of the Board of Directors, consisting of directors who are not parties to such proceeding, (b) if such quorum of directors is not obtainable, by independent legal counsel in a written opinion, (c) approval of the shareholders pursuant to Section 153 of the California Corporations Code, with the shares owned by the person to be indemnified not being entitled to vote thereon, or (d) an order of the court in which such proceeding is or was pending that the officer or director acted in good faith in a manner such person reasonably believed to be in the best interests of the corporation, and in the case of a criminal proceeding, such person had no reasonable cause to believe the conduct of such person was unlawful.  This section further provides that indemnification may be paid in connection with derivative suits, in the same manner as described above, except that, with respect to derivative suits, the authority authorizing the indemnification must find that such person acted in good faith, in a manner such person believed to be in the best interests of the corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under the circumstances.  Court approval is required for indemnification of expenses or amounts incurred in respect of any claim or matter in which a director or officer has been adjudged to be liable to the corporation in the performance of such person’s duty to the corporation.  No indemnification of expenses can be made under Section 317 in settling or otherwise disposing of a threatened or pending action, with or without action which is settled or otherwise disposed of without court approval.

Manhattan Bancorp’s Articles of Incorporation and Bylaws provide, among other things, for the indemnification of Manhattan Bancorp’s directors, officers and agents, and authorize the Board to pay expenses incurred by, or to satisfy a judgment or fine rendered or levied against, such agents in connection with any personal legal liability incurred by that individual while acting for the corporation within the scope of his or her employment.  Such provisions of Manhattan Bancorp’s Articles of Incorporation and Bylaws are subject to certain limitations imposed under state and federal law.  It is the policy of the Board of Directors that Manhattan Bancorp’s executive officers and directors shall be indemnified to the maximum extent permitted under applicable law and Manhattan Bancorp’s Articles of Incorporation and Bylaws.

Manhattan Bancorp’s Articles of Incorporation also currently provide for the limitation or elimination of personal liability of the corporation’s directors to the corporation or its shareholders for monetary damages, to the extent permitted by California law.  However, under federal law, the Comptroller of the Currency may seek monetary damages from bank or bank holding company directors in cases involving gross negligence or any greater disregard of the duty of care, notwithstanding any provisions of state law which may permit limitations on director liability in such circumstances.

Manhattan Bancorp has obtained liability insurance covering all of its officers and directors and Bank of Manhattan expects to have similar insurance in force before the opening of Bank of Manhattan.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling Manhattan Bancorp under the provisions in Manhattan Bancorp’s Articles of Incorporation and Bylaws, Manhattan Bancorp has been informed that, in the opinion of the SEC, this kind of indemnification is against public policy as expressed in the Securities Act, and is therefore unenforceable.

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Item 25.  Other Expenses of Issuance and Distribution

Registration fee	$	3,210.00
Printing and engraving	$	7,965.00	*
Blue sky fees and expenses	$	20,000.00	*
Legal fees and expenses	$	85,000.00	*
Accounting fees and expenses	$	4,500.00	*
Escrow Agent fees	$	5,000.00	*
Transfer Agent Fees	$	2,500.00	*
Miscellaneous	$	10,000.00	*
Total	$	138,175.00

* estimates

Item 26.  Recent Sales of Unregistered Securities

From September 6, 2006 through January 30, 2007 the Company conducted a private placement of its common stock to its directors and  issued an aggregate of 45,000 shares of its common stock to its nine directors at a price of $10.00 per share for aggregate proceeds to the Company of $450,000.  There was no underwriting discounts, fees or commissions paid in connection with these transactions.

The sales were made to persons who had access to the kind of information which registration would disclose and who did not purchase the shares for resale to the public.  Also, these sales were made solely for the purposes of completing the initial organization of Manhattan Bancorp and to advance organizational and pre-opening expenses for Bank of Manhattan.  Accordingly, these sales constituted transactions by the issuer not involving a pubic offering, separate and apart from this offering, which were exempt from registration under Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder.

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Item 27.  Exhibits

1.1	Financial Advisory Services Agreement dated January 18, 2007 between Manhattan Bancorp and Seapower Carpenter Capital, Inc.
3.1	Articles of Incorporation of Manhattan Bancorp and Amendments to Articles of Incorporation
3.2	By-laws of Manhattan Bancorp and Amendment to By-Laws
4.1	Specimen Stock Certificate*
5.1	Opinion of King, Holmes, Paterno & Berliner, LLP regarding the legality of the securities to be offered
10.1	Form of Employment Agreement between Bank of Manhattan and Jeffrey Watson
10.2	Lease for Main Office of Bank of Manhattan*
10.3	Form of Stock Option Plan*
23.1	Consent of Hutchinson & Bloodgood, LLP
23.2	Consent of King, Holmes, Paterno & Berliner (included in Exhibit 5)
24	Power of Attorney (included in signature page to registration statement)
99.1	Form of Subscription Agreement
99.2	Form of Impound Account Agreement between Pacific Coast Bankers’ Bank and Manhattan Bancorp

* To be filed by amendment

Item 28.  Undertakings

The small business issuer hereby undertakes:

(1)To file, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to:

(i)include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii)reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information set forth in the registration statement.  Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii)include any additional or changed material information on the plan of distribution.

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(2)For determining liability under the Securities Act, to treat each post-effective amendment as a new registration statement of the securities offered, and the offering of securities at that time to be the initial bona fide offering.

(3)To remove from registration by means of a post-effective amendment any of the securities that remain unsold at the termination of the offering.

(4)For determining liability of the undersigned small business issuer under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned small business issuer undertakes that in a primary offering of securities of the undersigned small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned small business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424;

(ii)Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer;

(iii)The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and

(iv)Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of El Segundo, California on February 5, 2007.

Manhattan Bancorp
By:	/s/ Jeffrey M. Watson
	Jeffrey M. Watson
	President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jeffrey M. Watson and Kyle S. Ransford  and each or any one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement was signed by the following persons in the capacities and on the dates stated.

Signature	Title	Date
/s/ Peter J. Boyes	Director	February 5, 2007
Peter J. Boyes
/s/ Chris W. Caras, Jr	Director	February 5, 2007
Chris W. Caras, Jr.
/s/ Harry “Duke” W. Chenoweth	Director	February 5, 2007
Harry “Duke” W. Chenoweth

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/s/ Patrick E. Greene	Director	February 5, 2007
Patrick E. Greene
/s/ Christopher J. Growney	Director	February 5, 2007
Christopher J. Growney
/s/ Larry S. Murphy	Director	February 5, 2007
Larry S. Murphy
/s/ Kyle S. Ransford	Chairman	February 5, 2007
Kyle S. Ransford
/s/ Jeffery M. Watson	Director, President and Chief Executive Officer and Chief Financial Officer	February 5, 2007
Jeffrey M. Watson	(Principal Executive Officer and Principal Financial Officer)
/s/ Stephen P. Yost	Director	February 5, 2007
Stephen P. Yost

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EX-1.1

Exhbit 1.1

Financial Advisory Services Agreement

The following is the Financial Advisory Services Agreement between Seapower Carpenter Capital, Inc. dba Carpenter & Company (the “Advisor”) and Manhattan Bancorp (the “Company”), effective this 18th day of January, 2007.

1.Proposed Transaction.  The Company proposes to issue and sell newly issued securities (the “Securities”) to investors (the “Investors”) in a public offering (the “Offering”).The principal purpose of the Offering is to raise up to $25,000,000 in additional capitalization for the Company.

2.Appointment of Advisor.  The Company hereby appoints the Advisor as its exclusive financial advisor in connection with the Offering, subject to the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.  The Company at its election and consistent with the terms of this agreement, may also engage licensed selling agents (“Selected Dealers”) to assist in the placement of the Securities in connection with the Offering.

3.Duties of the Advisor.  The Advisor will perform the following duties under this Agreement:

Financial Advisory Duties

(a)Assist the Company in the development of a financial model and resultant proposed pricing for the Offering.

(b)Assist the Company in the development of its overall marketing plan for the Offering and placement of the Securities.

(c) Manage the Offering sales and marketing effort in conjunction with the officers and directors of the Company.

(c)Coordinate with Company’s legal counsel and other advisors in the preparation of an offering circular and related marketing, sales and subscription material.

(d)Assist the Company in identification and development of target Investors.

(e)Assist the Company in the implementation of its marketing strategy and materials for presentation of the Offering to potential Investors.

(f)Attend meetings with potential Investors.

(g)Assist the Company in the selection and allocation process related to Selected Dealers.

(h)Complete such other general consulting and assistance as is reasonably connected to the purposes herein.

Sales and Placement Duties

(a)Use its best efforts to place Securities of up to $20 million.

4.Representations.  Warranties and Covenants of the Company.  The Company represents and warrants to, and agrees with, the Advisor as follows:

(a)(i) The Company has all requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder.  When executed and delivered by the Advisor and the Company, this Agreement will constitute a valid and legally binding obligation of the Company, enforceable in accordance with its terms.  (ii) The Advisor has all requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder.  When executed and delivered by the Advisor and the Company, this Agreement will constitute a valid and legally binding obligation of the Advisor, enforceable in accordance with its terms.

(b)The consummation of the Offering contemplated by this Agreement will not (i) conflict with or result in a breach of any of the terms or provisions of, or constitute a default under any indenture, loan agreement, or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject, or (ii) result in any violation of the provisions of the Articles of Incorporation or Bylaws of the Company.

(c)The Company will cooperate with the Advisor in connection with the financial review and analysis of the Company and shall provide any information concerning the Company and its subsidiaries that the Advisor reasonably deems appropriate, and will provide access to the Company’s officers, directors, accountants, counsel and other advisors.  All such information concerning the Company and its subsidiaries is and will be true and accurate in all material respects, and does not and will not as of its date, and will not as supplemented or amended as of the date of the Closing (as defined below), contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which such statements are or were made.  The Company acknowledges and agrees that the Advisor will be using and relying upon such information supplied by the Company, its officers, directors, accountants, counsel and other advisors, and other publicly-available information concerning the Company and its subsidiaries, without any independent investigation or verification thereof or any independent appraisal by the Advisor of the Company or its business or assets.

(d)There are no brokers, representatives or other persons that have an interest in compensation due to the Advisor from the Offering contemplated herein.

(e)The Company understands that the Advisor’s responsibility is limited to a “best efforts” basis in placing the Securities, with no understanding, express or implied, on the Advisor’s part of a commitment by the Advisor to purchase or place the Securities, and neither Advisor nor any Selected Dealer shall have any liability to the Company in the event the Offering is not completed for any reason.

(f)The Company agrees that if, at any time during the Term (as defined below), any event shall have occurred as a result of which any information provided to the Advisor and/or any prospective Investors would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, the Company shall notify the Advisor promptly and provide the Advisor with such information as shall be necessary so that an appropriate amendment or supplement to the information can be prepared or other appropriate action taken.

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(g)The Company shall be responsible for and shall ensure compliance with all applicable securities, privacy, anti-money laundering, and other laws and regulations with respect to all Investors in the Offering (with the exception of compliance related to those Investors with respect to whom the Advisor is paid a Sales and Placement Fee as described in Paragraph 5(c) below (“Advisor Investors”), for whom the responsibility for compliance with such laws and regulations shall be the Advisor’s, and the exception of compliance related to those Investors with respect to whom a Selected Dealer is paid a Sales and Placement Fee as described in Paragraph 5(c) below (“Selected Dealer Investors”), for whom the responsibility for compliance with such laws and regulations shall be the applicable Selected Dealer’s).

5.Compensation.  The Company shall pay to the Advisor compensation for its services hereunder as follows:

(a)Retention Fee:  The Retention Fee is waived.

(b)Financial Advisory Fee:   At the closing of the Offering (“Closing”), the Company shall pay to the Advisor a fee (“Sales Management Fee”) equal to the lesser of (1) 1.0% of the gross Offering proceeds and (2) $125,000.

(c)Sales and Placement Fee:   At the Closing, the Company shall pay a sales and placement fee equal to 5% of the gross Offering proceeds derived from Securities placed by the Advisor or one of the Selected Dealers (the “Sales and Placement Fee”).

6.Expense Reimbursements.  The Company will reimburse the Advisor for its reasonable out-of-pocket expenses incurred in connection with the Offering.  Expenses will not exceed $10,000 without the Company’s prior written consent.  In the event that the Offering is terminated, the Advisor will be reimbursed only for its actual accountable and reasonable out-of-pocket expenses incurred in connection with the Offering.

7.Indemnification

a)The Company agrees to indemnify and hold the Advisor and its affiliates and their respective partners, directors, officers, employees, agents, and controlling persons (each such person being an “Indemnified Party”) harmless from and against any and all losses, claims, damages, expenses and liabilities, joint or several, to which such indemnified Party may become subject under applicable state or federal law, or otherwise, arising out of any actual or proposed Business Combination or Capital Placement, or the retention of the Advisor, or the services performed under this agreement by the Advisor, and will promptly reimburse such Indemnified Party for all expenses (including reasonable counsel fees and expenses) upon written request made from time to time, including expenses incurred in connection with the investigation of, preparation for, or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether civil, criminal, administrative or investigative in nature, and whether or not such indemnified Party is a party.  The Company will not be liable under this indemnification provision to the extent that any loss, claim, damage, liability, or expense is found in a final judgment by a court of competent jurisdiction to have resulted primarily from the Advisor’s bad faith, gross negligence, or willful misconduct.

b)The Company agrees to notify the Advisor and the Advisor agrees to notify the Company promptly of the assertion against either of them or any other person of any claim or the commencement of any action or proceeding relating to any transaction contemplated by this agreement.

c)If any indemnification or reimbursement sought under this provision were for any reason not available to any Indemnified Party or insufficient to fully indemnify it as and to the extent contemplated by this provision, the Company will contribute to the amounts paid or payable by such Indemnified Person in a proportion that appropriately reflects the relative benefits to the Company and its equity owners on the one hand, and the Advisor on the other, in connection with the matters to which such indemnification or

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reimbursement relates and the relative faults of such parties, as well as any other equitable considerations.  The Company and the Advisor agree that it would not be just and equitable if this contribution were determined by pro rata allocation or any other method that does not take into account such equitable considerations.  The relative benefits to the Company and its equity owners and to the Advisor with respect to the services to be provided under this Agreement will be deemed to be in the same proportion as (i) the anticipated total proceeds of any contemplated capital offering (whether or not consummated); and (ii) the compensation actually paid to the Advisor in connection with the services provided under this Agreement.  In no event will the Company contribute less than the amount necessary to ensure that all Indemnified Parties, in the aggregate, are not liable for any amounts in excess of the aggregate amount of fees actually received by the Advisor pursuant to this Agreement.

d)In no event shall the Advisor be liable for any amount in excess of the aggregate amount of compensation actually received by Carpenter under this agreement.

e)In the event the Advisor appears as a witness in any action brought against the Company in which an Indemnified Party is not named as a defendant, the Company agrees to reimburse the Advisor for all reasonable expenses incurred and time expended by it in connection with its appearing as a witness.

8.Term.  This agreement shall take effect on the date first written above and shall continue for a period of twelve (12) months (the “Term”).

9.Agreement.  This agreement embodies the entire understanding of the parties with respect to the engagement of Advisor.

10.Confidential Information.  During the Term of this Agreement, the Company may learn from the Advisor data, discoveries, know-how, ideas, and other information which the Advisor considers to be proprietary and confidential, for example information relating to its internal processes, methods, documents, programs, operations, customers, and present and future business or marketing plans of the Advisor (“Confidential Information”).  Except as authorized by the Advisor in writing, the Company agrees to keep confidential and not to use, except in connection with the services to be provided under this Agreement all Confidential Information.  All Confidential Information (and any copies and notes thereof) shall remain the sole property of the Advisor.  Notwithstanding the foregoing, however, no obligation of confidentiality shall apply to the extent Confidential Information (i) is or becomes available to the public through no breach of this Agreement by the Company; (ii) is obtained by the Company from a third party who had the legal right to disclose the information to the Company; (iii) is already in the possession of the Company on the date this Agreement becomes effective; or (iv) is required to be disclosed by law, government regulation, or court order. The obligation of confidentiality with respect to Confidential Information shall continue for three years beyond the date of this Agreement.

11.Corporate Obligation. The obligations of Advisor and the Company hereunder are solely corporate obligations, and no officer, director, employee, advisor, shareholder, or controlling person shall be subject to any personal liability whatsoever, nor will any such claim be asserted by or on behalf of the Company or the Advisor, as the case may be, or any of affiliates of the Company or of the Advisor.

12.Opinions and Advice. All opinions and advice, whether written or oral, rendered by Advisor to the Company pursuant to this agreement are intended solely for the Company’s benefit and use in considering the Offering. No such opinions or advice may be disclosed to third parties without Advisor’s prior written consent.

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13.Miscellaneous.

(a)The Advisor shall have the right to place advertisements in financial and other newspapers and journals at its own expense describing its services to the Company hereunder.

(b)Except as required by federal or state securities laws to be included in any offering circular or offering document or by regulatory requirements of Company, the terms of this Agreement shall not be disclosed to any third party without the prior written consent of both parties to this Agreement, which consent shall not be unreasonably withheld.

(c)This agreement shall be binding upon and inure solely to the benefit of the Advisor and the Company, and all of their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement.

(d)This agreement may not be amended or modified except in writing signed by both parties hereto.

(e)This agreement and the rights and obligations of the parties hereunder shall be governed by and construed in accordance with the laws of the State of California applicable to agreements entered into and to be performed entirely within such State.

(f)In the event that an action or suit is brought to declare or enforce any term hereof or any obligation created hereunder, the prevailing party shall be entitled to recover from the losing party all reasonable costs and expenses incurred or sustained by such prevailing party in connection with such suit or actions, including legal fees and court costs.

(g)The choice whether to accept or reject any subscription in the Offering, whether from a Company-identified Investor or any other Investor, remains exclusively the Company’s to make in its sole and exclusive discretion.

(h)This agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and no agreements, understandings, restrictions, warranties or representations exist between the parties other than those set forth herein.

(i)Both parties acknowledge and agree that: (1) the parties are executing this Agreement voluntarily and without any duress or undue influence; (2) the parties have carefully read this Agreement and have asked any questions needed to understand the terms, consequences, and binding effect of this Agreement and fully understand them; and (3) the parties have sought the advice of an attorney of their respective choice if so desired prior to signing this Agreement.

If the foregoing is in accordance with your understanding, please sign and return to us one counterpart of this Agreement, whereupon this Agreement shall constitute a binding agreement between the Advisor and the Company, effective as of the date first above written.

SEAPOWER CARPENTER		MANHATTAN BANCORP
CAPITAL, INC
/s/ John Flemming		/s/ Jeffrey M. Watson
By:	John Flemming	By:	Jeffrey M. Watson
Its:	President	Its:	President and Chief Executive Officer

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EX-3.1

Exhibit 3.1

ARTICLES OF INCORPORATION

OF

CARDINAL BANCORP

ONE:       NAME.  The name of this corporation is:

CARDINAL BANCORP

TWO:     PURPOSE.  The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

THREE:          INITIAL AGENT.  The name and address in this State of the corporation’s initial agent for service of process is Keith T. Holmes, 1900 Avenue of the Stars, 25th Floor, Los Angeles, California 90067.

FOUR:    AUTHORIZED STOCK.  This Corporation is authorized to issue two (2) classes of shares of stock: one class of shares to be called “Serial Preferred Stock” and the second class of shares to be called “Common Stock.”  The total number of shares of stock which the Corporation shall have authority to issue is Twenty Million (20,000,000), of which Ten Million (10,000,000) shall be Serial Preferred Stock and Ten Million (10,000,000) shall be Common Stock.

The Serial Preferred Stock may be issued from time to time in one or more series.  The Board of Directors is hereby authorized to fix or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of preferred shares, and the number of shares constituting any such series and a designation thereof, or any of them; and to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of such series then outstanding.  In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume that status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.

FIVE:      DIRECTOR LIABILITY.  The liability of the directors of this corporation for monetary damages shall be eliminated to the fullest extent permissible under California law.

SIX:        INDEMNIFICATION.       The Corporation is authorized to provide indemnification of agents (as defined in Section 317 of the General Corporation Law) for breach of duty to the Corporation and its shareholders through bylaw provisions or through agreements with the agents, or both, in excess of the indemnification otherwise permitted by Section 317 of the General Corporation Law, subject to the limits on such excess indemnification set forth in Section 204 of the General Corporation Law.

Dated: August 7, 2006	/s/ Peggy I. Weiner
	Peggy I. Weiner, Incorporator

I hereby declare that I am the person who executed the foregoing Articles of Incorporation, which execution is my act and deed.

Dated: August 7, 2006	/s/ Peggy I. Weiner
	Peggy I. Weiner, Incorporator

CERTIFICATE OF AMENDMENT

OF

ARTICLES OF INCORPORATION

OF

CARDINAL BANCORP

A California Corporation

The undersigned, Peggy I. Weiner, hereby certifies that:

1.I am the Incorporator of CARDINAL BANCORP, a California corporation (the “Corporation”).

2.Article ONE of the Articles of Incorporation of the Corporation is amended to read as follows:

“ONE:  The name is this corporation is:  FIRST MANHATTAN BANCORP.”

3.No directors were named in the original Articles of Incorporation and none have been elected.

4.The Corporation has issued no shares.

The undersigned declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of her own knowledge.

Dated:  September 6, 2006

/s/ Peggy I. Weiner

Peggy I. Weiner, Incorporator

CERTIFICATE OF AMENDMENT

OF

ARTICLES OF INCORPORATION

OF

FIRST MANHATTAN BANCORP

A California Corporation

The undersigned, Kyle Ransford and Nicole Fitzgerald, hereby certify that:

1.They are the President and the Secretary, respectively, of FIRST MANHATTAN BANCORP, a California corporation (the “Corporation”).

2.Article ONE of the Articles of Incorporation of the Corporation is amended to read as follows:

“ONE:  The name is this Corporation is:  MANHATTAN BANCORP.”

3.The foregoing amendment of Articles of Incorporation has been duly approved by the Board of Directors.

4.The Corporation has issued no shares.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this Certificate are true and correct of our own knowledge.

Dated:  October 25, 2006

/s/ Kyle Ransford

KYLE RANSFORD, President

/s/ Nicole Fitzgerald

NICOLE FITZGERALD, Secretary

EX-3.2

Exhibit 3.2

BYLAWS

OF

FIRST MANHATTAN BANCORP
(a California corporation)

Adopted September 6, 2006

INDEX

		Page
ARTICLE I APPLICABILITY		1
Section 1.1	APPLICABILITY OF BYLAWS	1
ARTICLE II OFFICES		1
Section 2.1	PRINCIPAL OFFICES	1
Section 2.2	CHANGE IN LOCATION OR NUMBER OF OFFICES	1
ARTICLE III MEETINGS OF SHAREHOLDERS		1
Section 3.1	PLACE OF MEETINGS	1
Section 3.2	ANNUAL MEETINGS	1
Section 3.3	NOMINATIONS FOR DIRECTOR	1
Section 3.4	SPECIAL MEETINGS.	2
Section 3.5	NOTICE OF ANNUAL, SPECIAL OR ADJOURNED MEETINGS	2
Section 3.6	QUORUM	3
Section 3.7	ADJOURNMENT	4
Section 3.8	VALIDATION OF ACTIONS TAKEN AT
	DEFECTIVELY CALLED, NOTICED OR HELD MEETINGS	4
Section 3.9	VOTING FOR ELECTION OF DIRECTORS	4
Section 3.10	PROXIES	5
Section 3.11	INSPECTORS OF ELECTION	5
Section 3.12	ACTION BY WRITTEN CONSENT	6
ARTICLE IV DIRECTORS		6
Section 4.1	NUMBER OF DIRECTORS	6
Section 4.2	ELECTION AND TERM OF OFFICE	7
Section 4.3	VACANCIES	7
Section 4.4	REMOVAL	7
Section 4.5	RESIGNATION	8
Section 4.6	FEES AND COMPENSATION	8
Section 4.7	INDEMNIFICATION OF CORPORATE AGENTS	8
Section 4.8	TRANSACTIONS BETWEEN THE CORPORATION AND ITS DIRECTORS	8
ARTICLE V COMMITTEES OF THE BOARD OF DIRECTORS		9
Section 5.1	DESIGNATION OF COMMITTEES	9
Section 5.2	POWERS OF COMMITTEES	9

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		Page
ARTICLE VI MEETINGS OF THE BOARD OF DIRECTORS
	AND COMMITTEES THEREOF	10
Section 6.1	PLACE OF MEETINGS	10
Section 6.2	ORGANIZATION MEETING	10
Section 6.3	SPECIAL MEETINGS	10
Section 6.4	NOTICE OF SPECIAL MEETINGS	10
Section 6.5	WAIVERS, CONSENTS AND APPROVALS	11
Section 6.6	QUORUM; ACTION AT MEETINGS; TELEPHONE MEETINGS	11
Section 6.7	ADJOURNMENT	11
Section 6.8	ACTION WITHOUT A MEETING	11
Section 6.9	MEETINGS OF AND ACTION BY COMMITTEES	12
ARTICLE VII OFFICERS		12
Section 7.1	OFFICERS	12
Section 7.2	ELECTION OF OFFICERS	12
Section 7.3	SUBORDINATE OFFICERS, ETC	12
Section 7.4	REMOVAL AND RESIGNATION	12
Section 7.5	VACANCIES	12
Section 7.6	CHAIRMAN OF THE BOARD	13
Section 7.7	VICE CHAIRMAN OF THE BOARD	13
Section 7.8	PRESIDENT	13
Section 7.9	VICE PRESIDENT	13
Section 7.10	SECRETARY	13
Section 7.11	CHIEF FINANCIAL OFFICER	13
ARTICLE VIII RECORDS AND REPORTS		14
Section 8.1	MINUTE BOOK	14
Section 8.2	SHARE REGISTER	14
Section 8.3	BOOKS AND RECORDS OF ACCOUNT	14
Section 8.4	BYLAWS	14
Section 8.5	INSPECTION OF CORPORATE RECORDS	14
Section 8.6	ANNUAL REPORTS TO SHAREHOLDERS	15

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		Page
ARTICLE IX GENERAL CORPORATE MATTERS		15
Section 9.1	RECORD DATES	15
Section 9.2	CHECKS, DRAFTS, ETC	16
Section 9.3	CONTRACTS, ETC., HOW EXECUTED	16
Section 9.4	CERTIFICATES FOR SHARES	16
Section 9.5	STATEMENTS ON CERTIFICATE FOR SHARES	16
Section 9.6	LOST, STOLEN OR DESTROYED CERTIFICATES	16
Section 9.7	REPRESENTATION OF SHARES OF OTHER CORPORATIONS	17
Section 9.8	CONSTRUCTION AND DEFINITIONS	17
Section 9.9	PURCHASE OF LIABILITY INSURANCE	17
ARTICLE X AMENDMENTS		17
Section 10.1	POWER OF SHAREHOLDERS	17
Section 10.2	POWER OF DIRECTORS	17

iii

BYLAWS

OF

FIRST MANHATTAN BANCORP
(a California corporation)

ARTICLE I

APPLICABILITY

Section 1.1            APPLICABILITY OF BYLAWS.  These Bylaws govern, except as otherwise provided by statute or its Articles of Incorporation, the management of the business and the conduct of the affairs of the Corporation.

ARTICLE II

OFFICES

Section 2.1            PRINCIPAL OFFICES.  The Board of Directors shall fix the location of the principal executive office of the Corporation at any place within or outside the State of California.  If the principal executive office is located outside this state, and the Corporation has one or more business offices in this state, the Board of Directors shall designate a principal business office in the State of California.

Section 2.2            CHANGE IN LOCATION OR NUMBER OF OFFICES.  The Board of Directors may change any office from one location to another or establish or eliminate any office or offices.

ARTICLE III

MEETINGS OF SHAREHOLDERS

Section 3.1            PLACE OF MEETINGS.  Meetings of the shareholders shall be held at any place within or without the State of California designated by the Board of Directors, or, in the absence of such designation, at the principal executive office of the Corporation.

Section 3.2            ANNUAL MEETINGS.  The Annual Meeting of Shareholders shall be held each year on a date and at a time as designated by the Board of Directors.  The date so designated shall be within fifteen (15) months after incorporation or after the last Annual Meeting.  Directors shall be elected at each Annual Meeting and any other proper business may be transacted thereat.

Section 3.3            NOMINATIONS FOR DIRECTOR.  Nominations for election of members of the Board of Directors may be made by the Board of Directors or by any shareholder

1

of any outstanding class of voting stock of the Corporation entitled to vote for the election of directors.  Notice of intention to make any nominations, other than by the Board of Directors, shall be made in writing and shall be received by the President of the Corporation no more than 60 days prior to any meeting of shareholders called for the election of directors, and no more than 10 days after the date the notice of such meeting is sent to shareholders pursuant to Section 3.5(a) of Article III of these bylaws; provided, however, that if only 10 days’ notice of the meeting is given to shareholders, such notice of intention to nominate shall be received by the President of the Corporation not later than the time fixed in the notice of the meeting for the opening of the meeting.  Such notification shall contain the following information to the extent known to the notifying shareholder:  (A) the name and address of each proposed nominee; (B) the principal occupation of each proposed nominee; (C) the number of shares of voting stock of the Corporation owned by each proposed nominee; (D) the name and residence address of the notifying shareholder; and (E) the number of shares of voting stock of the Corporation owned by the notifying shareholder.  Nominations not made in accordance herewith may be disregarded by the then chairman of the meeting, and the inspectors of election shall then disregard all votes cast for each such nominee.

Section 3.4            SPECIAL MEETINGS.

(a)           Special meetings of the shareholders may be called by the Board of Directors, the Chairman of the Board, the President, or by the shareholders upon the request of the holders of shares entitled to cast not less than ten percent (10%) of the votes at such meeting.

(b)           Any request for the calling of a special meeting of the shareholders shall (1) be in writing, (2) specify the date and time thereof, which date shall be not less than thirty-five (35) nor more than sixty (60) days after receipt of the request, (3) specify the general nature of the business to be transacted thereat and (4) be given either personally or by first-class mail, postage prepaid, or other means of written communication to the Chairman of the Board, President, any Vice President or the Secretary of the Corporation.  The officer receiving a proper request to call a special meeting of the shareholders shall cause notice to be given pursuant to the provisions of Section 3.4 of this Article to the shareholders entitled to vote thereat that a meeting will be held at the date and time specified by the person or persons calling the meeting.  If notice is not given within 20 days of the receipt of the request, the shareholders making the request may give notice of such meeting so long as the notice given complies with the other provisions of this subsection.

(c)           No business may be transacted at a special meeting unless the general nature thereof was stated in the notice of such meeting.

Section 3.5            NOTICE OF ANNUAL, SPECIAL OR ADJOURNED MEETINGS.

(a)           Whenever any meeting of the shareholders is to be held, a written notice of such meeting shall be given in the manner described in subdivision (d) of this Section not less than ten (10) nor more than sixty (60) days before the date thereof to each shareholder entitled to vote thereat.  The notice shall state the place, date and hour of the meeting and (1) in the case of a special meeting, the general nature of the business to be transacted or (2) in the case of the annual meeting, those matters which the Board of Directors, at the time of the giving of the

2

notice, intends to present for action by the shareholders.  The notice of any meeting at which directors are to be elected shall include the name of any nominee or nominees who, at the time of the notice, management intends to present for election.

(b)           Any proper matter may be presented at an annual meeting for action.  However, any action to approve (1) a contract or transaction in which a director has a direct or indirect financial interest under Section 310 of the Corporations Code of California, (2) an amendment of the Articles of Incorporation under Section 902 of that code, (3) a reorganization of the Corporation, under Section 1201 of that code, (4) a voluntary dissolution of the Corporation under Section 1900 of that code, or (5) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares under Section 2007 of that code may be taken only if the notice of the meeting states the general nature of the matter to be approved.

(c)           Notice need not be given of an adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, except that if the adjournment is for more than 45 days or if after the adjournment a new record date is provided for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at that meeting.

(d)           Notice of any meeting of the shareholders shall be given personally, by first-class mail, or by telegraph or other written communication, addressed to the shareholder at his address appearing on the books of the Corporation or given by him 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.  Notice shall be deemed to have been given at the time when delivered personally to the recipient, deposited in the mail, delivered to a common carrier for transmission to the recipient or sent by other means of written communication.  An affidavit of the mailing or other means of giving notice may be executed by the Secretary, Assistant Secretary or any transfer agent of the Corporation giving the notice and shall be prima facie evidence of the giving of the notice.  Such affidavits shall be filed and maintained in the minute books of the Corporation.

(e)           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 his written demand 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.

Section 3.6            QUORUM.

(a)           A majority of the shares entitled to vote at a meeting of the shareholders, represented in person or by proxy, shall constitute a quorum for the transaction of business at the meetings.

3

(b)           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.

Section 3.7            ADJOURNMENT.  Any meeting of the shareholders may be adjourned from time to time whether or not a quorum is present by the vote of a majority of the shares represented thereat either in person or by proxy.  At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting.

Section 3.8            VALIDATION OF ACTIONS TAKEN AT DEFECTIVELY CALLED, NOTICED OR HELD MEETINGS.

(a)           The transactions of any meeting of the 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 thereat, 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.  Any written waiver of notice shall comply with subdivision (f) of Section 601 of the Corporations Code of California.  All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

(b)           Attendance of a person at a meeting shall constitute a waiver of notice of and presence at such meeting, except (1) 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 (2) that attendance at a meeting is not a waiver of any right to object to the consideration of any matter required by the General Corporation Law of California to be included in the notice but not so included, if such objection is expressly made at the meeting.

Section 3.9            VOTING FOR ELECTION OF DIRECTORS.

(a)           Except as provided in subdivision (c) of this Section, the affirmative vote of the majority of the shares represented and voting at a duly held meeting at which a quorum is present (which shares voting affirmatively also constitute at least a majority of the required quorum) shall be the act of the shareholders, unless the vote of a greater number is required by law or the Articles of Incorporation.

(b)           Every shareholder complying with subdivision (c) of this Section and entitled to vote at any election of directors may 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 normally entitled, or distribute his votes on the same principle among as many candidates as he thinks fit.

(c)           No shareholder shall be entitled to cumulate his votes (i.e., cast for any candidate a number of votes greater than the number of votes which such shareholder normally is entitled to cast) unless the candidate’s or candidates’ names for which he desires to cumulate his votes have been properly placed in nomination prior to the voting and the shareholder has given notice at the meeting prior to the voting of his intention to cumulate his votes.  If any one

4

shareholder has given such notice, all shareholders may cumulate their votes for candidates in nomination.

(d)           In any election of directors, the candidates receiving the highest number of affirmative votes of the shares entitled to be voted for them up to the number of directors to be elected by such shares are elected as directors.

Section 3.10         PROXIES.

(a)           Every person entitled to vote shares may authorize another person or persons to act with respect to such shares by a written proxy signed by him or his attorney-in-fact and filed with the Secretary of the Corporation.  A proxy shall be deemed signed if the shareholder’s name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by him or his attorney-in-fact.

(b)           Any validly executed proxy, except a proxy which is irrevocable pursuant to subdivision (c) of this Section, shall continue in full force and effect until the expiration of the term specified therein or upon its earlier revocation by the person executing it prior to the vote pursuant thereto (1) by a writing delivered to the Corporation stating that it is revoked, (2) by written notice of the death of the person executing the proxy, delivered to the Corporation, (3) by a subsequent proxy executed by the person executing the prior proxy and presented to the meeting or (4) as to any meeting by attendance at such meeting and voting in person by the person executing the proxy.  No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy.  The date contained on the form of proxy shall be deemed to be the date of its execution.

(c)           A proxy which states that it is irrevocable is irrevocable for the period specified therein subject to the provisions of subdivisions (e) and (f) of Section 705 of the Corporations Code of California.

Section 3.11         INSPECTORS OF ELECTION.

(a)           In advance of any meeting of the shareholders, the Board of Directors may appoint either one or three persons (other than nominees for the office of director) as inspectors of election to act at such meeting or any adjournments thereof.  If inspectors of election are not so appointed, or if any person so appointed fails to appear or refuses to act, the chairman of any such meeting may, and on the request of any shareholder or his proxy shall, appoint inspectors of election (or persons to replace those who so fail or refuse to act) at the meeting.  If appointed at a meeting on the request of one or more shareholders or the proxies thereof, the majority of shares represented in person or by proxy shall determine whether one or three inspectors are to be appointed.

(b)           The duties of inspectors of election and the manner of performance thereof shall be as prescribed in subdivisions (b) and (c) of Section 707 of the Corporations Code of California.

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Section 3.12         ACTION BY WRITTEN CONSENT.

(a)           Subject to subdivisions (b) and (c) of this Section, any action which may be taken at any annual or special meeting of the shareholders may be taken without a meeting, without a vote and without prior notice, 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 which would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  All such consents shall be filed with the Secretary of the Corporation and maintained with the corporate records.

(b)           Except for the election of a director by written consent to fill a vacancy (other than a vacancy created by removal), directors may be elected by written consent only by the unanimous written consent of all shares entitled to vote for the election of directors.  In the case of an election of a director by written consent to fill a vacancy (other than a vacancy created by removal), any such election requires the consent of a majority of the outstanding shares entitled to vote for the election of directors.

(c)           Unless the consents of all shareholders entitled to vote have been solicited in writing, the Secretary shall give prompt notice of the corporate action approved by the shareholders without a meeting.  This notice shall be given in the manner specified in subdivision (d) of Section 3.5 of this Article.  In the case of approval of (1) contracts or transactions in which a director has a direct or indirect financial interest under Section 310 of the Corporations Code of California, (2) indemnification of agents of the Corporation, under Section 317 of that code, (3) a reorganization of the Corporation, under Section 1201 of that code, or (4) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares, under Section 2007 of that code, notice of such approval shall be given at least ten (10) days before the consummation of any action authorized by that approval.

(d)           Any shareholder giving a written consent, or his proxy holders, or a transferee of the shares or a personal representative of the shareholder or their respective proxy holders, may revoke the consent by a writing received by the Corporation prior to the time that written consents of 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.

ARTICLE IV

DIRECTORS

Section 4.1            NUMBER OF DIRECTORS.  The authorized number of Directors shall be not less than seven (7) nor more than thirteen (13) unless changed by amendment of the Articles or by a Bylaw duly adopted by the vote or written consent of holders of a majority of the outstanding shares entitled to vote.   The exact number of directors shall be fixed, within the limits specified by this Section, by a bylaw or amendment thereof or by a resolution duly adopted by a vote of a majority of the shares entitled to vote represented at a duly held meeting

6

at which a quorum is present, or by the written consent of the holders of a majority of the outstanding shares entitled to vote, or by a resolution duly adopted by the Board of Directors.

Subject to the foregoing provisions for changing the number of directors, the number of directors of this Corporation has been fixed at eight (8).

Section 4.2            ELECTION AND TERM OF OFFICE.  The directors shall be elected at each Annual Meeting of Shareholders but, if any such Annual Meeting is not held or the directors are not elected thereat, the directors may be elected at any special meeting of shareholders held for that purpose.  All directors shall hold office until the next Annual Meeting of Shareholders and until his successor is elected and qualified, subject to the General Corporation Law and the provisions of these Bylaws with respect to vacancies on the Board.

Section 4.3            VACANCIES.

(a)           A vacancy in the Board of Directors exists whenever any authorized position of director is not then filled by a duly elected director, whether caused by death, resignation, removal, change in the authorized number of directors, or otherwise.

(b)           Subject to the right of the holders of any class or series of Preferred Stock, except for a vacancy created by the removal of a director, vacancies on the Board of Directors may be filled by a majority of the directors then in office, whether or not less than a quorum, or by a sole remaining director.  A vacancy created by the removal of a director shall be filled only by a person elected by a majority of the shareholders entitled to vote at a duly held meeting at which there is a quorum present or by the unanimous written consent of the holders of the outstanding shares entitled to vote at such a meeting.

(c)           The shareholders may elect a director at any time to fill any vacancy not filled by the directors.

Section 4.4            REMOVAL.

(a)           The Board of Directors may declare vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony.

(b)           Any or all of the directors may be removed without cause if such removal is approved by a majority of the outstanding shares entitled to vote; provided, however, that no director may be removed (unless the entire Board of Directors is removed) if whenever the votes cast against his 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 his most recent election were then being elected.

(c)           Any reduction of the authorized number of directors does not remove any director prior to the expiration of his term of office.

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Section 4.5            RESIGNATION.  Any director may resign effective upon giving written notice to the Chairman of the Board, the President, 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.

Section 4.6            FEES AND COMPENSATION.  Directors may be paid for their services in such capacity a sum in such amounts, at such times and upon such conditions as may be determined from time to time by resolution of the Board of Directors and may be reimbursed for their expenses, if any, for attendance at each meeting of the Board.  No such payments shall preclude any director from serving the Corporation in any other capacity and receiving compensation in any manner therefore.

Section 4.7            INDEMNIFICATION OF CORPORATE AGENTS.  The Corporation may indemnify each of its agents against expenses, judgments, fines, settlements and other amounts, actually and reasonably incurred by such person having been made or having been threatened to be made a party to a proceeding to the fullest extent possible by the provisions of the General Corporation Law and the Corporation may advance the expenses reasonably expected to be incurred by such agent in defending any such proceeding upon receipt of the undertaking required by the General Corporation Law.  The terms “agent,” “proceeding” and “expense” made in this Section 4.7 shall have the same meaning as such terms in said Section 317 of the General Corporation Law, as amended.

Section 4.8            TRANSACTIONS BETWEEN THE CORPORATION AND ITS DIRECTORS.

(a)           Corporation and Directors.  No contract or other transaction between the Corporation and one or more of its directors, or between the Corporation and any corporation, firm or association in which one or more of its directors has a material financial interest (a mere common directorship shall not constitute a material financial interest), is either void or voidable because such director or directors or such other corporation, firm or association are parties or because such director or directors are present at the meeting of the board or a committee thereof which authorizes, approves or ratifies the contract or transaction, if:

(i)            the material facts as to the transaction and as to such director’s interest are fully disclosed or known to the shareholders, and such contract or transaction is approved in good faith by the affirmative vote of a majority of the shares entitled to vote, represented at a duly held meeting at which a quorum is present or by the written consent of shareholders, with the shares owned by the interested director or directors not being entitled to vote thereon; or

(ii)           the material facts as to the transaction and as to such director’s interest are fully disclosed or known to the Board or 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 is authorized, approved or ratified; or

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(iii)          as to contracts or transactions not approved as provided in paragraph (1) or (2) of this subdivision, the person asserting the validity of the contract or transaction sustains the burden of proving that the contract or transaction was just and reasonable as to the Corporation at the time it was authorized, approved or ratified.

(b)           Corporations Having Interrelated Directors.  No contract or other transaction between the Corporation and any corporation or association of which one or more of its directors are directors is either void or voidable because such director or directors are present at the meeting of the Board or a committee thereof which authorizes, approves or ratifies the contract or transaction, if:

(i)            The material facts as to the transaction and as to such director’s other directorship are fully disclosed or known to the Board or 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 common director or directors, or the contract or transaction is approved by the shareholders in good faith; or

(ii)           As to contracts or other transactions not approved as provided in paragraph (1) of this subdivision, the contract or transaction is just and reasonable as to the Corporation at the time it is authorized, approved or ratified.

This subsection (b) does not apply to contracts or transactions covered by subsection (a).

(c)           Interested Directors.  Interested or common directors may be counted in determining the presence of a quorum at a meeting of the Board or a committee thereof which authorizes, approves or ratifies a contract or transaction.

(i)            Loans and Extensions of Credit.  For purposes of this Section 4.8, the term “transaction” does not include loans or extensions of credit in the ordinary course of business.

ARTICLE V

COMMITTEES OF THE BOARD OF DIRECTORS

Section 5.1            DESIGNATION OF COMMITTEES.  The Board of Directors may, by resolution adopted by a majority of the authorized number of directors, designate (i) one or more committees, each consisting of two or more directors, and (ii) one or more directors as alternate members of any committee, who may replace any absent member at any meeting thereof.  Any member or alternate member of a committee shall serve at the pleasure of the Board.

Section 5.2            POWERS OF COMMITTEES.  Any committee, to the extent provided in the resolution of the Board of Directors designating such committee, shall have all the authority of the Board, except with respect to:

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(a)           The approval of any action for which the General Corporation Law of California also requires any action by the shareholders;

(b)           The filling of vacancies on the Board or in any committee thereof;

(c)           The fixing of compensation of the directors for serving on the Board or on any committee thereof;

(d)           The amendment or repeal of these Bylaws or the adoption of new bylaws;

(e)           The amendment or repeal of any resolution of the Board which by its express terms is not so amendable or repealable;

(f)            A distribution to the shareholders of the Corporation, except at a rate or in a periodic amount or within a price range determined by the Board of Directors; or

(g)           The designation of other committees of the Board or the appointment of members or alternate members thereof.

ARTICLE VI

MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES THEREOF

Section 6.1            PLACE OF MEETINGS.  Regular meetings of the Board of Directors shall be held at any place within or without the State of California which has been designated from time to time by the Board or, in the absence of such designation, at the principal executive office of the Corporation.  Special meetings of the Board shall be held either at any place within or without the State of California which has been designated in the notice of meeting or, if not stated in the notice or if there is no notice, at the principal executive office of the Corporation.

Section 6.2            ORGANIZATION MEETING.  Immediately following each annual meeting of the shareholders the Board of Directors shall hold a regular meeting for the purpose of organization and the transaction of other business.  Notice of any such meeting is not required.

Section 6.3            SPECIAL MEETINGS.  Special meetings of the Board of Directors may be called at any time for any purpose or purposes by the Chairman of the Board or the President or any Vice President or the Secretary or any two directors.  Notice shall be given of any special meeting of the Board.

Section 6.4            NOTICE OF SPECIAL MEETINGS.  Notice of the time and place of special meetings of the Board of Directors shall be delivered personally to each director or communicated to each director by telephone, including a voice messaging system or by a qualified means of electronic transmission, addressed to him at his address as it is shown upon the records of the Corporation or, if it is not so shown on such records or if not readily ascertainable, at the place at which the meetings of the directors are regularly held.  A “qualified means of electronic transmission” includes i) a facsimile telecommunication or electronic mail when directed to the facsimile number or electronic mail address, respectively, for that recipient

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on record with the corporation, (ii) posting on an electronic message board or network which the corporation has designated for those communications, together with a separate notice to the recipient of the posting, which transmission shall be validly delivered upon the later of the posting or delivery of the separate notice thereof, or (iii) other means of electronic communication.  In all cases of electronic transmissions, the recipient must have provided an unrevoked consent to the use of those means of transmission for such communications, and the means of transmission must create a record that is capable of retention, retrieval, and review, and that may thereafter be rendered into clearly legible tangible form.  In case such notice is mailed, it shall be deposited in the United States mail in the place in which the Head Office of the Corporation is located at least two (2) days prior to the time of the holding of the meeting.  In case such notice is delivered, personally or by telephone or other electronic means, as provided above, it shall be so delivered at least twenty-four (24) hours prior to the time of the holding of the meeting.  Such mailing or delivery, personally or by telephone or other electronic means, as provided above, shall constitute due, legal and personal notice to such director.  Any notice shall state the date, place and hour of the meeting but need not state the purpose of the meeting.

Section 6.5            WAIVERS, CONSENTS AND APPROVALS.  Notice of any meeting of the Board of Directors 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 him.  All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 6.6            QUORUM; ACTION AT MEETINGS; TELEPHONE MEETINGS.

(a)           A majority of the authorized number of directors shall constitute a quorum for the transaction of business.  Every act or decision done or made by a majority of the directors present is the act of the Board of Directors, unless action by a greater proportion of the directors is required by law or the Articles of Incorporation.

(b)           A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for such meeting.

(c)           Members of the Board of Directors may participate in a meeting through use of conference telephone, electronic video screen communication or similar communications equipment so long as all members participating in such meeting can hear one another.

Section 6.7            ADJOURNMENT.  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 twenty-four (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 6.8            ACTION WITHOUT A MEETING.  Any action required or permitted to be taken by the Board of Directors may be taken without a meeting, if all members of the Board individually or collectively consent in writing to such action.  Such written consent or

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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 6.9            MEETINGS OF AND ACTION BY COMMITTEES.  The provisions of this Article apply to committees of the Board of Directors and action by such committees with such changes in the language of those provisions as are necessary to substitute the committee and its members for the Board and its members.

ARTICLE VII

OFFICERS

Section 7.1            OFFICERS.  The Corporation shall have as officers, a President, a Secretary and a Chief Financial Officer.  The Corporation may also have, at the discretion of the Board, a Chairman of the Board, a Vice Chairman of the Board, one or more Vice Presidents, a Treasurer, one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers as may be appointed in accordance with the provisions of Section 7.3 of this Article.  One person may hold two or more offices.

Section 7.2            ELECTION OF OFFICERS.  The officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 7.3 or Section 7.5 of this Article, shall be chosen by the Board of Directors.

Section 7.3            SUBORDINATE OFFICERS, ETC.  The Board of Directors may appoint by resolution, and may empower the Chairman of the Board, if there be such an officer, or the President, to appoint such other officers as the business of the Corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are determined from time to time by resolution of the Board or, in the absence of any such determination, as are provided in these Bylaws.  Any appointment of an officer shall be evidenced by a written instrument filed with the Secretary of the Corporation and maintained with the corporate records.

Section 7.4            REMOVAL AND RESIGNATION.

(a)           Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the Board of Directors or, except in case of any officer chosen by the Board, by any officer upon whom such power of removal may be conferred by resolution of the Board.

(b)           Subject to the rights, if any, of the Corporation under any contract of employment, any officer may resign at any time effective upon giving written notice to the Chairman of the Board, President, any Vice President or Secretary of the Corporation, unless the notice specifies a later time for the effectiveness of such resignation.

Section 7.5            VACANCIES.  A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to such office.

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Section 7.6            CHAIRMAN OF THE BOARD.  If there is a Chairman of the Board, he shall, if present, preside at all meetings of the Board of Directors, exercise and perform such other powers and duties as may be from time to time assigned to him by resolution of the Board or prescribed by these Bylaws and, if there is no President, the Chairman of the Board shall be the chief executive officer of the corporation and have the power and duties set forth in Section 7.8 of this Article.

Section 7.7            VICE CHAIRMAN OF THE BOARD.  The Board of Directors may appoint one of its members to be the Vice Chairman of the Board.  He shall preside at all meetings of the shareholders and all meetings of the Board of Directors in the absence of the Chairman of the Board, and shall exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or prescribed in the Bylaws.

Section 7.8            PRESIDENT.  Subject to such supervisory powers, if any as may be given by these Bylaws or the Board of Directors to the Chairman of the Board, if there be such an officer, the President may be the chief executive officer and general manager of the Corporation and shall, subject to the control of the Board, have general supervision, direction and control of the business and affairs of the Corporation.  He shall preside at all meetings of the shareholders and, in the absence of the Chairman of the Board, or if there be none, at all meetings of the Board.  He shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed from time to time by resolution of the Board.

Section 7.9            VICE PRESIDENT.  In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or, if not ranked, the Vice President designated by the Board, shall perform all the duties of the President, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President.  The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board or as the President may from time to time delegate.

Section 7.10         SECRETARY.

(a)           The Secretary, any Assistant Secretary, or, if they are absent or unable to act, any other officer shall keep or cause to be kept (1) the minute book, (2) the share register and (3) the seal, if any, of the Corporation.

(b)           The Secretary shall give, or cause to be given, notice of all meetings of the shareholders and of the Board of Directors required by these Bylaws or bylaw to be given, and shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors or any committee of the Board of Directors.

Section 7.11         CHIEF FINANCIAL OFFICER.

(a)           The Chief Financial Officer shall keep, or cause to be kept, the books and records of account of the Corporation.

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(b)           The Chief Financial Officer shall deposit all monies and other valuables in the name and to the credit of the Corporation with such depositories as may be designated from time to time by resolution of the Board of Directors.  He shall disburse the funds of the Corporation as may be ordered by the Board of Directors, shall render to the President and the Board, whenever they request it, an account of all of his transactions as Chief Financial Officer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed from time to time by the Board or as the President may from time to time delegate.

ARTICLE VIII

RECORDS AND REPORTS

Section 8.1            MINUTE BOOK.  The Corporation shall keep or cause to be kept in written form at its principal executive office or such other place as the Board of Directors may order, a minute book which shall contain a record of all actions by its shareholders, Board or committees of the Board including the time, date and place of each meeting; whether a meeting is regular or special and, if special, how called; the manner of giving notice of each meeting and a copy thereof; the names of those present at each meeting of the Board or committees thereof; the number of shares present or represented at each meeting of the shareholders; the proceedings of all meetings; any written waivers of notice, consents to the holding of a meeting or approvals of the minutes thereof; and written consents for action without a meeting.

Section 8.2            SHARE REGISTER.  The Corporation shall keep or cause to be kept at its principal executive office or, if so provided by resolution of the Board of Directors, at the Corporation’s transfer agent or registrar, a share register, or a duplicate share register, which shall contain the names of the shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same and the number and date of cancellation of every certificate surrendered for cancellation.

Section 8.3            BOOKS AND RECORDS OF ACCOUNT.  The Corporation shall keep or cause to be kept at its principal executive office or such other place as the Board of Directors may order, adequate and correct books and records of account.

Section 8.4            BYLAWS.  The Corporation shall keep at its principal executive office or, in the absence of such office in the State of California, at its principal business office in the state, the original or a copy of the Bylaws as amended to date.

Section 8.5            INSPECTION OF CORPORATE RECORDS.

(a)           By Shareholders.  The accounting books and records, the record of shareholders, and minutes of proceedings of the shareholders and the Board and committees of the Board of this Corporation and any subsidiary of this Corporation shall be open to inspection upon the written demand on the Corporation by any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to such holder’s interests as a shareholder or as the holder of such voting trust certificate.  Such

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inspection by a shareholder or holder of a voting trust certificate may be made in person or by agent or attorney, and the right of inspection includes the right to copy and make extracts.

A shareholder or shareholders holding at least five percent (5%) in the aggregate of the outstanding voting shares of the Corporation, or, in the event the Corporation is subject to the reporting requirements of the Securities Exchange Act of 1934, a shareholder or shareholders who hold at least one percent (1%) of such voting shares and have filed a Form F-6 with the Federal Deposit Insurance Corporation relating to the election of directors of the Corporation, shall have (in person or by agent or attorney) the absolute right:  (1) to inspect and copy the record of shareholders’ names and addresses and shareholdings during usual business hours upon five (5) business days’ prior written demand upon the Corporation and; (2) to obtain from the transfer agent for the Corporation, upon written demand and upon the tender of its usual charges, a list of the shareholders’ names and addresses, who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which it has been compiled or as of a date specified by the shareholder subsequent to the date of demand.  The list shall be made available on or before the later of five (5) business days after the demand is received or the date specified therein as the date as of which the list is to be compiled.

(b)           By Directors.  Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the Corporation.  Such inspection by a director may be made in person or by agent or attorney and the right of inspection includes the right to copy and make extracts.

Section 8.6            ANNUAL REPORTS TO SHAREHOLDERS.  The Board of Directors of the Corporation shall cause an annual report to be sent by first-class mail to the shareholders at least fifteen (15) days prior to the Annual Meeting of Shareholders but not later than one hundred twenty (120) days after the close of the fiscal year in accordance with the provisions of the General Corporation Law.

ARTICLE IX

GENERAL CORPORATE MATTERS

Section 9.1            RECORD DATES.  The Board of Directors may fix a time in the future as a record date for the determination of the shareholders (i) entitled to notice of and to vote at any meeting of shareholders, (ii) entitled to give consent to corporate action in writing without a meeting, (iii) entitled to receive any dividend or distribution or any allotment of rights, or (iv) entitled to exercise rights in respect to any change, conversion, or exchange of shares.  The record date so fixed shall be not more than sixty (60) days nor less than ten (10) days prior to the date of any meeting, nor more than sixty (60) days prior to any other event for the purposes of which it is fixed.  When a record date is so fixed, only shareholders of record on that date are entitled to notice of and to vote at any such meeting, to give consent without a meeting, to receive any report, to receive a dividend, distribution, or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the

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Corporation after the record date, except as otherwise provided in the Articles of Incorporation or these Bylaws.

Section 9.2            CHECKS, DRAFTS, ETC.  All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors.

Section 9.3            CONTRACTS, ETC., HOW EXECUTED.  The Board of Directors, except as otherwise provided in these Bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances; and, unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or to any amount.  However, any contract or other instrument in writing executed or entered into between the Corporation and any other person, when signed by 1) the Chairman of the Board, the President or any Vice President, and 2) the Secretary, any Assistant Secretary, the Chief Financial Officer or any Assistant Treasurer, is not invalid as to the corporation by any lack of authority of the signing officers in the absence of actual knowledge on the part of the other person that the signing officers had no authority to execute such contract or other instrument.

Section 9.4            CERTIFICATES FOR SHARES.  Every holder of shares in the Corporation shall be entitled to have a certificate signed in the name of the Corporation by the Chairman of the Board or Vice Chairman of the Board or the President or a Vice President and by the Chief Financial Officer or an Assistant Treasurer or the Secretary or any Assistant Secretary, certifying the number of shares and the class or series of shares owned by the shareholder.  Any of the signatures 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 be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue.

Section 9.5            STATEMENTS ON CERTIFICATE FOR SHARES.  Any such certificate shall also contain such legend or other statement as may be required by law, by these Bylaws or by any agreement between the Corporation and the issuee thereof.

Section 9.6            LOST, STOLEN OR DESTROYED CERTIFICATES.  No new certificates for shares shall be issued to replace an old certificate unless the latter is surrendered and cancelled at the same time; provided, however, that the Board of Directors or the Chairman of the Board or the President may, however, in case any certificate for shares is lost, stolen, mutilated or destroyed, authorize the issuance of a new certificate in lieu thereof, upon such terms and conditions, including reasonable indemnification of the Corporation, as the Board of Directors or the Chairman of the Board or the President shall determine.  In the event of the issuance of a new certificate, the rights and liabilities of the Corporation, and of the holders of the old and new certificates, shall be governed by the relevant provisions of the California Commercial Code.

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Section 9.7            REPRESENTATION OF SHARES OF OTHER CORPORATIONS.  Any person designated by resolution of the Board of Directors or, in the absence of such designation, the Chairman of the Board, the President or any Vice President or the Secretary, or any other person authorized by any of the foregoing, is authorized to vote on behalf of the Corporation any and all shares of any other corporation or corporations, foreign or domestic, owned by the Corporation.

Section 9.8            CONSTRUCTION AND DEFINITIONS.  Unless the context otherwise requires, the general provisions, rules of construction and definitions contained in the Corporations Code of California shall govern the construction of these Bylaws.

Section 9.9            PURCHASE OF LIABILITY INSURANCE.  The Corporation may, if and to the extent the Board of Directors so determines by resolution, purchase and maintain insurance in an amount and on behalf of such agents of the Corporation as the Board may specify in such resolution against any liability asserted against or incurred by the agent in such capacity or arising out of the agent’s status as such whether or not the Corporation would have the capacity to indemnify the agent against such liability under the provisions of this Section 9.9.

ARTICLE X

AMENDMENTS

Section 10.1         POWER OF SHAREHOLDERS.  New bylaws may be adopted or these Bylaws may be amended or repealed by the affirmative vote of a majority of the outstanding shares entitled to vote, or by the written consent of the shareholders entitled to vote such shares, except as otherwise provided by law or by the Articles of Incorporation.

Section 10.2         POWER OF DIRECTORS.  Subject to the right of shareholders (as provided in Section 10.1 of this Article) to adopt, amend or repeal bylaws, these Bylaws may be adopted, amended or repealed by the Board of Directors; provided, however, that the Board of Directors may adopt a bylaw or amendment thereof changing the authorized number of directors only for the purpose of fixing the exact number of directors within the limits specified in Section 4.1 of Article IV of these Bylaws.

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CERTIFICATE OF SECRETARY

OF

FIRST MANHATTAN BANCORP

I, the undersigned, do hereby certify:

1.             That I am the duly elected and acting Secretary of First Manhattan Bancorp, a California corporation; and

2.             That the foregoing Bylaws, comprising seventeen (17) pages, constitute the Bylaws of said Corporation as duly adopted by action of the Board of Directors of the Corporation duly taken on August 8, 2006.

IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of this Corporation this 6th day of September, 2006.

/s/ Nicole Fitzgerald

Nicole Fitzgerald, Corporate Secretary

CERTIFICATE OF ASSISTANT SECRETARY

OF

MANHATTAN BANCORP

A California Corporation

I am the duly elected, qualified and acting Assistant Secretary of MANHATTAN BANCORP, a California corporation (the “Corporation”), and hereby certify that the following amendment to Article IV, Section 4.1, of the Bylaws of the Corporation was adopted at a duly called meeting of the Board of Directors of the Corporation on January 18, 2007:

RESOLVED, that Article IV, Section 4.1 of the Corporation’s Bylaws is hereby amended to read as follows:

“Section 4.1  NUMBER OF DIRECTORS.  The authorized number of Directors shall be not less than seven (7) nor more than thirteen (13) unless changed by amendment of the Articles or by a Bylaw duly adopted by the vote or written consent of holders of a majority of the outstanding shares entitled to vote.   The exact number of directors shall be fixed, within the limits specified by this Section, by a bylaw or amendment thereof or by a resolution duly adopted by a vote of a majority of the shares entitled to vote represented at a duly held meeting at which a quorum is present, or by the written consent of the holders of a majority of the outstanding shares entitled to vote, or by a resolution duly adopted by the Board of Directors.

Subject to the foregoing provisions for changing the number of directors, the number of directors of this Corporation has been fixed at nine (9).”

Dated as of January 30, 2007	/s/ Nicole Bryant
	Nicole Bryant, Assistant Secretary

EX-5.1

Exhibit 5.1

[KING, HOLMES, PATERNO & BERLINER, LLP LETTERHEAD]

February 5,  2007

Manhattan Bancorp
2221 East Rosecrans Avenue, Suite 131
El Segundo, California 90245

Ladies and Gentlemen:

We have acted as counsel to Manhattan Bancorp, a California corporation (the “Company”), in connection with the proposed registration under the Securities Act of 1933, as amended, by the Company of an aggregate of up to 3,000,000 shares of common stock, without par value, of the Company (the “Shares”), and the related preparation and filing by the Company with the Securities and Exchange Commission of a Registration Statement on Form SB-2 (the “Registration Statement”).  In rendering the opinion set forth below, we do not express any opinion concerning law other than federal law and the law of the State of California.

We have examined originals or copies, certified or otherwise identified, of such documents, corporate records and other instruments, and have examined such matters of law, as we have deemed necessary or advisable for purposes of rendering the opinion set forth below, including but not limited to (i) the Company’s Articles of Incorporation, as amended; (ii) the Company’s Bylaws, as amended; (iii) the Registration Statement, including the prospectus contained therein and the exhibits thereto; and (iv) certain resolutions of the Board of Directors of the Company relating to the issuance of the Shares being registered under the Registration Statement.  We have also examined originals or copies of such documents, corporate records, certificates of public officials and other instruments, and have conducted such other investigations of law and fact, as we have deemed necessary or advisable for purposes of our opinion.  As to matters of fact, we have examined and relied upon the factual representations of the Company contained in the Registration Statement.  We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the conformity to the originals of all documents submitted to us as copies.  In making our examination of any documents, we have assumed that all parties, other than the Company, had the corporate power and authority to enter into and perform all obligations thereunder, and, as to such parties, we have also assumed the due authorization by all requisite action, the due execution and delivery of such documents, and the validity and binding effect and enforceability thereof.

Based on the foregoing, we are of the opinion that the Shares have been duly authorized and, when issued as contemplated in the Registration Statement, will be validly issued and outstanding, fully paid and non-assessable.

In rendering the opinion set forth above, we have not passed upon and do not purport to pass upon the application of securities or “blue-sky” laws of any jurisdiction (except federal securities laws).

This opinion is given solely for the benefit of the Company and investors who purchase Shares of common stock of the Company pursuant to the Registration Statement.

We consent to the filing of this opinion as an Exhibit to the Registration Statement and to the reference to our name in the Prospectus contained in the Registration Statement under the heading “Legal Matters.”

Very truly yours,

/s/ King, Holmes, Paterno & Berliner,LLP

King, Holmes, Paterno & Berliner, LLP

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT dated as of                   ,         , between Bank of Manhattan, N.A. (the “Bank”) and Jeffrey M. Watson (“Executive”).

W I T N E S S E T H

WHEREAS, the Bank is a proposed national banking association;

WHEREAS, the Bank desires to avail itself of the skill, knowledge and experience of Executive in order to insure the successful management of its business;

WHEREAS, the parties hereto desire to specify the terms controlling Executive’s employment by the Bank;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, and intending to be legally bound, it is agreed that the following terms and conditions shall apply to Executive’s said employment:

A.TERM OF EMPLOYMENT

The term of this Agreement (“Term”) shall commence on the date the Bank opens for business (the “Effective Date”) and end three (3) years thereafter, subject, however, to prior termination of this Agreement as hereinafter provided.  Where used herein, “Term” shall refer to the entire period of employment of Executive by the Bank hereunder, whether for the period provided above, or whether terminated earlier as hereinafter provided.

B.DUTIES OF EXECUTIVE

1.Duties.  Executive shall perform the duties of President and Chief Executive Officer of the Bank, reporting directly to the Board of Directors (the “Board”) of the Bank, and subject, at all times, to the powers vested by law in the Board and the Bank’s shareholders.  Executive shall also serve as a member of the Board throughout the Term.  During the Term, Executive shall perform the services herein contemplated to be performed by Executive faithfully, diligently and to the best of Executive’s ability, consistent with the highest and best standards of the banking industry and in compliance with all applicable laws and the Bank’s Articles of Association, Bylaws and internal written policies.

2.Conflicts of Interest.  Except as permitted by the prior written consent of the Board, Executive shall devote Executive’s entire productive time, ability and attention to the business of the Bank during the Term and Executive shall not directly or indirectly render any services of a business, commercial or professional nature, to any other person, firm or corporation, whether for compensation or otherwise, which are in conflict with the Bank’s interests.  Notwithstanding the foregoing, Executive may make investments of a passive nature

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in any business or venture, provided that such business or venture is not in competition, directly or indirectly, in any manner with the Bank.

C.COMPENSATION

1.Salary.  For Executive’s services hereunder, the Bank shall pay or cause to be paid as annual base salary (the “Base Salary”) to Executive not less than Two Hundred Thousand Dollars ($200,000) for the first year of the Term, with annual increases in the discretion of the Board or the Bank’s Compensation Committee.  Base Salary shall be payable in equal installments in conformity with the Bank’s normal payroll period.

2.Bonuses.  Any bonuses shall be as determined by the Board, in its sole discretion.

D.EXECUTIVE BENEFITS

1.Vacation.  Executive shall be entitled to vacation during each year of the Term consistent with the Bank’s approved vacation schedule and policy, which shall provide Executive with not less than four (4) weeks vacation for each year of the Term.  Executive is encouraged to use all accrued vacation benefits and will be expected to take vacation in the year it is earned.  Accrual of any unused vacation shall be determined in accordance with the Bank’s Personnel Policyas in effect from time to time and shall be subject to any limitations set forth therein.

2.Group Medical and Other Insurance Benefits.  The Bank shall provide for Executive, at the Bank’s expense, group medical and other insurance benefits in accordance with the Bank’s Personnel Policy as in effect from time to time.  All coverage under this paragraph shall be in existence or shall take effect as of the Effective Date hereof.  The Bank’s liability to Executive for any breach of this paragraph shall be limited to the amount of premiums required hereunder to be payable by the Bank to obtain or maintain, as applicable, the coverage contemplated herein.

3.Stock Option.  The Bank will cause its holding company, Manhattan Bancorp (“Bancorp”) to grant to Executive not later than the Effective Date an option to purchase a number of shares of the Bancorp’s authorized but unissued Common Stock equal to five percent (5.0%) of the amount of shares of Bancorp’s Common Stock issued and outstanding immediately prior to the Effective Date, at the fair market value of the stock on the date of grant which shall equal the price at which such shares were sold by Bancorp prior to the Effective Date.  The Bank and Executive agree that such option shall be for a term of ten (10) years and shall vest in three installments of 33.33% per year over a period of three (3) years, with the first such installment to vest one year from the date of grant, and with subsequent installments vesting two and three years thereafter.  The Bank and Executive also agree that, to the maximum extent permitted by law, the option will qualify as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.  Such stock option will be granted to Executive, pursuant to Bancorp’s Stock Option Plan (the “Plan”) and an agreement between Bancorp and Executive containing the terms set forth herein and all other terms as

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specified in the form Stock Option Agreement approved by the Board of Directors of Bancorp in connection with its adoption of the Plan.

In addition to the foregoing option, the Bank agrees to cause Bancorp to grant to Executive options (the “Additional Options”) to purchase a number of shares of the Bancorp’s authorized but unissued Common Stock equal to five percent (5.0%) of the amount of the Bancorp’s Common Stock sold in the Bancorp’s first subsequent non-underwritten public offering following its initial public offering at the fair market value of such stock at the time of the closing of such subsequent offering.  The right of Executive to receive Additional Options upon the closing of such non-underwritten public offering shall terminate on the commencement of an offering underwritten pursuant to a firm commitment.  Each Additional Option shall be for a term of ten (10) years, and will vest in three installments of 33⅓% per year over a period of three (3) years, with the first such installment to vest one year from the date of grant, and with subsequent installments vesting two and three years thereafter.  As used herein the term “non-underwritten public offering” shall include a public offering in which all underwriters participate on a best efforts basis only.

4.Auto Allowance.  During the Term, Executive shall be entitled to receive One Thousand Dollars ($1,000) per month as a car allowance.

5.Club Membership.  Executive shall be provided with an executive membership at Palos Verdes Country Club at the Bank’s expense.  The Bank shall pay or reimburse Executive for all dues associated with such membership and reimburse Executive for all business expenses in accordance with Bank’s reimbursement policies.

E.REIMBURSEMENT FOR BUSINESS EXPENSES

Executive shall be entitled to reimbursement by the Bank for any ordinary and necessary business expenses incurred by Executive in the performance of Executive’s duties in accordance with the Bank’s reimbursement policies in effect from time to time, provided that each such expenditure is of a nature qualifying it as a proper deduction on the federal and state income tax returns of the Bank as a business expense and not as deductible compensation to Executive; and Executive furnishes to the Bank adequate records and other documentary evidence required by federal and state statutes and regulations issued by the appropriate taxing authorities for the substantiation of such expenditures as deductible business expenses of the Bank and not as deductible compensation to Executive.

F.TERMINATION

1.Termination for Cause.  The Bank may terminate this Agreement at any time by action of the Board for cause (“Cause”).  For purposes of this Agreement termination for “Cause” shall mean termination because of Executive’s personal dishonesty, incompetence, willful misconduct, any breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order or material breach of any provision of this Agreement.  For purposes of this Agreement, no act, or the failure to act, on Executive’s part shall be considered “willful” unless done, or omitted to be done, not in good faith and without

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reasonable belief that the action or omission was in the best interests of the Bank.  Termination under this Paragraph shall not prejudice any remedy that the Bank may have at law, in equity, or under this Agreement.

2.Death or Disability.  In the event of Executive’s death or if Executive is found to be physically or mentally disabled (as hereinafter defined) by the Board in good faith, this Agreement shall terminate without any further liability or obligation by the Bank to Executive.  For purposes of this Agreement only, physical or mental disability shall be defined as Executive having been unable to fully perform under this Agreement for a continuous period of ninety (90) days or a cumulative period of one-hundred eighty (180) days in any calendar year, or, if applicable, such other periods as may be defined in the Bank’s Personnel Policy or in applicable disability insurance policies as in effect from time to time.  If there should be a dispute between the Bank and Executive as to Executive’s physical or mental disability for purposes of this Agreement, the question shall be settled by the opinion of an impartial reputable physician or psychiatrist agreed upon by the parties or their representatives, or if the parties cannot agree within ten (10) days after a request for designation of such party, then by a physician or psychiatrist designated by the Los Angeles County Medical Association.  The certification of such physician or psychiatrist as to the question in dispute shall be final and binding upon the parties hereto.  The Bank shall bear the costs of such physician or psychiatrist selected to determine such matter.

3.Supervisory Matters.  If Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by notice served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) and (g)(1)), the Bank’s obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Bank may in its discretion:  (i) pay Executive all or part of the compensation withheld while its obligations under this Agreement were suspended; and (ii) reinstate (in whole or in part) any of its obligations which were suspended.  If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(3) or i(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) or (g)(1)), all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the parties shall not be affected.  If the Bank is in default (as defined in Section 3(x)(1) of the Federal Deposit Insurance Act (12 U.S.C. Section 1813(x)(1)), all obligations under this Agreement shall terminate as of the date of default, but vested rights of the parties shall not be affected.  All obligations under this Agreement shall be terminated, except to the extent that it is determined that continuation of the Agreement is necessary for the continued operation of the Bank; (i) by the Federal Deposit Insurance Corporation at the time that the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 11 of the Federal Deposit Insurance Act (12 U.S.C. Section 1821); or (ii) by the Federal Deposit Insurance Corporation or the United States Comptroller of the Currency or his or her designee, at the time that the Federal Deposit Insurance Corporation or the United States Comptroller of the Currency or his or her designee approves a supervisory merger to resolve problems related to the operation of the Bank or when the Bank is in an unsafe or unsound condition.  All rights of the parties that have already vested, however, shall not be affected by such action.

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4.Termination by Bank Without Cause.  Notwithstanding anything to the contrary contained herein, it is agreed by the parties hereto that the Bank may at any time without Cause and for any reason immediately terminate this Agreement and Executive’s employment by the Bank by action of the Board.  Upon such termination by the Bank all benefits provided by the Bank hereunder to Executive shall thereupon cease, except as provided in this Subparagraph, and Executive shall be deemed to have resigned as a director, officer and employee of the Bank and any corporation, partnership, venture, limited liability company or other entity controlled by, controlling or under common control with the Bank.  Notwithstanding the foregoing, it is agreed that in the event of such termination without Cause by the Bank upon the delivery to the Bank by the Executive of a waiver and release in substantially the form of Attachment “A” to this Agreement, and Executive’s compliance with the terms thereof, Executive shall be entitled to, upon the effective date of termination, payment of a lump sum equivalent to twelve (12) months’ base salary as such base salary is in effect on the date of termination of employment, plus continuation of Executive’s medical benefits for a period of twelve (12) months following such termination, with Bank continuing to pay Executive’s share of premiums and associated costs as if Executive continued to be employed with the Bank; provided, however, that the Bank’s obligation to provide such coverage shall be terminated if the Executive is eligible to receive comparable substitute coverage from another employer at any time during such twelve-month period.  Executive agrees to advise the Bank immediately if such comparable substitute coverage is available from another employer.  The Executive shall be entitled at the expiration of the twelve-month period, to elect to continue coverage under the Bank’s medical benefit plans pursuant to the terms of COBRA.  Notwithstanding any provision to the contrary in this Subparagraph F.4, no severance benefits shall be payable to Executive hereunder if Executive’s employment is terminated for any of the reasons delineated in Subparagraphs F.1, F.2 or F.3 hereof or while grounds for termination under such Subparagraphs exist.

G.GENERAL PROVISIONS

1.Trade Secrets.  During the Term, Executive will have access to and become acquainted with what Executive and the Bank acknowledge are trade secrets, to wit, knowledge or data concerning the Bank, including its operations and methods of doing business, and the identity of customers of the Bank, including knowledge of their financial condition and their financial needs.  Executive shall not disclose any of the aforesaid trade secrets, directly or indirectly, or use them in any way either during the Term or thereafter, except as required in the course of Executive’s employment with the Bank.

2.Indemnification.  To the extent permitted by law, applicable statutes and the Bylaws or resolutions of the Bank in effect from time to time, the Bank shall indemnify Executive against liability or loss arising out of Executive’s actual or asserted misfeasance or non-feasance in the performance of Executive’s duties or out of any actual or asserted wrongful act against, or by, the Bank including but not limited to judgments, fines, settlements and legal and other expenses incurred in the defense of actions, proceedings and appeals therefrom.  However, the Bank shall have no duty to indemnify Executive with respect to any claim, issue or matter as to which Executive has been adjudged to be liable to the Bank in the performance of his duties, unless and only to the extent that the court in which such action was brought shall determine upon application that, in view of all of the circumstances of the case, Executive is

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fairly and reasonably entitled to indemnification for the expenses which such court shall determine.  The Bank shall endeavor to apply for and obtain Directors and Officers Liability Insurance to indemnify and insure the Bank and Executive from and against the aforesaid liabilities.  The provisions of this paragraph shall apply to the estate, executor, administrator, heirs, legatees or devisees of Executive.  The obligations of the Bank under this Subparagraph G.2 shall continue through and after the Term of this Agreement.

3.Return of Documents.  Executive expressly agrees that all manuals, documents, files, reports, studies, instruments or other materials used and/or developed by Executive during the Term are solely the property of the Bank, and that Executive has no right, title or interest therein.  Upon termination of this Agreement, Executive or Executive’s representative shall promptly deliver possession of all of said property to the Bank in good condition.

4.Non-solicitation.  During the Term and for a period of one year thereafter, Executive shall not, directly or indirectly, engage or participate in the solicitation or any attempt to solicit employees of the Bank to work for any person, firm or business.

5.Controlling Law.  This Agreement is to be governed by and construed in accordance with the laws of the United States and, to the extent not inconsistent therewith, the laws of the State of California.

6.Invalid Provisions.  Should any provision of this Agreement for any reason be declared invalid, void, or unenforceable by a court of competent jurisdiction, the validity and binding effect of any remaining portion shall not be affected, and the remaining portions of this Agreement shall remain in full force and effect as if this Agreement had been executed with said provision eliminated.

7.Entire Agreement.  This Agreement contains the entire agreement of the parties.  It supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by the Bank.  Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding.  This Agreement may not be modified or amended by oral agreement, but only by an agreement in writing signed by both the Bank and Executive.

8.Notice.  For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be personally delivered or (unless otherwise specified) mailed by United States mail, or sent by facsimile, provided that the facsimile cover sheet contains a notation of the date and time of transmission, and shall be deemed received:  (i) if personally delivered, upon the date of delivery to the address of the person to receive such notice, (ii) if mailed in accordance with the provisions of this Subparagraph G.8, three (3) business days after the date placed in the United States mail, or (iii) if given by facsimile, when sent.  Notices shall be addressed to the Bank at its main office and to Executive at the address then maintained by the Bank in its records for Executive, or to such other respective addresses as the parties hereto shall designate to the other by like notice.

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9.Arbitration.  Any dispute or controversy arising under or in connection with this Agreement, the inception or termination of the Executive’s employment, or any alleged discrimination or statutory or tort claim related to such employment, including issues raised regarding the Agreement’s formation, interpretation or breach, shall be settled exclusively by binding arbitration in Los Angeles, California in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA”).  Without limiting the foregoing, the following potential claims by the Executive could be subject to arbitration under the Arbitration Agreement:  claims for wages or other compensation due; claims for breach of any contract or covenant (express or implied) under which the Executive believes he would be entitled to compensation or benefits; tort claims related to such employment; claims for discrimination and harassment (including, but not limited to, race, sex, religion, national origin, age, marital status or medical condition, disability, sexual orientation, or any other characteristic protected by federal, state or local law); claims for benefits (except where an employee benefit or pension plan specifies that its claims procedure shall culminate in an arbitration or other procedure different from this one); and claims for violation of any public policy, federal, state or other governmental law, statute, regulation or ordinance.  The arbitration will be conducted in Los Angeles County.  The arbitration shall provide for written discovery and depositions adequate to give the parties access to documents and witnesses that are essential to the dispute.  The arbitrator shall have no authority to add to or to modify this Agreement, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy.  The arbitrator shall issue a written decision that includes the essential findings and conclusions upon which the decision is based, which shall be signed and dated.  Executive and the Bank shall each bear his or its own costs and attorneys’ fees incurred in conducting the arbitration and, except in such disputes where Executive assets a claim otherwise under a state or federal statute prohibiting discrimination in employment (“a Statutory Claim”), or unless required otherwise by applicable law, shall split equally the fees and administrative costs charged by the arbitrator and AAA.  In disputes where Executive asserts a Statutory Claim against the Bank, Executive shall be required to pay only the AAA filing fee to the extent such filing fee does not exceed the fee to file a complaint in state or federal court.  Executive shall pay the balance of the arbitrator’s fees and administrative costs.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

	BANK OF MANHATTAN, N.A.
	By:
		Name:
		Title:
Jeffrey M. Watson (“Executive”)

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WAIVER AND RELEASE AGREEMENT

This Waiver and Release Agreement (the “Waiver Agreement”) is entered into by and between Jeffrey M. Watson (“Employee”) and Bank of Manhattan, N.A. on its behalf and on behalf of its parents, subsidiaries, affiliates and successors-in-interest (collectively, the “Bank”).

RECITALS

A.            Employee and the Bank have entered into an Employment Agreement dated as of                       ,         (the “Agreement”).

B.            A condition precedent to certain of Bank’s obligations under the Agreement is the execution of this Waiver Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties, intending to be legally bound, agree and covenant as follows:

RELEASE

In consideration for the payment of severance and other compensation under the Agreement, Employee agrees unconditionally and forever to release and discharge the Bank its parents, subsidiaries, affiliates, successors-in-interest, and their respective officers, directors, managers, employees, members, shareholders, representatives, attorneys, agents and assigns from any and all claims, actions, causes of action, demands, rights or damages of any kind or nature which Employee may now have, or ever have, whether known or unknown, that arise out of or in any way relate to Employee’s employment with, or separation from, the Bank on or before the date of execution of this Waiver Agreement.  Employee also confirms his resignation as a director, officer and employee of the Bank and any corporation, partnership, venture, limited liability company or other entity controlled by, controlling or under common control with the Bank.

This release specifically includes, but is not limited to, any claims for discrimination and/or violation of any statutes, rules, regulations or ordinances, whether federal, state or local, including, but not limited to, Title VII of the Civil Rights Act of 1964, as amended, age claims under the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefits Protection Act of 1990, the Employee Retirement Income Security Act of 1974, as amended, the California Fair Employment and Housing Act, the California Labor Code, the Equal Pay Act, the Americans With Disabilities Act, the Rehabilitation Act of 1973, the Racketeer Influenced and Corrupt Organizations Act, the Financial Reform Recovery and Enforcement Act of 1989, and/or Section 1981 of Title 42 of the United State Code.

Employee further agrees knowingly to waive the provisions and protections of Section 1542 of the California Civil Code, which reads:

Attachment A

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which, if known by him, must have materially affected his settlement with the debtor.

REPRESENTATIONS OF EMPLOYEE

Employee represents and agrees that, prior to the execution of this Waiver Agreement, Employee has had the opportunity to discuss the terms of this Waiver Agreement with legal counsel of Employee’s choosing.

Employee affirms that no promise or inducement was made to cause Employee to enter into this Waiver Agreement other than the inducements provided in the Agreement.  Employee further confirms that Employee has not relied upon any other statement or representation by anyone other than what is in this Waiver Agreement as a basis for Employee’s agreement.

MISCELLANEOUS

Except for the Agreement and any other employee benefit plans expressly referred to in the Agreement as continuing following Employee’s termination of employment with the Bank, this Waiver Agreement sets forth the entire agreement between Employee and the Bank, and shall be binding on both party’s heirs, representatives and successors.  This Waiver Agreement shall be construed under the laws of the State of California, both procedurally and substantively.  If any portion of this Waiver Agreement is found to be illegal or unenforceable, such action shall not affect the validity or enforceability of the remaining paragraphs or subparagraphs of this Waiver Agreement.

Employee acknowledges that Employee has been advised that Employee has twenty-one (21) days to consider this Waiver Agreement, and that Employee was informed that Employee has the right to consult with counsel regarding this Waiver Agreement.  To the extent Employee has taken less than twenty-one (21) days to consider this Waiver Agreement, Employee acknowledges that Employee has had sufficient time to consider the Waiver Agreement and to consult with counsel, and that Employee does not desire additional time.

This Waiver Agreement is revocable by Employee for a period of seven (7) days following Employee’s execution of this Waiver Agreement. The revocation by Employee of this Waiver Agreement must be in writing, must specifically revoke this Waiver Agreement and must be received by the Bank prior to the eighth (8th) day following the execution of this Waiver Agreement by Employee.  This Waiver Agreement becomes effective, enforceable and irrevocable on the eighth (8th) day following Employee’s execution of the Waiver Agreement.  No payment will be made to the undersigned until such date.

The undersigned agree to the terms of this Waiver Agreement and voluntarily enters into it with the intent to be bound hereby.

DATED:
	Jeffrey M. Watson
	Bank of Manhattan, N.A.
DATED:
	Name:
	Title:

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACOCUNTING FIRM

To the Board of Directors
Manhattan Bancorp
El Segundo, California

We hereby consent to the use in this Registration Statement on Form SB-2 for Manhattan Bancorp, of our report dated January 17, 2007 with respect to the balance sheet of Manhattan Bancorp as of December 31, 2006 and the related statements of operations, stockholders’ equity, and cash flows for the period from June 19, 2006 (inception) to December 31, 2006.

/s/ Hutchinson and Bloodgood LLP

Hutchinson and Bloodgood LLP

Glendale, CA

February 5, 2007

EX-99.1

Exhibit 99.1

APPLICATION FOR SUBSCRIPTION FOR COMMON STOCK

MANHATTAN BANCORP

Manhattan Bancorp, a California corporation (the “Company”), is offering up to 3,000,000 shares of its common stock (the “Shares”) to the public at a price of  $10.00 per share payable as provided herein and as described in and offered pursuant to the Prospectus furnished to the undersigned herewith (the “Prospectus”).

1.             Subscription.  Subject to the terms  and conditions hereof, the undersigned hereby tenders this subscription, together with payment indicated below in United States currency, to Pacific Coast Bankers’ Bank, the Company’s escrow agent, representing the payment of $10.00 per Share for the number of Shares indicated below.  The total subscription price must be paid at the time the Subscription Agreement is executed.

2.             Acceptance of Subscription.  It is understood and agreed that the Company shall have the right to accept or reject this subscription in whole or in part, for any reason whatsoever.  The Company may reduce the number of Shares for which the undersigned has subscribed, indicating acceptance of less than all of the Shares subscribed.  If  the subscription, or any part thereof, is rejected by the Company, or if this offering is terminated for any reason, the escrow agent will return to the undersigned as much of the payment as exceeds the amount required for the Shares allotted to the undersigned, together with any interest earned thereon.

3.             Acknowledgments.  The undersigned hereby acknowledges receipt of a copy of the Prospectus.  This Subscription Agreement and the Prospectus contain the entire agreement and understanding among the undersigned and the Company with respect to the offering and sale of Shares to the undersigned.  This Subscription Agreement creates a legally binding obligation, and the undersigned agrees to be bound by the terms of this Agreement.

4.             No Revocation.  The undersigned agrees that once this Subscription Agreement is tendered to Pacific Coast Bankers’ Bank, the Company’s escrow agent, it may not be withdrawn by the undersigned and that this Agreement shall survive the death or disability of the undersigned.

5.             Escrow Agent.  The undersigned acknowledge(s) that Pacific Coast Bankers’ Bank is acting solely as escrow agent in connection with the offering of Shares and makes no recommendation with respect thereto.  Pacific Coast Bankers’ Bank has made no investigation regarding the offering or any person or entity involved in the offering.

IMPORTANT: THE TOP TWO COPIES OF THIS APPLICATION, COMPLETED, SIGNED AND ACCOMPANIED BY PAYMENT IN FULL FOR ALL SHARES SUBSCRIBED FOR, MUST BE RECEIVED BY THE ESCROW AGENT BY 5:00 P.M., PACIFIC DAYLIGHT TIME, ON OR BEFORE                       , 2007 (SUBJECT TO EXTENSION BY THE COMPANY WITHOUT NOTICE TO SUBSCRIBERS) (the “Offering Expiration Date”).  THE COMPANY WILL NOT ACCEPT SUBSCRIPTIONS FOR FEWER THAN 2,500 SHARES, unless the Company, in its discretion, elects to reduce this minimum number on a case by case basis.  The address to send your subscription is Manhattan Bancorp, c/o Pacific Coast Bankers’ Bank, 340 Pine Street, Suite 401, San Francisco, California 94104, Attention: Impound Account.  Payment may only be made (a) by check or postal, telegraphic or express money order, payable to “Pacific Coast Bankers’ Bank FBO Manhattan Bancorp Impound  Account,” or (b) by wire transfer of funds to the Impound Account No.                     maintained by the Impound Agent, ABA No. 121042484, Attention: Impound Account FBO Manhattan Bancorp.  The subscription price will be deemed to have been received by the escrow agent only upon (i) clearance of any uncertified check, (ii) receipt by the escrow agent of any certified check or cashier’s check or of any postal, telegraphic or express money order, or (iii) receipt of collected funds in the impound account designated above.

Shares purchased by the undersigned shall be registered as listed below.  (If certificates for shares are to be issued in more than one name, please specify whether ownership is to be as tenants in common, joint tenants, etc.  If certificates for shares are to be issued in the name of one person for the benefit of another, please indicate whether registration should be as trustee or custodian for such person, and specify the exact name and date of the trust and/or other pertinent information concerning the trust or custodial arrangement.)

Name(s) in which Shares are to be Registered	Number of Shares
(Please Print)	(At $10.00 Per Share)

IN WITNESS WHEREOF, the undersigned has (have) executed this Application and returned the original and one copy thereof to the escrow agent at the address set forth above, accompanied by payment in full in the manner set forth above.  I (We) understand that all information submitted on this Application will be treated confidentially by the Company.

Dated:
(Signature)		(Signature)
Name (please print or type)		Name (please print or type)
Please print title or capacity (if other than individual shareholder)		Please print title or capacity (if other than individual shareholder)
Street Address		Street Address
City and State	Zip	City and State	Zip
Telephone		Telephone
Social Security Number or Taxpayer I.D. Number		Social Security Number or Taxpayer I.D. Number

IF SHARES ARE TO BE HELD IN JOINT OWNERSHIP, ALL JOINT OWNERS SHOULD SIGN THIS APPLICATION
ORIGINAL-White-[Return to Pacific Coast Bankers’ Bank]    CUSTOMER Copy-Pink-[Retain]
ESCROW AGENT Copy-Yellow-[Return to Pacific Coast Bankers’ Bank]

EX-99.2

Exhibit 99.2

IMPOUND ACCOUNT AGREEMENT

This Impound Account Agreement (the “Agreement”) is made as of                , 2007 by and among Manhattan Bancorp, a California corporation (the “Company”) and Pacific Coast Bankers’ Bank, a California banking corporation (“Impound Agent”).

1.Recitals of Fact.

The Company was formed in order to be the holding company for Bank of Manhattan, N.A. (Proposed)(the “Bank”).  Bank of Manhattan has filed an application with the Comptroller of Currency (“Regulatory Agency”) to organize a commercial bank under the laws of the United States. The Company is conducting an initial public offering (the “Offering”) in order to raise funds to capitalize the Bank. The Company has filed a registration statement with the Securities and Exchange Commission to sell shares of its common stock on a best efforts basis.  The Company desires all funds received from various persons (the “Subscribers”) as subscriptions for shares of the Company’s stock in the Offering be placed in an impound account with a bank or trust company authorized to do business in California, and desires that Impound Agent act as the depository for such funds subject to such direction as may be made by the Regulatory Agency.  Company intends at this time to issue and sell a minimum of 2,150,000 shares and a maximum of 3,000,000 shares of its stock at a price of $10.00 per share and to deposit all funds received from the Subscribers as subscriptions for such shares with Impound Agent as depository.

2.Appointment of Impound Agent as Escrow Agent.

Company hereby appoints Pacific Coast Bankers’ Bank as Impound Agent and Pacific Coast Bankers’ Bank hereby accepts such appointment, subject to the terms and conditions set forth in this Agreement.

3.Subscription Funds Held in Impound Account.

All funds received from the issuance of shares of Company’s stock will be placed in an escrow account with Impound Agent (the “Impound Account”), to be held by Impound Agent subject to the order of the Regulatory Agency, and shall not become the property of or be released to Company unless and until otherwise released to Company by order of the Regulatory Agency.  All funds in the Impound Account, including any interest earned thereon, shall not be subject to the claims of any creditors of the Company or the Bank or any of their officers, directors, associates or affiliates until such funds in the Impound Account have been released to the Company pursuant to the terms of this Agreement.

4.Subscriptions for Shares.

a.   Subscription agreements for shares of Company’s stock will be completed and submitted to Impound Agent in triplicate, along with checks and other payment orders or wire transfer for the amount of the subscriptions.  Checks and other payment orders shall be made payable to “Pacific Coast Bankers Bank for Manhattan Bancorp Impound Account.”  Company will inform Impound Agent of its intent to accept or reject subscriptions or to accept a subscription in part.  If any subscriptions are rejected or accepted only in part Impound Agent will refund the

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rejected amount, including any interest actually earned thereon, to the Subscriber.  Upon the closing of the Offering, Impound Agent will return one copy of the subscription agreement to the Subscriber, return one copy to Company, and retain one copy for Impound Agent’s records.

b.   In the event that the Company engages one or more members of the National Association of Securities Dealers (each a “Member”) to participate in the effort to sell the shares of the Company’s stock, checks from Subscribers shall be transmitted to the Impound Agent by noon of the next business day after receipt by the Member.

5.Investment of Impound Funds.

All funds received from Subscribers as subscriptions for shares of Company’s stock which are accompanied by copies of executed subscription agreements for such subscriptions and by completed IRS Form W-9, including any interest earnings on such funds, will be placed in the Impound Account with Impound Agent, to be held by Impound Agent in the manner provided in this Agreement.

Upon the clearing of checks received for subscriptions for shares under normal banking practices and as and when directed in writing by Company, Impound Agent shall invest and reinvest available funds deposited with it pursuant to this Agreement in short-term certificates of deposit issued by the Impound Agent.  Impound Agent shall not be liable or responsible for any loss resulting from investments made pursuant to this Section 5, except for losses which result from the gross negligence or intentional misconduct of Impound Agent.

6.Term.

This Impound Agreement shall commence as of the date set forth above and shall expire upon distribution of the Impound Account as described in Section 7, below.

7.Distribution.

a.   Upon receipt of authorization from the Regulatory Agency to release the Impound Account (or portion thereof) to Company, such amount (including any interest earned thereon) shall be released to Company pursuant to Company’s written instruction signed by two of its officers, less the amount of any subscriptions (or portions thereof) the Company rejects in whole or in part as described in Section A hereof.  Such authorization shall be in the form of specific written instructions from the Regulatory Agency to Impound Agent.

b.   If Company with or without the approval of the Regulatory Agency directs Impound Agent to distribute the Impound Account to the Subscribers for any reason, including failure to sell the minimum number of shares offered in the Offering, then the Impound Account (including any interest-actually earned thereon) shall be distributed to the Subscribers as follows: each Subscriber, or a third party as specifically authorized in writing by such subscriber, shall receive the amount of his or her subscription, plus or minus the Subscriber’s pro rata share of any profits or losses incurred and any interest actually earned through the investment of such amounts in Permitted Investments.

c.   In the event that the Impound Account is distributed pursuant to Section 7b, above, all remaining obligations of Company described in Section 9, 10a, 10b and 10f shall remain

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obligations of Company.  The obligations created pursuant to this Section 7c shall continue after the expiration of this Agreement.

d.   In the event that the Impound Account is distributed pursuant to Section 7b, above, or any refunds are distributed pursuant to 4a above, Impound Agent shall, as to each Subscriber, file Form 1099 with the State of California and the Internal Revenue Service, respectively.

8.Information to Company.

From time to time and at least weekly Impound Agent will provide Company with information relative to the total number of subscriptions received pursuant to this Agreement together with the aggregate number of shares for which subscriptions have been received and the total amount of funds received and collected, and the name and address of, and number of shares purchased by each subscriber.  Upon termination or expiration of this Agreement, Impound Agent shall provide an accounting of funds received, invested and disbursed pursuant to this Agreement together with a list of Subscriber names and addresses and the number of shares purchased by each Subscriber, and shall return all original subscription agreements to Company.

9.Unpaid Checks.

In the event that any check received by Impound Agent is returned unpaid by the drawee

bank, Impound Agent will resubmit the check to the drawee financial institution for repayment.  In the event that any such resubmitted check is returned unpaid a second time, Impound Agent may withdraw from the funds held by it pursuant to this Agreement the amount of that check together with an amount representing the applicable savings rate payable on the amount of the check for the period during which the funds are credited as available funds under this Agreement.  Impound Agent shall forward any such check to Company endorsed to Company without recourse.  In the event that any such check is returned to Impound Agent as unpaid after the funds represented thereby have been distributed to any person, upon notification by Impound Agent Company shall promptly pay the amount of that check to Impound Agent and Impound Agent shall forward the check to Company endorsed to Company without recourse.

10.Rights of Impound Agent.

a.   The Company agrees to pay the regular fees of Impound Agent, as stated on the attached fee schedule, as well as any reasonable fees for extraordinary services performed by Impound Agent pursuant to this Agreement and agreed to in writing by Company.  The Company  also agrees to pay and/or reimburse Impound Agent for its reasonable expenses and disbursements, including those of its agents, consultants and attorneys.  The obligations described in this Section 10a shall continue notwithstanding the expiration or termination of this Agreement for any reason.

b.   If conflicting demands are made or notices served by parties other than the Regulatory Agency  upon Impound Agent with respect to the Impound Account, Impound Agent shall be entitled to refuse to comply with any such claim or demand and to suspend performance of this Agreement so long as such disagreements shall continue; in so doing Impound Agent shall not be held liable for damages or interest to the Organizers of the Bank, to Bank, to Company or to any person (including but not limited to Subscribers) for failure to comply with such conflicting or adverse demands, Impound Agent shall be entitled to continue to refrain and refuse to act until:

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(i)   the rights of the adverse claimants have been finally adjudicated in a court assuming and having jurisdiction of the parties and/or the money, papers, and property involved in the claim or demand; and/or

(ii)  all differences have been settled by mutual agreement and Impound Agent has been notified of the settlement in a writing signed by all of the interested persons.

In the alternative, Impound Agent may file a suit in interpleader for the purpose of having the respective rights of the claimants adjudicated, and deposit with the court all money, papers, and property held pursuant to this Agreement, and the Company agrees to pay all costs, expenses and reasonable attorney’s fees incurred by Impound Agent in connection therewith, the amount thereof to be fixed and a judgment thereof to be rendered by the court in such suit; provided, however, that nothing in this Section 10b shall affect the obligations of the Company, the Organizers of the Bank and Impound Agent to immediately comply with all orders, demands and notices issued by the Regulatory Agency.

c.   Impound Agent shall act as a depository only and is not responsible or liable in any manner whatever for the sufficiency, correctness, genuineness or validity of any instrument deposited with it pursuant to this Agreement, or with respect to the form or execution of any such instrument, or the identity, authority, or rights of any person executing or depositing any such instrument.

d.   No notice, demand or change of instructions shall be of any effect unless made in a writing signed by all parties to this Agreement and mailed or delivered to an authorized officer of Impound Agent at the address set forth below for notices.

e . The Company agrees to hold harmless and indemnify Impound Agent, its directors, officers, employees and agents for any loss, cost, liability, damage or expense, including reasonable attorneys’ fees and expenses, arising out of or relating to this Agreement, the Impound Account, the performance of Impound Agent’s duties under this Agreement, or to any prospectus, disclosure document or any subscription agreement relating to this Agreement; provided, however, that no indemnification will be made for any act of willful misconduct or gross negligence of Impound Agent.

f.  Impound Agent:

(i) shall be deemed conclusively to have given and delivered any notice required to be given or delivered by it pursuant to this Agreement if the same is in writing, signed by any one of Impound Agent’s authorized officers and mailed to Company at the addresses set forth in this Agreement;

(ii) shall be entitled to consult with legal counsel and shall not be liable for any action taken or omitted by that counsel;

(iii) shall not, by act, delay, omission or otherwise, be deemed to have waived any rights or remedies under this Agreement unless such waiver is in a writing signed by Impound Agent; a waiver by Impound Agent of any right or remedy on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on any future occasion;

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(iv) shall not be liable for any action taken or omitted to be taken in good faith, and shall be liable only for its own gross negligence or willful misconduct;

(v) shall be entitled to rely on any paper, request, certificate, schedule, notice or other document which it in good faith believes to be genuine and to have been signed or adopted by the proper party or parties;

(vi) shall under no circumstances be required to risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it,; and

(vii) shall have no duties or responsibilities except those expressly set forth in this Agreement, and the permissive right of Impound Agent to do things or omit to do things as set forth in this Agreement shall not be construed as a duty.

11.Representations Regarding Impound Agent.

Company represents and agrees that it has not made nor will it in the future make any representation that states or implies that Impound Agent has endorsed, recommended or guaranteed the purchase, value, or repayment of the securities offered for sale by Company.

12.Miscellaneous.

a.  This Agreement may be amended only by the written agreement of the Regulatory Agency, Company and Impound Agent.  This Agreement shall be governed by the laws of the State of California.

b.  This Agreement represents the entire agreement between Company and Impound Agent.

If Company or any of its officers, directors or agents has executed any other agreements or documents relating to the subject matter of this Agreement, or if any agreement is deposited under or arises out of this Agreement, Impound Agent shall not be deemed a party to or be responsible for any provision thereof unless expressly set forth in this Agreement or in a Schedule to this Agreement.  Impound Agent shall be under no duty to enforce any such other agreement.  In case of any conflict between this Agreement and any such other agreement or document or any Schedule thereto, the provisions of this Agreement shall be controlling.

c.  This Agreement may be executed and entered into in several counterparts, each of which shall be deemed to be an original, and all of which shall constitute but one and the same instrument.

d.  Impound Agent will not resign as Impound Agent under this Agreement after the receipt of any funds from Subscribers without the express written consent of Company.

e.  Any notice, report, demand, waiver or consent required or permitted pursuant to this Agreement shall be in writing and shall be given by prepaid first class mail, addressed as follows:

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Impound Agent:

Mail Instructions

340 Pine Street, Suite 401

San Francisco, CA 94104

Attention:  Impound Account

Wire Instructions

Pacific Coast Bankers’ Bank
ABA No.   121042484

Attention:  Impound Account FBO
Manhattan Bancorp

To Company:

Manhattan Bancorp
2221 E. Rosecrans Avenue, Suite 131
El Segundo, California  90245

Attention: Jeffrey M. Watson

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IN WITNESS WHEREOF, Company and Impound Agent have executed the Agreement on the day and year first written above.

Manhattan Bancorp

By:

Its:

Pacific Coast Bankers’ Bank

(“Impound Agent”)

By:

Tracy Holcomb

Executive Vice President & COO

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SCHEDULE OF FEES

Schedule of Fees- Settlement Relationship
Basic Impound Account Fee		$2,500.00
Subscription Fee		$10.00 per Subscription
Rejected/Return Subscription Fee		$10.00 per Subscription
Return Checks		$10.00 per check
Miscellaneous Fees at cost:	Postage
	Envelopes
	Address Stamp
	Overnight Delivery
Fees are due and payable upon the release of funds to Company
Schedule of Fees- Impound Services Only
Basic Impound Account Fee		$5,000.00
Subscription Fee		$20.00 per Subscription
Rejected/Return Subscription Fee		$20.00 per Subscription
Return Checks		$20.00 per check
Miscellaneous Fees at cost:	Postage
	Envelopes
	Address Stamp
	Overnight Delivery
Fees are due and payable upon the release of funds to Company

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CORRESP

KING, HOLMES, PATERNO & BERLINER, LLP
1900 AVENUE OF THE STARS
SUITE 2500
LOS ANGELES, CALIFORNIA  90067
(310) 282-8989

February 5, 2007

VIA EDGAR TRANSMISSION

Securities and Exchange Commission
100 F Street N.E.
Washington, D.C.  20549

Re:Manhattan Bancorp— Form SB-2

Ladies and Gentlemen:

On behalf of Manhattan Bancorp, a California corporation (the “Company”), we enclose for filing pursuant to the Securities Act of 1933, as amended, a Registration Statement on Form SB-2, with exhibits, covering a best efforts initial public offering of up to 3,000,000 shares of the Company’s common stock.

Please direct any questions or comments you may have concerning the enclosed Registration Statement to the undersigned at (310) 282-8911 or Beletsky@khpblaw.com or to Keith T. Holmes, Esq. at (310) 282-8989 or Holmes@khpblaw.com

Sincerely,

/s/ Madge S. Beletsky

MADGE S. BELETSKY

of King, Holmes, Paterno & Berliner, LLP