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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-K/A
Amendment No. 2



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|                                            |  |                                                                                         
|------------------------------------------- |  | ----------------------------------------------------------------------------------------
|(XBOX)                                      |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934    
|                                           
|For the fiscal year ended December 31, 2001
|                                           
|(BOX)                                       |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission File Number: 0-1100

HAWTHORNE FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)


|                                                               |                                     
|-------------------------------------------------------------- | ------------------------------------
|Delaware                                                       | 95-2085671                          
|(State or other jurisdiction of
incorporation or organization) | (I.R.S. Employer
Identification No.)
|                                                              
|2381 Rosecrans Avenue, 2nd Floor
El Segundo, California        | 90245
(Zip Code)                    
|(Address of principal executive offices)                       |                                     

Registrants telephone number, including area code: (310) 725-5000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share

(Title of class)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.    Yes  (XBOX)    No  (BOX)

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-K or any
amendment to this Form 10-K.    (BOX)

As of April 24, 2002, the aggregate market value of voting stock held by
nonaffiliates of the registrant was approximately $166,455,728 (based upon the
last reported sales price of the Common Stock as reported by the Nasdaq
National Market). Shares of Common Stock held by each executive officer,
director, and shareholders with beneficial ownership of greater than 10% of the
outstanding Common Stock of the registrant and persons or entities known to the
registrant to be affiliates of the foregoing have been excluded in that such
persons may be deemed to be affiliates. This assumption regarding affiliate
status is not necessarily a conclusive determination for other purposes.

The number of shares of Common Stock, par value $0.01 per share, of the
Registrant outstanding as of April 24, 2002 was 5,869,848 shares.



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TABLE OF CONTENTS



|           |                                                                      |  |  |  |  |  |  | 
|---------- | -------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART III  
|           | ITEM 10. DIRECTORS OF THE REGISTRANT                                
|           | ITEM 11. EXECUTIVE COMPENSATION                                     
|           | ITEM 12. SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
|           | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS             
|SIGNATURES



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##### Table of Contents



Hawthorne Financial Corporation (Hawthorne or the Company) files this
Amendment No. 2 to its Annual Report on Form 10-K to include Part III, Item 10,
Item 11, Item 12 and Item 13.




PART III




ITEM 10. DIRECTORS OF THE REGISTRANT

The following table sets forth certain information concerning the nominees of
the Board, each of whom is currently a director of the Company. Each of the
directors of the Company is also a director of Hawthorne Savings, F.S.B. (the
Bank), a wholly owned subsidiary of the Company.

In December 1995, the Company sold $27.0 million of investment units in a
private placement offering. Pursuant to an agreement entered into in connection
with the offering, each of the three largest purchasers of investment units is
entitled to recommend one person for nomination by the Board of Directors for
election as a director. Pursuant to these rights, Fort Pitt Fund, L.P.
recommended Harry F. Radcliffe, and Lee M. Bass recommended Anthony W.
Liberati. Also pursuant to its rights, one of the three largest purchasers of
investment units, Value Partners Ltd., recommended Gary W. Brummett, who became
a director in October 1999. The right of each of these purchasers to nominate
a director terminates at the time the purchaser no longer owns Warrants to
purchase 220,000 shares of Common Stock and/or shares of Common Stock acquired
upon the exercise of Warrants. On April 16, 2002, Value Partners Ltd. sold its
entire interest in the Company and, therefore, is no longer entitled to
nominate a director.

|                          |  |     |    |       |  |          |      |                    |  |           |         |               |  |  |       |  
|------------------------- |  | --- | -- | ----- |  | -------- | ---- | ------------------ |  | --------- | ------- | ------------- |  |  | ----- | -
|                          |  |     |    |       |  |          |      |                    |  | Shares of |         | Percentage of
|                          |  |     |    |       |  |          |      |                    |  | Common    |         | Outstanding  
|                          |  |     |    |       |  | Director |      | Stock Beneficially |  | Common   
|Name                      |  | Age |    | Since |  | Owned(1) |      | Stock             
|                          |  |     |    |       |  |          |      |                   
|Marilyn Garton Amato(2)   |  |     | 63 |       |  |          | 1988 |                    |  |           | 40,162  |               |  |  | *     |  
|Gary W. Brummett(2)       |  |     | 43 |       |  |          | 1999 |                    |  |           | 24,000  |               |  |  | *     |  
|Timothy R. Chrisman(2)(3) |  |     | 55 |       |  |          | 1994 |                    |  |           | 50,693  |               |  |  | *     |  
|Simone F. Lagomarsino(4)  |  |     | 40 |       |  |          | 1999 |                    |  |           | 42,592  |               |  |  | *     |  
|Anthony W. Liberati(2)    |  |     | 69 |       |  |          | 1996 |                    |  |           | 30,000  |               |  |  | *     |  
|Harry F. Radcliffe(2)(5)  |  |     | 51 |       |  |          | 1996 |                    |  |           | 633,651 |               |  |  | 10.06 | %
|Howard E. Ritt(2)         |  |     | 77 |       |  |          | 1993 |                    |  |           | 29,500  |               |  |  | *     |  



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|*   |  | Less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(1) |  | As of April 24, 2002. Except as may be indicated in the footnotes to the
table and subject to applicable community property laws, each of such
persons has the sole voting and investment power with respect to the
shares owned. Beneficial ownership has been determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
Exchange Act). Under this Rule, certain shares may be deemed to be
beneficially owned by more than one person (such as where persons share
voting power or investment power). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the
shares (for example, upon exercise of an option) within 60 days of the
date as of which information is provided; in computing the percentage
ownership of any person, the amount of shares outstanding is deemed to
include the amount of shares beneficially owned by such person (and only
such person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in the table above
does not necessarily reflect the persons actual voting power at any
particular date.
|   
|   
|   
|   
|(2) |  | Includes 22,000 shares that this director may acquire within 60 days of
April 24, 2002 upon the exercise of stock options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|   
|   
|   
|(3) |  | Also includes (i) 22,349 shares directly owned and (ii) 6,344 shares
which Mr. Chrisman may acquire within 60 days of April 24, 2002 upon the
exercise of Warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|   
|   
|   
|(4) |  | Includes 40,000 shares that Ms. Lagomarsino may acquire within 60 days of
April 24, 2002 upon the exercise of stock options. Does not include
84,632 shares held of record by the 401(k)/ESOP which have been allocated
to participants accounts and which are voted by Ms. Lagomarsino and other
officers as trustees at the direction of the participants or, if no
direction is given, by them as trustees in their discretion. Ms.
Lagomarsino disclaims beneficial ownership of such shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|   
|   
|   
|(5) |  | Also includes (i) 196,258 shares directly owned by the Fort Pitt Fund,
L.P., the Fort Pitt Fund, III, L.P., and Harry F. Radcliffe and (ii)
409,393 shares which Fort Pitt Fund, L.P. may acquire upon the exercise of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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| |  | Warrants. Mr. Radcliffe is the General Partner of Fort Pitt Fund,
L.P., and Fort Pitt Fund III, L.P.
| |  | ----------------------------------------------------------------------------------------------------

Biographical Information

MARILYN GARTON AMATO has owned and operated for more than the past five years
an interior design firm, The Finishing Touch, which specializes in both
commercial and residential interior design. She has also been active in many
civic and charitable groups over the years and is the daughter of Dr. Cecil O.
Garton, a past director and Chairman of the Board of Directors of the Company
and a director of the Bank.

GARY W. BRUMMETT has been a principal in Brummett Consulting Group, a
consulting firm serving the financial services industry, since February 1997.
Prior to that, he had been Chief Operating Officer, of Cal Fed
Bancorp where he was employed since
April 1985. Mr. Brummett served as the Companys interim Chief Executive
Officer from November 17, 1999 to December 7, 1999.

TIMOTHY R. CHRISMAN has been the President and owner of Chrisman & Company,
Inc., an executive search firm specializing in the placement of senior
executives in the financial services industry, for more than the past five
years. Mr. Chrisman has previously served as a director of other savings
institutions. In February 1996, Mr. Chrisman was named Chairman of the Board
of the Company and the Bank.

SIMONE F. LAGOMARSINO has been a director and the President and Chief Executive
Officer of the Company and the Bank since December 1999. Prior to that, Ms.
Lagomarsino was Executive Vice President and Chief Financial Officer of the
Company and the Bank since February 1999. She previously served as Executive
Vice President and Chief Financial Officer of First Plus Bank from March 1998
to February 1999, Senior Vice President of Imperial Financial Group from March
1997 to March 1998 and Senior Vice President and Chief Financial Officer of
Ventura County National Bancorp.

ANTHONY W. LIBERATI was the Chairman of the Board of Directors of MCSi Inc., a
distributor of computer supplies, from May 1996 until his retirement in
February 2000. Mr. Liberati retired in 1995 from the Edward J. DeBartolo
Corporation, Youngstown, Ohio where he was the Chief Operating Officer. Prior
to his appointment as Chief Operating Officer, he was the DeBartolo
Corporations Chief Financial Officer. Mr. Liberati is a former member of the
Board of Directors of DeBartolo Realty Corporation, Youngstown, Ohio, a real
estate investment trust. Mr. Liberati is a Director of First Fidelity Bancorp,
Inc., Irvine, California, a privately held thrift holding company, and Zengine,
Inc., an internet company. Mr. Liberati is a Limited Partner in Fort Pitt Fund
I, Ford Pitt Fund II, and Fort Pitt Fund III.

HARRY F. RADCLIFFE is an investment manager. He was President and Chief
Executive Officer of Fort Pitt Capital Management Corp. from April 1997 through
August 2000. From December 1993 through March 1997, Mr. Radcliffe was the
President, Chief Executive Officer and a Director of First Home Bancorp, Inc.,
Pittsburgh, Pennsylvania, and was President and Chief Executive Officer of its
subsidiary First Home Savings Bank, F.S.B., from December 1993 and a Director
from May 1993 until March 1997. He previously served as a Director and
President of First South Savings Association from April 1989 to December 1993,
and as its Chief Executive Officer from June 1989 to December 1993 and
Director, President and Chief Executive Officer from May 1990 to December 1993.
He also served as Director of Home Bancorp, Inc. and Home Savings Bank,
F.S.B., Norfolk, Virginia from October 1994 to September 1995. Mr. Radcliffe is
a Director of Essex Savings Bank, F.S.B., Virginia Beach, Virginia,
FNB Corp., Naples, Florida, MCSi Inc., and First Fidelity
Bancorp, Irvine, California, a privately held thrift holding company.

HOWARD E. RITT retired in 1990 as an Executive Vice President of Sanwa Bank.

Executive Officers of the Registrant

The Executive Officers of the Registrant are set forth in Part I-Item 4A.
Executive Officers of the Registrant.

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Section 16(A)  Beneficial Ownership Reporting Compliance

Based solely on its review of copies of reports filed by reporting persons of
the Company pursuant to Section 16(a) of the Exchange Act, or written
representations from reporting persons that no Form 5 filing was required for
such person, the Company believes that all filings required to be made by
reporting persons of the Company were timely made in accordance with
requirements of the Exchange Act, except for one Form 4 filing by
David Hardin, which was late.




ITEM 11.   EXECUTIVE COMPENSATION

The following table sets forth the compensation paid to the Chief Executive
Officer during 2001, and the four other most highly compensated executive
officers who were serving as executive officers of the Company and the Bank at
December 31, 2001 (the Named Executive Officers).

Summary Compensation Table

|                         |                                                      |      |      |        |  |          |                     |                 |            |                 |         |         |  |  |              |        |  |   |         |        |    
|------------------------ | ---------------------------------------------------- | ---- | ---- | ------ |  | -------- | ------------------- | --------------- | ---------- | --------------- | ------- | ------- |  |  | ------------ | ------ |  | - | ------- | ------ | ---
|                         |                                                      |      |      |        |  |          |                     |                 |            |                 |         |         |  |  | Long-Term    |        |  |   |        
|                         |                                                      |      |      |        |  |          |                     |                 |            |                 |         |         |  |  | Compensation |        |  |   |        
|                         |                                                      |      |      |        |  |          |                     |                 |            |                 |         |         |  |  |              |        |  |   |        
|                         |                                                      |      |      |        |  |          |                     |                 |            |                 |         |         |  |  | Awards       |        |  |   |        
|                         |                                                      |      |      |        |  |          |                     |                 |            |                 |         |         |  |  |              |        |  |   |        
|                         |                                                      |      |      |        |  |          | Annual Compensation |                 | Securities |                
|                         |                                                      |      |      |        |  |          |                     |                 | Underlying |                 | Other  
|Name and Position        |                                                      | Year |      | Salary |  | Bonus(1) |                     | Options/SARs(#) |            | Compensation(2)
|                         |                                                      |      |      |        |  |          |                     |                 |            |                
|Simone F. Lagomarsino(3) |                                                      |      | 2001 |        |  | $        | 325,000             |                 |            | $               | 150,000 |         |  |  |             |        |  | $ | 8,500   |       
|                         | President and Chief Executive Officer                |      |      | 2000   |  |          |                     | 300,000         |            |                 |         | 145,000 |  |  |              | 40,000 |  |   |         | 8,500  |    
|                         |                                                      |      | 1999 |        |  |          | 184,614             |                 |            |                 | 100,000 |         |  |  | 75,000       |        |  |   | 33,993  | (4)   
|                        
|                        
|                        
|                        
|David L. Hardin, Jr.     |                                                      |      | 2001 |        |  | $        | 228,800             |                 |            | $               | 115,000 |         |  |  |             |        |  | $ | 8,500   |       
|                         | Executive Vice President                             |      |      | 2000   |  |          |                     | 219,231         |            |                 |         | 100,000 |  |  |              | 30,000 |  |   |         | 8,500  |    
|                         |                                                      |      | 1999 |        |  |          | 210,000             |                 |            |                 | 25,000  |         |  |  |             |        |  |   | 8,000   |       
|                        
|                        
|                        
|                        
|Chuck Stoneburg          |                                                      |      | 2001 |        |  | $        | 219,440             |                 |            | $               | 100,000 |         |  |  |             |        |  | $ |        |       
|                         | Executive Vice President and Chief
Operating Officer |      |      | 2000   |  |          |                     | 202,000         |            |                 |         | 100,000 |  |  |              | 15,000 |  |   |         | 9,000  | (5)
|                         |                                                      |      |      | 1999   |  |          |                     | 168,076         |            |                 |         | 20,000  |  |  |              |       |  |   |         | 36,000 | (5)
|                        
|                        
|                        
|                        
|Karen C. Abajian (6)     |                                                      |      | 2001 |        |  | $        | 207,500             |                 |            | $               | 40,000  |         |  |  |             |        |  | $ | 138,723 | (7)   
|                         | Executive Vice President and Chief
Financial Officer |      |      | 2000   |  |          |                     | 150,000         |            |                 |         | 75,000  |  |  |              | 50,000 |  |   |         | 32,466 | (8)
|                         |                                                      |      |      | 1999   |  |          |                     |                |            |                 |         |        |  |  |              |       |  |   |         |       |    
|                        
|                        
|                        
|                        
|Eileen Lyon (9)          |                                                      |      | 2001 |        |  | $        | 183,015             |                 |            | $               | 100,000 |         |  |  |             |        |  | $ | 4,612   |       
|                         | Senior Vice President and General Counsel            |      |      | 2000   |  |          |                     | 154,808         |            |                 |         | 50,000  |  |  |              | 15,000 |  |   |         | 2,356  |    
|                         |                                                      |      | 1999 |        |  |          |                    |                 |            |                 |        |         |  |  |             |        |  |   |        |       



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|(1) |  | Amounts were earned in the years indicated. Bonuses were paid in the year
earned or in the first quarter of the following year.                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Except as otherwise disclosed, Other Compensation is comprised solely of
401(k) matching contributions made by the Company.                                                                              
|   
|   
|   
|   
|(3) |  | Ms. Lagomarsino was appointed Chief Executive Officer on December 7,
1999. From February 17, 1999 to December 7, 1999, Ms. Lagomarsino served
as the Chief Financial Officer of the Company and the Bank.
|   
|   
|   
|   
|(4) |  | Includes a $30,000 signing bonus and $871 COBRA reimbursement.                                                                                                                                           
|   
|   
|   
|   
|(5) |  | Represents housing allowances.                                                                                                                                                                           
|   
|   
|   
|   
|(6) |  | Ms. Abajian was appointed Chief Financial Officer on April 3, 2000.                                                                                                                                      
|   
|   
|   
|   
|(7) |  | Includes $130,683 loan forgiveness pursuant to a Deferred Compensation
Loan Agreement between the Company and Ms. Abajian.                                                                               
|   
|   
|   
|   
|(8) |  | Includes a $30,000 signing bonus.                                                                                                                                                                        
|   
|   
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|   
|(9) |  | Ms. Lyon was appointed Senior Vice President and General Counsel on
February 14, 2000.                                                                                                                   

Option Grants in Last Fiscal Year

No stock options were granted during 2001 to the Named Executive Officers.

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##### Table of Contents



Aggregate Option Exercises and Fiscal Year-End Option Values

The following table sets forth, for each of the Named Executive Officers,
certain information regarding options exercised in 2001 and options held at
December 31, 2001:

|                      |  |             |        |          |  |                           |         |                              |  |                      |        |                      |  |  |        |  |  |   |         |  |  |   |         | 
|--------------------- |  | ----------- | ------ | -------- |  | ------------------------- | ------- | ---------------------------- |  | -------------------- | ------ | -------------------- |  |  | ------ |  |  | - | ------- |  |  | - | ------- | 
|                      |  |             |        |          |  |                           |         |                              |  | Number of Securities |        | Value of Unexercised
|                      |  | Shares      |        |          |  |                           |         | Underlying Unexercised       |  | in-the-Money        
|                      |  | Acquired    |        | Value    |  | Options/SARs at Fiscal    |         | Options/SARs at Fiscal      
|                      |  | on Exercise |        | Realized |  | Year-End (#)              |         | Year-End ($)                
|Name                  |  | (#)         |        | ($)      |  | Exercisable/Unexercisable |         | Exercisable/Unexercisable(1)
|                      |  |             |        |          |  |                           |         |                              | 
|Simone F. Lagomarsino |  |             |       |          |  |                           |        |                              |  |                      | 40,000 |                      |  |  | 75,000 |  |  | $ | 172,360 |  |  | $ | 645,705 | 
|David L. Hardin, Jr.  |  |             | 27,000 |          |  | $                         | 462,650 |                              |  |                      | 30,000 |                      |  |  | 30,000 |  |  |   | 442,500 |  |  |   | 335,310 | 
|Chuck Stoneburg       |  |             | 13,000 |          |  |                           | 140,270 |                              |  |                      | 37,000 |                      |  |  | 15,000 |  |  |   | 173,740 |  |  |   | 167,655 | 
|Karen C. Abajian      |  |             |       |          |  |                           |        |                              |  |                      | 33,333 |                      |  |  | 16,667 |  |  |   | 349,163 |  |  |   | 174,587 | 
|Eileen Lyon           |  |             |       |          |  |                           |        |                              |  |                      |       |                      |  |  | 15,000 |  |  |   |        |  |  |   | 142,305 | 



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|(1) |  | Based on the closing sale price of $19.40 for the Common Stock on
December 31, 2001, less the option exercise price.
|--- |  | --------------------------------------------------------------------------------------------------------------------

Change in Control Arrangements

On February 22, 2000, the Compensation Committee of the Board of Directors
approved a change of control pay plan providing for the payment of
three years base salary and bonus, including an excise tax gross-up payment, for the Chief
Executive Officer of the Company, and providing for two years base salary and
bonus, including an excise tax gross-up payment, for all Executive Vice
Presidents of the Company (at present, 3 persons), and all Senior Vice
Presidents reporting directly to the President (at present, 4 persons).




ITEM 12.  SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT

The following table sets forth as of April 24, 2002
certain information regarding the ownership of the
Companys Common Stock by (i) each person known by
the Company to be the beneficial owner of more than
5% of the outstanding shares of the Common Stock,
(ii) each executive officer named in the Summary
Compensation Table in this Proxy Statement, and
(iii) all of the Companys executive officers and
directors as a group. Except as may be indicated in
the footnotes to the table and subject to
applicable community property laws, each of such
persons has the sole voting and investment power
with respect to the shares owned. Beneficial
ownership has been determined in accordance with
Rule 13d-3 under the Exchange Act. Under this Rule,
certain shares may be deemed to be beneficially
owned by more than one person (such as where
persons share voting power or investment power). In
addition, shares are deemed to be beneficially
owned by a person if the person has the right to
acquire the shares (for example, upon exercise of
an option) within 60 days of the date as of which
information is provided; in computing the
percentage ownership of any person, the amount of
shares outstanding is deemed to include the amount
of shares beneficially owned by such person (and
only such person) by reason of these acquisition
rights. As a result, the percentage of outstanding
shares of any person as shown in the following
table does not necessarily reflect the persons
actual voting power at any particular date.

5



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|                                                                     |  |              |         |            |  |  |       |  
|-------------------------------------------------------------------- |  | ------------ | ------- | ---------- |  |  | ----- | -
|                                                                     |  | Shares       |         |            |  | 
|                                                                     |  | Beneficially |         | Percent of
|Name of Beneficial Owner                                             |  | Owned        |         | Class     
|                                                                     |  |              |         |           
|Bass Group(1)                                                        |  |              | 647,637 |            |  |  | 10.15 |  
|Harry F. Radcliffe(2)                                                |  |              | 633,651 |            |  |  | 10.06 |  
|FMR Corp.(3)                                                         |  |              | 514,500 |            |  |  | 8.77  |  
|Wellington Management Company, LLP(4)                                |  |              | 454,300 |            |  |  | 7.74  |  
|Dimensional Fund Advisors Inc.(5)                                    |  |              | 384,800 |            |  |  | 6.56  |  
|Thomson Horstmann & Bryant Inc.(6)                                   |  |              | 303,900 |            |  |  | 5.18  |  
|Simone F. Lagomarsino(7)(8)                                          |  |              | 42,592  |            |  |  | *     |  
|David L. Hardin, Jr.(8)(9)                                           |  |              | 39,687  |            |  |  | *     |  
|Charles Stoneburg(10)                                                |  |              | 38,147  |            |  |  | *     |  
|Karen C. Abajian(11)                                                 |  |              | 33,333  |            |  |  | *     |  
|Eileen Lyon(8)                                                       |  |              | 28      |            |  |  | *     |  
|All directors and executive officers
as a group (14 persons)(12)(13) |  |              | 355,626 |            |  |  | 5.74  | %



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|*   |  | Less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(1) |  | This information is based on an amendment to the Schedule 13D filed on
December 3, 1999 by Portfolio II Investors, L.P., The Bass Management
Trust, Sid R. Bass Management Trust, Sid R. Bass and Lee M. Bass, (the
Bass Group). The Schedule 13D indicates that the Bass Group has
beneficial ownership of 647,637 shares of Common Stock, which amount
includes 511,742 shares which may be acquired upon the exercise of
Warrants and 135,725 shares of Common Stock directly owned by members of
the Bass Group. The Schedule 13D indicates that the Warrants and the
Common Stock are held in the following names: The Bass Management Trust
(39,919 shares and 232,610 Warrants), Sid R. Bass Management Trust
(279,132 Warrants), Sid R. Bass (47,903 shares), and Lee M. Bass (47,903
shares). The address for the Bass Group is c/o W. Robert Cotham, 201 Main
Street, Suite 2600, Fort Worth, TX, 76102.                                                                                                                                                                                                                                                                                                                                            
|   
|   
|   
|   
|(2) |  | This information is based on the Schedule 13D filed on December 24, 1998
by the Fort Pitt Fund, L.P., the Fort Pitt Fund, III, L.P., and Harry F.
Radcliffe. Mr. Radcliffe is the General Partner of Fort Pitt Fund,
L.P., and the Ford Pitt Fund III, L.P. (the Fort Pitt Funds). The
Schedule 13D indicates that the Fort Pitt Fund, L.P. has beneficial
ownership of 479,651 shares of Common Stock, which amount includes 409,393
shares acquirable upon the exercise of Warrants and 70,258 shares of
Common Stock directly owned, and that Fort Pitt Fund, III has beneficial
ownership of 120,000 shares of Common Stock directly owned. Harry F.
Radcliffes ownership includes (i) 6,000 shares directly owned, and (ii) 22,000 shares which Mr. Radcliffe may acquire within 60 days of April 24,
2002 upon the exercise of stock options. The address for the Fort Pitt
Fund, L.P. is 40 Wiggins Lane, Uniontown, PA 15401.                                                                                                                                                                                                                                                                                                                        
|   
|   
|   
|   
|(3) |  | This information is based on the Schedule 13G filed on February 14, 2002
by FMR Corp., Edward C. Johnson 3d and Abigail P. Johnson. The Schedule 13G indicates that various persons have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of,
the Common Stock. The shares of Common Stock are beneficially owned by
Fidelity Low Priced Stock Fund, an investment company registered under the
Investment Company Act of 1940 (the Fund). Fidelity Management &
Research Company, a subsidiary of FMR Corp. (Fidelity), and a registered
investment advisor, is deemed to be the beneficial owner of such
securities. Mr. Johnson, FMR Corp. through its control of Fidelity, and
the Fund, each have the power to dispose of the securities. Power to vote
the securities is held by Fidelity Funds Board of Trustees. Mr. Johnson
and Ms. Johnson are Chairman of the Board and a director, respectively, of
FMR Corp. Members of the Johnson family, through their stock
ownership and shareholder voting agreement, form a controlling group with
respect to FMR Corp. The address for FMR Corp., Fidelity, the Fund and
Mr. Johnson and Ms. Johnson is 82 Devonshire Street, Boston MA 02109.
|   
|   
|   
|   
|(4) |  | This information is based on the Schedule 13G/A filed February 12, 2002
by Wellington Management Company, LLP. The address for Wellington
Management Company, LLP is 75 State Street, Boston, MA 02109. The shares
are owned of record by advisory clients of Wellington Management Company
LLP, none of which owns in excess of 5% of the Common Stock, except First
Financial Fund, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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|(5)  |  | This information is based on the Schedule 13G/A filed January 23, 2002 by
Dimensional Fund Advisors Inc. The address for Dimensional Fund Advisors
Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401.
The shares reported are owned by four advisory clients of Dimensional Fund
Advisors Inc., none of which owns in excess of 5% of the Common Stock.
Dimensional Fund Advisors Inc. has voting and/or investment power over the
shares, but disclaims beneficial ownership of such shares.                                                                                                                                                                               
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|(6)  |  | This information is based on the Schedule 13G filed February 12, 2001 by
Thomson Horstmann & Bryant, Inc. The address for Thomson Horstmann &
Bryant, Inc. is Park 80 West, Plaza Two, Saddle Brook, NJ 07663.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|    
|    
|    
|(7)  |  | Includes (i) 2,344 shares directly owned, (ii) 248 shares allocated to
Ms. Lagomarsinos 401(k) Plan account and (iii) 40,000 shares that she may
acquire within 60 days of April 24, 2002 upon the exercise of stock
options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|    
|    
|    
|(8)  |  | Shares beneficially owned by Ms. Lagomarsino, Mr. Hardin and Ms. Lyon do
not include 84,632 shares held of record by the401(k) Plan/ESOP which
have been allocated to participants accounts and which are voted by them
as trustees at the direction of the participants or, if no direction is
given, by them as trustees in their discretion. Ms. Lagomarsino, Mr.
Hardin and Ms. Lyon disclaim beneficial ownership of such shares.                                                                                                                                                                                                                                                         
|    
|    
|    
|    
|(9)  |  | Includes (i) 22,500 shares which Mr. Hardin may acquire within 60 days of
April 24, 2002 upon the exercise of stock options, (ii) 13,957 shares
which Mr. Hardin may acquire upon the exercise of Warrants, (iii) 2,038
shares allocated to Mr. Hardins 401(k) Plan account and (iv) 174 shares
held by the ESOP which have been allocated to Mr. Hardins account.                                                                                                                                                                                                                                                                                                                            
|    
|    
|    
|    
|(10) |  | Includes (i) 37,000 shares which Mr. Stoneburg may acquire within 60 days
of April 24, 2002 upon the exercise of stock options and (ii) 147 shares
allocated to Mr. Stoneburgs ESOP account.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|    
|    
|    
|(11) |  | Includes 33,333 shares which Ms. Abajian may acquire within may acquire
within 60 days of April 24, 2002 upon the exercise of stock options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|    
|    
|    
|(12) |  | Current executive officers include Ms. Lagomarsino, Mr. Hardin, Mr.
Stoneburg, Ms. Abajian, Ms. Lyon, Jacqueline Calhoun, Senior Vice
President and Chief Credit Officer, Marilyn Momeny, Senior Vice President
and Director of Human Resources, and Carol Ward, Senior Vice
President-Risk Management.                                                                                                                                                                                                                                                                                                                                                                                         
|    
|    
|    
|    
|(13) |  | Includes (i) 264,833 shares which members of the group may acquire within
60 days of April 24, 2002 upon the exercise of stock options, (ii) 20,301
shares which members of the group may acquire within 60 days of April 24,
2002 upon the exercise of Warrants, and (iii) 2,433 shares held by the
401(k) Plan/ESOP which have been allocated to the accounts of executive
officers. Excludes 84,632 shares held of record by the 401(k) Plan/ESOP
which have been allocated to participants accounts and which are voted by
Ms. Lagomarsino, Mr. Hardin and Ms. Lyon as trustees at the direction of
the participants or, if no direction is given, by them as trustees in
their discretion.




ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In 2001, the Company entered into an agreement with Chrisman & Company, Inc., a
firm that specializes in executive recruiting for the financial services
industry, pursuant to which the Company engaged Chrisman & Company to assist in
recruiting qualified candidates for the position of the Executive Vice
President-Chief Lending Officer. Mr. Timothy R. Chrisman, Chairman of the
Board of the Company, is the President and owner of Chrisman & Company. During
2001, the Company paid Chrisman & Company an aggregate of $87,000 pursuant to
this agreement. The Company believes that the terms of this agreement are no
less favorable to the Company than the Company could have arranged with an
unrelated third party.

In March 2002, the Company announced the execution of a definitive agreement
(Merger Agreement) to acquire First Fidelity Bancorp, Inc. and its
subsidiary, First Fidelity Investment and Loan. The acquisition, which is
subject to shareholder and regulatory approval, provides for the Company to
issue 1,266,555 shares of Hawthorne Financial Corporation stock and $37.4
million in cash for the 1,815,115 shares of First Fidelity Bancorp, Inc. stock
and 88,000 options outstanding. The Bass Group, the Fort Pitt Funds, and Value
Partners, Ltd. beneficially own 33.47%, 9.30% and 33.47%, respectively, of
First Fidelity Bancorp, Inc. The Bass Group and the Fort Pitt Funds
beneficially own more than 5% of the Companys voting securities and, at the
time the Merger Agreement was executed, Value Partners, Ltd. beneficially owned
more than 5% of the Companys voting securities. See Part IIIItem 12.
Security Ownership Of Principal Stockholders And Management. Value Partners,
Ltd. sold its entire

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interest in the Company on April 16 2002. In addition, Anthony Liberati
and Harry Radcliffe, directors of the Company, are both directors of First
Fidelity Bancorp, Inc. Mr. Liberati and Mr. Radcliffe were nominated as
directors of the Company by the Bass Group and the Fort Pitt Funds,
respectively. See Part IIIItem 10. Directors of the Registrant.

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SIGNATURES

Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

|                     |                                 |                                                                              
|-------------------- | ------------------------------- | -----------------------------------------------------------------------------
|DATED:  May 21, 2002 | HAWTHORNE FINANCIAL CORPORATION
|                    
|                     | By:                             | /s/ SIMONE
LAGOMARSINOSimone LagomarsinoPresident and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.

|                                                                                                                                     |  |  |  |             
|------------------------------------------------------------------------------------------------------------------------------------ |  |  |  | ------------
|Signature                                                                                                                            |  |  |  | Date        
|                                                                                                                                    
|/s/ SIMONE
LAGOMARSINO
Simone LagomarsinoDirector, President, and Chief Executive Officer(Principal Executive Officer)               |  |  |  | May 21, 2002
|                                                                                                                                    
|/s/ KAREN C.
ABAJIAN
Karen C. AbajianExecutive Vice President andChief Financial Officer(Principal Financial and Accounting Officer) |  |  |  | May 21, 2002
|                                                                                                                                    
|Timothy R. Chrisman, Chairman of the Board                                                                                           |  |  |  | , 2002      
|                                                                                                                                    
|Marilyn Garton Amato, Director                                                                                                       |  |  |  | , 2002      
|                                                                                                                                    
|/s/ GARY W.
BRUMMETT
Gary W. Brummett, Director                                                                                      |  |  |  | May 21, 2002
|                                                                                                                                    
|/s/ ANTHONY W.
LIBERATI
Anthony W. Liberati, Director                                                                                |  |  |  | May 21, 2002
|                                                                                                                                    
|/s/ HARRY F.
RADCLIFFE

Harry F. Radcliffe, Director                                                                                 |  |  |  | May 21, 2002
|                                                                                                                                    
|/s/ HOWARD E. RITT
Howard E. Ritt, Director                                                                                          |  |  |  | May 21, 2002
|                                                                                                                                    

9