8-K

   


                        SECURITIES AND EXCHANGE COMMISSION


                              Washington, D.C. 20549


                                     FORM 8-K

                      Pursuant to Section 13 or 15(d) of the 
                          Securities Exchange Act of 1934



   Date of Report (Date of earliest event reported):  
                    December 19, 1996


                         CALIFORNIA COMMERCIAL BANKSHARES
      (Exact name of registrant as specified in its charter)



   California                 2-78788                    
93-3748495   
(State or other                 (Commission                 (IRS
Employer
jurisdiction of                 File Number)           
Identification No.)
incorporation)


            4100 Newport Place, Newport Beach, California  92660 

  (Address of principal executive offices)                (Zip
Code)



     Registrant's telephone number including area code:  (714)
863-2300


         (Former name or former address, if changed since last
report.)
         Not applicable.


                 _______________________________________________
                       ____________________________________





Item 5.  Other Events.

             Proposed Merger with Monarch Bancorp.  On December
19,
1996, California Commercial Bankshares (the "Company") and
Monarch Bancorp ("Monarch") executed an Agreement and Plan of
Merger (the "Plan") pursuant to which the Company agreed to merge
with and into Monarch (the "Merger").  The Merger is subject to
(i) receipt of regulatory and shareholder approvals, (ii) the
listing by Monarch of its common stock on the NASDAQ National
Market System, (iii) the concurrent merger of Monarch Bank with
and into the Company's wholly owned subsidiary, National Bank of
Southern California (the "Bank Merger"), and (iv) other customary
closing conditions.  It is estimated that the Merger will be
consummated by the end of the second quarter of 1997, subject to
satisfaction of closing conditions. 

             The Company also agreed to issue an option to
acquire
up to 19.9% of the Company's Common Stock if certain acquisition
transactions occur.  In addition, four directors of the Company,
holding in the aggregate ___% of the Company's Common Stock, each
executed a shareholder agreement pursuant to which they agreed,
in their capacity as shareholder, to vote their shares in favor
of the Merger.  The Company agreed to cause certain of its
remaining directors to execute similar shareholder agreements on
or prior to January 10, 1997.

             Upon completion of the Merger and the Bank Merger,
Monarch, as the surviving corporation, will own Western Bank in
Los Angeles and National Bank of Southern California (the "Bank")
in Newport Beach.  Monarch Bank in Laguna Niguel will operate as
a division of the Bank.  The assets of the combined companies
were $840 million at September 30, 1996.

             Under the terms of the Merger, each shareholder of
the
Company will receive shares in Monarch having a year-end fully
diluted adjusted book value equal to 1.6 times the year-end fully
diluted adjusted book value of the Company.  Adjustments to book
value will include certain expenses related to the Merger.  Based
upon current estimates of book value and the existing capital
structures of the two companies, it is estimated that each
shareholder of the Company will receive approximately eight
shares of Monarch for each share of the Company held upon
consummation of the Merger.

             Upon consummation of the Merger, William Jacoby will
continue as Chairman of the Board of the Bank and will become a
director of Monarch.  Mark Stuenkel will continue as President of
the Bank and will also become a director of Monarch.  In
addition, Robert McKay, Chairman of the Company, will become a
director of Monarch.

             Financial Institutions Partners' Suit.  On December
20,
1996, the Company was informed that Financial Institutions
Partners, Inc. ("FIP") had filed suit against the Company in the
United States District Court for the Central District of
California.  As of the date hereof, the Company has not been
served and has not been provided with a copy of the complaint.

             In December 1995, FIP purchased 288,888 shares of
the
Company's Common Stock (the "Initial Shares") in a private
placement at $6.75 per share ($1,949,994 in the aggregate). 
Under the terms of the Company's agreements with FIP, FIP agreed
to purchase an additional 266,659 shares of the Company's Common
Stock (the "Additional Shares") on or prior to May 1, 1996,
subject to satisfaction of certain closing conditions.  FIP has
contended that these closing conditions were not, and could not
be, satisfied by the Company.
   
             On June 11, 1996, FIP demanded that the Company
either
(i) extend the agreement until December 31, 1996 at an increased
purchase price based upon the earnings of the Company from June
1, 1996 through November 30, 1996, or (ii) repurchase the Initial
Shares for an amount equal to the purchase price, plus $6.00,
plus 9% interest, plus FIP's legal, accounting and due diligence
expenses.  The Company has had periodic discussions with FIP
regarding the purchase of the Additional Shares by FIP from the
Company, but has been unable to reach agreement with FIP.

             According to information provided by FIP to the
Company, FIP purchased 59,909 additional shares of the Company's
Common Stock in the open market on April 24, 1996. 

             On December 12, 1996, FIP informed the Company that
it
intended to sue the Company for fraud and breach of contract,
unless FIP's demands were met.  Monarch was provided with
information related to FIP's demands prior to execution of the
Plan.

             Under the terms of the Plan, if additional shares of
the Company's Common Stock are issued to FIP prior to
consummation of the Merger, such shares will be disregarded for
purposes of calculating the adjusted fully diluted book value of
the Company.   

Item 7.  Financial Statements and Exhibits

             Exhibits

             2.1   Agreement and Plan of Merger dated December
19,
                   1996 between Monarch and the Company (without
                   Annexes)

             2.2   Stock Option Agreement dated December 19, 1996
                   between Monarch and the Company

             2.3   Shareholder Agreement dated December 19, 1996
                   between Monarch and William Jacoby

             2.4   Shareholder Agreement dated December 19, 1996
                   between Monarch and Robert McKay

             2.5   Shareholder Agreement dated December 19, 1996
                   between Monarch and Mark Stuenkel

             2.6   Shareholder Agreement dated December 19, 1996
                   between Monarch and James Hamilton

             Pursuant to the requirements of the Securities
Exchange
Act of 1934, Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

                                      CALIFORNIA COMMERCIAL
BANKSHARES

                                                                  
    
                                      By: ___/s/ Abdul Memon___
                                        
                                           



Dated:  December 27, 1996

EX-2

               
Exhibit 2.1


                AGREEMENT AND PLAN OF MERGER

         DATED AS OF THE 19th DAY OF DECEMBER, 1996

                       BY AND BETWEEN

                       MONARCH BANCORP

                             AND

              CALIFORNIA COMMERCIAL BANKSHARES



          AGREEMENT AND PLAN OF MERGER, dated as of the 19th
day of December, 1996 (this "Plan"), by and between Monarch
Bancorp, a California corporation ("Monarch"), and
California Commercial Bankshares, a California corporation
(the "Company").


                          RECITALS:

          A.  Monarch.  Monarch is a corporation duly incor-
porated, validly existing and in good standing under the
laws of the State of California, with its principal
executive offices located in Laguna Niguel, California.  As
of the date hereof, Monarch has (i) 100 million authorized
shares of common stock, no par value ("Monarch Common
Stock"), of which no more than 36,818,216 shares were
outstanding as of the date hereof (including 2,443,395
shares to be issued upon the completion of the exercise of
certain options and warrants), (ii) 5 million authorized
shares of preferred stock, none of which were outstanding,
and (iii) no other class of capital stock authorized. 
Monarch is a bank holding company duly registered with the
Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") under the Bank Holding Company Act
of 1956, as amended (the "BHC Act").  


          B.  Monarch Rights, Etc.  Monarch does not have
any shares of its capital stock reserved for issuance, any
outstanding option, call or commitment relating to shares of
its capital stock or any outstanding securities, obligations
or agreements convertible into or exchangeable for, or
giving any person any right (including, without limitation,
preemptive rights) to subscribe for or acquire from it, any
shares of its capital stock (collectively, "Monarch
Rights"), except pursuant to the options, warrants, awards
and other rights described on Annex 1(which includes details
on the terms and conditions of any such Monarch Rights,
including the grantee, vesting periods and exercise prices
of any options and the exercise price of any warrants).

          C.  The Company.  The Company is a corporation
duly incorporated, validly existing and in good standing
under the laws of the State of California, with its
principal executive offices located in Newport Beach,
California.  As of the date hereof, the Company has (i)
10,000,000 authorized shares of common stock, no par value
("Company Common Stock"), of which no more than 3,193,822
shares were outstanding as of the date hereof (including
236,750 shares to be issued upon the completion of the
exercise of certain options, warrants and awards), (ii)
1,000,000 authorized shares of preferred stock, none of
which were outstanding, and (iii) no other class of capital
stock authorized.  The Company is a bank holding company
duly registered with the Federal Reserve Board under the BHC
Act.

          D.  Company Rights, Etc.  The Company does not
have any shares of its capital stock reserved for issuance,
any outstanding option, call or commitment relating to
shares of its capital stock or any outstanding securities,
obligations or agreements convertible into or exchangeable
for, or giving any person any right (including, without
limitation, preemptive rights) to subscribe for or acquire
from it, any shares of its capital stock (collectively,
"Company Rights"), except pursuant to the options, warrants,
awards, and other rights described on Annex 2 (which
includes details on the terms and conditions of any Company
Rights, including the grantee, vesting periods and exercise
prices of any options).

          E.  Board Approvals.  The respective Boards of
Directors of Monarch and the Company have duly approved this
Plan and have duly authorized its execution and delivery.

          F.  Intention of the Parties.  It is the intention
of the parties to this Plan that (a) the Merger (as
hereinafter defined) (i) for federal income tax purposes
shall qualify as a "reorganization" within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended
(the "Code") and (ii) for accounting purposes shall qualify
as a "pooling of interests" and (b) concurrently with the
Merger, Monarch Bank, a wholly-owned Subsidiary of Monarch,
shall be merged into National Bank of Southern California
(the "Company Bank"), a wholly-owned Subsidiary of the
Company, with the Company Bank as the survivor (the "Bank
Merger").

          G.   Stock Option Agreement.  Concurrently
herewith, the Company and Monarch are entering into a Stock
Option Agreement, to be dated the date hereof, whereby the
Company will grant to Monarch the option to purchase up to
19.9% of the outstanding shares of the Company Common Stock
upon the occurrence of certain events.

          In consideration of their mutual promises and
obligations hereunder, the parties hereto adopt and make
this Plan and prescribe the terms and conditions hereof and
the manner and basis of carrying it into effect, which shall
be as follows:


                   ARTICLE I.  THE MERGER

          SECTION 1.1.  Structure of the Merger.  On the
Effective Date (as defined in Section 7.1 hereof), the
Company will merge (the "Merger") with and into Monarch,
with Monarch being the surviving corporation (the "Surviving
Corporation"), pursuant to the provisions of, and with the
effect provided in, the California General Corporation Law
(the "State Corporation Law").  The separate corporate
existence of the Company shall thereupon cease.  The
Surviving Corporation shall continue to be governed by the
State Corporation Law and its separate corporate existence
with all of its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger.  At the
Effective Time (as defined in Section 7.1 hereof), the arti-
cles of incorporation and by-laws of the Surviving
Corporation shall be the articles of incorporation and
by-laws of Monarch immediately prior to the Effective Time.

          SECTION 1.2.  Effect on Outstanding Shares. 
(a)  By virtue of the Merger, each share of Company Common
Stock issued and outstanding at the Effective Time (other
than (i) shares which have not been voted in favor of the
approval of this Plan and with respect to which dissenters'
rights shall have been perfected in accordance with State
Corporation Law (the "Dissenters' Shares") and (ii) shares
held directly or indirectly by Monarch, other than shares
held in a fiduciary capacity or in satisfaction of a debt
previously contracted) shall become and be converted,
automatically and without any action on the part of the
holder thereof, into that number of shares of Monarch Common
Stock (the "Conversion Number") equal to the quotient
obtained by dividing (i) 1.6 times the Company's Per Share
Book Value (as defined in Section 8.1 hereof) by
(ii) Monarch's Per Share Book Value (as defined in Section
8.1 hereof) (the aggregate of all such shares of Monarch
Common Stock is hereinafter called the "Merger
Consideration").

          (b)  At the Effective Time, the issued and
outstanding shares of Monarch Common Stock, including shares
issued pursuant to Section 1.2(a) hereof, shall constitute
all of the issued and outstanding shares of capital stock of
the Surviving Corporation.

          (c)  If Monarch effects a stock dividend,
reclassification, recapitalization, split-up, combination,
exchange of shares or similar transaction after the date
hereof and before the Effective Time, the Conversion Number
shall, if necessary, be adjusted.  As of the Effective Time,
each share of Company Common Stock held directly or
indirectly by Monarch, other than shares held in a fiduciary
capacity or in satisfaction of a debt previously contracted,
shall be cancelled, retired and cease to exist, and no
exchange or payment shall be made in respect thereof.

          (d)  No fractional shares of Monarch Common Stock
shall be issued pursuant hereto.  In lieu of the issuance of
any fractional share of Monarch Common Stock pursuant to
Section 1.2(a) hereof, cash adjustments will be paid to
holders in respect of any fractional share of Monarch Common
Stock that would otherwise be issuable; the amount of such
cash adjustment shall be equal to such fractional proportion
of the average closing price of a share of Monarch Common
Stock as quoted on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") for the five
trading days immediately prior to and including the trading
day next preceding the Effective Time or, if the Monarch
Common Stock is not then quoted on NASDAQ, such fractional
proportion of an amount equal to the Monarch Per Share Book
Value multiplied by 1.6.

          (e)  Dissenters' Shares shall be purchased and
paid for in accordance with Section 1300 et. seq. of the
State Corporation Law.

          SECTION 1.3.  Exchange Procedures.  (a)  At and
after the Effective Time, each certificate theretofore
representing shares of Company Common Stock (each, a
"Certificate") shall represent only the right to receive the
applicable portion of the Merger Consideration without
interest.

          (b)  As of the Effective Time, Monarch shall
deposit, or shall cause to be deposited, with such bank or
trust company as Monarch shall elect (which may be a
Subsidiary of Monarch) (the "Exchange Agent"), for the
benefit of the holders of shares of Company Common Stock,
for exchange in accordance with this Section 1.3,
certificates representing the shares of Monarch Common Stock
and cash in lieu of fractional shares to be exchanged
pursuant to Section 1.2 hereof for outstanding shares of
Company Common Stock.

          (c)  As soon as practicable after the Effective
Time, Monarch shall cause the Exchange Agent to mail to each
holder of record of a Certificate or Certificates the
following: (i) a letter of transmittal specifying that
delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon delivery of the
Certificates and, in the case of holders of more than 5% of
the Company Common Stock at the Effective Time, the letter
referred to in Section 4.13(b) hereof, to the Exchange
Agent, which transmittal letter shall be in a form and
contain any other customary provisions as Monarch may
determine; and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the applicable
portion of the Merger Consideration.  Upon the proper
surrender of a Certificate to the Exchange Agent, together
with a properly completed and duly executed letter of
transmittal, the holder of such Certificate shall be
entitled to receive in exchange therefor (1) a certificate
representing the number of whole shares of Monarch Common
Stock and (2) a check representing the amount of cash in
lieu of any fractional shares and unpaid dividends and
distributions, if any, which such holder has the right to
receive in respect of the Certificate surrendered pursuant
to the provisions hereof, and the Certificate so surrendered
shall forthwith be cancelled.  No interest will be paid or
accrued on the Merger Consideration.  In the event of a
transfer of ownership of any shares of Company Common Stock
not registered in the transfer records of the Company, the
exchange described in this Section 1.3(c) may nonetheless be
effected if the Certificate representing such Company Common
Stock is presented to the Exchange Agent, accompanied by
documents sufficient, in the discretion of Monarch and the
Exchange Agent, (i) to evidence and effect such transfer but
for the provisions of Section 1.3(e) hereof and (ii) to
evidence that all applicable stock transfer taxes have been
paid.

          (d)  Whenever a dividend or other distribution is
declared by Monarch on Monarch Common Stock, the record date
for which is at or after the Effective Time, the declaration
shall include dividends or other distributions on all shares
issuable pursuant to this Plan; provided, however, that no
dividend or other distribution declared or made on Monarch
Common Stock shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of
Monarch Common Stock represented thereby until the holder of
such Certificate shall duly surrender such Certificate in
accordance with this Section 1.3.  Following such surrender
of any such Certificate, there shall be paid to the holder
of the certificates representing whole shares of Monarch
Common Stock issued in exchange therefor, without interest,
(i) at the time of such surrender, the amount of dividends
or other distributions having a record date after the
Effective Time theretofore payable with respect to such
whole shares of Monarch Common Stock and not yet paid and
(ii) at the appropriate payment date, the amount of
dividends or other distributions having (x) a record date
after the Effective Time but prior to surrender and (y) a
payment date subsequent to surrender with respect to such
whole shares of Monarch Common Stock.

          (e)  From and after the Effective Time, there
shall be no transfers on the stock transfer records of the
Company of any shares of Company Common Stock that were
outstanding immediately prior to the Effective Time.  If
Certificates are presented to the Surviving Corporation
after the Effective Time, they shall be cancelled and
exchanged for the Merger Consideration deliverable in
respect thereof pursuant to this Plan in accordance with the
procedures set forth in this Section 1.3.

          (f)  Any portion of the aggregate Merger
Consideration that remains unclaimed by the shareholders of
the Company for six months after the Effective Time shall be
returned by the Exchange Agent to the Surviving Corporation. 
Any shareholder of the Company who has not theretofore
complied with this Section 1.3 shall thereafter be entitled
to look only to the Surviving Corporation for payment of the
Merger Consideration deliverable in respect of each share of
Company Common Stock held by such shareholder without any
interest thereon.  If Certificates are not surrendered or
the consideration therefor is not claimed prior to the date
on which such consideration would otherwise escheat to or
become the property of any governmental unit or agency, the
unclaimed consideration shall, to the extent permitted by
abandoned property and any other applicable law, become the
property of Monarch (and to the extent not in its possession
shall be paid over to Monarch), free and clear of all claims
or interest of any person previously entitled to such
claims.  Notwithstanding the foregoing, none of Monarch, the
Surviving Corporation, the Exchange Agent or any other
person shall be liable to any former holder of Company
Common Stock for any amount delivered to a public official
pursuant to applicable abandoned property, escheat or
similar laws.

          (g)  In the event any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming such Certificate to be
lost, stolen or destroyed and, if required by the Exchange
Agent, the posting by such person of a bond in such amount
as the Exchange Agent may direct as indemnity against any
claim that may be made against it with respect to such
Certificate, the Exchange Agent will effect the exchange of
such lost, stolen or destroyed Certificate for the portion
of the Merger Consideration deliverable in exchange
therefor.

          SECTION 1.4.  Dissenters' Rights.  Any Dissenting
Shareholder who shall be entitled to be paid the "fair
market value" of his or her Dissenters' Shares, as provided
in Section 1300 of the State Corporation Law, shall not be
entitled to the Merger Consideration in respect thereof
unless and until such Dissenting Shareholder shall have
failed to perfect or shall have effectively withdrawn or
lost such Dissenting Shareholder's right to dissent from the
Merger under the State Corporation Law, and shall be
entitled to receive only the payment provided for by
Section 1300 of the State Corporation Law with respect to
such Dissenters' Shares.  If any Dissenting Shareholder
shall fail to perfect or shall have effectively withdrawn or
lost such right to dissent, the Dissenters' Shares held by
such Dissenting Shareholder shall thereupon be treated as
though such Dissenters' Shares had been converted into the
right to receive the Merger Consideration pursuant to
Section 1.2 hereof.

          SECTION 1.5.  Options.  At the Effective Time,
each option granted by the Company to directors, officers
and employees of the Company and the Company Bank to
purchase shares of Company Common Stock which, at the
Effective Time, is outstanding and has not been exercised (a
"Company Option"), shall be converted into an option to
purchase shares of Monarch Common Stock in accordance with
the terms of the applicable Company stock option plan and
the stock option agreement by which it is evidenced.  From
and after the Effective Time, (i) each Company Option may be
exercised solely for shares of Monarch Common Stock,
(ii) the number of shares of Monarch Common Stock subject to
such Company Option shall be equal to the product (rounded
down to the nearest whole share) of multiplying the number
of shares of Company Common Stock subject to such Company
Option immediately prior to the Effective Time by the
Conversion Number and (iii) the per share exercise price
under each such Company Option shall be equal to the
quotient (rounded down to the nearest cent) of dividing the
per share exercise price under each such Company Option by
the Conversion Number.

          SECTION 1.6.  Determinations of December 31, 1996
Shareholders' Equity. (a)  As promptly as practicable, but
no less than seven business days prior to the release of its
1996 earnings, each party hereto shall deliver to the other
its proposed consolidated statement of income and
consolidated balance sheet, and shall cause its independent
accountants to make available to the other party their work
papers.

          (b)  If either party disagrees with the other's
calculation of shareholders' equity, it shall not later than
the day prior to the seventh business day following such
delivery, deliver a notice specifying those items or amounts
on the financial statements as to which it disagrees,
including the reasons for its disagreement and its
calculation of the relevant shareholders' equity.

          (c)  If a notice of disagreement shall be
delivered pursuant to subsection 1.6(b) hereof, the parties
shall, during the 10 days following such delivery, use their
best efforts to reach agreement on the disputed items or
amounts, as may be required, in order to determine the
amount of the relevant shareholders' equity, which amount
shall not be more than the amount thereof shown in the
calculation delivered pursuant to subsection 1.6(a) hereof
nor less than the amount thereof shown in the calculation
delivered pursuant to subsection 1.6(b) hereof.  If during
such period the parties are unable to reach such agreement,
they shall promptly thereafter cause Price Waterhouse LLP or
other firm of independent accountants of nationally
recognized standing reasonably satisfactory to the parties
(who shall not have any material relationship with either of
the parties, other than personal banking relationships that
may be maintained by partners of such firms in their
individual capacity), promptly to review the disputed items
or amounts for the purpose of calculating the relevant
shareholders' equity.  In making such calculation, such
independent accountants shall consider only those items or
amounts as to which a party has disagreed.  Such independent
accountants shall deliver to the parties, as promptly as
practicable, a report setting forth such calculation.  Such
report shall be final and binding upon the parties.  The
cost of such review and report shall be borne (i) by
Monarch, if its consolidated shareholders' equity as
determined pursuant hereto shall be less than 97.5% of that
delivered pursuant to subsection 1.6(a) hereof, (ii) by the
Company if its consolidated shareholders' equity as
determined pursuant hereto shall be less than 97.5% of that
delivered pursuant to subsection 1.6(a) hereof, (iii) by the
challenging party if the consolidated shareholder's equity
of the other party as determined pursuant hereto shall be
not less than 99.5% of that delivered pursuant to subsection
(a) hereof and (iv) otherwise, 50% by each of the parties.

          (d)  The parties agree that they will, and agree
to cause their respective independent accountants to,
cooperate and assist in the preparation of the financial
statements and in the conduct of the audits and reviews
referred to in this Section 1.6, including without
limitation the making available to the extent necessary of
books, records, work papers and personnel.  


           ARTICLE II.  CONDUCT PENDING THE MERGER

          SECTION 2.1.  Conduct of Business Prior to the
Effective Time.  Except as expressly provided in this Plan,
during the period from the date of this Plan to the
Effective Time, each of Monarch and the Company shall, and
shall cause each of its respective Subsidiaries to,
(i) conduct its business in the usual, regular and ordinary
course of business consistent with past practice, (ii) use
its reasonable best efforts to maintain and preserve intact
its business organization, properties, leases, employees and
advantageous business relationships and retain the services
of its officers and key employees, (iii) take no action
which would adversely affect or delay the ability of the
Company or Monarch to obtain any necessary approvals,
consents or waivers of any governmental authority required
for the transactions contemplated hereby or to perform its
covenants and agreements on a timely basis under this Plan
and (iv) take no action that is reasonably likely to have a
Material Adverse Effect (as defined in Section 8.1 hereof)
on either Monarch or the Company.

          SECTION 2.2.  Forbearance.  During the period from
the date of this Plan to the Effective Time, neither Monarch
nor the Company shall, nor shall either permit any of its
respective Subsidiaries to, without in any such case the
prior consent of the other (it being understood that, except
as otherwise specified herein, for purposes of this Section
2.2, a consent shall be deemed given if, within 3 business
days after a request for any such consent is made by one
party, the other party does not object to the action for
which the consent is requested):

          (a)  incur any indebtedness for borrowed money
(other than Federal Funds borrowings) or assume, guarantee,
endorse or otherwise as an accommodation become responsible
for the obligations of any other person;

          (b)  except as contemplated in Recital G and
Schedule 2.2(b) hereto, adjust, split, combine or reclassify
any capital stock; make, declare or pay any dividend or make
any other distribution on, or directly or indirectly redeem,
purchase or otherwise acquire, any shares of its capital
stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or grant
any stock appreciation rights or grant, sell or issue to any
individual, corporation or other person any right or option
to acquire, or securities evidencing a right to convert into
or acquire, any shares of its capital stock, or issue any
additional shares of capital stock except pursuant to the
exercise of stock options, warrants, awards and other rights
outstanding as of the date hereof as set forth on Annexes 1
and 2 and on the terms in effect on the date hereof;

          (c)  other than in the ordinary course of business
consistent with past practice and pursuant to policies
currently in effect, sell, transfer, mortgage, encumber or
otherwise dispose of any of its properties, leases or assets
to any person, or cancel, release or assign any indebtedness
of any such person, except (i) pursuant to contracts or
agreements in force as of the date of this Plan or (ii) any
such action or series of related actions which result in a
pre-tax loss of not more than $100,000;

          (d)  make any capital expenditures, other than
capital expenditures made in the ordinary course of business
consistent with past practice in amounts not exceeding
$25,000 individually or $100,000 in the aggregate;

          (e)  increase in any manner the compensation or
fringe benefits of any of its employees or directors, or
create or institute, or make any payments pursuant to, any
severance plan or package, or pay any pension or retirement
allowance not required by any existing plan or agreement to
any such employees or directors, or become a party to, amend
or commit itself to or fund or otherwise establish any trust
or account related to any Employee Plan (as defined in
Section 3.1(p) hereof), with or for the benefit of any
employee, other than (i) general increases in compensation
for employees in the ordinary course of business consistent
with past practices, (ii) bonuses which have been accrued on
the 1996 financial statements of the relevant party in the
ordinary course of business consistent with past practices
or (iii) any amendment required by applicable law (provided
that any such amendment shall provide the least increase to
cost permitted under such applicable law), or voluntarily
accelerate the vesting of any stock options or other
compensation or benefit;

          (f)  (i)  other than in the ordinary course of
business consistent with past practice in individual amounts
not to exceed $100,000 or in securities transactions as
provided in (f)(ii) below, make any investment either by
contributions to capital, property transfers, or purchase of
any property or assets of any person, provided that neither
party shall make any acquisition of business operations
without the other party's prior consent, or 

          (ii)  other than purchases of direct obligations
     of the United States of America or obligations of U.S.
     government agencies which are entitled to the full
     faith and credit of the United States of America, in
     any case with a remaining maturity at the time of
     purchase of three years or less, purchase or acquire
     securities of any type; provided, however, that, in the
     case of investment securities, either party hereto may
     purchase (or permit a Subsidiary to purchase)
     investment securities if, within one business day after
     such party requests in writing (which notice shall
     describe in detail the investment securities to be
     purchased and the price thereof) that the other consent
     to the making of any such purchase, the other has
     approved such request in writing or has not responded
     in writing to such request; 

          (g)  enter into or terminate any contract or
agreement, or make any change in any of its leases or
contracts, other than with respect to those involving
aggregate payments of less than, or the provision of goods
or services with a market value of less than, $25,000;

          (h)  settle any claim, action or proceeding
involving any liability of it or any of its Subsidiaries for
money damages in excess of $25,000 or material restrictions
upon the operations of the party or any of its Subsidiaries;

          (i)  except in the ordinary course of business and
in amounts less than $100,000, waive or release any material
right or collateral or cancel or compromise any extension of
credit or other debt or claim; provided, however, that
either party hereto may take (or permit a Subsidiary to
take) any such action if, within two business days after
such party requests in writing (which request shall include
information and analyses sufficient for the other party to
assess the proposed action) that the other party consent to
the taking of such action, the other party has approved such
request in writing or has not responded in writing to such
request;

          (j)  make, renegotiate, renew, increase, extend or
purchase any loan, lease (credit equivalent), advance,
credit enhancement or other extension of credit, or make any
commitment in respect of any of the foregoing, except (i) in
the ordinary course of business consistent with past
practice and in conformity with all applicable policies and
procedures (ii) any loans or advances as to which such party
(or a Subsidiary thereof) has a legally binding obligation
to make such loan or advance as of the date hereof and a
description of which has been provided by such party in
writing to the other party prior to the execution of this
Plan; 

          (k)  except as contemplated by Section 4.2 hereof,
change its method of accounting as in effect at December 31,
1995, except as required by changes in generally accepted
accounting principles as concurred in by the party's
independent auditors;

          (l)  engage in any merger, consolidation or other
similar transaction with, or acquire a significant portion
of the capital stock or assets of, any other corporate or
other entity except in the ordinary course of business or in
connection with foreclosures and collection on secured
interests;

          (m)  amend its articles of incorporation or its
by-laws; or

          (n)  agree to, or make any commitment to, take any
of the actions prohibited by this Section 2.2.

          SECTION 2.3.  Cooperation.  (a) Each of Monarch
and the Company shall cooperate with each other in
completing the transactions contemplated hereby and shall
not take, cause to be taken or agree or make any commitment
to take any action: (i) that would cause any of the
representations or warranties of it that are set forth in
Article III hereof not to be true and correct, or (ii) that
is inconsistent with or prohibited by Sections 2.1 or 2.2.

          (b)  Without limiting the generality of the
foregoing, each of Monarch and the Company shall have the
right to have one of its representatives present at all loan
committee meetings or meetings of similar purpose of the
other party or the other party's Subsidiaries, and each
party shall give notice to the other party of any such
meeting one business day prior to such meeting.


        ARTICLE III.  REPRESENTATIONS AND WARRANTIES

          SECTION 3.1.  Representations and Warranties of
the Company.  The Company represents and warrants to Monarch
that, except as to the matters disclosed in a letter of the
Company delivered to Monarch on or prior to the date hereof,
which disclosures shall be deemed to be made with respect to
any applicable representation notwithstanding the specific
section references therein (the "Company Disclosure
Letter"):

          (a)  Recitals True.  The facts set forth in the
Recitals of this Plan with respect to the Company are true
and correct.

          (b)  Capital Stock.  All outstanding shares of
capital stock of the Company and the Company Bank have been
duly authorized and validly issued, are fully paid and
(subject to 12 U.S.C. Section  55 with respect to the
Company Bank) non-assessable and are not subject to any
preemptive rights.

          (c)  Due Organization and Qualification.  The
Company Bank is a national banking association duly
organized, validly existing and in good standing under the
laws of the United States of America.  The Company Bank is a
member of the Bank Insurance Fund ("BIF") of the Federal
Deposit Insurance Corporation (the "FDIC") and all of its
deposits are subject to assessment by the BIF.

          (d)  Corporate Authority.  Each of the Company and
Company Bank has the corporate power and authority, and is
duly qualified in all jurisdictions (except for such
qualifications the absence of which, in the aggregate, would
not have a Material Adverse Effect on the Company) where
such qualification is required, to carry on its business as
it is now being conducted and to own all its properties and
assets, and it has all federal, state, local and foreign
governmental authorizations necessary for it to own or lease
its properties and assets and to carry on its business as it
is now being conducted.

          (e)  Subsidiaries; Significant Investments.  The
only Subsidiaries of the Company are the Company Bank and
Venture Partners, Inc., a California corporation
("Venture").  All of the shares of capital stock of each
such Subsidiary are owned directly and of record by the
Company, free and clear of all liens, claims, encumbrances
and restrictions on transfer, and there is no outstanding
option, call or commitment with respect to any such capital
stock, nor any obligations or agreements convertible into or
exchangeable for, or giving any person any right (including,
without limitation, preemptive rights) to subscribe for or
acquire from either Subsidiary, any shares of its capital
stock.  Neither the Company nor either of its Subsidiaries
owns any equity securities, any security convertible or
exchangeable into an equity security or any rights to
acquire any equity security, except for shares of the
Company Bank and Venture held by the Company.

          (f)  Shareholder Approvals.  

          (i)  Subject to the receipt of required
     shareholder approval of this Plan, this Plan and the
     transactions contemplated herein have been duly
     authorized by all necessary corporate action of the
     Company.  In addition, the Company has received the
     written opinion of The Findley Group to the effect that
     the Merger Consideration to be received by the
     shareholders of the Company is fair to such
     shareholders from a financial point of view and has
     provided true and complete copies of such opinions to
     Monarch.  Subject to receipt of such shareholder
     approval, this Plan is a valid and binding agreement of
     the Company enforceable against it in accordance with
     its terms, subject to bankruptcy, insolvency,
     fraudulent transfer, reorganization, moratorium and
     similar laws of general applicability relating to or
     affecting creditors' rights and to general equity
     principles.

          (ii) The affirmative vote of a majority of the
     outstanding shares of Company Common Stock entitled to
     vote on this Plan is the only shareholder vote required
     by the Company for approval of the Plan and
     consummation of the Merger and the other transactions
     contemplated hereby.

          (g)  No Violations.  The execution, delivery and
performance of this Plan by the Company do not, and the
consummation of the transactions contemplated hereby by the
Company will not, constitute (i) a breach or violation of,
or a default under, any law, rule or regulation or any
judgment, decree, order, governmental permit or license to
which the Company or either of its Subsidiaries (or any of
their respective properties) is subject, or enable any
person to enjoin the Merger or the other transactions
contemplated hereby, (ii) a breach or violation of, or a
default under, the articles of incorporation or by-laws or
similar organizational documents of the Company or either of
its Subsidiaries or (iii) a breach or violation of, or a
default under (or an event which with due notice or lapse of
time or both would constitute a default under), or result in
the termination of, accelerate the performance required by,
or result in the creation of any lien, pledge, security
interest, charge or other encumbrance upon any of the
properties or assets of the Company or either of its
Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, indenture, deed of trust, loan
agreement or other agreement, instrument or obligation to
which the Company or either of its Subsidiaries is a party,
or to which any of their respective properties or assets may
be bound or affected; provided, however, that this clause
(iii) shall not apply to any breach, violation or default of
any such agreement, instrument or obligation which involves
payments to or by the Company or either of its Subsidiaries
of an amount not exceeding $25,000 per year; and the
consummation of the transactions contemplated hereby will
not require any approval, consent or waiver under any such
law, rule, regulation, judgment, decree, order, governmental
permit or license or the approval, consent or waiver of any
other party to any such agreement, indenture or instrument,
other than (i) the required approvals, consents and waivers
of governmental authorities referred to in Section 5.1(b)
hereof, (ii) any such approval, consent or waiver that
already has been obtained, and (iii) any other approvals,
consents or waivers the absence of which, individually or in
the aggregate, would not result in a Material Adverse Effect
on the Company or enable any person to enjoin the Merger or
the Bank Merger.

          (h)  Company Reports.  

          (i)  As of their respective dates, neither the
     Company's Annual Report on Form 10-K for the fiscal
     year ended December 31, 1995, nor any other document
     filed by the Company subsequent to December 31, 1995
     under Section 13(a), 13(c), 14 or 15(d) of the
     Securities Exchange Act of 1934, as amended (the
     "Securities Exchange Act"), each in the form (including
     exhibits) filed with the Securities and Exchange
     Commission (the "SEC") (collectively, the "Company
     Reports"), contained or will contain any untrue
     statement of a Material fact or omitted or will omit to
     state a Material fact required to be stated therein or
     necessary to make the statements made therein, in light
     of the circumstances under which they were made, not
     misleading.  Each of the consolidated balance sheets
     contained or incorporated by reference in the Company
     Reports (including in each case any related notes and
     schedules) fairly presented in all Material respects
     the financial position of the entity or entities to
     which it relates as of its date and each of the
     consolidated statements of income, consolidated
     statements of shareholders' equity and consolidated
     statement of cash flows contained or incorporated by
     reference in the Company Reports (including in each
     case any related notes and schedules) fairly presented
     in all Material respects the results of operations,
     shareholders' equity and cash flows, as the case may
     be, of the entity or entities to which it relates for
     the periods set forth therein (subject, in the case of
     unaudited interim statements, to normal year-end audit
     adjustments that are not Material in amount or effect),
     in each case in accordance with GAAP during the periods
     involved, except as may be noted therein.  

          (ii) The Company and the Company Bank have each
     timely filed all reports, registrations and statements,
     together with any amendments required to be made with
     respect thereto, if any, that they were required to
     file since December 31, 1993 with (i) the SEC, (ii) the
     Federal Reserve Board, (iii) the FDIC, (iv) the BIF,
     (v) the Office of the Comptroller of the Currency (the
     "OCC"), (vi) any state banking commission or other
     regulatory authority (each, a "State Regulator") (such
     entities collectively, the "Regulatory Agencies"), and
     (vii) the National Association of Securities Dealers,
     Inc. and any other self-regulatory organization (an
     "SRO"), and all other Material reports and statements
     required to be filed by them since December 31, 1993,
     including, without limitation, any report or statement
     required to be filed pursuant to the laws, rules or
     regulations of the United States, the Federal Reserve
     Board, the FDIC, the BIF, the OCC, any State Regulator
     or any SRO, and have paid all fees and assessments due
     and payable in connection therewith.

          (i)  Absence of Undisclosed Liabilities and
Certain Changes or Events.  Except as disclosed in the
Company Reports, since December 31, 1995, neither the
Company nor the Company Bank (as defined herein) has
incurred any Material liability, except in the ordinary
course of their business consistent with past practice. 
Since September 30, 1996, there has not been any change in
the business, assets, financial condition, properties,
results of operations or prospects of the Company or the
Company Bank which, individually or in the aggregate, has
had, or is reasonably likely to have, a Material Adverse
Effect on the Company (other than changes in (i) banking
laws or regulations, or interpretations thereof, that affect
the banking industry generally, (ii) the general level of
interest rates or (iii) GAAP).

          (j)  Guarantees; Suretyships; Contingent
Liabilities.  The Company Disclosure Letter lists and
briefly describes all guarantees, matters of suretyship and
similar contingent liabilities, other than loan commitments
and letters of credit issued in the ordinary course of
business, of the Company and its Subsidiaries.

          (k)  Taxes.  All federal, state, local and foreign
tax returns (including information returns) required to be
filed by or on behalf of the Company or its Subsidiaries
have been timely filed or requests for extensions have been
timely filed and any such extension shall have been granted
and not have expired, and all such filed returns are
complete and accurate in all Material respects.  All taxes
shown on such returns have been paid in full and adequate
provision has been made for any such taxes (in accordance
with GAAP) on the Company's balance sheets set forth in the
Company Reports.  There is no pending audit examination,
assessment or proposed assessment of a deficiency, or refund
litigation with respect to any taxes of the Company or its
Subsidiaries.  All taxes, interest, additions, and penalties
due with respect to completed and settled examinations or
concluded litigation relating to it have been paid in full
or adequate provision has been made for any such taxes (in
accordance with generally accepted accounting principles) on
the Company's balance sheet as set forth in the Company
Reports.  Neither the Company nor either of its Subsidiaries
has executed an extension or waiver of any statute of
limitations on the assessment or collection of any tax due
that is currently in effect.  

     No liens or other security interests have been imposed
on any assets of the Company or its Subsidiaries in
connection with any failure (or alleged failure) to pay any
tax.  The Company and its Subsidiaries have timely withheld,
and paid over to the relevant governmental authority or
other appropriate payee, all taxes required to have been
withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor,
stockholder, or other person.  Neither the Company nor
either of its Subsidiaries is a party to any tax allocation
or sharing agreement, is or has been a member of an
affiliated group filing consolidated or combined tax returns
(other than a group the common parent of which is or was the
Company) or otherwise has any liability for the taxes of any
person (other than the Company or its Subsidiaries).  For
purposes of this paragraph (k), "taxes" includes all
federal, state, local or foreign income, gross receipts,
windfall profits, severance, property, production, sales,
use, license, excise, franchise, employment, withholding or
similar taxes imposed on the income, properties or
operations of the Company or its Subsidiaries, together with
any interest additions or penalties with respect thereto and
any interest in respect of such additions or penalties.

          (l)  Absence of Claims.  As of the date hereof,
there is no pending litigation, controversy, claim, action
or proceeding against the Company or its Subsidiaries before
any court or governmental agency, and, to the best of the
Company's knowledge after reasonable inquiry, no such
litigation, proceeding, controversy, claim or action has
been threatened or is contemplated.  As of the Effective
Time and except as disclosed in the Company Disclosure
Letter, there is no pending litigation, controversy, claim,
action or proceeding against the Company or its Subsidiaries
before any court or governmental agency, which is reasonably
likely, individually or in the aggregate, to have a Material
Adverse Effect on the Company or to hinder or delay
consummation of the transactions contemplated hereby and, to
the best of the Company's knowledge after reasonable
inquiry, no such litigation, proceeding, controversy, claim
or action has been threatened or is contemplated.

          (m)  Absence of Regulatory Actions.  Neither the
Company nor either of its Subsidiaries is a party to any
cease and desist order, written agreement or memorandum of
understanding with, or a party to any commitment letter or
similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board
resolutions at the request of, federal or state governmental
authorities charged with the supervision or regulation of
depository institutions or depositary institution holding
companies or engaged in the insurance of bank and/or savings
and loan deposits ("Government Regulators") nor has it been
advised by any Government Regulator that it is contemplating
issuing or requesting (or is considering the appropriateness
of issuing or requesting) any such order, directive, written
agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter, board resolutions or
similar undertaking.

          (n)  Agreements.  

          (i)  Except for this Plan and arrangements made in
     the ordinary course of business, the Company and its
     Subsidiaries are not bound by any material contract (as
     defined in Item 601(b)(10) of Regulation S-K) to be
     performed after the date hereof that has not been filed
     with or incorporated by reference in the Company
     Reports.  Except as disclosed in the Company Reports
     filed prior to the date of this Plan, neither the
     Company nor either of its Subsidiaries is a party to an
     oral or written (A) consulting agreement (other than
     data processing, software programming and licensing
     contracts entered into in the ordinary course of
     business) not terminable on 30 days' or less notice
     involving the payment of more than $25,000 per annum,
     in the case of any such agreement with an individual,
     or $50,000 per annum, in the case of any other such
     agreement, (B) agreement with any executive officer or
     other key employee of the Company or either of its
     Subsidiaries the benefits of which are contingent, or
     the terms of which are materially altered, upon the
     occurrence of a transaction involving the Company or
     the Company Bank of the nature contemplated by this
     Plan and which provides for the payment of in excess of
     $50,000, (C) agreement with respect to any executive
     officer of the Company or either of its Subsidiaries
     providing any term of employment or compensation
     guarantee extending for a period longer than six months
     and for the payment of in excess of $50,000 per annum,
     (D) agreement or plan, including any stock option plan,
     stock appreciation rights plan, restricted stock plan
     or stock purchase plan, any of the benefits of which
     will be increased, or the vesting of the benefits of
     which will be accelerated, by the occurrence of any of
     the transactions contemplated by this Plan or the value
     of any of the benefits of which will be calculated on
     the basis of any of the transactions contemplated by
     this Plan or (E) agreement containing covenants that
     limit the ability of the Company or the Company Bank to
     compete in any line of business or with any person, or
     that involve any restriction on the geographic area in
     which, or method by which, the Company (including any
     successor thereof) or the Company Bank (including any
     successor thereof) may carry on its business (other
     than as may be required by law or any regulatory
     agency).

          (ii) Neither the Company nor either of its
     Subsidiaries is in default under or in violation of any
     provision of any note, bond, indenture, mortgage, deed
     of trust, loan agreement or other agreement to which it
     is a party or by which it is bound or to which any of
     its respective properties or assets is subject.

          (o)  Labor Matters.  Neither the Company nor
either of its Subsidiaries is a party to, or is bound by,
any collective bargaining agreement, contract, or other
agreement or understanding with a labor union or labor
organization, nor is the Company or either of its
Subsidiaries the subject of any proceeding asserting that it
has committed an unfair labor practice or seeking to compel
it to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike, other
labor dispute or organizational effort involving the Company
or either of its Subsidiaries pending or threatened.

          (p)  Employee Benefit Plans.  The Company
Disclosure Letter contains a complete list of all pension,
retirement, stock option, stock purchase, stock ownership,
savings, stock appreciation right, profit sharing, deferred
compensation, consulting, bonus, group insurance, severance
and other benefit plans, contracts, agreements, policies and
arrangements, including, but not limited to, "employee
benefit plans", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")
and all trust agreements related thereto in respect to any
present or former directors, officers, or other employees of
the Company or its Subsidiaries (hereinafter referred to
collectively as the "Company Employee Plans").  (i) All of
the Company Employee Plans comply in all material respects
with all applicable requirements of ERISA, the Code and
other applicable laws; neither the Company nor the Company
Bank has engaged in a "prohibited transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Code) with
respect to any Company Employee Plan which could subject the
Company or the Company Bank to a material tax or penalty
under Section 4975 of the Code or Section 502(i) of ERISA;
and all contributions required to be made under the terms of
any Company Employee Plan have been timely made or have been
reflected on the Company's balance sheet; (ii) no liability
to the Pension Benefit Guaranty Corporation (the "PBGC") has
been or is expected by the Company or the Company Bank to be
incurred with respect to any Company Employee Plan which is
subject to Title IV of ERISA (a "Company Pension Plan"), or
with respect to any "single-employer plan" (as defined in
Section 4001(a)(15) of ERISA) currently or formerly
maintained by the Company or any entity (a "Company ERISA
Affiliate") which is considered one employer with the
Company under Section 4001 of ERISA or Section 414 of the
Code (a "Company ERISA Affiliate Plan"); and no proceedings
have been instituted to terminate any Company Pension Plan
or Company ERISA Affiliate Plan and no condition exists that
presents a material risk of the institution of such
proceedings; (iii) no Company Pension Plan or Company ERISA
Affiliate Plan had an "accumulated funding deficiency" (as
defined in Section 302 of ERISA (whether or not waived)) as
of the last day of the end of the most recent plan year
ending prior to the date hereof; the fair market value of
the assets of each Company Pension Plan and Company ERISA
Affiliate Plan exceeds the present value of the "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA)
under such Company Pension Plan or Company ERISA Affiliate
Plan as of the end of the most recent plan year with respect
to the respective Company Pension Plan or Company ERISA
Affiliate Plan ending prior to the date hereof, calculated
on the basis of the actuarial assumptions used in the most
recent actuarial valuation for such Company Pension Plan or
Company ERISA Affiliate Plan prior to the date hereof, and
there has been no material change in the financial condition
of any such Company Pension Plan or Company ERISA Affiliate
Plan since the last day of the most recent plan year; and no
notice of a "reportable event" (as defined in Section 4043
of ERISA) for which the 30-day reporting requirement has not
been waived has been required to be filed for any Company
Pension Plan or Company ERISA Affiliate Plan within the
12-month period ending on the date hereof; (iv) neither the
Company nor either of its Subsidiaries has provided or is
required to provide, security to any Company Pension Plan or
to any Company ERISA Affiliate Plan pursuant to
Section 401(a)(29) of the Code; (v) neither the Company,
either of its Subsidiaries, nor any Company ERISA Affiliate
has contributed to any "multiemployer plan", as defined in
Section 3(37) of ERISA, on or after September 26, 1980;
(vi) each Company Employee Plan of the Company or either of
its Subsidiaries which is an "employee pension benefit plan"
(as defined in Section 3(2) of ERISA) has received a
favorable determination letter from the Internal Revenue
Service deeming such plan to be qualified (a "Qualified
Plan"), under Section 401(a) of the Code, or has requested
such a determination letter within the applicable remedial
amendment period under Section 401(b) of the Code; and
neither the Company nor the Company Bank is aware of any
circumstances likely to result in revocation of any such
favorable determination letter; (vii) each Qualified Plan
which is an "employee stock ownership plan" (as defined in
Section 4975(e)(7) of the Code) has satisfied all of the
applicable requirements of Sections 409 and 4975(e)(7) of
the Code and the regulations thereunder; all Company
Employee Plans covering foreign participants comply in all
material respects with applicable local law, and there are
no material unfunded liabilities with respect to any Company
Employee Plan which covers foreign employees; (viii) there
is no pending or, to the Company's knowledge, threatened
litigation, administrative action or proceeding relating to
any Company Employee Plan; (ix) there has been no
announcement or commitment by the Company or the Company
Bank to create an additional Company Employee Plan, or to
amend an Company Employee Plan except for amendments
required by applicable law which do not increase the cost of
such Company Employee Plan; and the Company and its
Subsidiaries do not have any obligations for retiree health
and life benefits under any Company Employee Plan except as
set forth in the Company Disclosure Letter, and there are no
such Company Employee Plans that cannot be amended or
terminated without incurring any liability thereunder;
(x) with respect to the Company or its Subsidiaries, except
as specifically identified in the Company Disclosure Letter,
the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will
not result in any payment or series of payments by the
Company or its Subsidiaries to any person which is an
"excess parachute payment" (as defined in Section 280G of
the Code) under any Company Employee Plan, increase or
secure (by way of a trust or other vehicle) any benefits
payable under any Company Employee Plan, or accelerate the
time of payment or vesting of any such benefit, and (xi)
with respect to each Company Employee Plan, the Company has
supplied to Monarch a true and correct copy, if applicable,
of (A) the two most recent annual reports on the applicable
form of the Form 5500 series filed with the Internal Revenue
Service (the "IRS"), (B) such Company Employee Plan,
including amendments thereto, (C) each trust agreement and
insurance contract relating to such Company Employee Plan,
including amendments thereto, (D) the most recent summary
plan description for such Company Employee Plan, including
amendments thereto, if the Company Employee Plan is subject
to Title I of ERISA, (E) the most recent actuarial report or
valuation if such Company Employee Plan is a Company Pension
Plan, (F) the most recent determination letter issued by the
IRS if such Company Employee Plan is a Qualified Plan and
(G) the most recent financial statements and auditor's
report.

          (q)  Real Property.  (i) The Company Disclosure
Letter contains a complete and correct list of (A) all real
property or premises owned on the date hereof, in whole or
in part by the Company or its Subsidiaries and all
indebtedness secured by any encumbrance thereon, and (B) all
real property or premises leased in whole or in part by the
Company or its Subsidiaries and together with a list of all
applicable leases and the name of the lessor.  None of such
premises or properties have been condemned or otherwise
taken by any public authority and no condemnation or taking
is threatened or contemplated and none thereof is subject to
any claim, contract or law which might affect its use or
value for the purposes now made of it.  None of the premises
or properties of the Company or its Subsidiaries is subject
to any current or potential interests of third parties or
other restrictions or limitations that would impair or be
inconsistent with the current use of such property by the
Company or its Subsidiaries.

          (ii) Each of the leases referred to in the Company
     Disclosure Letter is valid and existing and in full
     force and effect, and no party thereto is in default
     and no notice of a claim of default by any party has
     been delivered to the Company or its Subsidiaries or is
     now pending, and there does not exist any event that
     with notice or the passing of time, or both, would
     constitute a default or excuse performance by any party
     thereto, provided that with respect to matters relating
     to any party other than the Company the foregoing
     representation is based on the knowledge of the
     Company.

          (r)  Title.  The Company and the Company Bank have
good title to its properties and assets (other than (i)
property as to which it is lessee and (ii) real estate owned
as a result of foreclosure, transfer in lieu of foreclosure
or other transfer in satisfaction of a debtor's obligation
previously contracted).

          (s)  Knowledge as to Conditions.  As of the date
hereof, the Company knows of no reason why the approvals,
consents and waivers of governmental authorities referred to
in Section 5.1(b) should not be obtained without the
imposition of any condition of the type referred to in the
provisos thereto.

          (t)  Compliance with Laws.  Since December 31,
1993, the Company and its Subsidiaries have complied in all
Material respects with all applicable laws except for any
noncompliance with any such laws which, individually or in
the aggregate, would not have a Material Adverse Effect on
the Company or enable any Person to enjoin the Merger or the
Bank Merger.  Except as would not have a Material Adverse
Effect on the Company, the Company and the Company Bank have
all permits, licenses, certificates of authority, orders and
approvals of, and has made all filings, applications and
registrations with, federal, state, local and foreign
governmental or regulatory bodies that are required in order
to permit it to carry on its business as it is presently
conducted.  All such permits, licenses, certificates of
authority, orders and approvals are in full force and
effect, and, to the knowledge of the Company, no suspension
or cancellation of any of them is threatened.

          (u)  Fees.  Other than in respect of financial
advisory services performed for the Company by The Findley
Group, in amounts and pursuant to an agreement previously
disclosed to Monarch, none of the Company, its Subsidiaries
or any of their respective officers, directors, employees or
agents, has employed any broker or finder or incurred any
liability for any financial advisory fees, brokerage fees,
commissions, or finder's fees, and no broker or finder has
acted directly or indirectly for the Company or its
Subsidiaries, in connection with the Plan or the
transactions contemplated hereby.

          (v)  Environmental Matters.  (i) the Company and
its Subsidiaries have complied at all times with all
applicable Environmental Laws; (ii) none of the properties
(including buildings or any other structures) currently
owned or operated by the Company or its Subsidiaries
("Company Properties") have been contaminated with, or have
had any release of, any Hazardous Substance (as defined
below); (iii) to the Company's knowledge, none of the
properties formerly owned or operated by the Company or
either of its Subsidiaries have been contaminated with
Hazardous Substances during such period of ownership or
operation; (iv) to the Company's knowledge, neither the
Company nor either of its Subsidiaries is subject to
liability for any Hazardous Substance disposal or
contamination on any third party property; (v) neither the
Company nor either of its Subsidiaries has received any
notice, demand letter, claim or request for information
alleging that the Company or either of its Subsidiaries may
be in violation of or subject to liability under any
Environmental Law (as defined below); (vi) neither the
Company nor either of its Subsidiaries is subject to any
orders, decrees, injunctions or other agreements with any
governmental authority or any third party relating to
Hazardous Substances or any Environmental Law; (vii) there
are no circumstances or conditions involving the Company or
either of its Subsidiaries that could reasonably be expected
to result in any claims, liability, investigations, suits or
costs or result in restrictions on the ownership, use, or
transfer of any Property pursuant to any Environmental Law;
(viii) none of the Properties contain any underground
storage tanks, asbestos-containing material, lead products,
or polychlorinated biphenyls; (ix) to the knowledge of the
Company none of the Properties have ever been operated in
the past as a gas station, automotive repair or supply
business, metalworking operation, industrial facility or as
a drycleaner; (x) neither the Company nor either of its
Subsidiaries has engaged in any activity involving the
generation, use, handling or disposal of any Hazardous
Substances other than ordinary and routine office operations
and maintenance; (xi) neither the Company nor either of its
Subsidiaries has participated in the management of any
borrower or other third party, including entities in which
it may hold a security, fiduciary or other interest, that,
to the Company's knowledge, engage in activities involving
Hazardous Substances to an extent that it could be deemed an
"owner" or "operator" of such entity under any Environmental
Law; and (xii) to the Company's knowledge, the Company has
delivered to Monarch copies of all environmental reports,
studies, sampling data, permits, government filings and
other environmental information in its possession relating
to Company or its Subsidiaries or any of their current or
former properties or operations.

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

          As used herein, the term "Hazardous Substance"
means any substance in any concentration that is:  (A)
listed, classified or regulated pursuant to any
Environmental Law; (B) any petroleum product or by-product,
asbestos-containing material, lead-containing paint or
plumbing, polychlorinated biphenyls, radioactive materials
or radon; or (C) any other substance which is or may be the
subject of regulatory action by any government authority
pursuant to any Environmental Law.

          (w)  Allowance.  The allowance for possible loan
and lease losses shown on the Company's unaudited balance
sheet as of September 30, 1996 was, and the allowance for
possible loan losses shown on the balance sheets in Company
Reports for periods ending after the date of this Plan will
be, adequate, as of the date thereof, under generally
accepted accounting principles applicable to banks and bank
holding companies.  The Company has disclosed to Monarch in
writing prior to the date hereof the amounts of all loans,
leases, advances, credit enhancements, other extensions of
credit, commitments and interest-bearing assets of the
Company and the Company Bank that have been classified as
"Other Assets Specially Mentioned," "Substandard,"
"Doubtful," "Loss," "Classified," "Criticized," "Credit Risk
Assets" or words of similar import.  The Other Real Estate
Owned ("OREO") included in any non-performing assets of the
Company or the Company Bank is carried net of reserves at
the lower of cost or market value, less applicable selling
costs, based on independent appraisals consistent with
applicable regulatory requirements.

          (x)  Material Interests of Certain Persons. 
Except as disclosed in the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996, no
officer or director of the Company, or any "associate" (as
such term is defined in Rule 12b-2 under the Securities
Exchange Act) of any such officer or director, has any
Material interest in any Material contract or property (real
or personal), tangible or intangible, used in or pertaining
to the business of the Company or the Company Bank.

          (y)  Insurance.  The Company and its Subsidiaries
are currently insured, and since December 31, 1993, have
been insured, for reasonable amounts with financially sound
and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance
with good business practice, customarily be insured.  All of
the insurance policies and bonds maintained by the Company
and its Subsidiaries are in full force and effect, the
Company and its Subsidiaries are not in default thereunder
and all Material claims thereunder have been filed in due
and timely fashion.  Since December 31, 1993, no claim by
the Company or its Subsidiaries on or in respect of an
insurance policy or bond has been declined or refused by the
relevant insurer or insurers.  In the best judgment of the
Company's management, such insurance coverage is adequate
and will be available in the future under terms and
conditions substantially similar to those in effect on the
date hereof.  Between the date hereof and the Effective
Time, the Company and its Subsidiaries will maintain the
levels of insurance coverage in effect on the date hereof
and will submit all potential claims existing prior to the
Effective Time to its insurance carrier on or before the
Effective Time.  The Company Disclosure Letter lists all
insurance policies maintained by or for the benefit of the
Company, the Company Bank or their directors, officers,
employees or agents, specifying the (i) type of policy, (ii)
policy limits and (iii) self insurance amounts.

          (z)  Investment Securities.  Except for pledges to
secure public and trust deposits and reverse repurchase
agreements entered into in arm's-length transactions
pursuant to normal commercial terms and conditions and other
pledges required by law, none of the investments reflected
in the consolidated balance sheet of the Company included in
the Company's Report on Form 10-Q for the quarter ended
September 30, 1996, and none of the Material investments
made by it or its Subsidiaries since December 31, 1995, is
subject to any restriction (contractual, statutory or
otherwise) that would materially impair the ability of the
entity holding such investment freely to dispose of such
investment at any time.

          (aa) Derivatives.  Neither the Company nor either
of its Subsidiaries is currently a party to any interest
rate swap, cap, floor, option agreement, other interest rate
risk management arrangement or agreement or derivative-type
security or derivative arrangement or agreement.

          (bb) Registration Obligations.  Neither the
Company nor either of its Subsidiaries is under any
obligation, contingent or otherwise, to register any of its
securities under the Securities Act of 1933, as amended (the
"Securities Act").

          (cc) Books and Records.  The books and records of
the Company and its Subsidiaries have been, and are being,
maintained in accordance with applicable legal and
accounting requirements and reflect in all Material respects
the substance of events and transactions that should be
included therein.

          (dd)  Corporate Documents.  The Company has
delivered to Monarch true and complete copies of (i) its
amended articles of incorporation and amended by-laws and
(ii) the articles of association and by-laws of the Company
Bank.

          (ee) Company Action.  The Board of Directors of
the Company has adopted resolutions recommending that this
Plan be approved by the shareholders of the Company and
directing that this Plan be submitted for consideration by
the Company's shareholders at the Company's Meeting (as
defined below).

          (ff) Indemnification.  Neither the Company nor
either of its Subsidiaries is a party to any indemnification
agreement with any of its present or future directors,
officers, employees, individual agents or other individuals
who serve or served in any other capacity with any other
enterprise at the request of the Company or either of its
Subsidiaries (a "Covered Person"), and to the knowledge of
the Company, there are no claims for which any Covered
Person would be entitled to indemnification under Section
4.6 hereof if such provisions were deemed to be in effect.

          (gg) Loans.  Each loan reflected as an asset on
the Company's consolidated balance sheet as of September 30,
1996 and each balance sheet date subsequent thereto (i) is
evidenced by notes, agreements or other evidences of
indebtedness which are true, genuine and what they purport
to be, (ii) is the legal, valid and binding obligation of
the obligor named therein, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles, and (iii) to the knowledge of the Company, will
not be subject to any defenses which may be asserted against
Company Bank.  All loans and extensions of credit that have
been made by Company Bank and that are subject to
Sections 22(h), 23A and 23B of the Federal Reserve Act
comply therewith.

          (hh) Fair Lending; Community Reinvestment Act.  As
of the date hereof, with the exception of routine
investigation of consumer complaints, neither the Company
nor the Company Bank has been advised that it is or may be
in violation of the Equal Credit Opportunity Act or the Fair
Housing Act or any similar federal or state statute.  The
Company Bank received a CRA rating of "outstanding" in its
most recent CRA examination.

          (ii) No Omission of Material Fact.  No
representation or warranty by the Company in this Plan,
including the Annexes hereto, the disclosure letters and
schedules to be delivered herewith or the Proxy Statement
filed in connection with the Meeting, contains any untrue
statement of Material fact, or omits to state a Material
fact necessary to make the statements or facts contained
herein or therein not misleading.  None of the information
regarding the Company or the Company Bank or the
transactions contemplated hereby supplied or to be supplied
by the Company or the Company Bank for inclusion in any
documents or filings to be filed with any regulatory
authority in connection with the transactions contemplated
hereby will contain any untrue statement of Material fact,
or omit to state a Material fact necessary to make the
statements or facts contained therein not misleading.

          SECTION 3.2.  Representations and Warranties of
Monarch.  Monarch represents and warrants to the Company
that, except as to the matters disclosed in a letter of
Monarch delivered to the Company on or prior to the date
hereof, which disclosures shall be deemed to be made with
respect to any applicable representation notwithstanding the
specific section references therein (the "Monarch Disclosure
Letter"):

          (a)  Recitals True.  The facts set forth in the
Recitals of this Plan with respect to Monarch are true and
correct.

          (b)  Capital Stock.  All outstanding shares of
capital stock of Monarch and its Significant Subsidiaries
(as defined in Rule 1-02 of Regulation S-X) have been duly
authorized and validly issued, are fully paid and (subject
to 12 U.S.C. Section  55 in the case of a national bank
Subsidiary and any similar state statute in the case of a
Subsidiary that is a state-chartered bank) non-assessable
and are not subject to any preemptive rights.

          (c)  Due Organization and Qualification.  Each of
Monarch Bank and Western Bank is a banking corporation duly
organized, validly existing and in good standing under the
laws of the State of California. 

          (d)  Corporate Authority.  Each of Monarch and its
Significant Subsidiaries has the corporate power and
authority, and is duly qualified in all jurisdictions
(except for such qualifications the absence of which, in the
aggregate, would not have a Material Adverse Effect on
Monarch) where such qualification is required, to carry on
its business as it is now being conducted and to own all its
properties and assets, and it has all federal, state, local
and foreign governmental authorizations necessary for it to
own or lease its properties and assets and to carry on its
business as it is now being conducted.

          (e)  Shareholder Approvals.  

          (i) Subject to the receipt of required shareholder
     approval of this Plan, this Plan and the transactions
     contemplated herein have been duly authorized by all
     necessary corporate action of Monarch.  Subject to
     receipt of such shareholder approval, this Plan is and
     will be, a valid and binding agreement of Monarch
     enforceable against it in accordance with its terms,
     subject to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general
     applicability relating to or affecting creditors'
     rights and to general equity principles.

          (ii) The affirmative vote of a majority of the
     outstanding shares of Monarch Common Stock entitled to
     vote on this Plan is the only shareholder vote required
     by Monarch for approval of the Plan and consummation of
     the Merger and the other transactions contemplated
     hereby.

          (f)  No Violations.  The execution, delivery and
performance of this Plan by Monarch do not, and the
consummation of the transactions contemplated hereby by
Monarch will not, constitute (i) a breach or violation of,
or a default under, any law, rule or regulation or any
judgment, decree, order, governmental permit or license to
which Monarch or any of its Subsidiaries (or any of their
respective properties) is subject, which breach, violation
or default would have a Material Adverse Effect on Monarch,
or enable any person to enjoin the Merger or the other
transactions contemplated hereby, (ii) a breach or violation
of, or a default under, the articles of incorporation or by-
laws or similar organizational documents of Monarch or any
of its Subsidiaries or (iii) a breach or violation of, or a
default under (or an event which with due notice or lapse of
time or both would constitute a default under), or result in
the termination of, accelerate the performance required by,
or result in the creation of any lien, pledge, security
interest, charge or other encumbrance upon any of the
properties or assets of Monarch or any of its Subsidiaries
under, any of the terms, conditions or provisions of any
note, bond, indenture, deed of trust, loan agreement or
other agreement, instrument or obligation to which Monarch
or any of its Subsidiaries is a party, or to which any of
their respective properties or assets may be bound or
affected, except for any of the foregoing that, individually
or in the aggregate, would not have a Material Adverse
Effect on Monarch; and the consummation of the transactions
contemplated hereby will not require any approval, consent
or waiver under any such law, rule, regulation, judgment,
decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such
agreement, indenture or instrument, other than (i) the
required approvals, consents and waivers of governmental
authorities referred to in Section 5.1(b) hereof, (ii) any
such approval, consent or waiver that already has been
obtained, and (iii) any other approvals, consents or waivers
the absence of which, individually or in the aggregate,
would not result in a Material Adverse Effect on Monarch or
enable any person to enjoin the Merger or the Bank Merger.

          (g)  Monarch Reports.  

          (i) As of their respective dates, neither
     Monarch's Annual Report on Form 10-KSB for the fiscal
     year ended December 31, 1995, nor any other document
     filed by Monarch subsequent to December 31, 1995 under
     Section 13(a), 13(c), 14 or 15(d) of the Securities
     Exchange Act, each in the form (including exhibits)
     filed with the SEC (collectively, the "Monarch
     Reports"), contained or will contain any untrue
     statement of a Material fact or omitted or will omit to
     state a Material fact required to be stated therein or
     necessary to make the statements made therein, in light
     of the circumstances under which they were made, not
     misleading.  Each of the consolidated balance sheets or
     statements of condition contained or incorporated by
     reference in Monarch Reports (including in each case
     any related notes and schedules) fairly presented in
     all Material respects the financial position of the
     entity or entities to which it relates as of its date
     and each of the consolidated statements of income,
     consolidated statements of changes in shareholders'
     equity and consolidated statements of cash flows
     contained or incorporated by reference in Monarch
     Reports (including in each case any related notes and
     schedules) fairly presented in all Material respects
     the results of operations, shareholders' equity and
     cash flows, as the case may be, of the entity or
     entities to which it relates for the periods set forth
     therein (subject, in the case of unaudited interim
     statements, to normal year-end audit adjustments that
     are not Material in amount or effect), in each case in
     accordance with GAAP during the periods involved,
     except as may be noted therein.

          (ii) Monarch and each of its Subsidiaries have
     each timely filed all reports, registrations and
     statements, together with any amendments required to be
     made with respect thereto, if any, that they were
     required to file since December 31, 1993 with the
     Regulatory Agencies, the National Association of
     Securities Dealers, Inc. and any other SRO, and all
     other Material reports and statements required to be
     filed by them since December 31, 1993, including,
     without limitation, any report or statement required to
     be filed pursuant to the laws, rules or regulations of
     the United States, the Federal Reserve Board, the FDIC,
     the BIF, the OCC, any State Regulator or any SRO, and
     have paid all fees and assessments due and payable in
     connection therewith.

          (h)  Absence of Certain Undisclosed Liabilities
and Certain Changes or Events.  Except as disclosed in the
Monarch Reports, since December 31, 1995, neither Monarch
nor any of its Significant Subsidiaries has incurred any
Material liability, except in the ordinary course of their
business consistent with past practice.  Since September 30,
1996, there has not been any change in the business, assets,
financial condition, properties, results of operations or
prospects of Monarch or any of its Significant Subsidiaries
which, individually or in the aggregate, has had, or is
reasonably like to have, a Material Adverse Effect on
Monarch (other than changes in (i) banking laws or
regulations, or interpretations thereof, that affect the
banking industry generally, (ii) the general level of
interest rates or (iii) GAAP).

          (i)  Guarantees; Suretyships; Contingent
Liabilities.  The Monarch Disclosure Letter lists and
briefly describes all guarantees, matters of suretyship and
similar contingent liabilities, other than loan commitments
and letters of credit issued in the ordinary course of
business, of Monarch and its Subsidiaries.

          (j)  Taxes.  All federal, state, local, and
foreign tax returns (including information returns) required
to be filed by or on behalf of Monarch or any of its
Subsidiaries have been timely filed or requests for
extensions have been timely filed and any such extension
shall have been granted and not have expired, and all such
filed returns are complete and accurate in all Material
respects.  All taxes shown on such returns have been paid in
full and adequate provision has been made for any such taxes
(in accordance with GAAP) on Monarch's balance sheets set
forth in Monarch Reports.  There is no pending audit
examination, assessment or proposed assessment of a
deficiency, or refund litigation with respect to any taxes
of Monarch or any of its Subsidiaries.  All taxes, interest,
additions, and penalties due with respect to completed and
settled examinations or concluded litigation relating to it
have been paid in full or adequate provision has been made
for any such taxes (in accordance with generally accepted
accounting principles) on Monarch's balance sheet as set
forth in the Monarch Reports.  Neither Monarch nor any of
its Subsidiaries has executed an extension or waiver of any
statute of limitations on the assessment or collection of
any tax due that is currently in effect.  

          No liens or other security interests have been
imposed on any assets of Monarch or any of its Subsidiaries
in connection with any failure (or alleged failure) to pay
any tax.  Monarch and each of its Subsidiaries have timely
withheld, and paid over to the relevant governmental
authority or other appropriate payee, all taxes required to
have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor,
stockholder, or other person.  Neither Monarch nor any
Subsidiary is a party to any tax allocation or sharing
agreement, is or has been a member of an affiliated group
filing consolidated or combined tax returns (other than a
group the common parent of which is or was Monarch) or
otherwise has any liability for the taxes of any person
(other than Monarch or any of its Subsidiaries).  For
purposes of this paragraph (j), "taxes" includes all
federal, state, local or foreign income, gross receipts,
windfall profits, severance, property, production, sales,
use, license, excise, franchise, employment, withholding or
similar taxes imposed on the income, properties or
operations of Monarch or any of its Subsidiaries, together
with any interest additions or penalties with respect
thereto and any interest in respect of such additions or
penalties.

          (k)  Absence of Claims.  As of the date hereof,
there is no pending litigation, controversy, claim, action
or proceeding against Monarch or any of its Subsidiaries
before any court or governmental agency, and, to the best of
Monarch's knowledge after reasonable inquiry, no such
litigation, proceeding, controversy, claim or action has
been threatened or is contemplated.  As of the Effective
Time and except as disclosed in the Monarch Disclosure
Letter, there is no pending litigation, controversy, claim,
action or proceeding against Monarch or any of its
Subsidiaries before any court or governmental agency, which
is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on Monarch or to hinder or
delay consummation of the transactions contemplated hereby
and, to the best of Monarch's knowledge after reasonable
inquiry, no such litigation, proceeding, controversy, claim
or action has been threatened or is contemplated.

          (l)  Absence of Regulatory Actions.  Neither
Monarch nor any of its Subsidiaries is a party to any cease
and desist order, written agreement or memorandum of
understanding with, or a party to any commitment letter or
similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board
resolutions at the request of, Government Regulators nor has
it been advised by any Government Regulator that it is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order,
directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter, board
resolutions or similar undertaking.

          (m)  Agreements.  

          (i)  Except for this Plan and arrangements made in
     the ordinary course of business, Monarch and its
     Subsidiaries are not bound by any Material contract (as
     defined in Item 601(b)(10) of Regulation S-K) to be
     performed after the date hereof that has not been filed
     with or incorporated by reference in the Reports. 
     Except as disclosed in the Monarch Reports filed prior
     to the date of this Plan, neither Monarch nor any of
     its Subsidiaries is a party to an oral or written
     (A) consulting agreement (other than data processing,
     software programming and licensing contracts entered
     into in the ordinary course of business) not terminable
     on 30 days' or less notice involving the payment of
     more than $25,000 per annum, in the case of any such
     agreement with an individual, or $50,000 per annum, in
     the case of any other such agreement, (B) agreement
     with any executive officer or other key employee of
     Monarch or any of its Subsidiaries the benefits of
     which are contingent, or the terms of which are
     materially altered, upon the occurrence of a
     transaction involving Monarch or any of its
     Subsidiaries of the nature contemplated by this Plan
     and which provides for the payment of in excess of
     $50,000, (C) agreement with respect to any executive
     officer of Monarch or any of its Subsidiaries providing
     any term of employment or compensation guarantee
     extending for a period longer than six months and for
     the payment of in excess of $50,000 per annum,
     (D) agreement or plan, including any stock option plan,
     stock appreciation rights plan, restricted stock plan
     or stock purchase plan, any of the benefits of which
     will be increased, or the vesting of the benefits of
     which will be accelerated, by the occurrence of any of
     the transactions contemplated by this Plan or the value
     of any of the benefits of which will be calculated on
     the basis of any of the transactions contemplated by
     this Plan or (E) agreement containing covenants that
     limit the ability of Monarch or any of its Subsidiaries
     to compete in any line of business or with any person,
     or that involve any restriction on the geographic area
     in which, or method by which, Monarch (including any
     successor thereof) or any of its Subsidiaries may carry
     on its business (other than as may be required by law
     or any regulatory agency).

          (ii) Neither Monarch nor any of its Subsidiaries
     is in default under or in violation of any provision of
     any note, bond, indenture, mortgage, deed of trust,
     loan agreement or other agreement to which it is a
     party or by which it is bound or to which any of its
     respective properties or assets is subject.

          (n)  Labor Matters.  Neither Monarch nor any of
its Subsidiaries is a party to, or is bound by, any
collective bargaining agreement, contract, or other
agreement or understanding with a labor union or labor
organization, nor is Monarch or any of its Subsidiaries the
subject of any proceeding asserting that it has committed an
unfair labor practice or seeking to compel it or any such
Subsidiary to bargain with any labor organization as to
wages and conditions of employment, nor is there any strike,
other labor dispute or organizational effort involving
Monarch or any of its Subsidiaries pending or threatened.

          (o)  Employee Benefit Plans.  The Monarch
Disclosure Letter contains a complete list of all pension,
retirement, stock option, stock purchase, stock ownership,
savings, stock appreciation right, profit sharing, deferred
compensation, consulting, bonus, group insurance, severance
and other benefit plans, contracts, agreements, policies and
arrangements, including, but not limited to, "employee
benefit plans", as defined in Section 3(3) of ERISA and all
trust agreements related thereto in respect to any present
or former directors, officers, or other employees of Monarch
or any of its Subsidiaries (hereinafter referred to
collectively as the "Monarch Employee Plans"). (i) All of
the Monarch Employee Plans comply in all material respects
with all applicable requirements of ERISA, the Code and
other applicable laws; neither Monarch nor any of its
Subsidiaries has engaged in a "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code)
with respect to any Monarch Employee Plan which could
subject Monarch or any Subsidiary to a material tax or
penalty under Section 4975 of the Code or Section 502(i) of
ERISA; and all contributions required to be made under the
terms of any Monarch Employee Plan have been timely made or
have been reflected on Monarch's balance sheet; (ii) no
liability to the PBGC has been or is expected by Monarch or
any of its Subsidiaries to be incurred with respect to any
Monarch Employee Plan which is subject to Title IV of ERISA
(a "Monarch Pension Plan"), or with respect to any "single-
employer plan" (as defined in Section 4001(a)(15) of ERISA)
currently or formerly maintained by Monarch or any entity (a
"Monarch ERISA Affiliate") which is considered one employer
with Monarch under Section 4001 of ERISA or Section 414 of
the Code (an "Monarch ERISA Affiliate Plan"); and no
proceedings have been instituted to terminate any Monarch
Pension Plan or Monarch ERISA Affiliate Plan and no
condition exists that presents a material risk of the
institution of such proceedings; (iii) no Monarch Pension
Plan or Monarch ERISA Affiliate Plan had an "accumulated
funding deficiency" (as defined in Section 302 of ERISA
(whether or not waived)) as of the last day of the end of
the most recent plan year ending prior to the date hereof;
the fair market value of the assets of each Monarch Pension
Plan and Monarch ERISA Affiliate Plan exceeds the present
value of the "benefit liabilities" (as defined in
Section 4001(a)(16) of ERISA) under such Monarch Pension
Plan or Monarch ERISA Affiliate Plan as of the end of the
most recent plan year with respect to the respective Monarch
Pension Plan or Monarch ERISA Affiliate Plan ending prior to
the date hereof, calculated on the basis of the actuarial
assumptions used in the most recent actuarial valuation for
such Monarch Pension Plan or Monarch ERISA Affiliate Plan
prior to the date hereof, and there has been no material
change in the financial condition of any such Monarch
Pension Plan or Monarch ERISA Affiliate Plan since the last
day of the most recent plan year; and no notice of a
"reportable event" (as defined in Section 4043 of ERISA) for
which the 30-day reporting requirement has not been waived
has been required to be filed for any Monarch Pension Plan
or Monarch ERISA Affiliate Plan within the 12-month period
ending on the date hereof; (iv) neither Monarch nor any
Subsidiary of Monarch has provided or is required to
provide, security to any Monarch Pension Plan or to any
Monarch ERISA Affiliate Plan pursuant to Section 401(a)(29)
of the Code; (v) neither Monarch, its Subsidiaries, nor any
Monarch ERISA Affiliate has contributed to any
"multiemployer plan", as defined in Section 3(37) of ERISA,
on or after September 26, 1980; (vi) each Employee Plan of
Monarch or any of its Subsidiaries which is an "employee
pension benefit plan" (as defined in Section 3(2) of ERISA)
or has received a favorable determination letter from the
Internal Revenue Service deeming such plan to be a Qualified
Plan or has requested such a determination letter within the
applicable remedial amendment period under Section 401(b) of
the Code; and neither Monarch nor its Subsidiaries are aware
of any circumstances likely to result in revocation of any
such favorable determination letter; (vii) each Qualified
Plan which is an "employee stock ownership plan" (as defined
in Section 4975(e)(7) of the Code) has satisfied all of the
applicable requirements of Sections 409 and 4975(e)(7) of
the Code and the regulations thereunder; all Monarch
Employee Plans covering foreign participants comply in all
material respects with applicable local law, and there are
no material unfunded liabilities with respect to any Monarch
Employee Plan which covers foreign employees; (viii) there
is no pending or, to Monarch's knowledge, threatened
litigation, administrative action or proceeding relating to
any Monarch Employee Plan; (ix) there has been no
announcement or commitment by Monarch or any Subsidiary of
Monarch to create an additional Monarch Employee Plan, or to
amend a Monarch Employee Plan except for amendments required
by applicable law which do not increase the cost of such
Monarch Employee Plan; and Monarch and its Subsidiaries do
not have any obligations for retiree health and life
benefits under any Monarch Employee Plan except as set forth
in the Monarch Disclosure Letter, and there are no such
Monarch Employee Plans that cannot be amended or terminated
without incurring any liability thereunder; (x) with respect
to Monarch or any of its Subsidiaries, except as
specifically identified in the Monarch Disclosure Letter,
the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will
not result in any payment or series of payments by Monarch
or any Subsidiary of Monarch to any person which is an
"excess parachute payment" (as defined in Section 280G of
the Code) under any Monarch Employee Plan, increase or
secure (by way of a trust or other vehicle) any benefits
payable under any Monarch Employee Plan, or accelerate the
time of payment or vesting of any such benefit, and (xi)
with respect to each Monarch Employee Plan, Monarch has
supplied to the Company a true and correct copy, if
applicable, of (A) the two most recent annual reports on the
applicable form of the Form 5500 series filed with the
Internal Revenue Service (the "IRS"), (B) such Monarch
Employee Plan, including amendments thereto, (C) each trust
agreement and insurance contract relating to such Monarch
Employee Plan, including amendments thereto, (D) the most
recent summary plan description for such Monarch Employee
Plan, including amendments thereto, if the Monarch Employee
Plan is subject to Title I of ERISA, (E) the most recent
actuarial report or valuation if such Monarch Employee Plan
is a Monarch Pension Plan, (F) the most recent determination
letter issued by the IRS if such Monarch Employee Plan is a
Qualified Plan and (G) the most recent financial statements
and auditor's report.

          (p)  Real Property.  

          (i) The Monarch Disclosure Letter contains a
     complete and correct list of (A) all real property or
     premises owned on the date hereof, in whole or in part
     by Monarch or any of its Subsidiaries and all
     indebtedness secured by any encumbrance thereon, and
     (B) all real property or premises leased in whole or in
     part by Monarch or any of its Subsidiaries, together
     with a list of all applicable leases and the name of
     the lessor.  None of such premises or properties have
     been condemned or otherwise taken by any public
     authority and no condemnation or taking is threatened
     or contemplated and none thereof is subject to any
     claim, contract or law which might affect its use or
     value for the purposes now made of it.  None of the
     premises or properties of Monarch or any of its
     Subsidiaries is subject to any current or potential
     interests of third parties or other restrictions or
     limitations that would impair or be inconsistent with
     the current use of such property by Monarch or any of
     its Subsidiaries.

          (ii) Each of the leases referred to in the Monarch
     Disclosure Letter is valid and existing and in full
     force and effect, and no party thereto is in default
     and no notice of a claim of default by any party has
     been delivered to Monarch or any of its Subsidiaries or
     is now pending, and there does not exist any event that
     with notice or the passing of time, or both, would
     constitute a default or excuse performance by any party
     thereto, provided that with respect to matters relating
     to any party other than Monarch the foregoing
     representation is based on the knowledge of Monarch.

          (q)  Title.  Monarch and each of its Subsidiaries
has good title to its properties and assets (other than (i)
property as to which it is lessee and (ii) real estate owned
as a result of foreclosure, transfer in lieu of foreclosure
or other transfer in satisfaction of a debtor's obligation
previously contracted).

          (r)  Knowledge as to Conditions.  As of the date
hereof, Monarch knows of no reason why the approvals,
consents and waivers of governmental authorities referred to
in Section 5.1(b) should not be obtained without the
imposition of any condition of the type referred to in the
provisos thereto.

          (s)  Compliance with Laws.  Since December 31,
1993, Monarch and each of its Subsidiaries have complied in
all Material respects with all applicable laws, except for
any noncompliance with any such laws which, individually or
in the aggregate, would not have a Material Adverse Effect
on Monarch or enable any Person to enjoin the Merger or the
Bank Merger.  Except as would not have a Material Adverse
Effect on Monarch, Monarch and each of its Subsidiaries has
all permits, licenses, certificates of authority, orders and
approvals of, and has made all filings, applications and
registrations with, federal, state, local and foreign
governmental or regulatory bodies that are required in order
to permit it to carry on its business as it is presently
conducted.  All such permits, licenses, certificates of
authority, orders and approvals are in full force and
effect, and, to the knowledge of Monarch, no suspension or
cancellation of any of them is threatened.

          (t)  Fees.  Other than in respect of financial
advisory services performed for Monarch by Belle Plaine
Financial Partners, Inc. and/or other qualified financial
advisors, in amounts and pursuant to arrangements previously
disclosed to the Company, neither Monarch nor any of its
Subsidiaries, nor any of their respective officers,
directors, employees or agents, has employed any broker or
finder or incurred any liability for any financial advisory
fees, brokerage fees, commissions, or finder's fees, and no
broker or finder has acted directly or indirectly for
Monarch or any Subsidiary of Monarch, in connection with the
Plan or the transactions contemplated hereby.

          (u)  Environmental Matters.  (i) Monarch and each
Subsidiary has complied at all times with all applicable
Environmental Laws; (ii) none of the properties (including
buildings or any other structures) currently owned or
operated by Monarch or any Subsidiary ("Monarch Properties")
has been contaminated with, or has had any release of, any
Hazardous Substance; (iii) to Monarch's knowledge, none of
the properties formerly owned or operated by it or any
Subsidiary has been contaminated with Hazardous Substances
during such period of ownership or operation; (iv) to
Monarch's knowledge, neither it nor any Subsidiary is
subject to liability for any Hazardous Substance disposal or
contamination on any third party property; (v) neither
Monarch nor any Subsidiary has received any notice, demand
latter, claim or request for information alleging that
Monarch or any Subsidiary may be in violation of or subject
to liability under any Environmental Law; (vi) neither
Monarch nor any of its Subsidiaries is subject to any
orders, decrees, injunctions or other agreements with any
governmental authority or any third party relating to
Hazardous Substances or any Environmental Law; (vii) there
are no circumstances or conditions involving Monarch or any
of its Subsidiaries that could reasonably be expected to
result in any claims, liability, investigations, suits or
costs or result in restrictions on the ownership, use, or
transfer of any Property pursuant to any Environmental Law,
(viii) none of the Properties contain any underground
storage tanks, asbestos-containing material, lead products,
or polychlorinated biphenyls; (ix) to the knowledge of
Monarch none of the Properties have ever been operated in
the past as a gas station, automotive repair or supply
business, metalworking operation, industrial facility or as
a drycleaner; (x) neither Monarch nor any Subsidiary has
engaged in any activity involving the generation, use,
handling or disposal of any Hazardous Substances other than
ordinary and routine office operations and maintenance, (xi)
neither Monarch nor any Subsidiary has participated in the
management of any borrower or other third party, including
entities in which it may hold a security, fiduciary or other
interest, that, to Monarch's knowledge, engage in activities
involving Hazardous Substances to an extent that it could be
deemed an "owner" or "operator" of such entity under any
Environmental Law, and (xii) to Monarch's knowledge, it has
delivered to the Company copies of all environmental
reports, studies, sampling data, permits, government filings
and other environmental information in its possession
relating to Monarch or its Subsidiaries or any of their
current or former properties or operations.

          (v)  Allowance.  The allowance for possible loan
and lease losses shown on Monarch's unaudited balance sheet
as of September 30, 1996 was, and the allowance for possible
loan losses shown on the balance sheets in Monarch Reports
for periods ending after the date of this Plan will be,
adequate, as of the date thereof, under generally accepted
accounting principles applicable to banks and bank holding
companies.  Monarch has disclosed to the Company in writing
prior to the date hereof the amounts of all loans, leases,
advances, credit enhancements, other extensions of credit,
commitments and interest-bearing assets of Monarch and its
Subsidiaries that have been classified as "Other Assets
Specially Mentioned," "Substandard," "Doubtful," "Loss,"
"Classified," "Criticized," "Credit Risk Assets" or words of
similar import.  The OREO included in any non-performing
assets of Monarch or any of its Subsidiaries is carried net
of reserves at the lower of cost or market value; less
applicable selling costs, based on independent appraisals
consistent with applicable regulatory requirements.

          (w)  Material Interests of Certain Persons. 
Except as disclosed in Monarch's Quarterly Report on
Form 10-QSB for the quarter ended September 30, 1996, no
officer or director of Monarch, or any "associate" (as such
term is defined in Rule 12b-2 under the Securities Exchange
Act) of any such officer or director, has any Material
interest in any Material contract or property (real or
personal), tangible or intangible, used in or pertaining to
the business of Monarch or any of its Subsidiaries. 

          (x)  Insurance.  Monarch and its Subsidiaries are
currently insured, and since December 31, 1993, have been
insured, for reasonable amounts with financially sound and
reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance
with good business practice, customarily be insured.  All of
the insurance policies and bonds maintained by Monarch and
its Subsidiaries are in full force and effect, Monarch and
its Subsidiaries are not in default thereunder and all
Material claims thereunder have been filed in due and timely
fashion.  Since December 31, 1993, no claim by Monarch or
any of its Subsidiaries on or in respect of an insurance
policy or bond has been declined or refused by the relevant
insurer or insurers.  In the best judgment of Monarch's
management, such insurance coverage is adequate and will be
available in the future under terms and conditions
substantially similar to those in effect on the date hereof. 
Between the date hereof and the Effective Time, Monarch and
its Subsidiaries will maintain the levels of insurance
coverage in effect on the date hereof and will submit all
potential claims existing prior to the Effective Time to its
insurance carrier on or before the Effective Time.  The
Monarch Disclosure Letter lists all insurance policies
maintained by or for the benefit of Monarch, its
Subsidiaries or its directors, officers, employees or
agents, specifying the (i) type of policy, (ii) policy
limits and (iii) self insurance amounts.

          (y)  Investment Securities.  Except for pledges to
secure public and trust deposits and reverse repurchase
agreements entered into in arm's-length transactions
pursuant to normal commercial terms and conditions and other
pledges required by law, none of the investments reflected
in the consolidated balance sheet of Monarch included in
Monarch's Report on Form 10-Q for the quarter ended
September 30, 1996, and none of the Material investments
made by it or any of its Subsidiaries since December 31,
1995, is subject to any restriction (contractual, statutory
or otherwise) that would materially impair the ability of
the entity holding such investment freely to dispose of such
investment at any time.

          (z)  Derivatives.  Neither Monarch nor any of its
Subsidiaries is currently a party to any interest rate swap,
cap, floor, option agreement, other interest rate risk
management arrangement or agreement or derivative-type
security or derivative arrangement or agreement.

          (aa) Registration Obligations.  Neither Monarch
nor any of its Subsidiaries is under any obligation,
contingent or otherwise, to register any of its securities
under the Securities Act except as contemplated by this
Plan.

          (bb) Books and Records.  The books and records of
Monarch and its Subsidiaries have been, and are being,
maintained in accordance with applicable legal and
accounting requirements and reflect in all Material respects
the substance of events and transactions that should be
included therein.

          (cc) Corporate Documents.  Monarch has delivered
to the Company true and complete copies of (i) its amended
articles of incorporation and amended by-laws and (ii) the
articles of incorporation and by-laws of Monarch Bank.

          (dd) Company Action.  The Board of Directors of
Monarch has adopted resolutions recommending that this Plan
and the Bank Merger be approved by the shareholders of
Monarch and directing that this Plan and the Bank Merger be
submitted for consideration by Monarch's shareholders at
Monarch's Meeting.

          (ee) Loans.  Each loan reflected as an asset on
Monarch's consolidated balance sheet as of September 30,
1996 and each balance sheet date subsequent thereto (i) is
evidenced by notes, agreements or other evidences of
indebtedness which are true, genuine and what they purport
to be, (ii) is the legal, valid and binding obligation of
the obligor named therein, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles, and (iii) to the knowledge of Monarch, will not
be subject to any defenses which may be asserted against
Monarch Bank or Western Bank.  All loans and extensions of
credit that have been made by Monarch Bank or Western Bank
and that are subject to Sections 22(h), 23A and 23B of the
Federal Reserve Act comply therewith.

          (ff) Fair Lending; Community Reinvestment Act.  As
of the date hereof, with the exception of routine
investigation of consumer complaints, neither Monarch nor
any of its Subsidiaries has been advised that it is or may
be in violation of the Equal Credit Opportunity Act or the
Fair Housing Act or any similar federal or state statute. 
Monarch Bank received a CRA rating of "outstanding" in its
most recent CRA examination.  Western Bank received a CRA
rating of "satisfactory" in its most recent CRA examination.

          (gg) No Omission of Material Fact.  No
representation or warranty by Monarch in this Plan,
including the Annexes hereto, the disclosure letters and the
schedules to be delivered herewith or the Proxy Statement
filed in connection with the Meeting, contains any untrue
statement of Material fact, or omits to state a Material
fact necessary to make the statements or facts contained
herein or therein not misleading.  None of the information
regarding Monarch or any of its Subsidiaries or the
transactions contemplated hereby supplied or to be supplied
by Monarch or any of its Subsidiaries for inclusion in any
documents or filings to be filed with any regulatory
authority in connection with the transactions contemplated
hereby will contain any untrue statement of Material fact,
or omit to state a Material fact necessary to make the
statements or facts contained therein not misleading.

          (hh) Monarch Common Stock.  The shares of Monarch
Common Stock to be issued pursuant to this Plan, when issued
in accordance with the terms of this Plan, will be duly
authorized, validly issued, fully paid and non-assessable.


                   ARTICLE IV.  COVENANTS

          SECTION 4.1.  Acquisition Proposals.  The Company
agrees that none of it, the Company Bank or any of their
respective officers and directors shall, and the Company
shall direct and use its reasonable best efforts to cause
its employees, agents and representatives (including,
without limitation, any investment banker, attorney or
accountant retained by it or the Company Bank) not to,
initiate, solicit or encourage, directly or indirectly, any
inquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to shareholders of
the Company) with respect to a merger, consolidation or
similar transaction, other than pursuant to this Plan,
involving, or any purchase of all or any significant portion
of the assets or any equity securities of, the Company or
the Company Bank (any such proposal or offer being
hereinafter referred to as an "Acquisition Proposal") or,
except to the extent legally required for the discharge by
the board of directors of its fiduciary duties as advised in
writing by such board's counsel, engage in any negotiations
concerning, or provide any confidential information or data
to, or have any discussions with, any person relating to an
Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal.  The
Company will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any of the
foregoing and shall make all reasonable efforts to enforce
any confidentiality agreements to which it or the Company
Bank is a party.  The Company will take the necessary steps
to inform the appropriate individuals or entities referred
to in the first sentence hereof of the obligations
undertaken in this Section 4.1.  The Company will notify
Monarch immediately if any such inquiries or proposals are
received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated
or continued with the Company.

          SECTION 4.2.  Certain Policies of the Company.  At
or before the Effective Time, the Company shall make such
accounting entries or adjustments as Monarch shall request
in order to implement its plans for the Company Bank
following the Merger or to reflect merger-related expenses
and costs; provided, however, that (a) the Company shall not
be required to take such action more than two days prior to
the Effective Time, (b) no such adjustment shall require,
based upon consultation with counsel and accountants for the
Company, any filing with any governmental agency, or violate
any law, rule or regulation applicable to the Company,
(c) no such adjustment shall require any changes in net
income or shareholders' equity that will be required to be
contained in any financial statement required to be filed by
the Company under the rules of the SEC if the Company
reasonably believes that all of the conditions to closing
set forth in Article V will not be either satisfied or
waived; and further provided, that in any event no accrual
or reserve made by the Company or the Company Bank pursuant
to this Section 4.2 shall constitute or be deemed to be a
breach or violation of or failure to satisfy any
representation, warranty, covenant, condition or other
provision of this Plan or otherwise be considered in
determining whether any such breach, violation or failure to
satisfy shall have occurred.  The recording of such
adjustments shall not be deemed to imply any misstatement of
previously furnished financial statements or information and
shall not be construed as concurrence of the Company's
management with any such adjustments.

          SECTION 4.3.  Employee Benefits.  (a)  Monarch and
the Company agree that, unless otherwise mutually determined
or as set forth in subsection (c) below, the Employee Plans
of the Company and the Company Bank in effect at the date of
this Plan (except stock plans, including without limitation
the Company's stock option plans, stock award plan and stock
bonus plan) will remain in effect for a period of at least
six months after the Effective Time with respect to
employees of the Company and the Company Bank covered by
such plans at the Effective Time.  Monarch will take such
steps as are required so that each person employed by the
Company or the Company Bank prior to the Effective Time who
remains an employee of the Surviving Corporation or its
Subsidiaries following the Effective Time (each a "Continued
Employee") shall be entitled to participate in the employee
benefit plans that are in effect generally for employees of
Monarch's Subsidiaries from time to time (all such plans
collectively, "Monarch's Benefit Plans"), if such Continued
Employee shall be eligible (or, with respect to
discretionary Monarch's Benefit Plans, selected) for
participation therein and otherwise shall not be
participating in a similar plan which continues to be
maintained by the Surviving Corporation and its
Subsidiaries.  Continued Employees will be eligible to
participate on the same basis as similarly situated
employees of Monarch or Monarch's Subsidiaries.  All such
participation shall be subject to the terms of Monarch's
Benefit Plans as may be in effect from time to time. 
Monarch or Monarch's Subsidiaries shall, solely for purposes
of vesting and eligibility to participate in Monarch's
Benefit Plans, recognize credit for each Continued
Employee's term of service with the Company and the
Company's Subsidiaries.


          (b)  Monarch will honor, to the extent set forth
in the Company Disclosure Letter, all employment and
severance agreements of the Company and the Company Bank, in
accordance with their terms.

          SECTION 4.4.  Access and Information.  Upon
reasonable notice, each party hereto shall (and shall cause
its Subsidiaries to) afford to the other party and its
representatives (including, without limitation, directors,
officers and employees of such party and its affiliates, and
counsel, accountants and other advisors retained by such
party and its affiliates) such access (including, without
limitation, for the purpose of conducting supplemental due
diligence reviews) during normal business hours throughout
the period prior to the Effective Time to the books, records
(including, without limitation, loan and credit files, tax
returns and work papers of independent auditors),
properties, personnel and to such other information as the
requesting party may reasonably request; provided, however,
that no investigation pursuant to this Section 4.4 shall
affect or be deemed to modify any representation or warranty
made herein.  Each party agrees that it will not, and will
cause its representatives not to, use any information
obtained pursuant to this Section 4.4 for any purpose
unrelated to the consummation of the transactions
contemplated by this Plan.  Subject to the requirements of
law, each party will keep confidential, and will cause its
representatives to keep confidential, all information and
documents obtained pursuant to this Section 4.4 unless such
information (i) was already known to such party or an
affiliate of such party prior to the date of the
confidentiality agreement (the "Confidentiality Agreement")
between the Company and Monarch in effect prior to the date
hereof, (ii) becomes available to such party or an affiliate
of such party from other sources not known by such party to
be bound by a confidentiality agreement, (iii) is disclosed
with the prior written approval of the relevant party or
(iv) is or becomes readily ascertainable from published
information or trade sources.  In the event that this Plan
is terminated or the transactions contemplated by this Plan
shall otherwise fail to be consummated, each party shall
promptly cause all copies of documents or extracts thereof
containing information and data as to another party hereto
(or an affiliate of any party hereto) to be returned to the
party which furnished the same.  Except as otherwise
specifically provided herein, the terms of the
Confidentiality Agreement shall remain in full force effect.

          SECTION 4.5.  Certain Filings, Consents and
Arrangements.  Monarch and the Company shall (a) as soon as
practicable make any filings and applications required to be
filed in order to obtain all approvals, consents and waivers
of governmental authorities necessary or appropriate for the
consummation of the transactions contemplated hereby and use
their reasonable best efforts to cause the applications for
the approvals described in Section 5.1(b) hereof to be
initially filed on or before February 15, 1997; (b)
cooperate with one another (i) in promptly determining what
filings are required to be made or approvals, consents or
waivers are required to be obtained under any relevant
federal, state or foreign law or regulation and (ii) in
promptly making any such filings, furnishing information
required in connection therewith and seeking timely to
obtain any such approvals, consents or waivers; and (c)
deliver to the other copies of the publicly available
portions of all such filings and applications promptly after
they are filed.

          SECTION 4.6.  Indemnification; Directors' and
Officers' Insurance.  (a)  From and after the Effective
Time, Monarch agrees to indemnify and hold harmless each
director and officer of the Company or the Company Bank,
determined as of the Effective Time (the "Indemnified
Parties"), against any costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities (collectively, "Costs")
incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of matters
existing or occurring at or prior to the Effective Time
(including with respect to this Plan or any of the
transactions contemplated hereby), whether asserted, claimed
or arising prior to, at or after the Effective Time, to the
extent to which such Indemnified Parties were entitled under
California law and the Company's articles of incorporation
or by-laws in effect on the date hereof, and Monarch shall
also advance expenses as incurred to the extent permitted
under California law and the Company's articles of
incorporation and by-laws.

          (b)  Any Indemnified Party wishing to claim
indemnification under Section 4.6(a) hereof, upon learning
of any such claim, action, suit, proceeding or
investigation, shall as  promptly as possible notify Monarch
thereof, but the failure to so notify shall not relieve
Monarch of any liability it may have to such Indemnified
Party if such failure does not materially prejudice Monarch. 
In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective
Time), (i) Monarch shall have the right to assume the
defense thereof and Monarch shall not be liable to such
Indemnified Parties for any legal expenses of other counsel
or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof,
except that if Monarch elects not to assume such defense or
counsel for the Indemnified Parties advises that there are
issues which raise conflicts of interest between Monarch and
the Indemnified Parties, the Indemnified Parties may retain
counsel satisfactory to them, and Monarch shall pay the
reasonable fees and expenses of one such counsel for the
Indemnified Parties in any jurisdiction promptly as
statements thereof are received unless the use of one
counsel for such Indemnified Parties would present such
counsel with a conflict of interest, (ii) the Indemnified
Parties will cooperate in the defense of any such matter and
(iii) Monarch shall not be liable for any settlement
effected without its prior written consent.  Notwithstanding
the foregoing, Monarch shall not have any obligation
hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and such
determination shall have become final and nonappealable,
that the indemnification of such Indemnified Party in the
manner contemplated hereby is not permitted or is prohibited
by applicable law.

          (c)  For a period of six years after the Effective
Time, Monarch shall use its reasonable best efforts to cause
to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by
the Company (provided that Monarch may substitute therefor
policies of comparable coverage with respect to claims
arising from facts or events which occurred before the
Effective Time); provided, however, that in no event shall
Monarch be obligated to expend, in order to maintain or
provide insurance coverage pursuant to this
Subsection 4.6(c), any amount per annum in excess of 200% of
the amount of the annual premiums paid as of the date hereof
by the Company for such insurance (the "Maximum Amount"). 
If the amount of the annual premiums necessary to maintain
or procure such insurance coverage exceeds the Maximum
Amount, Monarch shall use all reasonable efforts to maintain
the most advantageous policies of directors' and officers'
insurance obtainable for an annual premium equal to the
Maximum Amount.  Notwithstanding the foregoing, prior to the
Effective Time, Monarch may request the Company to, and the
Company shall, purchase insurance coverage, on such terms
and conditions as shall be acceptable to Monarch, extending
for a period of six years the Company's directors' and
officers' liability insurance coverage in effect as of the
date hereof (covering past or future claims with respect to
periods before the Effective Time) and such coverage shall
satisfy Monarch's obligations under this Subsection (c).

          (d)  If Monarch or any of its successors or
assigns (i) shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or
surviving corporation or entity of such consolidation or
merger or (ii) shall transfer all or substantially all of
its properties and assets to any individual, corporation or
other entity, then and in each such case, proper provision
shall be made so that the successors and assigns of Monarch
shall assume the obligations set forth in this Section 4.6.

          (e)  The provisions of this Section 4.6 are
intended to be for the benefit of, and shall be enforceable
by, each Indemnified Party and his or her heirs and
representatives.

          SECTION 4.7.  Additional Agreements.  Subject to
the terms and conditions herein provided, each of the
parties hereto agrees to use its reasonable best efforts to
take promptly, or cause to be taken promptly, all actions
and to do promptly, or cause to be done promptly, all things
necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the
transactions contemplated by this Plan as soon as
practicable, including using efforts to obtain all necessary
actions or non-actions, extensions, waivers, consents and
approvals from all applicable governmental entities,
effecting all necessary registrations, applications and
filings (including, without limitation, filings under any
applicable state securities laws) and obtaining any required
contractual consents and regulatory approvals.

          SECTION 4.8.  Publicity.  The initial press
release announcing this Plan shall be a joint press release
and thereafter the Company and Monarch shall consult with
each other in issuing any press releases or otherwise making
public statements with respect to the other or the
transactions contemplated hereby and in making any filings
with any governmental entity or with any national securities
exchange with respect thereto.  

          SECTION 4.9.  Registration Statement.  As soon as
reasonably practicable after the date hereof, Monarch and
the Company shall jointly prepare a registration statement,
including a joint proxy statement in respect of the Meetings
(as defined herein) (the "Registration Statement"), for the
purpose of registering the Monarch Common Stock to be issued
pursuant hereto, file the Registration Statement with the
SEC, respond to comments of the staff of the SEC and
promptly thereafter mail the Registration Statement to all
holders of record (as of the applicable record date) of
shares of Company Common Stock and Monarch Common Stock. 
The Company covenants that (a) all information supplied by
it in writing to Monarch expressly for use in the Registra-
tion Statement will be accurate and complete in all Material
respects and (b) none of the information to be supplied by
the Company will, in the case of the proxy statement to be
used by Monarch to solicit the approval of its shareholders
as contemplated by this Plan, when it is first mailed to the
Monarch's shareholders, contain any untrue statement of a
Material fact or omit to state any Material fact necessary
in order to make the statement made therein, in light of the
circumstances under which such statements are made, not
misleading.  Monarch covenants that (a) all information
supplied by it in writing to the Company expressly for use
in the Registration Statement will be accurate and complete
in all Material respects and (b) none of the information to
be supplied by Monarch will, in the case of the proxy
statement to be used by the Company to solicit the approval
of its shareholders as contemplated by this Plan, when it is
first mailed to the Company's shareholders, contain any
untrue statement of a Material fact or omit to state any
Material fact necessary in order to make the statement made
therein, in light of the circumstances under which such
statements are made, not misleading.

          SECTION 4.10.  Shareholders' Meetings.  Each party
hereto shall take all action necessary, in accordance with
applicable law and its articles of incorporation and by-
laws, to convene a meeting of the holders of its common
stock (each, a "Meeting") as promptly as practicable for the
purpose of approving this Plan.  Except to the extent
legally required for the discharge by such party's board of
directors of its fiduciary duties as advised in writing by
such board's counsel, such party's board of directors shall
recommend at its Meeting that this Plan be approved by its
shareholders.

          SECTION 4.11.  Notification of Certain Matters. 
Each party shall give prompt notice to the other of: 
(a) any notice of, or other communication relating to, a
default or event that, with notice or lapse of time or both,
would become a default, received by it or any of its
Subsidiaries subsequent to the date of this Plan and prior
to the Effective Time, under any contract Material to the
financial condition, properties, businesses or results of
operations of such party taken as a whole to which such
party or any Subsidiary is a party or is subject; and
(b) any Material adverse change in the condition (financial
or other), properties, assets, business, results of
operations or prospects of it and its Subsidiaries taken as
a whole or the occurrence of any event which, so far as
reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in any such change.  Each of the
Company and Monarch shall give prompt notice to the other
party of any notice or other communication from any third
party alleging that the consent of such third party is or
may be required in connection with the transactions
contemplated by this Plan.

          SECTION 4.12.  No Acquisitions of Company Common
Stock.  Prior to the earlier of (i) immediately prior to the
Effective Time and (ii) the termination of this Plan in
accordance with Article VI hereof, Monarch shall not and
shall cause its affiliates not to, directly or indirectly,
acquire any shares of Company Common Stock, other than (i)
up to 5% of such shares acquired during the period
commencing on the third business day after the release of
the press release announcing this Plan and (ii) shares
acquired in a fiduciary or agency capacity or in
satisfaction of a debt or debts previously contracted.

          SECTION 4.13.  Securities Act.  (a)  As soon as
practicable after the date of the Company's Meeting, the
Company shall identify to Monarch all persons who the
Company believes to be affiliates of the Company as that
term is used in paragraphs (c) and (d) of Rule 145 under the
Securities Act ("Affiliates").

          (b)  The Company shall use its best efforts to
obtain a written agreement from each person identified as an
Affiliate pursuant to clause 4.13(a) above who is an officer
or director of the Company providing that each such person
will agree not to sell, pledge, transfer or otherwise
dispose of the shares of Monarch Common Stock to be received
by such person in the Merger except in compliance with the
applicable provisions of the Securities Act and until such
time as financial results covering at least 30 days of
combined operations of Monarch and the Company shall have
been published.  The Company shall cause forms of such
written agreement to be delivered to each other person who
the Company believes may be or become an Affiliate of
Monarch for purposes of enabling such persons to comply with
the exchange procedures set forth in Section 1.3(c).

          SECTION 4.14.  Quotation on NASDAQ.  Monarch shall
use its best efforts to list on the NASDAQ National Market
System, upon official notice of issuance, the Monarch Common
Stock to be issued in the Merger.

          SECTION 4.15.  Tax-Free Reorganization Treatment;
Pooling.  Neither Monarch nor the Company shall take or
cause to be taken any action, whether before or after the
Effective Time, which would disqualify (a) either the Merger
or the Bank Merger as a "reorganization" within the meaning
of Section 368 of the Code or (b) the Merger as a "pooling
of interests" for accounting purposes.

          SECTION 4.16.  Shareholder Agreements.  Certain
directors of the Company, in their capacities as
shareholders, in exchange for good and valuable
consideration, have executed and delivered to Monarch
shareholder agreements substantially in the form of Annex 3
hereto (the "Shareholder Agreements"), committing such
persons, among other things, (i) to vote their shares of
Company Common Stock in favor of the Plan at the Company's
Meeting, (ii) not to compete with Monarch for a period of
time, and (iii) to certain representations concerning the
ownership of Company Common Stock and Monarch Common Stock
to be received in the Merger.  The Company agrees to cause
its remaining directors (except as otherwise set forth in
Schedule 4.16) to execute agreements substantially in the
form of Annex 3A and deliver such agreements to the Company
on or prior to January 10, 1997.

          SECTION 4.17.  Director and Officer Resignations. 
The Company shall cause to be delivered to Monarch at the
Effective Time the resignations of the members of the board
of directors of the Company and of such officers as are
specified by Monarch to the Company in advance of the
Effective Time.

          SECTION 4.18.  Consummation of Company Bank and
Monarch Bank Merger.  Monarch and the Company shall take
promptly, or cause to be taken promptly, all actions
necessary to consummate and make effective the Bank Merger
concurrently with the Effective Time on the Effective Date. 
The merger agreement with respect to the Bank Merger will
provide, among other things, that the existing directors of
the Company Bank shall continue as directors following the
Bank Merger.


           ARTICLE V.  CONDITIONS TO CONSUMMATION

          SECTION 5.1.  Conditions to All Parties'
Obligations.  The respective obligations of Monarch and the
Company to effect the Merger shall be subject to the
satisfaction or waiver prior to the Effective Time of the
following conditions:

          (a)  The Plan, the Merger, the Bank Merger and the
other transactions contemplated hereby shall have been
approved by the requisite vote of the respective
shareholders of the Company, Company Bank, Monarch and
Monarch Bank.

          (b)  Monarch and the Company shall have procured
the approvals, consents or waivers with respect to the Plan,
the Merger, the Bank Merger and the other transactions
contemplated hereby by the Federal Reserve Board, and all
applicable statutory waiting periods shall have expired; and
the parties shall have procured all other regulatory
approvals, consents or waivers of governmental authorities
or other persons that, in the opinion of counsel for Monarch
and the Company, are necessary or appropriate for the
consummation of the Merger, the Bank Merger and the other
transactions contemplated hereby; provided, however, that no
approval, consent or waiver referred to in this Section
5.1(b) shall be deemed to have been received if it shall
include any condition or requirement (other than conditions
or requirements that have been imposed on Monarch in
connection with previous acquisitions announced since 1995)
that, individually or in the aggregate, (i) would result in
a Material Adverse Effect on Monarch or the Company or (ii)
would reduce the economic and business benefits of the
transactions contemplated by the Plan to Monarch or the
Company in so significant and adverse a manner that the
party or parties so affected, in its or their judgment,
would not have entered into this Plan had such condition or
requirement been known at the date hereof.

          (c)  All other requirements prescribed by law
which are necessary to the consummation of the Merger and
the Bank Merger and any transactions necessary to consummate
the Merger and the Bank Merger shall have been satisfied.

          (d)  No party hereto shall be subject to any
order, decree or injunction of a court or agency of
competent jurisdiction which enjoins or prohibits the
consummation of the Merger or the Bank Merger or any
transaction necessary to consummate the Merger or the Bank
Merger, and no litigation or proceeding shall be pending
against Monarch or the Company or any of their Subsidiaries
brought by any governmental agency seeking to prevent
consummation of the Merger or the Bank Merger or any
transaction necessary to consummate the Merger or the Bank
Merger.

          (e)  No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered,
promulgated, interpreted, applied or enforced by any
governmental authority which prohibits, restricts or makes
illegal consummation of the Merger, the Bank Merger or any
other transaction contemplated by this Plan.

          (f)  The Registration Statement shall have become
effective and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or
threatened by the SEC.

          (g)  Monarch shall have received an opinion of
Sullivan & Cromwell and the Company shall have received an
opinion of Company Counsel, no later than thirty (30) days
from the date hereof, and confirmed immediately prior to the
Effective Time, substantially to the effect that the Merger
will be a reorganization within the meaning of
Section 368(a) of the Code, and that Monarch and the Company
will each be a party to that reorganization.  Each such
opinion may be based on, in addition to the review of such
matters of law and fact as counsel rendering the opinion
considers appropriate, (i) representations made at counsel's
request by Monarch, the Company, shareholders of Monarch or
the Company, or any combination of such persons, (ii)
Certificates provided at counsel's request by officers of
Monarch or of the Company and other appropriate persons and
(iii) assumptions set forth in the opinion with the consent
of Monarch (in the case of the opinion to be delivered by
Sullivan & Cromwell) or with the consent of the Company (in
the case of the opinion to be delivered by Company Counsel).

          SECTION 5.2.  Conditions to the Obligations of
Monarch.  The obligations of Monarch to effect the Merger
shall be subject to the satisfaction or waiver prior to the
Effective Time of the following additional conditions:

          (a)  Monarch shall have received (i) from the
Company's independent certified public accountants a "cold
comfort" letter or "specified procedures" letter, dated (A)
the date of the mailing of the Registration Statement, and
(B) shortly prior to the Effective Date, with respect to
certain financial information regarding Monarch and the
Company, respectively, and (ii) from KPMG Peat Marwick LLP a
letter confirming that the Merger is entitled to "pooling of
interests" treatment for accounting purposes, each of such
letters to be in the form customarily issued by "Big Six"
independent auditors in transactions of this type.

          (b)  Each of the representations and warranties of
the Company contained in this Plan shall have been true and
correct on the date hereof and shall be true and correct at
the Effective Time (or on the date when made in the case of
any representation or warranty which specifically relates to
an earlier date or period), provided, however, that for
purposes of this Section 5.2(b) a representation or warranty
shall only fail to be true and correct at the Effective Time
if the failure of any such representation or warranty to be
true and correct has or constitutes, or is likely to have or
constitute or relates to, either individually or in the
aggregate with other such representations or warranties, a
Material Adverse Effect on the Company or the Company Bank;
the Company shall have performed, or shall have caused to be
performed, in all Material respects, each of its covenants
and agreements contained in this Plan required to be
performed at or prior to the Effective Time; and Monarch
shall have received a certificate signed by the Chief
Executive Officer and the Chief Financial Officer of the
Company, dated the Effective Date, as to the foregoing.

          (c)  Monarch shall have received an opinion, dated
the Effective Date, from O'Melveny & Myers, LLP, counsel to
the Company ("Company Counsel"), covering the matters set
forth in Annex 4, in form and substance satisfactory to
Monarch.

          (d)  Monarch shall have received the written
resignation of each director (in his/her capacity as
director) of the Company, effective as of the Effective Time
and such resignations of officers as may be specified by
Monarch pursuant to Section 4.17 hereof.

          (e)  The Company or Monarch shareholders voting
against the Plan or giving notice in writing to the Company
or Monarch, as the case may be, at or before the applicable
Meeting that such shareholder dissents from the Plan, in the
aggregate, shall not hold more than five percent of the
Company Common Stock or Monarch Common Stock, as the case
may be.

          (f)  Prior to solicitation of shareholder
approval, Monarch shall have received an opinion confirming
the fairness of the terms of the Merger to its shareholders
from a financial point of view.

          (g)  Monarch shall have received a conformed copy
of a certificate of satisfaction of the Franchise Tax Board
of the State of California that all taxes imposed by law on
the Company have been paid or secured, as filed with the
Secretary of State for the State of California pursuant to
Section 1103 of the California Corporations Code.

          SECTION 5.3.  Conditions to the Obligation of the
Company.  The obligation of the Company to effect the Merger
shall be subject to the satisfaction or waiver prior to the
Effective Time of the following additional conditions:

          (a)  The Company shall have received (i) from
Monarch's independent certified public accountants a "cold
comfort" letter or letters or "specified procedures" letter
or letters, dated (A) the date of the mailing of the
Registration Statement, and (B) shortly prior to the
Effective Date, with respect to certain financial
information regarding Monarch and the Company, respectively
and (ii) from Deloitte & Touche LLP a letter confirming that
the Merger is entitled to "pooling of interests" treatment
for accounting purposes, each of such letters to be in the
form customarily issued by "Big Six" independent auditors in
transactions of this type.

          (b)  Each of the representations, warranties and
covenants of Monarch contained in this Plan shall have been
true on the date hereof and shall be true in all Material
respects on the Effective Date as if made on such date (or
on the date when made in the case of any representation or
warranty which specifically relates to an earlier date or
period), provided, however, that for purposes of this
Section 5.3(a) a representation or warranty shall only fail
to be true and correct at the Effective Time if the failure
of any such representation or warranty to be true and
correct has or constitutes or relates to, or is likely to
have or constitute or relate to, either individually or in
the aggregate with other such representations or warranties,
a Material Adverse Effect on Monarch; Monarch shall have
performed, or shall have caused to be performed, in all
Material respects, each of its covenants and agreements
contained in this Plan required to be performed at or prior
to the Effective Time; and the Company shall have received
certificates signed by the Chief Executive Officer and the
Chief Financial Officer of Monarch, dated the Effective
Date, as to the foregoing.

          (c)  The Company shall have received an opinion,
dated the Effective Date, from Sullivan & Cromwell, covering
the matters set forth in Annex 5, in form and substance
satisfactory to the Company.

          (d)  Each of William H. Jacoby, Robert L. McKay
and Mark H. Stuenkel shall have been elected to the board of
directors of Monarch.

          (e)  Prior to the solicitation of shareholder
approval, the Company shall have received an opinion
confirming the fairness of the terms of the Merger to its
shareholders from a financial point of view.

          (f)  As of the Effective Date or upon consummation
of the Merger, the Monarch Common Stock shall be included
for quotation on the NASDAQ National Market.


                  ARTICLE VI.  TERMINATION

          SECTION 6.1.  Termination.  This Plan may be
terminated, and the Merger abandoned, prior to the Effective
Date, either before or after its approval by the
shareholders of the Company and Monarch:

          (a)  by the mutual consent of Monarch and the
Company, if the board of directors of each so determines by
vote of a majority of the members of its entire board;

          (b)  by Monarch or the Company, by written notice
to the other party, if its board of directors so determines
by vote of a majority of the members of its entire board, in
the event of (i) the failure of the shareholders of the
Company to approve the Plan at its Meeting, (ii) the failure
of the shareholders of Monarch to approve the Plan at its
Meeting (iii) a Material breach by the other party hereto of
any representation, warranty, covenant or agreement
contained herein which is not cured or not curable within
30 days after written notice of such breach is given to the
party committing such breach by the other party; 

          (c)  by Monarch or the Company, by written notice
to the other party, if either (i) any approval, consent or
waiver of a governmental authority required to permit
consummation of the Merger or any transaction necessary to
consummate the Merger shall have been denied or (ii) any
governmental authority of competent jurisdiction shall have
issued a final, unappealable order enjoining or otherwise
prohibiting consummation of the Merger or any transaction
necessary to consummate the Merger; 

          (d)  by Monarch or the Company, by written notice
to the other party, if its board of directors so determines
by vote of a majority of the members of its entire board, in
the event that the Merger is not consummated by September
30, 1997, unless the failure so to consummate by such time
is due to the breach of any representation, warranty or
covenant contained in this Plan by the party seeking to
terminate;

          (e)  by Monarch, by written notice to the Company,
if the Company takes, causes to be taken or allows to be
taken any action that, without giving effect to the
exception contained in Section 4.1 hereof regarding the
exercise by the Company's board of directors of its
fiduciary duties, would otherwise be prohibited under
Section 4.1 hereof; or

          (f)  by the Company, by written notice to Monarch
prior to the approval by the shareholders of the Company of
this Plan, if the Company receives an Acquisition Proposal
on terms and conditions which the board of directors
determines, after receiving the written advice of its
outside counsel, (i) that to proceed with the Merger will
violate the fiduciary duties of the board of directors to
the Company's shareholders and (ii) to accept such proposal;
provided, however, that the Company shall not be entitled to
terminate this Plan pursuant to this clause (f) unless it
shall have provided Monarch with written notice of such a
possible determination (which written notice will inform
Monarch of the Material terms and conditions of the
proposal, including the identity of the proponent) two
business days prior to such determination.

          SECTION 6.2.  Effect of Termination.  (a) In the
event of the termination of this Plan by either Monarch or
the Company, as provided above, this Plan shall thereafter
become void and, subject to the provisions of Section 6.2(b)
and (c) and Section 8.2 hereof, there shall be no liability
on the part of any party hereto or their respective officers
or directors, except that any such termination shall be
without prejudice to the rights of any party hereto arising
out of the willful breach by any other party of any covenant
or willful misrepresentation contained in this Plan.

          (b)  The parties agree and acknowledge that it is
impractical to ascertain the precise amount of damage to the
Company as a result of a failure to consummate the Merger
and the other transactions contemplated hereby due to a
termination of this Plan by the Company pursuant to clause
(iii) of Section 6.1(b) hereof.  Accordingly, in the event
of such termination, Monarch shall pay to the Company $1.25
million plus all costs and expenses incurred by the Company
in connection with this Plan, up to $500,000, the parties
agreeing that such amount will represent a reasonable
estimate of the minimum damage to the Company and not a
penalty.  The fee payable pursuant to the foregoing sentence
shall be payable by Monarch to the Company by wire transfer
to an account designated by the Company in writing, on or
before the seventh day after it becomes due.  Payment of
such amount shall be in full satisfaction of damages to the
Company arising from any breach by Monarch of any of its
representations, warranties, covenants or agreements
contained herein.

          (c)  The parties agree and acknowledge that it is
impractical to ascertain the precise amount of damage to the
Monarch as a result of a failure to consummate the Merger
and the other transactions contemplated hereby due to a
termination of this Plan by Monarch pursuant to clause (iii)
of Section 6.1(b) or Section 6.1(e) hereof or by the Company
pursuant to Section 6.1(f) hereof.  Accordingly, in the
event of such termination, the Company shall pay to Monarch
$1.25 million plus all costs and expenses incurred by
Monarch in connection with this Plan, up to $500,000, the
parties agreeing that such amount will represent a
reasonable estimate of the minimum damage to Monarch and not
a penalty.  The fee payable pursuant to the foregoing
sentence shall be payable by the Company to Monarch by wire
transfer to an account designated by Monarch in writing, on
or before the seventh day after it becomes due.  Payment of
such amount shall be in full satisfaction of damages to
Monarch arising from any breach by the Company of any of its
representations, warranties, covenants or agreements
contained herein.


       ARTICLE VII.  EFFECTIVE DATE AND EFFECTIVE TIME

          SECTION 7.1.  Effective Date and Effective Time. 
On such date as Monarch selects, which shall be within
30 days after the last to occur of the expiration of all
applicable waiting periods in connection with approvals of
governmental authorities, the receipt of all approvals of
governmental authorities and the satisfaction or waiver of
all other conditions to the consummation of the Merger, or
on such earlier or later date as may be agreed in writing by
the parties, an agreement of merger, a certificate of merger
and related documents, substantially in the forms attached
hereto as Annex 7, shall be executed in accordance with all
appropriate legal requirements and shall be filed as
required by law, and the Merger provided for herein shall
become effective upon such filing or on such date and such
time as may be specified in such articles of merger.  The
date of such filing or such later effective date is herein
called the "Effective Date".  The "Effective Time" of the
Merger shall be the time of such filing or as set forth in
such articles of merger.


                ARTICLE VIII.  OTHER MATTERS

          SECTION 8.1.  Certain Definitions; Interpretation. 
As used in this Plan, the following terms shall have the
meanings indicated:

          "Company Book Value" means the consolidated
     shareholders' equity of the Company and the Company
     Bank, determined in accordance with GAAP, as reflected
     on the audited balance sheet as of December 31, 1996,
     as adjusted (if at all) in accordance with Section 1.6
     hereof, less (i) the Company's Deal Expenses, and (ii)
     50% of the Retention Bonuses; provided, however, that,
     except as otherwise agreed by the parties, if the
     allowance for loan and lease losses is less than
     $6,300,000 as shown on such balance sheet, then the
     Company Book Value shall be reduced by an amount equal
     to the after-tax effect of the difference between
     $6,300,000 and such lesser sum.

          "Company Per Share Book Value" means the quotient
     obtained by dividing the Company Book Value by the
     aggregate number of fully-diluted shares of Company
     Common Stock outstanding immediately prior to the
     Effective Time, calculated in the manner set forth in
     the example provided in Annex 6 hereto.

          "Deal Expenses" means the sum of the after tax-
     effect of (i) all fees and expenses paid or accrued to
     a party's financial advisors and consultants arising
     out of or relating to this Plan, (ii) the fees and
     expenses of such party's independent accountants and
     attorneys paid or accrued in connection with the
     preparation and negotiation of this Plan and (iii) all
     costs paid pursuant to the last sentence of
     Section 1.6(c) hereof; provided, however, that "Deal
     Expenses" shall not include any such expenses booked as
     an expense or otherwise deducted from consolidated
     shareholders' equity in the preparation of financial
     statements contemplated by Section 1.6.

          "GAAP" means generally accepted accounting
     principles applicable to bank holding companies,
     consistently applied.

          "Material" means material to Monarch or the
     Company (as the case may be) and its respective
     Subsidiaries, taken as a whole.

          "Material Adverse Effect", with respect to a
     person, means any condition, event, change or
     occurrence that is reasonably likely to have a Material
     adverse effect upon (A) the condition (financial or
     other), properties, assets, business, results of
     operations or prospects of such person and its
     Subsidiaries, taken as a whole, or (B) the ability of
     such person to perform its obligations under, and to
     consummate the transactions contemplated by, this Plan;
     provided, however, that in determining whether there
     has been a Material Adverse Effect with respect to the
     Company, the after-tax effect of any outcome of the
     litigation referred to by name in the Company's Report
     on Form 10-Q for the quarter ended September 30, 1996
     shall be excluded.

          "Monarch Book Value" means the consolidated
     shareholders' equity of Monarch and its Subsidiaries,
     determined in accordance with GAAP, as reflected on the
     audited balance sheet as of December 31, 1996, as
     adjusted (if at all) in accordance with Section 1.6
     hereof, less (i) Monarch's Deal Expenses, and (ii) 50%
     of the Retention Bonuses; provided, however, that if
     the allowance for loan and lease losses is less than
     $6,137,000 as shown on such balance sheet, then the
     Monarch Book Value shall be reduced by an amount equal
     to the after-tax effect of the difference between
     $6,137,000 and such lesser sum.

          "Monarch Per Share Book Value" means the quotient
     obtained by dividing the Monarch Book Value by the
     aggregate number of fully-diluted shares of Monarch
     Common Stock outstanding immediately prior to the
     Effective Time, calculated in the manner set forth in
     the example provided in Annex 6 hereto.

          "Person" includes an individual, corporation,
     partnership, association, trust or unincorporated
     organization.

          "Retention Bonuses" means payments to key
     employees of the Company and the Company Bank for the
     purpose of assuring the services of such employees
     through the Effective Time, which payments shall be
     approved by Monarch and shall not in the aggregate
     exceed $200,000.

          "Subsidiary", with respect to a person, means any
     other person controlled by such person.

When a reference is made in this Plan to Sections or
Annexes, such reference shall be to a Section of, or Annex
to, this Plan unless otherwise indicated.  For all
calculations of the "after-tax effect" pursuant to this
Plan, a combined Federal and California rate of 41.5% shall
be used.  The table of contents, tie sheet and headings
contained in this Plan are for ease of reference only and
shall not affect the meaning or interpretation of this Plan. 
Whenever the words "include", "includes", or "including" are
used in this Plan, they shall be deemed followed by the
words "without limitation".  Any singular term in this Plan
shall be deemed to include the plural, and any plural term
the singular.

          SECTION 8.2.  Survival.  Only those agreements and
covenants of the parties that are by their terms applicable
in whole or in part after the Effective Time shall survive
the Effective Time.  All other representations, warranties,
agreements and covenants shall be deemed to be conditions of
the Plan and shall not survive the Effective Time.  If the
Plan shall be terminated, the agreements of the parties in
Section 6.2, this Section 8.2, Section 8.6, Section 8.7 and
the last four sentences of Section 4.4 hereof shall survive
such termination.

          SECTION 8.3.  Waiver.  Prior to the Effective
Time, any provision of this Plan may be:  (i) waived by the
party benefitted by the provision; or (ii) amended or
modified at any time (including the structure of the
transaction) by an agreement in writing between the parties
hereto approved by their respective boards of directors.

          SECTION 8.4.  Counterparts.  This Plan may be
executed in counterparts, each of which shall be deemed to
constitute an original, but all of which together shall
constitute one and the same instrument.

          SECTION 8.5.  Governing Law.  This Plan shall be
governed by, and interpreted in accordance with, the laws of
the State of California.

          SECTION 8.6.  WAIVER OF JURY TRIAL.  EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS PLAN OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

          SECTION 8.7.  Expenses.  Each party hereto will
bear all expenses incurred by it in connection with this
Plan and the transactions contemplated hereby.

          SECTION 8.8.  Notices.  All notices, requests,
acknowledgements and other communications hereunder to a
party shall be in writing and shall be deemed to have been
duly given when delivered by hand, telecopy, telegram or
telex (confirmed in writing) to such party at its address
set forth below or such other address as such party may
specify by notice to the other party hereto.

          If to the Company, to:

               California Commercial Bankshares
               4100 Newport Place
               Newport Beach, CA 92660
               Telecopier:  (714) 863-2336
               Attention:   Mark H. Stuenkel


               With copies to:

               O'Melveny & Myers LLP
               400 South Hope Street
               Los Angeles, CA 90071
               Telecopier:  (213) 669-6407
               Attention:   Frances E. Lossing

               And

               The Findley Group
               1470 North Hundley Street
               Anaheim, CA 92806-1322
               Telecopier:  (714) 630-7910
               Attention:   Gary Steven Findley

          If to Monarch, to:

               Monarch Bancorp
               1251 Westwood Blvd.
               Los Angeles, CA 90024
               Telecopier:  (310) 477-8611
               Attention:   Matt Wagner


               With copies to:

               Sullivan & Cromwell
               444 South Flower Street
               Los Angeles, California  90071
               Telecopier:  (212) 683-0458

               Attention:  Stanley F. Farrar

          SECTION 8.9.  Entire Agreement; Etc.  This Plan,
together with the Confidentiality Agreement, the
Shareholders Agreements and the Option Agreement of even
date herewith being executed simultaneously herewith by the
Company and Monarch, represents the entire understanding of
the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or
written agreements heretofore made.  All terms and
provisions of the Plan shall be binding upon and shall inure
to the benefit of the parties hereto and their respective
successors and assigns.  Except as to Section 4.6 hereof,
nothing in this Plan is intended to confer upon any other
person any rights or remedies of any nature whatsoever under
or by reason of this Plan.

          SECTION 8.10.  Assignment.  This Plan may not be
assigned by any party hereto without the written consent of
the other parties.


          IN WITNESS WHEREOF, the parties hereto have caused
this Plan to be executed by their duly authorized officers
as of the day and year first above written.

                         MONARCH BANCORP



                         By: Hugh S. Smith, Jr.
                            -----------------------------
                            Name:  Hugh S. Smith, Jr.
                            Title: Chairman


                         CALIFORNIA COMMERCIAL BANKSHARES
                         


                         By: Mark H. Stuenkel
                            ----------------------------- 
                            Name:  Mark H. Stuenkel
                            Title: Executive Vice President





                                                    Annex 4/5
               [FORMS OF OPINIONS OF COUNSEL]


                          [To Come]


                       SCHEDULE 2.2(b)
                PERMITTED EQUITY TRANSACTIONS



          Monarch is contemplating a reverse stock split in
connection with its proposed NASDAQ application.

                        SCHEDULE 4.16


          The Company will use its best efforts to cause
Phillip Bush to sign the Shareholder Agreement,
substantially in the form of Annex 3A hereto.


                      TABLE OF CONTENTS

                                                         Page

                          RECITALS

                   ARTICLE I.  THE MERGER

 SECTION 1.1.  Structure of the Merger. . . . . . . .   3
 SECTION 1.2.  Effect on Outstanding Shares . . . . .   3
 SECTION 1.3.  Exchange Procedures. . . . . . . . . .   4
 SECTION 1.4.  Dissenters' Rights . . . . . . . . . .   7
 SECTION 1.5.  Options. . . . . . . . . . . . . . . .   7
 SECTION 1.6.  Determinations of December 31, 1996  
               Shareholders' Equity . . . . . . . . .   7

           ARTICLE II.  CONDUCT PENDING THE MERGER

SECTION 2.1.  Conduct of Business Prior to the     
              Effective Time . . . . . . . . . . . .   9
SECTION 2.2.  Forbearance. . . . . . . . . . . . . .   9
SECTION 2.3.  Cooperation. . . . . . . . . . . . . .  12

        ARTICLE III.  REPRESENTATIONS AND WARRANTIES

SECTION 3.1.  Representations and Warranties of    
              the Company. . . . . . . . . . . . . .  12
SECTION 3.2.  Representations and Warranties of    
              Monarch. . . . . . . . . . . . . . . .  28

                   ARTICLE IV.  COVENANTS

SECTION 4.1.  Acquisition Proposals. . . . . . . . .  43
SECTION 4.2.  Certain Policies of the Company. . . .  43
SECTION 4.3.  Employee Benefits. . . . . . . . . . .  44
SECTION 4.4.  Access and Information . . . . . . . .  45
SECTION 4.5.  Certain Filings, Consents and        
              Arrangements . . . . . . . . . . . . .  45
SECTION 4.6.  Indemnification; Directors' and      
              Officers' Insurance. . . . . . . . . .  46
SECTION 4.7.  Additional Agreements. . . . . . . . .  48
SECTION 4.8.  Publicity. . . . . . . . . . . . . . .  48
SECTION 4.9.  Registration Statement . . . . . . . .  48
SECTION 4.10. Shareholders' Meetings . . . . . . . .  49
SECTION 4.11. Notification of Certain Matters. . . .  49
SECTION 4.12. No Acquisitions of Company Common    
              Stock. . . . . . . . . . . . . . . . .  50
SECTION 4.13. Securities Act . . . . . . . . . . . .  50
SECTION 4.14. Quotation on NASDAQ. . . . . . . . . .  50
SECTION 4.15. Tax-Free Reorganization Treatment;   
              Pooling. . . . . . . . . . . . . . . .  50
SECTION 4.16.  Shareholder Agreements. . . . . . . .  51
SECTION 4.17.  Director and Officer Resignations . .  51
SECTION 4.18.  Consummation of Company Bank and
               Monarch Bank Merger . . . . . . . . .  51

           ARTICLE V.  CONDITIONS TO CONSUMMATION

SECTION 5.1.  Conditions to All Parties'           
              Obligations. . . . . . . . . . . . . .  51
SECTION 5.2.  Conditions to the Obligations of     
              Monarch. . . . . . . . . . . . . . . .  53
SECTION 5.3.  Conditions to the Obligation of the  
              Company. . . . . . . . . . . . . . . .  54

                  ARTICLE VI.  TERMINATION

SECTION 6.1.  Termination. . . . . . . . . . . . . .  56
SECTION 6.2.  Effect of Termination. . . . . . . . .  57

       ARTICLE VII.  EFFECTIVE DATE AND EFFECTIVE TIME

SECTION 7.1.  Effective Date and Effective Time. . .  58

                ARTICLE VIII.  OTHER MATTERS

SECTION 8.1.  Certain Definitions; Interpretation. .  58
SECTION 8.2.  Survival . . . . . . . . . . . . . . .  61
SECTION 8.3.  Waiver . . . . . . . . . . . . . . . .  61
SECTION 8.4.  Counterparts . . . . . . . . . . . . .  61
SECTION 8.5.  Governing Law. . . . . . . . . . . . .  61
SECTION 8.6.  WAIVER OF JURY TRIAL . . . . . . . . .  61
SECTION 8.7.  Expenses . . . . . . . . . . . . . . .  61
SECTION 8.8.  Notices. . . . . . . . . . . . . . . .  61
SECTION 8.9.  Entire Agreement; Etc. . . . . . . . .  62
SECTION 8.10. Assignment . . . . . . . . . . . . . .  63

Schedule 2.2(b)
Schedule 4.16

                       LIST OF ANNEXES

Annex 1 - Monarch Rights (Recital B)
Annex 2 - Company Rights (Recital D)
Annex 3 - Form of Shareholder Agreement (Section 4.16)
Annex 3A - Form of Shareholder Agreement to be signed
          (Section 4.16)
Annex 4 - Form of Opinion of Company Counsel
            (Section 5.2(c))
Annex 5 - Form of Opinion of Monarch Counsel 
            (Section 5.3(b))
Annex 6 - Calculation of Company Per Share Book Value
            (Section 8.1)
Annex 7 - Certificate of Merger and Related Documents

                   INDEX OF DEFINED TERMS


                                                         Page

Acquisition Proposal. . . . . . . . . . . . . . . . . . .43
Affiliates. . . . . . . . . . . . . . . . . . . . . . . .50
BHC Act . . . . . . . . . . . . . . . . . . . . . . . .   1
BIF . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Certificate . . . . . . . . . . . . . . . . . . . . . . . 4
Code. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company Bank. . . . . . . . . . . . . . . . . . . . . . . 2
Company Book Value. . . . . . . . . . . . . . . . . . . .59
Company Common Stock. . . . . . . . . . . . . . . . . . . 1
Company Counsel . . . . . . . . . . . . . . . . . . . . .54
Company Disclosure Letter . . . . . . . . . . . . . . . .12
Company Employee Plans. . . . . . . . . . . . . . . . . .20
Company ERISA Affiliate . . . . . . . . . . . . . . . . .20
Company ERISA Affiliate Plan. . . . . . . . . . . . . . .20
Company Option. . . . . . . . . . . . . . . . . . . . . . 7
Company Pension Employee. . . . . . . . . . . . . . . . .20
Company Per Share Book Value. . . . . . . . . . . . . . .59
Company Properties. . . . . . . . . . . . . . . . . . . .24
Company Reports . . . . . . . . . . . . . . . . . . . . .15
Company Rights. . . . . . . . . . . . . . . . . . . . .   2
Confidentiality Agreement . . . . . . . . . . . . . . . .45
Continued Employee. . . . . . . . . . . . . . . . . . . .44
Conversion Number . . . . . . . . . . . . . . . . . . . . 3
Costs . . . . . . . . . . . . . . . . . . . . . . . . . .46
Covered Person. . . . . . . . . . . . . . . . . . . . . .27
Deal Expenses . . . . . . . . . . . . . . . . . . . . . .59
Dissenters' Shares. . . . . . . . . . . . . . . . . . . . 3
Effective Date. . . . . . . . . . . . . . . . . . . . . .58
Effective Time. . . . . . . . . . . . . . . . . . . . . .58
Environmental Law . . . . . . . . . . . . . . . . . . . .25
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . .20
ERISA Affiliate . . . . . . . . . . . . . . . . . . . . .20
Exchange Agent. . . . . . . . . . . . . . . . . . . . . . 4
FDIC. . . . . . . . . . . . . . . . . . . . . . . . . . .13
Federal Reserve Board . . . . . . . . . . . . . . . . . . 1
GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . .59
Government Regulators . . . . . . . . . . . . . . . . . .18
Hazardous Substance . . . . . . . . . . . . . . . . . . .25
Indemnified Parties . . . . . . . . . . . . . . . . . . .46
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Material. . . . . . . . . . . . . . . . . . . . . . . . .59
Material Adverse Effect . . . . . . . . . . . . . . . . .59
Maximum Amount. . . . . . . . . . . . . . . . . . . . . .47
Meeting . . . . . . . . . . . . . . . . . . . . . . . . .49
Merger. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Merger Consideration. . . . . . . . . . . . . . . . . . . 3
Monarch . . . . . . . . . . . . . . . . . . . . . . . . . 1
Monarch Book Value. . . . . . . . . . . . . . . . . . . .60
Monarch Common Stock. . . . . . . . . . . . . . . . . . . 1
Monarch Disclosure Letter . . . . . . . . . . . . . . . .28
Monarch Employee Plans. . . . . . . . . . . . . . . . . .35
Monarch ERISA Affiliate . . . . . . . . . . . . . . . . .35
Monarch ERISA Affiliate Plan. . . . . . . . . . . . . . .35
Monarch Pension Plan. . . . . . . . . . . . . . . . . . .35
Monarch Per Share Book Value. . . . . . . . . . . . . . .60
Monarch Properties. . . . . . . . . . . . . . . . . . . .38
Monarch Reports . . . . . . . . . . . . . . . . . . . . .30
Monarch Rights. . . . . . . . . . . . . . . . . . . . . . 1
Monarch's Benefit Plans . . . . . . . . . . . . . . . . .44
NASDAQ. . . . . . . . . . . . . . . . . . . . . . . . . . 4
OCC . . . . . . . . . . . . . . . . . . . . . . . . . . .16
OREO. . . . . . . . . . . . . . . . . . . . . . . . . . .25
PBGC. . . . . . . . . . . . . . . . . . . . . . . . . . .20
Person. . . . . . . . . . . . . . . . . . . . . . . . . .60
Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Registration Statement. . . . . . . . . . . . . . . . . .48
Regulatory Agencies . . . . . . . . . . . . . . . . . . .16
Retention Bonuses . . . . . . . . . . . . . . . . . . . .60
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Securities Act. . . . . . . . . . . . . . . . . . . . . .27
Securities Exchange Act . . . . . . . . . . . . . . . . .15
Shareholder Agreements. . . . . . . . . . . . . . . . . .51
Significant Subsidiaries. . . . . . . . . . . . . . . . .16
SRO . . . . . . . . . . . . . . . . . . . . . . . . . . .16
State Corporation Law . . . . . . . . . . . . . . . . . . 3
State Regulator . . . . . . . . . . . . . . . . . . . . .16
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . .60
Surviving Corporation . . . . . . . . . . . . . . . . . . 3

EX-2

Exhibit 2.2
                                                            

                   STOCK OPTION AGREEMENT

         DATED AS OF THE 19TH DAY OF DECEMBER, 1996

                       BY AND BETWEEN

                       MONARCH BANCORP

                             AND

              CALIFORNIA COMMERCIAL BANKSHARES

                                                            



                   STOCK OPTION AGREEMENT

          STOCK OPTION AGREEMENT, dated as of the 19th day
of December, 1996 (this "Agreement"), between Monarch
Bancorp, a California corporation ("Grantee"), and
California Commercial Bankshares, a California corporation
("Issuer").

                         WITNESSETH:

          WHEREAS, Grantee and Issuer are entering into an
Agreement and Plan of Merger dated as of the date hereof
(the "Plan"), which is being executed by the parties hereto
simultaneously with the execution of this Agreement; and

          WHEREAS, as a condition and inducement to
Grantee's entering into the Plan and in consideration
therefor, Issuer has agreed to grant Grantee the Option (as
defined below);

          NOW, THEREFORE, in consideration of the foregoing
and the mutual covenants and agreements set forth herein and
in the Plan, the parties hereto agree as follows:

          SECTION 1.  GRANT OF OPTION.  Issuer hereby grants
to Grantee an unconditional, irrevocable option (the
"Option") to purchase, subject to the terms hereof, up to
635,570 (or such lesser amount as shall constitute 19.9% of
the outstanding shares of the Common Stock on the date of
exercise) fully paid and nonassessable shares of Common
Stock, no par value ("Common Stock"), of Issuer at a price
per share equal to $9.50 per share (the "Initial Price");
provided, however, that in the event Issuer issues or agrees
to issue (other than pursuant to options and warrants to
issue Common Stock in effect as of the date hereof) any
shares of Common Stock at a price less than the Initial
Price (as adjusted pursuant to Section 5(b)), such price
shall be equal to such lesser price (such price, as adjusted
as hereinafter provided, the "Option Price").  The number of
shares of Common Stock that may be received upon the
exercise of the Option and the Option Price are subject to
adjustment as herein set forth.

          SECTION 2.  EXERCISE OF OPTION.  

          (a)  Timing of Exercise, Termination.  Grantee may
exercise the Option, in whole or part, at any time and from
time to time following the occurrence of a Purchase Event
(as defined below); provided that the Option shall terminate
and be of no further force and effect upon the earliest to
occur of (i) the time immediately prior to the Effective
Time, (ii) 12 months after the first occurrence of a
Purchase Event (as defined below), (iii) 18 months after the
termination of the Plan following the occurrence of a
Preliminary Purchase Event (as defined below),
(iv) termination of the Plan in accordance with the terms
thereof prior to the occurrence of a Purchase Event or a
Preliminary Purchase Event (other than a termination of the
Plan by Grantee pursuant to Section 6.1(b)(iii), (e) or (f)
thereof), or (v) 18 months after the termination of the Plan
by Grantee pursuant to Section 6.1(b)(iii), (e) or (f)
thereof.  The events described in clauses (i) - (v) in the
preceding sentence are hereinafter collectively referred to
as an "Exercise Termination Event."

          (b)  Preliminary Purchase Event.  The term
"Preliminary Purchase Event" shall mean any of the following
events or transactions occurring after the date hereof:

          (i)  Issuer or any of its subsidiaries (each an
     "Issuer Subsidiary") without having received Grantee's
     prior written consent, shall have entered into an
     agreement to engage in an Acquisition Transaction (as
     defined below) with any Person (the term "Person" for
     purposes of this Agreement having the meaning assigned
     thereto in Sections 3(a)(9) and 13(d)(3) of the Securi-
     ties Exchange Act of 1934 (the "Securities Exchange
     Act"), and the rules and regulations thereunder) other
     than Grantee or any of its subsidiaries (each a
     "Grantee Subsidiary") or the Board of Directors of
     Issuer shall have recommended that the shareholders of
     Issuer approve or accept any Acquisition Transaction
     with any person other than Grantee or any Grantee Sub-
     sidiary.  For purposes of this Agreement, "Acquisition
     Transaction" shall mean (x) a merger or consolidation,
     or any similar transaction, involving Issuer or any of
     Issuer's subsidiaries, (y) a purchase, lease or other
     acquisition of all or substantially all of the assets
     of Issuer or any subsidiary or (z) a purchase or other
     acquisition (including by way of merger, consolidation,
     share exchange or otherwise) of securities representing
     10% or more of the voting power of Issuer or any sub-
     sidiary, other than by exercise of options, warrants or
     other rights (or in settlement or satisfaction of such
     rights) set forth in Annex 2 to the Plan, provided that
     the term "Acquisition Transaction" does not include any
     internal merger or consolidation involving only Issuer
     and/or Issuer Subsidiaries;

          (ii)  Any Person (other than Grantee or any
     Grantee Subsidiary) shall have acquired Beneficial
     Ownership or the right to acquire Beneficial Ownership,
     other than by exercise of options, warrants or other
     rights (or in settlement or satisfaction of such
     rights) set forth in Annex 2 to the Plan, of shares of
     Common Stock (the term "Beneficial Ownership" for pur-
     poses of this Agreement having the meaning assigned
     thereto in Section 13(d) of the Securities Exchange
     Act, and the rules and regulations thereunder) such
     that, upon the consummation of such acquisition, such
     Person would have Beneficial Ownership, in the
     aggregate, of 10% or more of the then outstanding
     shares of Common Stock if such person is a director or
     officer of the Issuer, and 25% or more of the then
     outstanding shares of Common Stock if such person is
     not a director or officer of the Issuer;

          (iii)  Any person other than Grantee or any
     Grantee Subsidiary shall have made a bona fide proposal
     to Issuer or its shareholders, by public announcement
     or written communication that is or becomes the subject
     of public disclosure, to engage in an Acquisition
     Transaction (including, without limitation, any
     situation in which any person other than Grantee or any
     subsidiary of Grantee shall have commenced (as such
     term is defined in Rule 14d-2 under the Securities
     Exchange Act) or shall have filed a registration
     statement under the Securities Act of 1933, as amended
     (the "Securities Act"), with respect to, a tender offer
     or exchange offer to purchase any shares of Common
     Stock such that, upon consummation of such offer, such
     person would own or control 10% or more of the then
     outstanding shares of Common Stock (such an offer being
     referred to herein as a "Tender Offer" or an "Exchange
     Offer", respectively)); 

          (iv)  After a proposal is made by a third party to
     Issuer or its shareholders to engage in an Acquisition
     Transaction, Issuer shall have breached any covenant or
     obligation contained in the Plan and such breach would
     entitle Grantee to terminate the Plan or the holders of
     Common Stock shall not have approved the Plan at the
     meeting of such stockholders held for the purpose of
     voting on the Plan, such meeting shall not have been
     held or shall have been canceled prior to termination
     of the Plan or Issuer's Board of Directors shall have
     withdrawn or modified in a manner adverse to Grantee
     the recommendation of Issuer's Board of Directors with
     respect to the Plan;

          (v)  Any Person other than Grantee or any Grantee
     Subsidiary, other than in connection with a transaction
     to which Grantee has given its prior written consent or
     in connection with the exercise of options, warrants or
     other rights (or in settlement or satisfaction of such
     rights) set forth in Annex 2 to the Plan, shall have
     filed an application or notice with the Board of
     Governors of the Federal Reserve System (the "Federal
     Reserve Board") or other governmental authority or
     regulatory or administrative agency or commission
     (each, a "Governmental Authority") for approval to
     engage in an Acquisition Transaction; or

          (vi)  The Board of Directors of Issuer does not
     recommend that the stockholders of Issuer approve the
     Plan.

          (c)  Purchase Event.  The term "Purchase Event"
shall mean either of the following events or transactions
occurring after the date hereof:

          (i)  The acquisition by any person other than
     Grantee or any Grantee Subsidiary of Beneficial
     Ownership of shares of Common Stock, other than by
     exercise of options, warrants or other rights (or in
     settlement or satisfaction of such rights) set forth in
     Annex 2 to the Plan or as a result of the execution and
     delivery of Shareholders Agreements referred to in
     Section 4.16 of the Plan, such that, upon the
     consummation of such acquisition, such Person would
     have Beneficial Ownership, in the aggregate, of 20% or
     more of the then outstanding shares of Common Stock if
     such person is a director or officer of the Issuer, and
     25% or more of the then outstanding shares of Common
     Stock if such person is not a director or officer of
     the Issuer; or

         (ii)  The occurrence of a Preliminary Purchase
     Event described in Section 2(b)(i) hereof except that
     the percentage referred to in clause (z) shall be 20%.

          (d)  Notice by Issuer.  Issuer shall notify
Grantee promptly in writing of the occurrence of any
Preliminary Purchase Event or Purchase Event; provided,
however, that the giving of such notice by Issuer shall not
be a condition to the right of Grantee to exercise the
Option.

          (e)  Notice of Exercise.  In the event that
Grantee is entitled to and wishes to exercise the Option, it
shall send to Issuer a written notice (the "Option Notice"
and the date of which being hereinafter referred to as the
"Notice Date") specifying (i) the total number of shares of
Common Stock it will purchase pursuant to such exercise,
(ii) the aggregate purchase price as provided herein and
(iii) a period of time (that shall not be less than three
business days nor more than thirty business days) running
from the Notice Date (the "Closing Date") and a place at
which the closing of such purchase shall take place;
provided, that, if prior notification to or approval of the
Federal Reserve Board or any other Governmental Authority is
required in connection with such purchase (each, a
"Notification" or an "Approval," as the case may be),
(a) Grantee shall promptly file, or cause to be filed, the
required notice or application for approval ("Notice/Appli-
cation"), (b) Grantee shall expeditiously process, or cause
to be expeditiously processed, the Notice/Application and
(c) for the purpose of determining the Closing Date pursuant
to clause (iii) of this sentence, the period of time that
otherwise would run from the Notice Date shall instead run
from the later of (x) in connection with any Notification,
the date on which any required notification periods have
expired or been terminated and (y) in connection with any
Approval, the date on which such approval has been obtained
and any requisite waiting period or periods shall have
expired.  For purposes of Section 2(a) hereof, any exercise
of the Option shall be deemed to occur on the Notice Date
relating thereto.  On or prior to the Closing Date, Grantee
shall have the right to revoke its exercise of the Option in
the event that the transaction constituting a Purchase Event
that gives rise to such right to exercise shall not have
been consummated.

          (f)  Payments.  At the closing referred to in
Section 2(e) hereof, Grantee shall pay to Issuer the
aggregate Option Price for the shares of Common Stock
specified in the Option Notice in immediately available
funds by wire transfer to a bank account designated by
Issuer; provided, however, that failure or refusal of Issuer
to designate such a bank account shall not preclude Grantee
from exercising the Option.

          (g)  Delivery of Common Stock.  At such closing,
simultaneously with the delivery of immediately available
funds as provided in Section 2(f) hereof, Issuer shall
deliver to Grantee a certificate or certificates
representing the number of shares of Common Stock specified
in the Option Notice and, if the Option should be exercised
in part only, a new Option evidencing the rights of Grantee
thereof to purchase the balance of the shares of Common
Stock purchasable hereunder.

          (h)  Common Stock Certificates.  Certificates for
Common Stock delivered at a closing hereunder shall be
endorsed with a restrictive legend substantially as follows:

          The transfer of the shares represented by
          this certificate is subject to resale
          restrictions arising under the Securities Act
          of 1933, as amended, and to certain provi-
          sions of an agreement between Monarch Bancorp
          and California Commercial Bankshares
          ("Issuer") dated as of the 19th day of
          December, 1996.  A copy of such agreement is
          on file at the principal office of Issuer and
          will be provided to the holder hereof without
          charge upon receipt by Issuer of a written
          request therefor.

It is understood and agreed that:  (i) the reference to the
resale restrictions of the Securities Act in the above
legend shall be removed by delivery of substitute certifi-
cate(s) without such reference if Grantee shall have
delivered to Issuer a copy of a letter from the staff of the
Securities and Exchange Commission (the "SEC"), or an
opinion of counsel, in form and substance satisfactory to
Issuer, to the effect that such legend is not required for
purposes of the Securities Act; (ii) the reference to the
provisions of this Agreement in the above legend shall be
removed by delivery of substitute certificate(s) without
such reference if the shares have been sold or transferred
in compliance with the provisions of this Agreement and
under circumstances that do not require the retention of
such reference; and (iii) the legend shall be removed in its
entirety if the conditions in the preceding clauses (i) and
(ii) are both satisfied.  In addition, such certificates
shall bear any other legend as may be required by law.  The
Grantee agrees that, except as otherwise contemplated
hereby, the Shares to be acquired pursuant hereto will be
acquired for investment only and not with a view to any
public distribution thereof, and Grantee will not offer to
sell or otherwise dispose of the Shares in violation of any
of the requirements of the Securities Act.

          (i)  Holder of Record.  Upon the giving by Grantee
to Issuer of an Option Notice and the tender of the
applicable purchase price in immediately available funds on
the Closing Date, Grantee shall be deemed to be the holder
of record of the number of shares of Common Stock specified
in the Option Notice, notwithstanding that the stock
transfer books of Issuer shall then be closed or that cer-
tificates representing such shares of Common Stock shall not
then actually be delivered to Grantee.  Issuer shall pay all
expenses and any and all United States federal, state and
local taxes and other charges that may be payable in
connection with the preparation, issue and delivery of stock
certificates under this Section 2 in the name of Grantee.

          SECTION 3.  ISSUER'S COVENANTS.  

          (a)  Available Shares.  The Issuer agrees that it
shall at all times until the termination of this Agreement
have reserved for issuance upon the exercise of the Option
that number of authorized and reserved shares of Common
Stock equal to the maximum number of shares of Common Stock
at any time and from time to time issuable hereunder, all of
which shares will, upon issuance pursuant hereto, be duly
authorized, validly issued, fully paid, nonassessable, and
delivered free and clear of all claims, liens, encumbrances
and security interests. 

          (b)  Compliance.  The Issuer agrees that it will
not, by amendment of its articles of incorporation or
through reorganization, consolidation, merger, dissolution
or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or
performed hereunder by Issuer. 

          (c)  Certain Actions, Applications and
Arrangements.  Issuer shall promptly take all action as may
from time to time be required (including (i) complying with
all premerger notification, reporting and waiting period
requirements specified in 15 U.S.C. Section  18a and regu-
lations promulgated thereunder and (ii) in the event, under
the Bank Holding Company Act of 1956, as amended ("BHC
Act"), or the Change in Bank Control Act of 1978, as
amended, or any state banking law, prior approval of or
notice to the Federal Reserve Board or to any other Govern-
mental Authority is necessary before the Option may be
exercised, cooperating with Grantee in preparing such
applications or notices and providing such information to
each such Governmental Authority as it may require) in order
to permit Grantee to exercise the Option and Issuer duly and
effectively to issue shares of Common Stock pursuant hereto.


          SECTION 4.  EXCHANGE OF OPTION.  This Agreement
and the Option granted hereby are exchangeable, without
expense, at the option of Grantee, upon presentation and
surrender of this Agreement at the principal office of
Issuer, for other agreements providing for Options of
different denominations entitling the holder thereof to
purchase, on the same terms and subject to the same
conditions as are set forth herein, in the aggregate the
same number of shares of Common Stock purchasable hereunder. 
The terms "Agreement" and "Option" as used in this Section 4
include any agreements and related options for which this
Agreement and the Option granted hereby may be exchanged. 
Upon receipt by Issuer of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Agreement, if mutilated,
Issuer will execute and deliver a new Agreement of like
tenor and date.  Any such new Agreement executed and
delivered shall constitute an additional contractual obli-
gation on the part of Issuer, whether or not the Agreement
so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.

          SECTION 5.  ADJUSTMENTS.  The number of shares of
Common Stock purchasable upon the exercise of the Option
shall be subject to adjustment from time to time as follows:

     (a)  In the event of any change in the Common Stock by
reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions,
exchanges of shares or the like, the type and number of
shares of Common Stock purchasable upon exercise hereof
shall be appropriately adjusted and proper provision shall
be made so that, in the event that any additional shares of
Common Stock are to be issued or otherwise to become
outstanding as a result of any such change (other than
pursuant to an exercise of the Option or any other options,
warrants or other rights (or in settlement or satisfaction
of such rights) set forth in Annex 2 to the Plan), the
number of shares of Common Stock that remain subject to the
Option shall be increased so that, after such issuance and
together with shares of Common Stock previously issued
pursuant to the exercise of the Option (as adjusted on
account of any of the foregoing changes in the Common
Stock), it represents the same proportion of the number of
shares of Common Stock then issued and outstanding as such
proportion before the applicable event described in this
Section 5(a).

     (b)  Whenever the number of shares of Common Stock
purchasable upon exercise hereof is adjusted as provided in
this Section 5, the Option Price shall be adjusted by
multiplying the Option Price by a fraction, the numerator of
which shall be equal to the number of shares of Common Stock
purchasable prior to the adjustment and the denominator of
which shall be equal to the number of shares of Common Stock
purchasable after the adjustment.

          SECTION 6.  REGISTRATION RIGHTS.  (a)  Upon the
occurrence of a Purchase Event that occurs prior to an
Exercise Termination Event, Issuer shall, at the request of
Grantee (whether on its own behalf or on behalf of any
subsequent holder of the Option (or part thereof) or any of
the shares of Common Stock issued pursuant hereto), promptly
prepare and file a registration statement under the
Securities Act covering any shares issued and issuable
pursuant to the Option and shall use its best efforts to
cause such registration statement to become effective, and
to remain current and effective for a reasonable period
after such registration statement first becomes effective,
in order to permit the sale or other disposition of any
shares of Common Stock issued upon total or partial exercise
of the Option ("Option Shares") in accordance with any plan
of disposition requested by Grantee; provided, however, that
Issuer may postpone filing a registration statement relating
to a registration request by Grantee under this Section 6
for a period of time (not in excess of 30 days) if in its
judgment such filing would require the disclosure of
material information that Issuer has a bona fide business
purpose for preserving as confidential.  Grantee shall have
the right to demand one such registration at the Issuer's
expense and additional registrations at its own expense. 
The foregoing notwithstanding, if, at the time of any
request by Grantee for registration of Option Shares as
provided above, Issuer is in the process of registration
with respect to an underwritten public offering of shares of
Common Stock, and if in the good faith judgment of the
managing underwriter or managing underwriters, or, if none,
the sole underwriter or underwriters, of such offering, the
offering or inclusion of the Option Shares would interfere
materially with the successful marketing of the shares of
Common Stock offered by Issuer, the number of Option Shares
otherwise to be covered in the registration statement
contemplated hereby may be reduced; provided, however, that
after any such required reduction, the number of Option
Shares to be included in such offering for the account of
Grantee shall constitute at least 33 1/3% of the total
number of shares of Common Stock held by Grantee and Issuer
covered in such registration statement; provided further,
however, that if such reduction occurs, then Issuer shall
file a registration statement for the balance as promptly as
practicable thereafter as to which no reduction pursuant to
this Section 6(a) shall be permitted or occur, and the
Grantee shall thereafter be entitled to one additional
registration statement at the Grantee's expense.  In
addition, if the Company proposes to register its Common
Stock or any other securities on a form that would permit
the registration of the Shares for public sale under the
Securities Act (whether proposed to be offered for sale by
the Issuer or any other Person) it will give prompt written
notice to Grantee of its intention to do so, specifying the
relevant terms of such proposal, including the proposed
maximum offering price thereof.  Upon the written request of
the Grantee delivered to the Issuer within 10 business days
after the giving of any such notice, which request shall
specify the number of Shares desired to be disposed by
Grantee, the Company will use its best efforts to effect, in
connection with its proposed registration, the registration
under the Securities Act of the Shares set forth in such
request.  The Grantee shall be entitled to two such
registrations at the Issuer's expense and additional
registrations at its own expense.  Grantee shall provide all
information reasonably requested by Issuer for inclusion in
any registration statement to be filed hereunder.  In
connection with any such registration, Issuer and Grantee
shall provide each other with representations, warranties,
indemnities and other agreements customarily given in
connection with such registrations.  If requested by Grantee
in connection with such registration, Issuer and Grantee
shall become a party to any underwriting agreement relating
to the sale of such shares, but only to the extent of
obligating themselves in respect of representations, warran-
ties, indemnities and other agreements customarily included
in such underwriting agreements.  Notwithstanding the
foregoing, if Grantee revokes any Option Notice or fails to
exercise any Option with respect to any Option Notice
pursuant to Section 2(e) hereof, Issuer shall not be
obligated to continue any registration process with respect
to the sale of Option Shares issuable upon the exercise of
such Option and Grantee shall not be deemed to have demanded
registration of Option Shares.

          (b)  In the event that Grantee requests Issuer to
file a registration statement following the failure to
obtain any approval required to exercise the Option as
described in Section 8 hereof, the closing of the sale or
other disposition of the Common Stock or other securities
pursuant to such registration statement shall occur
substantially simultaneously with the exercise of the
Option.

          SECTION 7.  SUBSTITUTE OPTION.  

          (a)  Grant of Substitute Option.  In the event
that prior to an Exercise Termination Event, Issuer shall
enter into an agreement (i) to consolidate or merge with any
person, other than Grantee or a Grantee Subsidiary, and
shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any person, other
than Grantee or a Grantee Subsidiary, to merge into Issuer
and Issuer shall be the continuing or surviving corporation,
but, in connection with such merger, the then outstanding
shares of Common Stock shall be changed into or exchanged
for stock or other securities of any other person or cash or
any other property or the then outstanding shares of Common
Stock shall after such merger represent less than 50% of the
outstanding shares and share equivalents of the merged com-
pany, or (iii) to sell or otherwise transfer all or substan-
tially all of its or any Material Subsidiary's assets to any
person, other than Grantee or a Grantee Subsidiary, then,
and in each such case, the agreement governing such
transaction shall make proper provision so that the Option
shall, upon the consummation of such transaction and upon
the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"),
at the election of Grantee, of either (x) the Acquiring
Corporation (as defined below) or (y) any person that
controls the Acquiring Corporation (the Acquiring
Corporation and any such controlling person being
hereinafter referred to as the "Substitute Option Issuer").

          (b)  Exercise of Substitute Option.  The
Substitute Option shall be exercisable for such number of
shares of the Substitute Common Stock (as is hereinafter
defined) as is equal to the product of (i) the Market Price
(as defined below) multiplied by the number of shares of the
Issuer Common Stock for which the Option was theretofore
exercisable, divided by (ii) the Average Price (as is
hereinafter defined).  The exercise price of the Substitute
Option per share of the Substitute Common Stock (the
"Substitute Purchase Price") shall then be equal to the
product of the Option Price multiplied by a fraction in
which the numerator is the number of shares of Common Stock
for which the Option was theretofore exercisable and the
denominator is the number of shares for which the Substitute
Option is exercisable.  For purposes of this Agreement, the
term "Market Price" shall mean the highest of (i) the price
per share of Common Stock paid or to be paid by any third
party pursuant to an agreement with Issuer (whether by way
of a merger, consolidation or otherwise) and (ii) in the
event of a sale of all or substantially all of Issuer's
assets, the sum of the price paid in such sale for such
assets and the current market value of the remaining assets
of Issuer as determined by a nationally recognized
independent investment banking firm selected by Grantee
divided by the number of shares of Common Stock of Issuer
outstanding at the time of such sale.  In determining the
Market Price, the value of consideration other than cash
shall be the value determined by a nationally recognized
independent investment banking firm selected by Grantee
whose determination shall be conclusive and binding on all
parties.

          (c)  Terms of Substitute Option.  The Substitute
Option shall otherwise have the same terms as the Option,
provided, however, that if the terms of the Substitute
Option cannot, for legal reasons, be the same as the Option,
such terms shall be as similar as possible and in no event
less advantageous to Grantee.

          (d)  Substitute Option Definitions.  The following
terms have the meanings indicated: 

          (i)  "Acquiring Corporation" shall mean (i) the
     continuing or surviving corporation of a consolidation
     or merger with Issuer (if other than Issuer), (ii)
     Issuer in a merger in which Issuer is the continuing or
     surviving person, and (iii) the transferee of all or
     any substantial part of the Issuer's assets (or the
     assets of any Issuer subsidiary);

         (ii)  "Substitute Common Stock" shall mean the
     common stock issued by the Substitute Option Issuer
     upon exercise of the Substitute Option; and

        (iii)  "Average Price" shall mean the average
     closing price of a share of the Substitute Common Stock
     for the one year immediately preceding the consolida-
     tion, merger or sale in question, but in no event
     higher than the closing price of the shares of the
     Substitute Common Stock on the day preceding such
     consolidation, merger or sale; provided, however, that
     if such closing price is not ascertainable due to an
     absence of a public market for the Substitute Common
     Stock, "Average Price" shall mean the higher of (i) the
     price per share of Substitute Common Stock paid or to
     be paid by any third party pursuant to an agreement
     with the issuer of the Substitute Common Stock and (ii)
     the book value per share, calculated in accordance with
     generally accepted accounting principles, of the
     Substitute Common Stock immediately prior to exercise
     of the Substitute Option; provided, further, that if
     Issuer is the issuer of the Substitute Option, the
     Average Price shall be computed with respect to a share
     of common stock issued by Issuer, the person merging
     into Issuer or by any company which controls or is con-
     trolled by such merging person, as Grantee may elect.

          (e)  Cap on Substitute Option.  In no event,
pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than that
proportion of the outstanding Substitute Common Stock equal
to the proportion of the outstanding Common Stock of the
Company which the Grantee had the right to acquire
immediately prior to the issuance of the Substitute Option. 
In the event that the Substitute Option would be exercisable
for more than the proportion of the outstanding Substitute
Common Stock referred to in the immediately preceding
paragraph but for this clause (e), the Substitute Option
Issuer shall make a cash payment to Grantee equal to the
excess of (i) the value of the Substitute Option without
giving effect to the limitation in this clause (e) over (ii)
the value of the Substitute Option after giving effect to
the limitation in this clause (e).  This difference in value
shall be determined by a nationally recognized investment
banking firm selected by Grantee and the Substitute Option
Issuer.

          SECTION 8.  EXTENSION OF EXERCISE RIGHT. 
Notwithstanding Sections 2 and 6 hereof, if Grantee has
given the notice referred to in one or more of such
Sections, the exercise of the rights specified in any such
Section shall be extended (a) if the exercise of such rights
requires obtaining regulatory approvals (including any
required waiting periods) to the extent necessary to obtain
all regulatory approvals for the exercise of such rights,
and (b) to the extent necessary to avoid liability under
Section 16(b) of the Securities Exchange Act by reason of
such exercise; provided, however, that in no event shall any
closing date occur more than 6 months after the related
Notice Date, and, if the closing date shall not have
occurred within such period due to the failure to obtain any
required approval by the Federal Reserve Board or any other
Governmental Authority despite the best efforts of Issuer or
the Substitute Option Issuer, as the case may be, to obtain
such approvals, the exercise of the Option shall be deemed
to have been rescinded as of the related Notice Date.  In
the event (a) Grantee receives official notice that an
approval of the Federal Reserve Board or any other Govern-
mental Authority required for the purchase and sale of the
Option Shares will not be issued or granted or (b) a closing
date has not occurred within 6 months after the related
Notice Date due to the failure to obtain any such required
approval, Grantee shall be entitled to exercise the Option
in connection with the resale of the Option Shares pursuant
to a registration statement as provided in Section 6.  

          SECTION 9.  ISSUER'S REPRESENTATIONS AND
WARRANTIES.  Issuer hereby represents and warrants to
Grantee as follows: 

          (a)  Corporate Authority.  Issuer has the
requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby.  The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby have been duly approved by the Board of
Directors of Issuer and no other corporate proceedings on
the part of Issuer are necessary to authorize this Agreement
or to consummate the transactions so contemplated.  This
Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of, Issuer,
enforceable against Issuer in accordance with its terms,
except as enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, mora-
torium and other similar laws affecting the enforcement of
creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunc-
tive relief is subject to the discretion of the court before
which any proceeding may be brought; and

          (b)  Availability of Shares.  Issuer has taken all
necessary corporate action to authorize and reserve and to
permit it to issue, and at all times from the date hereof
through the termination of this Agreement in accordance with
its terms will have reserved for issuance upon the exercise
of the Option, that number of shares of Common Stock equal
to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such
shares, upon issuance pursuant hereto, will be duly
authorized, validly issued, fully paid, non-assessable, and
will be delivered free and clear of all claims, liens,
encumbrances and security interests.

          SECTION 10.  Assignment. 

          (a)  Assignment.  Neither of the parties hereto
may assign any of its rights or delegate any of its obliga-
tions under this Agreement or the Option created hereunder
to any other person without the express written consent of
the other party, except that Grantee may assign this
Agreement to a wholly owned subsidiary of Grantee and
Grantee may assign its rights hereunder in whole or in part
after the occurrence of a Preliminary Purchase Event;
provided, however, that until the date at which the Federal
Reserve Board has approved an application by Grantee under
the BHC Act to acquire the shares of Common Stock subject to
the Option, other than to a wholly owned subsidiary of
Grantee, Grantee may not assign its rights under the Option
except in (i) a widely dispersed public distribution, (ii) a
private placement in which no one party acquires the right
to purchase in excess of 2% of the voting shares of Issuer,
(iii) an assignment to a single party (e.g., a broker or
investment banker) for the purpose of conducting a widely
dispersed public distribution on Grantee's behalf, or (iv)
any other manner approved by the Federal Reserve Board.  The
term "Grantee" as used in this Agreement shall also be
deemed to refer to Grantee's permitted assigns.  Any
attempted assignment prohibited by this Section 10 is void
and without effect.

          (b)  Restrictive Legend.  Any assignment of rights
of Grantee to any permitted assignee of Grantee hereunder
shall bear the restrictive legend at the beginning thereof
substantially as follows:

          The transfer of the option represented by this
          assignment and the related option agreement is
          subject to resale restrictions arising under the
          Securities Act of 1933, as amended, and to certain
          provisions of an agreement between Monarch Bancorp
          and California Commercial Bankshares ("Issuer"),
          dated as of the 19th day of December, 1996.  A
          copy of such agreement is on file at the principal
          office of Issuer and will be provided to any
          permitted assignee of the Option without change
          upon receipt by Issuer of a written request
          therefor.

It is understood and agreed that (i) the reference to the
resale restrictions of the Securities Act in the above
legend shall be removed by delivery of substitute assign-
ments without such reference if Grantee shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or
an opinion of counsel, in form and substance satisfactory to
Issuer, to the effect that such legend is not required for
purposes of the Securities Act; (ii) the reference to the
provisions of this Agreement in the above legend shall be
removed by delivery of substitute assignments without such
reference if the Option has been sold or transferred in
compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such
reference; and (iii) the legend shall be removed in its
entirety if the conditions in the preceding clauses (i) and
(ii) are both satisfied.  In addition, such assignments
shall bear any other legend as may be required by law.

          SECTION 11.  Filings and Consents.  Each of
Grantee and Issuer will use its reasonable efforts to make
all filings with, and to obtain consents of, all third
parties and Governmental Authorities necessary to the
consummation of the transactions contemplated by this
Agreement, including, without limitation, making application
if necessary, for listing of the shares of Common Stock
issuable hereunder on any exchange or quotation system and
applying to the Federal Reserve Board under the BHC Act and
to state banking authorities for approval to acquire the
shares issuable hereunder.

          SECTION 12.  Remedies.  The parties hereto
acknowledge that damages would be an inadequate remedy for a
breach of this Agreement by either party hereto and that the
obligations of the parties shall hereto be enforceable by
either party hereto through injunctive or other equitable
relief.  Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with
the obtaining of any such equitable relief and that this
provision is without prejudice to any other rights that the
parties hereto may have for any failure to perform this
Agreement.

          SECTION 13.  Severability.  If any term,
provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state
regulatory agency of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms,
provisions and covenants and restrictions contained in this
Agreement shall remain in full force and effect, and shall
in no way be affected, impaired or invalidated.  

          SECTION 14.  Notices.  All notices, requests,
claims, demands and other communications hereunder shall be
deemed to have been duly given when delivered in person, by
cable, telegram, telecopy or telex, or by registered or
certified mail (postage prepaid, return receipt requested)
at the respective addresses of the parties set forth in the
Plan.

          SECTION 15.  Counterparts.  This Agreement may be
executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute
one and the same agreement and shall be effective at the
time of execution.  

          SECTION 16.  Expenses.  Except as otherwise
expressly provided herein, each of the parties hereto shall
bear and pay all costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.

          SECTION 17.  Entire Agreement.  Except as
otherwise expressly provided herein or in the Plan, this
Agreement contains the entire agreement between the parties
with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with
respect thereof, written or oral.  The terms and conditions
of this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective
successors and permitted assigns.  Nothing in this
Agreement, expressed or implied, is intended to confer upon
any party, other than the parties hereto, and their
respective successors except as assigns, any rights,
remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided herein.  

          SECTION 18.  Definitions.  Capitalized terms used
in this Agreement and not defined herein but defined in the
Plan shall have the meanings assigned thereto in the Plan.

          SECTION 19.  Effect on Plan.  Nothing contained in
this Agreement shall be deemed to authorize Issuer or
Grantee to breach any provision of the Plan.

          SECTION 20.  Selections.  In the event that any
selection or determination is to be made by Grantee here-
under and at the time of such selection or determination
there is more than one Grantee, such selection shall be made
by a majority in interest of such Grantees.

          SECTION 21.  Further Assurances.  In the event of
any exercise of the option by Grantee, Issuer and such
Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided
for by such exercise.

          SECTION 22.  Voting.  Except to the extent Grantee
exercises the Option, Grantee shall have no rights to vote
or receive dividends or have any other rights as a
shareholder with respect to shares of Common Stock covered
hereby.
          SECTION 23.  Governing Law.  This Agreement shall
be governed by and construed in accordance with the laws of
the State of California.

          IN WITNESS WHEREOF, each of the parties has caused
this Stock Option Agreement to be executed on its behalf by
their officers thereunto duly authorized, all as of the date
first above written.


                         MONARCH BANCORP



                         By: Hugh S. Smith, Jr.
                            ----------------------------
                            Name: Hugh S. Smith, Jr.
                            Title: Chairman


                         CALIFORNIA COMMERCIAL BANKSHARES



                         By: Mark H. Stuenkel              
                            -----------------------------
                            Name: Mark H. Stuenkel
                            Title: Executive Vice President



                      TABLE OF CONTENTS

                                                        PAGE

INDEX OF DEFINED TERMS. . . . . . . . . . . . . . . . . . iv

SECTION 1.  GRANT OF OPTION.. . . . . . . . . . . . . . .  1

SECTION 2.  EXERCISE OF OPTION. . . . . . . . . . . . . .  1
     (a)  Timing of Exercise, Termination.. . . . . . . .  1
     (b)  Preliminary Purchase Event. . . . . . . . . . .  2
     (c)  Purchase Event. . . . . . . . . . . . . . . . .  4
     (d)  Notice by Issuer. . . . . . . . . . . . . . . .  4
     (e)  Notice of Exercise. . . . . . . . . . . . . . .  4
     (f)  Payments. . . . . . . . . . . . . . . . . . . .  5
     (g)  Delivery of Common Stock. . . . . . . . . . . .  5
     (h)  Common Stock Certificates.. . . . . . . . . . .  5
     (i)  Holder of Record. . . . . . . . . . . . . . . .  6

SECTION 3.  ISSUER'S COVENANTS. . . . . . . . . . . . . .  6
     (a)  Available Shares. . . . . . . . . . . . . . . .  6
     (b)  Compliance. . . . . . . . . . . . . . . . . . .  6
     (c)  Certain Actions, Applications and
          Arrangements. . . . . . . . . . . . . . . . . .  6
     (d)  Dilution. . . . . . . . . . . . . . . . . . . .  7

SECTION 4.  EXCHANGE OF OPTION. . . . . . . . . . . . . .  7

SECTION 5.  ADJUSTMENTS.. . . . . . . . . . . . . . . . .  7

SECTION 6.  REGISTRATION RIGHTS . . . . . . . . . . . . .  8

SECTION 7.  OPTION AND OPTION SHARE REPURCHASE. . . . . .  9
     (a)  Right to Repurchase, Price. . . . . . . . . . .  9
     (b)  Repurchase Procedure. . . . . . . . . . . . . . 10
     (c)  Regulatory Approvals, Partial Repurchase. . . . 11

SECTION 8.  SUBSTITUTE OPTION.. . . . . . . . . . . . . . 12
     (a)  Grant of Substitute Option. . . . . . . . . . . 12
     (b)  Exercise of Substitute Option.. . . . . . . . . 12
     (c)  Terms of Substitute Option. . . . . . . . . . . 13
     (d)  Substitute Option Definitions.. . . . . . . . . 13
     (e)  Cap on Substitute Option. . . . . . . . . . . . 14

SECTION 9.  EXTENSION OF EXERCISE RIGHT . . . . . . . . . 14

SECTION 10.  ISSUER REPRESENTATIONS AND WARRANTIES. . . . 15
     (a)  Corporate Authority . . . . . . . . . . . . . . 15
     (b)  Availability of Shares. . . . . . . . . . . . . 15

SECTION 11.  Assignment . . . . . . . . . . . . . . . . . 15
     (a)  Assignment. . . . . . . . . . . . . . . . . . . 15
     (b)  Restrictive Legend. . . . . . . . . . . . . . . 16

SECTION 12.  Filings and Consents . . . . . . . . . . . . 16

SECTION 13.  Remedies . . . . . . . . . . . . . . . . . . 17

SECTION 14.  Severability . . . . . . . . . . . . . . . . 17

SECTION 15.  Notices. . . . . . . . . . . . . . . . . . . 17

SECTION 16.  Counterparts . . . . . . . . . . . . . . . . 17

SECTION 17.  Expenses . . . . . . . . . . . . . . . . . . 18

SECTION 18.  Entire Agreement . . . . . . . . . . . . . . 18

SECTION 19.  Definitions. . . . . . . . . . . . . . . . . 18

SECTION 20.  Effect on Plan . . . . . . . . . . . . . . . 18

SECTION 21.  Selections . . . . . . . . . . . . . . . . . 18

SECTION 22.  Further Assurances . . . . . . . . . . . . . 18

SECTION 23.  Voting . . . . . . . . . . . . . . . . . . . 18



                   INDEX OF DEFINED TERMS

                                                        PAGE

Acquiring Corporation . . . . . . . . . . . . . . . . . . 13
Acquisition Transaction . . . . . . . . . . . . . . . . .  3
Agreement . . . . . . . . . . . . . . . . . . . . . . . . .1
Approval. . . . . . . . . . . . . . . . . . . . . . . . . .4
Average Price . . . . . . . . . . . . . . . . . . . . . . 13
Beneficial Ownership. . . . . . . . . . . . . . . . . . . .2
BHC Act . . . . . . . . . . . . . . . . . . . . . . . . . .6
Closing Date. . . . . . . . . . . . . . . . . . . . . . . .4
Common Stock. . . . . . . . . . . . . . . . . . . . . . . .1
Exchange offer. . . . . . . . . . . . . . . . . . . . . . .3
Exercise Termination Event. . . . . . . . . . . . . . . . .2
Federal Reserve Board . . . . . . . . . . . . . . . . . . .3
Governmental Authority. . . . . . . . . . . . . . . . . . .3
Grantee . . . . . . . . . . . . . . . . . . . . . . . . . .1
Grantee Subsidiary. . . . . . . . . . . . . . . . . . . . .2
Initial Price . . . . . . . . . . . . . . . . . . . . . . .1
Issuer. . . . . . . . . . . . . . . . . . . . . . . . . . .1
Issuer Subsidiary . . . . . . . . . . . . . . . . . . . . .2
Market Price. . . . . . . . . . . . . . . . . . . . . . . 10
Notice Date . . . . . . . . . . . . . . . . . . . . . . . .4
Notice/Application. . . . . . . . . . . . . . . . . . . . .4
Notification. . . . . . . . . . . . . . . . . . . . . . . .4
Option. . . . . . . . . . . . . . . . . . . . . . . . . . .1
Option Notice . . . . . . . . . . . . . . . . . . . . . . .4
Option Price. . . . . . . . . . . . . . . . . . . . . . . .1
Option Repurchase Price . . . . . . . . . . . . . . . . . .9
Option Repurchase Request Date. . . . . . . . . . . . . . .9
Option Share Repurchase Price . . . . . . . . . . . . . . 10
Option Share Repurchase Request Date. . . . . . . . . . . 10
Option Shares . . . . . . . . . . . . . . . . . . . . . . .8
Owner . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Person. . . . . . . . . . . . . . . . . . . . . . . . . . .2
Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Preliminary Purchase Event. . . . . . . . . . . . . . . . .2
Purchase Event. . . . . . . . . . . . . . . . . . . . . . .4
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Securities Act. . . . . . . . . . . . . . . . . . . . . . .3
Securities Exchange Act . . . . . . . . . . . . . . . . . .2
Substitute Common Stock . . . . . . . . . . . . . . . . . 13
Substitute Option . . . . . . . . . . . . . . . . . . . . 12
Substitute Option Issuer. . . . . . . . . . . . . . . . . 12
Substitute Purchase Price . . . . . . . . . . . . . . . . 12
Tender offer. . . . . . . . . . . . . . . . . . . . . . . .3

EX-2

Exhibit 2.3
                                                  Annex 3

                         SHAREHOLDER AGREEMENT


           Shareholder Agreement (the "Agreement"), dated as of 
December 19, 1996, by and between (i) William Jacoby, a director
and shareholder (the "Shareholder") of California Commercial
Bankshares, a California corporation (the "Company"), and
(ii) Monarch Bancorp, a California corporation ("Monarch").  All
terms used herein and not defined herein shall have the meaning
assigned thereto in the Merger Agreement (defined below).

           Whereas, the Company and Monarch have entered into an
Agreement and Plan of Merger, dated the date hereof (the "Merger
Agreement"), providing for the business combination transaction
contemplated therein in which the Company will merge with and
into
Monarch pursuant to the terms and conditions of the Merger
Agreement (the "Merger") and Monarch will pay consideration to
the
Company's shareholders in the form of Monarch Common Stock;

           Whereas, the Shareholder owns the shares of Company
Common Stock identified on ANNEX I hereto (such shares, together
with all shares of Company Common Stock subsequently acquired by
the Shareholder during the term of this Agreement, being referred
to as the "Shares"); and

           Whereas, in order to induce Monarch to enter into the
Merger Agreement and in consideration of the substantial expenses
incurred and to be incurred by Monarch in connection therewith,
the
Shareholder has agreed to enter into and perform this Agreement.

           Now, therefore, for good and valuable consideration,
the
receipt, sufficiency and adequacy of which are hereby
acknowledged,
the parties hereto agree as follows:

           1.  Agreement to Vote Shares.  Shareholder shall vote
or
cause to be voted, or execute a written consent with respect to,
the Shares (a) in favor of adoption and approval of the Merger
Agreement and the Merger and all transactions relating thereto at
every meeting of the shareholders of the Company at which such
matters are considered and at every adjournment thereof and in
connection with every proposal to take action by written consent
with respect thereto, and (b) against any other Acquisition
Proposal at every meeting of the shareholders of the Company at
which such matters are considered and at every adjournment
thereof
and in connection with every proposal to take action by written
consent with respect thereto.  

           2.  No Voting Trusts.  Shareholder agrees that
Shareholder will not, nor will Shareholder permit any entity
under
Shareholder's control to, deposit any Shares in a voting trust or
subject the Shares to any agreement, arrangement or understanding
with respect to the voting of the Shares inconsistent with this
Agreement.

           3.  Limitation on Sales.  During the term of this
Agreement, Shareholder agrees not to sell, assign, transfer or
dispose of any of the Shares.

           4.  Representations and Warranties of Shareholder. 
Shareholder represents and warrants to and agrees with Monarch as
follows:

           a.   Capacity.  Shareholder has all requisite capacity
     and authority to enter into and perform his or her
obligations
     under this Agreement.

           b.   Binding Agreement.  This Agreement constitutes
the
     valid and legally binding obligation of Shareholder, subject
     to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general
     applicability relating to or affecting creditors' rights and
     to general equity principles.

           c.   Non-Contravention.  The execution and delivery of
     this Agreement by Shareholder does not, and the performance
by
     Shareholder of his or her obligations hereunder and the
     consummation by Shareholder of the transactions contemplated
     hereby will not, violate or conflict with, or constitute a
     default under, any agreement, instrument, contract or other
     obligation or any order, arbitration award, judgment or
decree
     to which Shareholder is a party or by which Shareholder is
     bound, or any statute, rule or regulation to which
Shareholder
     is subject or, in the event that Shareholder is a
corporation,
     partnership, trust or other entity, any charter, bylaw or
     other organizational document of the Shareholder.

           d.   Ownership of Shares. Shareholder has good title
to
     all of the Shares as of the date hereof, and the Shares are
so
     owned free and clear of any liens, security interests,
charges
     or other encumbrances.

           5.  Competition.  Neither Shareholder nor any
corporation, partnership, trust or other entity controlled by
Shareholder shall:

           (a)  at any time within a three-year period
immediately
     following the Effective Time, engage in, be employed by,
     acquire an equity interest in or start, or otherwise provide
     any assistance to, directly or indirectly, any business
which
     provides banking services, including, but not limited to,
     deposit and operational services, loans, trust services,
     escrow services and electronic banking services ("Banking
     Businesses"), in the counties of Los Angeles, Orange and San
     Diego in the State of California so long as Monarch or its
     assigns remain engaged in any Banking Businesses;

           (b)  at any time following the Effective Time,
disclose
     confidential information regarding the Company or the
Company
     Bank to any third parties, except as required by law,
     regulation, a court order, in the defense of litigation for
     which the Company or the Company Bank may be liable, or in
any
     actions relating to this Agreement or the Merger Agreement
and
     the transactions contemplated hereby or thereby; and

           (c)  solicit, directly or indirectly, on its own
behalf
     or on behalf of any other person or entity, management
     personnel employed by Monarch immediately after the
Effective
     Time for employment with any other business;

provided, however, that with respect to any of the matters
covered
in this Section 5, to the extent that any restriction set forth
in
this Section 5 is adjudicated to be invalid or unenforceable in
any
jurisdiction, the court making such determination shall have the
power to limit, construe or reduce the duration, scope, activity
or
area of such provision to the extent necessary to render such
provision enforceable to the maximum extent permitted by
applicable
law, such limited form to apply only with respect to the
operation
of such provision in the particular jurisdiction in which such
adjudication is made.

           6.  Specific Performance and Remedies.  Shareholder
acknowledges that it will be impossible to measure in money the
damage to Monarch if Shareholder fails to comply with the
obligations imposed by this Agreement and that, in the event of
any
such failure, Monarch will not have an adequate remedy at law or
in
damages.  Accordingly, Shareholder agrees that injunctive relief
or
other equitable remedy, in addition to remedies at law or in
damages, is the appropriate remedy for any such failure and will
not oppose the granting of such relief on the basis that Monarch
has an adequate remedy at law.  Shareholder agrees that it will
not
seek, and agrees to waive any requirement for, the securing or
posting of a bond in connection with Monarch's seeking or
obtaining
such equitable relief.  In addition to all other rights or
remedies
which Monarch may have against Shareholder in the event of a
default in Shareholder's performance of Shareholder's obligations
under this Agreement, Shareholder shall be liable to Monarch for
all litigation costs and attorneys' fees incurred by Monarch in
connection with the enforcement of any of its rights or remedies
against Shareholder.  In addition, after discussing the matter
with
Shareholder, Monarch shall have the right to inform any third
party
that Monarch reasonably believes to be, or to be contemplating,
participating with Shareholder or receiving from Shareholder
assistance in violation of this Agreement, of the terms of this
Agreement and of the rights of Monarch hereunder, and that
participation by any such persons with Shareholder in activities
in
violation of Shareholder's agreement with Monarch set forth in
this
Agreement may give rise to claims by Monarch against such third
party.

           7.  Term of Agreement; Termination.  The term of this
Agreement shall commence on the date hereof and such term and
this
Agreement shall terminate upon the earlier to occur of (i) the
Effective Time, and (ii) the date on which the Merger Agreement
is
terminated in accordance with its terms.  Upon such termination,
no
party shall have any further obligations or liabilities
hereunder;
provided, however, such termination shall not relieve any party
from liability for any breach of this Agreement prior to such
termination.  

           8.  Entire Agreement.  This Agreement supersedes all
prior agreements, written or oral, among the parties hereto with
respect to the subject matter hereof and contains the entire
agreement among the parties with respect to the subject matter
hereof.  This Agreement may not be amended, supplemented or
modified, and no provisions hereof may be modified or waived,
except by an instrument in writing signed by each party hereto. 
No
waiver of any provisions hereof by either party shall be deemed a
waiver of any other provisions hereof by any such party, nor
shall
any such waiver be deemed a continuing waiver of any provision
hereof by such party.

           9.  Notices.  All notices, requests, claims, demands
or
other communications hereunder shall be in writing and shall be
deemed given when delivered personally, upon receipt of a
transmission confirmation if sent by telecopy or like
transmission
and on the next business day when sent by a reputable overnight
courier service to the parties at the following addresses (or at
such other address for a party as shall be specified by like
notice):

           If to Monarch:

           Monarch Bancorp
           1251 Westwood Blvd.
           Los Angeles, CA 90024
           Telecopier:     (310) 479-0844
           Attention:      Matt Wagner

     With a copy to:

           Sullivan & Cromwell
           444 South Flower Street
           Los Angeles, California  90071
           Telecopier:  (213) 683-0458
           Attention:  Stanley F. Farrar, Esq.

     If to the Shareholder:
           William Jacoby
           4100 Newport Place
           Newport Beach, CA  92660
           Telecopier:  (714) 863-2336

           With a copy to:

           O'Melveny & Myers LLP
           400 South Hope Street
           Los Angeles, CA  90071
           Telecopier:  (213) 669-6407

           Attention:  Frances E. Lossing

           10.  Miscellaneous.

           a.  Severability.  If any provision of this Agreement
or
     the application of such provision to any person or
     circumstances shall be held invalid or unenforceable by a
     court of competent jurisdiction, such provision or
application
     shall be unenforceable only to the extent of such invalidity
     or unenforceability, and the remainder of the provision held
     invalid or unenforceable and the application of such
provision
     to persons or circumstances, other than the party as to
which
     it is held invalid, and the remainder of this Agreement,
shall
     not be affected.

           b.  Capacity.  The covenants contained herein shall
apply
     to Shareholder solely in his or her capacity as a
shareholder
     of the Company, and no covenant contained herein shall apply
     to Shareholder in his or her capacity as a director of the
     Company.

           c.  Counterparts.  This Agreement may be executed in
one
     or more counterparts, each of which shall be deemed to be an
     original but all of which together shall constitute one and
     the same instrument.

           d.  Headings.  All Section headings herein are for
     convenience of reference only and are not part of this
     Agreement, and no construction or reference shall be derived
     therefrom.

           E.  CHOICE OF LAW.  THIS AGREEMENT SHALL BE DEEMED A
     CONTRACT MADE UNDER, AND FOR ALL PURPOSES SHALL BE CONSTRUED
     IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA,
     WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PRINCIPLES.

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


                                 MONARCH BANCORP

                                 By: __/s/ Hugh S. Smith, Jr.___
                                     Name: Hugh S. Smith, Jr.
                                     Title: Chairman


                                     William Jacoby
                                     (Print or type name)


                                                                  
  
                                     ___/s/ Mark Stuenkel___
                                     (Signature)

EX-2

Exhibit 2.4


                                                               
Annex 3
                         SHAREHOLDER AGREEMENT


           Shareholder Agreement (the "Agreement"), dated as of
December 19, 1996, by and between (i) Robert McKay, a director
and
shareholder (the "Shareholder") of California Commercial
Bankshares, a California corporation (the "Company"), and
(ii) Monarch Bancorp, a California corporation ("Monarch").  All
terms used herein and not defined herein shall have the meaning
assigned thereto in the Merger Agreement (defined below).

           Whereas, the Company and Monarch have entered into an
Agreement and Plan of Merger, dated the date hereof (the "Merger
Agreement"), providing for the business combination transaction
contemplated therein in which the Company will merge with and
into
Monarch pursuant to the terms and conditions of the Merger
Agreement (the "Merger") and Monarch will pay consideration to
the
Company's shareholders in the form of Monarch Common Stock;

           Whereas, the Shareholder owns the shares of Company
Common Stock identified on ANNEX I hereto (such shares, together
with all shares of Company Common Stock subsequently acquired by
the Shareholder during the term of this Agreement, being referred
to as the "Shares"); and

           Whereas, in order to induce Monarch to enter into the
Merger Agreement and in consideration of the substantial expenses
incurred and to be incurred by Monarch in connection therewith,
the
Shareholder has agreed to enter into and perform this Agreement.

           Now, therefore, for good and valuable consideration,
the
receipt, sufficiency and adequacy of which are hereby
acknowledged,
the parties hereto agree as follows:

           1.  Agreement to Vote Shares.  Shareholder shall vote
or
cause to be voted, or execute a written consent with respect to,
the Shares (a) in favor of adoption and approval of the Merger
Agreement and the Merger and all transactions relating thereto at
every meeting of the shareholders of the Company at which such
matters are considered and at every adjournment thereof and in
connection with every proposal to take action by written consent
with respect thereto, and (b) against any other Acquisition
Proposal at every meeting of the shareholders of the Company at
which such matters are considered and at every adjournment
thereof
and in connection with every proposal to take action by written
consent with respect thereto.  

           2.  No Voting Trusts.  Shareholder agrees that
Shareholder will not, nor will Shareholder permit any entity
under
Shareholder's control to, deposit any Shares in a voting trust or
subject the Shares to any agreement, arrangement or understanding
with respect to the voting of the Shares inconsistent with this
Agreement.

           3.  Limitation on Sales.  During the term of this
Agreement, Shareholder agrees not to sell, assign, transfer or
dispose of any of the Shares.

           4.  Representations and Warranties of Shareholder. 
Shareholder represents and warrants to and agrees with Monarch as
follows:

           a.   Capacity.  Shareholder has all requisite capacity
     and authority to enter into and perform his or her
obligations
     under this Agreement.

           b.   Binding Agreement.  This Agreement constitutes
the
     valid and legally binding obligation of Shareholder, subject
     to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general
     applicability relating to or affecting creditors' rights and
     to general equity principles.

           c.   Non-Contravention.  The execution and delivery of
     this Agreement by Shareholder does not, and the performance
by
     Shareholder of his or her obligations hereunder and the
     consummation by Shareholder of the transactions contemplated
     hereby will not, violate or conflict with, or constitute a
     default under, any agreement, instrument, contract or other
     obligation or any order, arbitration award, judgment or
decree
     to which Shareholder is a party or by which Shareholder is
     bound, or any statute, rule or regulation to which
Shareholder
     is subject or, in the event that Shareholder is a
corporation,
     partnership, trust or other entity, any charter, bylaw or
     other organizational document of the Shareholder.

           d.   Ownership of Shares. Shareholder has good title
to
     all of the Shares as of the date hereof, and the Shares are
so
     owned free and clear of any liens, security interests,
charges
     or other encumbrances.

           5.  Competition.  Neither Shareholder nor any
corporation, partnership, trust or other entity controlled by
Shareholder shall:

           (a)  at any time within a three-year period
immediately
     following the Effective Time, engage in, be employed by,
     acquire an equity interest in or start, or otherwise provide
     any assistance to, directly or indirectly, any business
which
     provides banking services, including, but not limited to,
     deposit and operational services, loans, trust services,
     escrow services and electronic banking services ("Banking
     Businesses"), in the counties of Los Angeles, Orange and San
     Diego in the State of California so long as Monarch or its
     assigns remain engaged in any Banking Businesses;

           (b)  at any time following the Effective Time,
disclose
     confidential information regarding the Company or the
Company
     Bank to any third parties, except as required by law,
     regulation, a court order, in the defense of litigation for
     which the Company or the Company Bank may be liable, or in
any
     actions relating to this Agreement or the Merger Agreement
and
     the transactions contemplated hereby or thereby; and

           (c)  solicit, directly or indirectly, on its own
behalf
     or on behalf of any other person or entity, management
     personnel employed by Monarch immediately after the
Effective
     Time for employment with any other business;

provided, however, that with respect to any of the matters
covered
in this Section 5, to the extent that any restriction set forth
in
this Section 5 is adjudicated to be invalid or unenforceable in
any
jurisdiction, the court making such determination shall have the
power to limit, construe or reduce the duration, scope, activity
or
area of such provision to the extent necessary to render such
provision enforceable to the maximum extent permitted by
applicable
law, such limited form to apply only with respect to the
operation
of such provision in the particular jurisdiction in which such
adjudication is made.

           6.  Specific Performance and Remedies.  Shareholder
acknowledges that it will be impossible to measure in money the
damage to Monarch if Shareholder fails to comply with the
obligations imposed by this Agreement and that, in the event of
any
such failure, Monarch will not have an adequate remedy at law or
in
damages.  Accordingly, Shareholder agrees that injunctive relief
or
other equitable remedy, in addition to remedies at law or in
damages, is the appropriate remedy for any such failure and will
not oppose the granting of such relief on the basis that Monarch
has an adequate remedy at law.  Shareholder agrees that it will
not
seek, and agrees to waive any requirement for, the securing or
posting of a bond in connection with Monarch's seeking or
obtaining
such equitable relief.  In addition to all other rights or
remedies
which Monarch may have against Shareholder in the event of a
default in Shareholder's performance of Shareholder's obligations
under this Agreement, Shareholder shall be liable to Monarch for
all litigation costs and attorneys' fees incurred by Monarch in
connection with the enforcement of any of its rights or remedies
against Shareholder.  In addition, after discussing the matter
with
Shareholder, Monarch shall have the right to inform any third
party
that Monarch reasonably believes to be, or to be contemplating,
participating with Shareholder or receiving from Shareholder
assistance in violation of this Agreement, of the terms of this
Agreement and of the rights of Monarch hereunder, and that
participation by any such persons with Shareholder in activities
in
violation of Shareholder's agreement with Monarch set forth in
this
Agreement may give rise to claims by Monarch against such third
party.

           7.  Term of Agreement; Termination.  The term of this
Agreement shall commence on the date hereof and such term and
this
Agreement shall terminate upon the earlier to occur of (i) the
Effective Time, and (ii) the date on which the Merger Agreement
is
terminated in accordance with its terms.  Upon such termination,
no
party shall have any further obligations or liabilities
hereunder;
provided, however, such termination shall not relieve any party
from liability for any breach of this Agreement prior to such
termination.  

           8.  Entire Agreement.  This Agreement supersedes all
prior agreements, written or oral, among the parties hereto with
respect to the subject matter hereof and contains the entire
agreement among the parties with respect to the subject matter
hereof.  This Agreement may not be amended, supplemented or
modified, and no provisions hereof may be modified or waived,
except by an instrument in writing signed by each party hereto. 
No
waiver of any provisions hereof by either party shall be deemed a
waiver of any other provisions hereof by any such party, nor
shall
any such waiver be deemed a continuing waiver of any provision
hereof by such party.

           9.  Notices.  All notices, requests, claims, demands
or
other communications hereunder shall be in writing and shall be
deemed given when delivered personally, upon receipt of a
transmission confirmation if sent by telecopy or like
transmission
and on the next business day when sent by a reputable overnight
courier service to the parties at the following addresses (or at
such other address for a party as shall be specified by like
notice):

           If to Monarch:
           Monarch Bancorp
           1251 Westwood Blvd.
           Los Angeles, CA 90024
           Telecopier:     (310) 479-0844
           Attention:      Matt Wagner

     With a copy to:

           Sullivan & Cromwell
           444 South Flower Street
           Los Angeles, California  90071
           Telecopier:  (213) 683-0458
           Attention:  Stanley F. Farrar, Esq.

     If to the Shareholder:
           Robert McKay
           4100 Newport Place
           Newport Beach, CA  92660
           Telecopier:  (714) 863-2336

           With a copy to:

           O'Melveny & Myers LLP
           400 South Hope Street
           Los Angeles, CA  90071
           Telecopier:  (213) 669-6407

           Attention:  Frances E. Lossing

           10.  Miscellaneous.

           a.  Severability.  If any provision of this Agreement
or
     the application of such provision to any person or
     circumstances shall be held invalid or unenforceable by a
     court of competent jurisdiction, such provision or
application
     shall be unenforceable only to the extent of such invalidity
     or unenforceability, and the remainder of the provision held
     invalid or unenforceable and the application of such
provision
     to persons or circumstances, other than the party as to
which
     it is held invalid, and the remainder of this Agreement,
shall
     not be affected.

           b.  Capacity.  The covenants contained herein shall
apply
     to Shareholder solely in his or her capacity as a
shareholder
     of the Company, and no covenant contained herein shall apply
     to Shareholder in his or her capacity as a director of the
     Company.

           c.  Counterparts.  This Agreement may be executed in
one
     or more counterparts, each of which shall be deemed to be an
     original but all of which together shall constitute one and
     the same instrument.

           d.  Headings.  All Section headings herein are for
     convenience of reference only and are not part of this
     Agreement, and no construction or reference shall be derived
     therefrom.

           E.  CHOICE OF LAW.  THIS AGREEMENT SHALL BE DEEMED A
     CONTRACT MADE UNDER, AND FOR ALL PURPOSES SHALL BE CONSTRUED
     IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA,
     WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PRINCIPLES.

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


                                 MONARCH BANCORP

                                 By: __/s/ Hugh S. Smith, Jr.___
                                     Name: Hugh S. Smith
                                     Title: Chairman


                                     Robert L. McKay 
                                     (Print or type name)


                                                                  
  
                                     __/s/ Robert L. McKay___
                                     (Signature)

EX-2

Exhibit 2.5


                                                               
Annex 3
                         SHAREHOLDER AGREEMENT


           Shareholder Agreement (the "Agreement"), dated as of
December 19, 1996, by and between (i) Mark Stuenkel, a director
and
shareholder (the "Shareholder") of California Commercial
Bankshares, a California corporation (the "Company"), and
(ii) Monarch Bancorp, a California corporation ("Monarch").  All
terms used herein and not defined herein shall have the meaning
assigned thereto in the Merger Agreement (defined below).

           Whereas, the Company and Monarch have entered into an
Agreement and Plan of Merger, dated the date hereof (the "Merger
Agreement"), providing for the business combination transaction
contemplated therein in which the Company will merge with and
into
Monarch pursuant to the terms and conditions of the Merger
Agreement (the "Merger") and Monarch will pay consideration to
the
Company's shareholders in the form of Monarch Common Stock;

           Whereas, the Shareholder owns the shares of Company
Common Stock identified on ANNEX I hereto (such shares, together
with all shares of Company Common Stock subsequently acquired by
the Shareholder during the term of this Agreement, being referred
to as the "Shares"); and

           Whereas, in order to induce Monarch to enter into the
Merger Agreement and in consideration of the substantial expenses
incurred and to be incurred by Monarch in connection therewith,
the
Shareholder has agreed to enter into and perform this Agreement.

           Now, therefore, for good and valuable consideration,
the
receipt, sufficiency and adequacy of which are hereby
acknowledged,
the parties hereto agree as follows:

           1.  Agreement to Vote Shares.  Shareholder shall vote
or
cause to be voted, or execute a written consent with respect to,
the Shares (a) in favor of adoption and approval of the Merger
Agreement and the Merger and all transactions relating thereto at
every meeting of the shareholders of the Company at which such
matters are considered and at every adjournment thereof and in
connection with every proposal to take action by written consent
with respect thereto, and (b) against any other Acquisition
Proposal at every meeting of the shareholders of the Company at
which such matters are considered and at every adjournment
thereof
and in connection with every proposal to take action by written
consent with respect thereto.  

           2.  No Voting Trusts.  Shareholder agrees that
Shareholder will not, nor will Shareholder permit any entity
under
Shareholder's control to, deposit any Shares in a voting trust or
subject the Shares to any agreement, arrangement or understanding
with respect to the voting of the Shares inconsistent with this
Agreement.

           3.  Limitation on Sales.  During the term of this
Agreement, Shareholder agrees not to sell, assign, transfer or
dispose of any of the Shares.

           4.  Representations and Warranties of Shareholder. 
Shareholder represents and warrants to and agrees with Monarch as
follows:

           a.   Capacity.  Shareholder has all requisite capacity
     and authority to enter into and perform his or her
obligations
     under this Agreement.

           b.   Binding Agreement.  This Agreement constitutes
the
     valid and legally binding obligation of Shareholder, subject
     to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general
     applicability relating to or affecting creditors' rights and
     to general equity principles.

           c.   Non-Contravention.  The execution and delivery of
     this Agreement by Shareholder does not, and the performance
by
     Shareholder of his or her obligations hereunder and the
     consummation by Shareholder of the transactions contemplated
     hereby will not, violate or conflict with, or constitute a
     default under, any agreement, instrument, contract or other
     obligation or any order, arbitration award, judgment or
decree
     to which Shareholder is a party or by which Shareholder is
     bound, or any statute, rule or regulation to which
Shareholder
     is subject or, in the event that Shareholder is a
corporation,
     partnership, trust or other entity, any charter, bylaw or
     other organizational document of the Shareholder.

           d.   Ownership of Shares. Shareholder has good title
to
     all of the Shares as of the date hereof, and the Shares are
so
     owned free and clear of any liens, security interests,
charges
     or other encumbrances.

           5.  Competition.  Neither Shareholder nor any
corporation, partnership, trust or other entity controlled by
Shareholder shall:

           (a)  at any time within a three-year period
immediately
     following the Effective Time, engage in, be employed by,
     acquire an equity interest in or start, or otherwise provide
     any assistance to, directly or indirectly, any business
which
     provides banking services, including, but not limited to,
     deposit and operational services, loans, trust services,
     escrow services and electronic banking services ("Banking
     Businesses"), in the counties of Los Angeles, Orange and San
     Diego in the State of California so long as Monarch or its
     assigns remain engaged in any Banking Businesses;

           (b)  at any time following the Effective Time,
disclose
     confidential information regarding the Company or the
Company
     Bank to any third parties, except as required by law,
     regulation, a court order, in the defense of litigation for
     which the Company or the Company Bank may be liable, or in
any
     actions relating to this Agreement or the Merger Agreement
and
     the transactions contemplated hereby or thereby; and

           (c)  solicit, directly or indirectly, on its own
behalf
     or on behalf of any other person or entity, management
     personnel employed by Monarch immediately after the
Effective
     Time for employment with any other business;

provided, however, that with respect to any of the matters
covered
in this Section 5, to the extent that any restriction set forth
in
this Section 5 is adjudicated to be invalid or unenforceable in
any
jurisdiction, the court making such determination shall have the
power to limit, construe or reduce the duration, scope, activity
or
area of such provision to the extent necessary to render such
provision enforceable to the maximum extent permitted by
applicable
law, such limited form to apply only with respect to the
operation
of such provision in the particular jurisdiction in which such
adjudication is made.

           6.  Specific Performance and Remedies.  Shareholder
acknowledges that it will be impossible to measure in money the
damage to Monarch if Shareholder fails to comply with the
obligations imposed by this Agreement and that, in the event of
any
such failure, Monarch will not have an adequate remedy at law or
in
damages.  Accordingly, Shareholder agrees that injunctive relief
or
other equitable remedy, in addition to remedies at law or in
damages, is the appropriate remedy for any such failure and will
not oppose the granting of such relief on the basis that Monarch
has an adequate remedy at law.  Shareholder agrees that it will
not
seek, and agrees to waive any requirement for, the securing or
posting of a bond in connection with Monarch's seeking or
obtaining
such equitable relief.  In addition to all other rights or
remedies
which Monarch may have against Shareholder in the event of a
default in Shareholder's performance of Shareholder's obligations
under this Agreement, Shareholder shall be liable to Monarch for
all litigation costs and attorneys' fees incurred by Monarch in
connection with the enforcement of any of its rights or remedies
against Shareholder.  In addition, after discussing the matter
with
Shareholder, Monarch shall have the right to inform any third
party
that Monarch reasonably believes to be, or to be contemplating,
participating with Shareholder or receiving from Shareholder
assistance in violation of this Agreement, of the terms of this
Agreement and of the rights of Monarch hereunder, and that
participation by any such persons with Shareholder in activities
in
violation of Shareholder's agreement with Monarch set forth in
this
Agreement may give rise to claims by Monarch against such third
party.

           7.  Term of Agreement; Termination.  The term of this
Agreement shall commence on the date hereof and such term and
this
Agreement shall terminate upon the earlier to occur of (i) the
Effective Time, and (ii) the date on which the Merger Agreement
is
terminated in accordance with its terms.  Upon such termination,
no
party shall have any further obligations or liabilities
hereunder;
provided, however, such termination shall not relieve any party
from liability for any breach of this Agreement prior to such
termination.  

           8.  Entire Agreement.  This Agreement supersedes all
prior agreements, written or oral, among the parties hereto with
respect to the subject matter hereof and contains the entire
agreement among the parties with respect to the subject matter
hereof.  This Agreement may not be amended, supplemented or
modified, and no provisions hereof may be modified or waived,
except by an instrument in writing signed by each party hereto. 
No
waiver of any provisions hereof by either party shall be deemed a
waiver of any other provisions hereof by any such party, nor
shall
any such waiver be deemed a continuing waiver of any provision
hereof by such party.

           9.  Notices.  All notices, requests, claims, demands
or
other communications hereunder shall be in writing and shall be
deemed given when delivered personally, upon receipt of a
transmission confirmation if sent by telecopy or like
transmission
and on the next business day when sent by a reputable overnight
courier service to the parties at the following addresses (or at
such other address for a party as shall be specified by like
notice):

           If to Monarch:

           Monarch Bancorp
           1251 Westwood Blvd.
           Los Angeles, CA 90024
           Telecopier:     (310) 479-0844
           Attention:      Matt Wagner

     With a copy to:

           Sullivan & Cromwell
           444 South Flower Street
           Los Angeles, California  90071
           Telecopier:  (213) 683-0458
           Attention:  Stanley F. Farrar, Esq.


     If to the Shareholder:
           Mark Stuenkel
           4100 Newport Place
           Newport Beach, CA  92660
           Telecopier:  (714) 863-2336

           With a copy to:

           O'Melveny & Myers LLP
           400 South Hope Street
           Los Angeles, CA  90071
           Telecopier:  (213) 669-6407

           Attention:  Frances E. Lossing


           10.  Miscellaneous.

           a.  Severability.  If any provision of this Agreement
or
     the application of such provision to any person or
     circumstances shall be held invalid or unenforceable by a
     court of competent jurisdiction, such provision or
application
     shall be unenforceable only to the extent of such invalidity
     or unenforceability, and the remainder of the provision held
     invalid or unenforceable and the application of such
provision
     to persons or circumstances, other than the party as to
which
     it is held invalid, and the remainder of this Agreement,
shall
     not be affected.

           b.  Capacity.  The covenants contained herein shall
apply
     to Shareholder solely in his or her capacity as a
shareholder
     of the Company, and no covenant contained herein shall apply
     to Shareholder in his or her capacity as a director of the
     Company.

           c.  Counterparts.  This Agreement may be executed in
one
     or more counterparts, each of which shall be deemed to be an
     original but all of which together shall constitute one and
     the same instrument.

           d.  Headings.  All Section headings herein are for
     convenience of reference only and are not part of this
     Agreement, and no construction or reference shall be derived
     therefrom.

           E.  CHOICE OF LAW.  THIS AGREEMENT SHALL BE DEEMED A
     CONTRACT MADE UNDER, AND FOR ALL PURPOSES SHALL BE CONSTRUED
     IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA,
     WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PRINCIPLES.

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


                                 MONARCH BANCORP

                                 By: __/s/ Hugh S. Smith, Jr.___
                                     Name: Hugh S. Smith, Jr.
                                     Title: Chairman


                                     Mark H. Stuenkel 
                                     (Print or type name)


                                                                  
  
                                     __/s/ Mark H. Stuenkel*___
                                     (Signature)

*  Pursuant to 12/5/96 power of attorney

EX-2

Exhibit 2.6

                                                        
Execution Copy

                         SHAREHOLDER AGREEMENT


           Shareholder Agreement (the "Agreement"), dated as of
December 19, 1996, by and between (i) James W. Hamilton, a
director
and shareholder (the "Shareholder") of California Commercial
Bankshares, a California corporation (the "Company"), and
(ii) Monarch Bancorp, a California corporation ("Monarch").  All
terms used herein and not defined herein shall have the meaning
assigned thereto in the Merger Agreement (defined below).

           Whereas, the Company and Monarch have entered into an
Agreement and Plan of Merger, dated the date hereof (the "Merger
Agreement"), providing for the business combination transaction
contemplated therein in which the Company will merge with and
into
Monarch pursuant to the terms and conditions of the Merger
Agreement (the "Merger") and Monarch will pay consideration to
the
Company's shareholders in the form of Monarch Common Stock;

           Whereas, the Shareholder owns the shares of Company
Common Stock identified on ANNEX I hereto (such shares, together
with all shares of Company Common Stock subsequently acquired by
the Shareholder during the term of this Agreement, being referred
to as the "Shares"); and

           Whereas, in order to induce Monarch to enter into the
Merger Agreement and in consideration of the substantial expenses
incurred and to be incurred by Monarch in connection therewith,
the
Shareholder has agreed to enter into and perform this Agreement.

           Now, therefore, for good and valuable consideration,
the
receipt, sufficiency and adequacy of which are hereby
acknowledged,
the parties hereto agree as follows:

           1.  Agreement to Vote Shares.  Shareholder shall vote
or
cause to be voted, or execute a written consent with respect to,
the Shares (a) in favor of adoption and approval of the Merger
Agreement and the Merger and all transactions relating thereto at
every meeting of the shareholders of the Company at which such
matters are considered and at every adjournment thereof and in
connection with every proposal to take action by written consent
with respect thereto, and (b) against any other Acquisition
Proposal at every meeting of the shareholders of the Company at
which such matters are considered and at every adjournment
thereof
and in connection with every proposal to take action by written
consent with respect thereto.  

           2.  No Voting Trusts.  Shareholder agrees that
Shareholder will not, nor will Shareholder permit any entity
under
Shareholder's control to, deposit any Shares in a voting trust or
subject the Shares to any agreement, arrangement or understanding
with respect to the voting of the Shares inconsistent with this
Agreement.

           3.  Limitation on Sales.  During the term of this
Agreement, Shareholder agrees not to sell, assign, transfer or
dispose of any of the Shares.

           4.  Representations and Warranties of Shareholder. 
Shareholder represents and warrants to and agrees with Monarch as
follows:

           a.   Capacity.  Shareholder has all requisite capacity
     and authority to enter into and perform his or her
obligations
     under this Agreement.

           b.   Binding Agreement.  This Agreement constitutes
the
     valid and legally binding obligation of Shareholder, subject
     to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general
     applicability relating to or affecting creditors' rights and
     to general equity principles.

           c.   Non-Contravention.  The execution and delivery of
     this Agreement by Shareholder does not, and the performance
by
     Shareholder of his or her obligations hereunder and the
     consummation by Shareholder of the transactions contemplated
     hereby will not, violate or conflict with, or constitute a
     default under, any agreement, instrument, contract or other
     obligation or any order, arbitration award, judgment or
decree
     to which Shareholder is a party or by which Shareholder is
     bound, or any statute, rule or regulation to which
Shareholder
     is subject or, in the event that Shareholder is a
corporation,
     partnership, trust or other entity, any charter, bylaw or
     other organizational document of the Shareholder.

           d.   Ownership of Shares. Shareholder has good title
to
     all of the Shares as of the date hereof, and the Shares are
so
     owned free and clear of any liens, security interests,
charges
     or other encumbrances, subject to the pledge of such Shares
     heretofore disclosed to Monarch (the shareholder
representing
     to Monarch that, with respect to such pledged Shares, he
     retains the ability to vote such shares for the Merger).

           5.    Specific Performance and Remedies.  Shareholder
acknowledges that it will be impossible to measure in money the
damage to Monarch if Shareholder fails to comply with the
obligations imposed by this Agreement and that, in the event of
any
such failure, Monarch will not have an adequate remedy at law or
in
damages.  Accordingly, Shareholder agrees that injunctive relief
or
other equitable remedy, in addition to remedies at law or in
damages, is the appropriate remedy for any such failure and will
not oppose the granting of such relief on the basis that Monarch
has an adequate remedy at law.  Shareholder agrees that it will
not
seek, and agrees to waive any requirement for, the securing or
posting of a bond in connection with Monarch's seeking or
obtaining
such equitable relief.  In addition to all other rights or
remedies
which Monarch may have against Shareholder in the event of a
default in Shareholder's performance of Shareholder's obligations
under this Agreement, Shareholder shall be liable to Monarch for
all litigation costs and attorneys' fees incurred by Monarch in
connection with the enforcement of any of its rights or remedies
against Shareholder.  In addition, after discussing the matter
with
Shareholder, Monarch shall have the right to inform any third
party
that Monarch reasonably believes to be, or to be contemplating,
participating with Shareholder or receiving from Shareholder
assistance in violation of this Agreement, of the terms of this
Agreement and of the rights of Monarch hereunder, and that
participation by any such persons with Shareholder in activities
in
violation of Shareholder's agreement with Monarch set forth in
this
Agreement may give rise to claims by Monarch against such third
party.

           6.  Term of Agreement; Termination.  The term of this
Agreement shall commence on the date hereof and such term and
this
Agreement shall terminate upon the earlier to occur of (i) the
Effective Time, and (ii) the date on which the Merger Agreement
is
terminated in accordance with its terms.  Upon such termination,
no
party shall have any further obligations or liabilities
hereunder;
provided, however, such termination shall not relieve any party
from liability for any breach of this Agreement prior to such
termination.  

           7.  Entire Agreement.  This Agreement supersedes all
prior agreements, written or oral, among the parties hereto with
respect to the subject matter hereof and contains the entire
agreement among the parties with respect to the subject matter
hereof.  This Agreement may not be amended, supplemented or
modified, and no provisions hereof may be modified or waived,
except by an instrument in writing signed by each party hereto. 
No
waiver of any provisions hereof by either party shall be deemed a
waiver of any other provisions hereof by any such party, nor
shall
any such waiver be deemed a continuing waiver of any provision
hereof by such party.

           8.  Notices.  All notices, requests, claims, demands
or
other communications hereunder shall be in writing and shall be
deemed given when delivered personally, upon receipt of a
transmission confirmation if sent by telecopy or like
transmission
and on the next business day when sent by a reputable overnight
courier service to the parties at the following addresses (or at
such other address for a party as shall be specified by like
notice):

           If to Monarch:

           Monarch Bancorp
           1251 Westwood Blvd.
           Los Angeles, CA 90024
           Telecopier:     (310) 479-0844
           Attention:      Matt Wagner


     With a copy to:

           Sullivan & Cromwell
           444 South Flower Street
           Los Angeles, California  90071
           Telecopier:  (213) 683-0458
           Attention:  Stanley F. Farrar, Esq.


     If to the Shareholder:

           James W. Hamilton
           c/o California Commercial Bankshares
           4100 Newport Place
           Newport Beach, CA 92660
           Telecopier:     (714) 863-2336

           With a copy to:

           O'Melveny & Myers LLP
           400 South Hope Street
           Los Angeles, CA 90071
           Telecopier:     (213) 669-6407
           Attention:      Frances E. Lossing


           9.  Miscellaneous.

           a.  Severability.  If any provision of this Agreement
or
     the application of such provision to any person or
     circumstances shall be held invalid or unenforceable by a
     court of competent jurisdiction, such provision or
application
     shall be unenforceable only to the extent of such invalidity
     or unenforceability, and the remainder of the provision held
     invalid or unenforceable and the application of such
provision
     to persons or circumstances, other than the party as to
which
     it is held invalid, and the remainder of this Agreement,
shall
     not be affected.

           b.  Capacity.  The covenants contained herein shall
apply
     to Shareholder solely in his or her capacity as a
shareholder
     of the Company, and no covenant contained herein shall apply
     to Shareholder in his or her capacity as a director of the
     Company.

           c.  Counterparts.  This Agreement may be executed in
one
     or more counterparts, each of which shall be deemed to be an
     original but all of which together shall constitute one and
     the same instrument.

           d.  Headings.  All Section headings herein are for
     convenience of reference only and are not part of this
     Agreement, and no construction or reference shall be derived
     therefrom.

           E.  CHOICE OF LAW.  THIS AGREEMENT SHALL BE DEEMED A
     CONTRACT MADE UNDER, AND FOR ALL PURPOSES SHALL BE CONSTRUED
     IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA,
     WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PRINCIPLES.

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


                                 MONARCH BANCORP

                                 By: ___/s/ Hugh S. Smith, Jr.___
                                     Name: Hugh S. Smith
                                     Title: Chairman


                                     James W. Hamilton 
                                     (Print or type name)


                                                                  
  
                                     __/s/ James W. Hamilton___
                                     (Signature)