EXHIBIT 10.16

                             EMPLOYMENT AGREEMENT

      This Employment  Agreement  ("Agreement") is made and entered into as of
July 15, 2004, by and among Service 1st Bancorp ("Bancorp"),  Service 1st Bank
("Bank") and Robert E. Bloch ("Executive").

                                   RECITALS

      WHEREAS,  Bancorp is a California  corporation  and bank holding company
registered under the Bank Holding Company Act of 1956, as amended,  subject to
the  supervision  and  regulation  of the Board of  Governors  of the  Federal
Reserve System ("BGFRS");

      WHEREAS,  Bancorp is the parent  holding  company  for Bank,  which is a
California  state-chartered banking corporation and wholly-owned subsidiary of
Bancorp,   subject  to  the  supervision  and  regulation  of  the  California
Department  of  Financial   Institutions  ("CDFI")  and  the  Federal  Deposit
Insurance Corporation ("FDIC");

      WHEREAS,  Bancorp, Bank and Executive desire to enter into an employment
agreement  for the  purposes of engaging  the  services  of  Executive  and to
delineate the rights,  obligations and  responsibilities of Bancorp,  Bank and
Executive;

      WHEREAS,   Bancorp   and   Executive   intend  that   Executive   devote
approximately  thirty  percent  (30%)  of  his  business  time,  ability,  and
attention to the  business of Bancorp  during the term of this  Agreement  and
the  balance  of  approximately  seventy  percent  (70%)  of such  time to the
business   of  Bank  (such   percentages   hereinafter   referred  to  as  the
"Allocation"),  in each case as delineated in a position  description approved
by the Boards of Directors of Bancorp and Bank as  described  hereinafter  and
attached to this Agreement as an addendum; and

      WHEREAS,  Bancorp  and Bank  intend to  allocate  the  compensation  and
benefits  payable or provided to Executive  under this Agreement in accordance
with the Allocation.

      NOW, THEREFORE,  in consideration of the mutual covenants and agreements
contained herein, Bancorp, Bank and Executive agree as follows:

                                  AGREEMENT

      1.    Term of  Employment.  Bancorp and Bank hereby employ  Executive in
the positions with Bancorp and Bank, in accordance  with the Allocation and as
hereinafter set forth,  and Executive  hereby accepts  employment with Bancorp
and Bank upon the terms and conditions  hereinafter set forth, for a period of
three (3) years from the date hereof,  subject to the  termination  provisions
of  paragraph  16 and  any  required  regulatory  approvals  as  specified  in
paragraph  28 of this  Agreement.  Upon the  occurrence  of the  third  annual
anniversary  of the date of this  Agreement,  and on each  annual  anniversary
date  thereafter,  the term of this  Agreement  shall be deemed  automatically
extended  for an  additional  one (1) year term,  subject  to the  termination
provisions of paragraph 16.

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      2.    Duties and  Obligations  of  Executive.  Executive  shall serve as
the Executive Vice President and Chief  Financial  Officer of Bancorp and Bank
in  accordance  with the  Allocation,  and shall  perform  the  duties of such
positions as set forth in the position  descriptions  approved by  resolutions
adopted  by the  Boards of  Directors  of  Bancorp  and Bank,  which  shall be
attached to this Agreement as an addendum,  and such additional  duties as may
from time to time be  reasonably  requested  of him by the Boards of Directors
of Bancorp and Bank.

      3.    Devotion to Bancorp's and Bank's Business.

            (a)   Executive  shall  devote his  business  time,  ability,  and
attention  to the  business  of the Bancorp  and Bank in  accordance  with the
Allocation  during the term of this Agreement and shall not during the term of
this Agreement engage in any other business  activities,  duties,  or pursuits
whatsoever,  or  directly  or  indirectly  render any  services of a business,
commercial,  or  professional  nature  to any other  person  or  organization,
whether for  compensation  or otherwise,  without the prior written consent of
the Bank and Bancorp's Board of Directors.

            (b)   The   expenditure   of   reasonable   amounts  of  time  for
educational,  charitable,  or  professional  activities  shall not be deemed a
breach of this Agreement if those activities do not materially  interfere with
the  services  required of  Executive  under this  Agreement.  It is expressly
understood  and agreed that  Executive may continue to participate in any such
activities  in  which  Executive  participated  prior  to  the  date  of  this
Agreement with the knowledge of Bancorp.  Nothing in this  Agreement  shall be
interpreted to prohibit  Executive from making passive  personal  investments;
provided that, except for ownership  interests in businesses acquired prior to
the date of this  Agreement  which  represent  in each case  less  than  three
percent (3%) of the total  ownership of each such  business,  Executive  shall
not directly or indirectly acquire,  hold, or retain any ownership interest in
any financial  institution,  including its affiliated companies,  or any other
business  competing  with or similar in nature to the  business  of Bancorp or
Bank, or their respective subsidiaries or affiliates,  which conducts business
or operations in San Joaquin County.

            (c)   Executive  agrees to  conduct  himself at all times with due
regard to public  conventions and morals.  Executive  further agrees not to do
or commit any act that will  reasonably  tend to shock or offend the community
and have an adverse effect upon Bancorp or Bank.

            (d)   Executive hereby  represents and agrees that the services to
be  performed  under the terms of this  Agreement  are of a  special,  unique,
unusual, extraordinary,  and intellectual character that gives them a peculiar
value,  the loss of which cannot be reasonably or  adequately  compensated  in
damages in an action at law.  Executive  therefore  expressly  agrees  that in
addition to any other  rights or remedies  that  Bancorp or Bank may  possess,
they shall be entitled to injunctive and other equitable  relief to prevent or
remedy a breach of this Agreement by Executive.

      4.    Noncompetition  by  Executive.  Executive  shall  not,  during the
term of this  Agreement,  directly  or  indirectly,  either  as a  consultant,
agent,  principal,  stockholder (except as permitted in paragraph 3(b) of this
Agreement),  officer,  director,  or in any other individual or representative
capacity,  engage,  assist,  consult or  participate  in any other  banking or

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financial  services business without the prior written consent of the Board of
Directors of Bancorp.  Following the  termination of this Agreement and during
any period when  Executive is  receiving  severance  payments  from Bancorp or
Bank pursuant to or related to this  Agreement,  Executive shall be subject to
the  foregoing  noncompetition  restrictions  only with  respect to banking or
financial  services  businesses  which  conduct  business or operations in San
Joaquin  County.  This paragraph 4 shall survive the expiration or termination
of this Agreement.

      5.    Indemnification.

            (a)   Executive  shall  indemnify  and hold Bancorp and Bank,  and
their respective affiliates and subsidiaries,  harmless from all liability for
loss,  damage,  or injury to  persons  or  property  resulting  from the gross
negligence or intentional misconduct of Executive.

            (b)   To  the  fullest  extent  permitted  by law  and  applicable
regulations  of the BGFRS and FDIC,  Bancorp shall  indemnify  Executive if he
was or is a party or is  threatened  to be made a party in any action  brought
by a third party against  Executive  (whether or not Bancorp or Bank is joined
as a party defendant)  against  expenses,  judgments,  fines,  settlements and
other amounts actually and reasonably  incurred in connection with said action
if  Executive  acted  in  good  faith  and in a  manner  Executive  reasonably
believed to be in the best  interests of Bancorp and Bank (and with respect to
a criminal  proceeding  if Executive  had no  reasonable  cause to believe his
conduct was unlawful),  provided that the alleged  conduct of Executive  arose
out of and was within the course and scope of his  employment as an officer or
executive of Bancorp or Bank.

      6.    Disclosure of  Information.  Executive shall not, either before or
after  termination  of this  Agreement,  without the prior written  consent of
Bancorp's  Board of  Directors  or except as  required  by law to comply  with
legal   process   including,    without   limitation,   by   oral   questions,
interrogatories,  requests  for  information  or  documents,  subpoena,  civil
investigative  demand or similar  process,  disclose  to anyone any  financial
information,  trade or business secrets,  customer lists, computer software or
other information not otherwise publicly available  concerning the business or
operations   of  Bancorp  or  Bank  and  their   respective   affiliates   and
subsidiaries.   Executive   further   recognizes  and  acknowledges  that  any
financial  information  concerning  any customers of Bancorp or Bank and their
respective  affiliates or subsidiaries,  as it may exist from time to time, is
strictly  confidential  and  is  a  valuable,  special  and  unique  asset  of
Bancorp's and Bank's  business.  Executive  shall not,  either before or after
termination of this  Agreement,  without such consent or except as required by
law,  disclose to anyone said financial  information or any part thereof,  for
any reason or purpose  whatsoever.  In the event  Executive is required by law
to disclose such  information  described in this  paragraph 6,  Executive will
provide Bancorp and its counsel with immediate  notice of such request so that
they  may  consider  seeking  a  protective  order.  If in  the  absence  of a
protective  order  or  the  receipt  of  a  waiver   hereunder   Executive  is
nonetheless,  in the written opinion of  knowledgeable  counsel,  compelled to
disclose  any of such  information  to any tribunal or any other party or else
stand  liable for  contempt  or suffer  other  material  censure  or  material
penalty,  then  Executive  may  disclose  (on an "as needed"  basis only) such
information  to such  tribunal or other  party  without  liability  hereunder.
Notwithstanding  the  foregoing,   Executive  may  disclose  such  information
concerning the business or operations of Bancorp or Bank and their  respective
affiliates  and  subsidiaries  as may be required by the BGFRS,  FDIC or other
regulatory  agency having  jurisdiction over the operations of Bancorp or Bank
in  connection  with an  examination  of Bancorp  or Bank or other  proceeding
conducted  by such  regulatory  agency.  This  paragraph  6 shall  survive the
expiration or termination of this Agreement.

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      7.    Written,  Printed or Electronic Material. All written,  printed or
electronic  material,  notebooks and records  including,  without  limitation,
computer  disks used by  Executive in  performing  duties for Bancorp or Bank,
other than  Executive's  personal notes and diaries,  are and shall remain the
sole property of Bancorp.  Upon  termination  of employment,  Executive  shall
promptly  return  all  such  material  (including  all  copies,  extracts  and
summaries  thereof) to Bancorp.  This paragraph 7 shall survive the expiration
or termination of this Agreement.

      8.    Surety   Bond.   Executive   agrees  that  he  will   furnish  all
information  and take any other  steps  necessary  from time to time to enable
Bancorp  or Bank to obtain or  maintain  a fidelity  bond  conditional  on the
rendering  of a true  account by  Executive  of all  monies,  goods,  or other
property which may come into the custody,  charge,  or possession of Executive
during the term of his  employment.  The surety  company  issuing the bond and
the amount of the bond must be  acceptable  to  Bancorp.  All  premiums on the
bond  shall be paid by Bancorp  and Bank in  accordance  with the  Allocation.
Bancorp shall have no  obligation  to pay  severance  benefits to Executive in
accordance  with  paragraph  16 (d) of this  Agreement  in the event  that the
Executive's  employment  is  terminated  in  connection  with the  Executive's
failure  to  qualify  for a surety  bond at any time  during  the term of this
Agreement and such failure to qualify results from an occurrence  described in
paragraph  16(a)  (5),  (6),  (7),  (8),  (9),  or (11,  to the  extent  of an
Executive breach).

      9.    Base  Salary.  In  consideration  for the services to be performed
hereunder,  Bancorp and Bank shall pay to  Executive  in  accordance  with the
Allocation,  a base  salary at the rate of One  Hundred  Nine  Thousand,  Four
Hundred  Seventy-Six  Dollars  ($109,476) per annum,  payable in substantially
equal  installments  during the term of this Agreement of  approximately  Four
Thousand Five Hundred  Sixty-One  Dollars and Fifty Cents  ($4,561.50)  on the
fifteenth and last days of each month,  subject to applicable  adjustments for
withholding   taxes  and  prorations  for  any  partial   employment   period.
Executive  shall receive such annual  adjustments  in base salary,  if any, as
may be determined by Bancorp's Board of Directors, in its sole discretion.

      10.   Salary  Continuation  During  Disability.  If  Executive  for  any
reason  (except  as  expressly   provided   below)   becomes   temporarily  or
permanently  disabled  so that he is unable to perform  the duties  under this
Agreement,  Bancorp and Bank agree to pay  Executive  in  accordance  with the
Allocation,  the base  salary  otherwise  payable  to  Executive  pursuant  to
paragraph 9 of this  Agreement  reduced by the amounts  received by  Executive
from state  disability  insurance,  or worker's  compensation or other similar
insurance  benefits through policies provided by Bancorp or Bank, for a period
of six (6) months from the date of disability.

            For purposes of this paragraph 10,  "disability"  shall be defined
as provided in any disability  insurance  coverage provided by Bancorp or Bank
to  Executive  or as may  otherwise  be  defined in any  disability  insurance
program of Bancorp or Bank.  Notwithstanding  anything herein to the contrary,
Bancorp and Bank shall have no  obligation  to make  payments for a disability
resulting from the deliberate,  intentional actions of Executive, such as, but
not limited to, attempted suicide or chemical dependence of Executive.

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      11.   Incentive  Compensation.  Executive  shall be  entitled to receive
an  annual  incentive  compensation  payment  as  determined  by the  Board of
Directors of Bancorp  based upon the  implementation  of  Bancorp's  strategic
plan for each year and the  profitability  of Bancorp for each year during the
term of this Agreement.

            Notwithstanding the foregoing,  no incentive compensation payments
shall be prorated  for a partial year and  Executive  shall not be entitled to
receive   incentive   compensation   payments   based   upon   the   increased
profitability  described  above for any year during the term of this Agreement
in which  Executive  was not  employed by Bancorp and Bank for the full fiscal
year.  Any incentive  compensation  payable to Executive  shall be distributed
to Executive  following  review by  Bancorp's  Board of Directors of the final
audited  consolidated  financial  results of  operations  for the  immediately
preceding fiscal year of Bancorp.

      12.   Stock  Options.  Executive has previously  been granted  incentive
stock  options to  purchase  Fifteen  Thousand  (15,000)  shares of  Bancorp's
common  stock  pursuant  to the 1999  Stock  Option  Plan (the  "1999  Plan").
Notwithstanding  any contrary  provision of the 1999 Plan or related Incentive
Stock  Option  Agreement,  no rights of  employment  shall be  conferred  upon
Executive  or  result  from  the  1999  Plan or such  Incentive  Stock  Option
Agreement.  Bancorp has a 2004 Stock  Option Plan (the "2004  Plan")  pursuant
to which no stock  options  have been  granted to  Executive as of the date of
this  Agreement.  Executive  shall be  eligible  for a  future  grant of stock
options  under  the 2004 Plan in the sole  discretion  of  Bancorp's  Board of
Directors.  In the event  stock  options are  granted to  Executive  under the
2004 Plan in the  future,  no rights of  employment  shall be  conferred  upon
Executive or result from the 2004 Plan or stock option agreements  thereunder.
Any employment  rights and corresponding  duties of Executive  pursuant to his
employment  by Bancorp or Bank shall be limited to and  interpreted  solely in
accordance with the terms and provisions of this Agreement.

      13.   Other  Benefits.  Executive  shall be entitled  to those  benefits
adopted  by  Bancorp or Bank for all  executive  officers  of Bancorp or Bank,
subject to the Allocation,  and to applicable  qualification  requirements and
regulatory  approval   requirements,   if  any.  Executive  shall  be  further
entitled  to the  following  additional  benefits  which shall  supplement  or
replace,  to the extent duplicative of any part or all of the general benefits
available for executive  officers of Bancorp or Bank,  the benefits  otherwise
provided to Executive:

            (a)   Vacation.  Executive  shall be entitled  to annual  vacation
leave,  the  duration  of which  shall be  equal to an  aggregate  of four (4)
weeks.  The  vacation  leave shall be paid by Bancorp  and Bank in  accordance
with the  Allocation,  based on Executive's  then existing rate of base salary
each year  during the term of this  Agreement.  Executive  may be absent  from
his  employment  for vacation as long as such leave is reasonable and does not
jeopardize his  responsibilities  and duties specified in this Agreement.  The
length of vacation  should not exceed two (2) weeks  without  the  approval of
Bancorp's  Board of  Directors,  but at  least  two (2)  consecutive  weeks of
vacation must be taken each year during the term of this  Agreement.  Vacation
time will accrue in accordance with Bancorp's personnel policies.

            (b)   Insurance.  Bancorp  shall  provide  during the term of this
Agreement group life, health (including medical,  dental and hospitalization),
accident and  disability  insurance  coverage for Executive and his dependents
through a policy or policies  provided by the California  Bankers  Association

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group  insurance  program or similarly  equivalent  program.  The cost of such
insurance shall be paid by Bancorp and Bank in accordance with the Allocation.

      14.   Annual  Physical  Examination.  Bancorp  and  Bank  shall  pay  or
reimburse  Executive  in  accordance  with the  Allocation  for the cost of an
annual  physical  examination  conducted  by a California  licensed  physician
selected by Executive and reasonably acceptable to Bancorp.

      15.   Business   Expenses.   Executive   shall  be  reimbursed  for  all
ordinary and necessary  expenses  incurred by Executive in connection with his
employment.  Executive  shall also be  reimbursed  for  expenses  incurred  in
activities  associated  with  promoting  the  business  of  Bancorp  or  Bank,
including  expenses  for club  memberships,  entertainment,  travel  and other
expenses for attendance at  conventions  and education  programs,  and similar
items.  Bancorp  and Bank will pay for or will  reimburse  Executive  for such
expenses in accordance  with the  Allocation  upon  presentation  by Executive
from  time  to  time  of  receipts  or  other  appropriate  evidence  of  such
expenditures  in form and content  reasonably  acceptable to Bancorp and Bank.
Any club  memberships  shall be approved  in advance of purchase by  Bancorp's
and Bank's Boards of Directors.

      16.   Termination of Agreement.

            (a)   Automatic Termination.  This Agreement shall terminate
automatically without further act of the parties and immediately upon the
occurrence of any one of the following events, subject to a party's right,
without any obligation whatsoever, to waive an event reasonably susceptible
of waiver which otherwise benefits the waiving party, and the obligation of
Bancorp and Bank to pay in accordance with the Allocation, the amounts which
would otherwise be payable to Executive under this Agreement through the end
of the month in which the event occurs, except that only in the event of
termination based upon subparagraphs (1), (4) or (11, to the extent of
Bancorp's or Bank's breach) below shall Executive be entitled to receive
severance payments and continuation of group insurance benefits based upon
automatic termination pursuant to paragraph 16 (d) of this Agreement:


                  (1)   The occurrence of circumstances that make it
                        impossible or impractical for Bancorp and Bank to
                        conduct or continue business.

                  (2)   The death of Executive.

                  (3)   The loss by Executive of legal capacity.

                  (4)   The loss by Bancorp and Bank of legal capacity to
                        contract.

                  (5)   The willful and material breach or the habitual and
                        continued neglect by the Executive of his employment
                        responsibilities and duties;

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                  (6)   The continuous mental or physical incapacity of the
                        Executive, subject to disability rights under this
                        Agreement;

                  (7)   The Executive's willful violation of any federal
                        banking or securities laws, or of the bylaws, rules,
                        policies or resolutions of Bancorp or Bank, or the
                        rules or regulations of the BGFRS, CDFI, FDIC, or
                        other regulatory agency or governmental authority
                        having jurisdiction over Bancorp or Bank, which has
                        an adverse effect upon the Bancorp or Bank;

                  (8)   The written determination by a state or federal
                        banking agency or governmental authority having
                        jurisdiction over the Bancorp or Bank that Executive
                        is not suitable to act in the capacity for which he
                        is employed by Bancorp and Bank;

                  (9)   The Executive's conviction of (i) any felony or (ii)
                        a crime involving moral turpitude, or the Executive's
                        willful commission of a fraudulent or dishonest act;
                        or

                  (10)  The Executive's willful disclosure, without
                        authority, of any secret or confidential information
                        concerning Bancorp or Bank and their respective
                        affiliates or subsidiaries, or taking any action
                        which Bancorp's Board of Directors determines, in its
                        sole discretion and subject to good faith, fair
                        dealing and reasonableness, constitutes unfair
                        competition with or induces any customer to breach
                        any contract with the Bancorp or Bank, or their
                        respective affiliates or subsidiaries.

                  (11)  Bancorp, Bank or Executive materially breaches the
                        terms or provisions of this Agreement.

            (b)   Termination  by Bancorp  and Bank.  Bancorp and Bank may, at
their election and in their sole  discretion,  terminate this Agreement at any
time for any reason,  or for no reason,  without prejudice to any other remedy
to which  Bancorp or Bank may be  entitled  either at law,  in equity or under
this  Agreement.  Upon such  termination,  Executive shall  immediately  cease
performing and  discharging the duties and  responsibilities  of his positions
with  Bancorp and Bank and remove  himself and his  personal  belongings  from
Bancorp's  and  Bank's  premises.  All  rights  and  obligations  accruing  to
Executive  under this Agreement shall cease at such  termination,  except that
such termination shall not prejudice  Executive's rights regarding  employment
benefits  which shall have accrued  prior to such  termination,  including the
right to receive the severance pay and benefits  specified in paragraph 16 (d)
below,  and any other  remedy  which  Executive  may have at law, in equity or
under this Agreement, which remedy accrued prior to such termination.

            (c)   Termination  by Executive.  This Agreement may be terminated
at any time by  Executive  for any  reason,  or no reason,  by giving not less
than thirty  (30) days' prior  written  notice of  termination  to Bancorp and
Bank.  Upon  such  termination,   all  rights  and  obligations   accruing  to
Executive  under this  Agreement  shall  cease,  except that such  termination

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shall not prejudice  Executive's  rights regarding  employment  benefits which
shall  have  accrued  prior to such  termination  and any other  remedy  which
Executive  may have at law, in equity or under this  Agreement,  which  remedy
accrued prior to such termination.

            (d)   Severance  Pay  and  Insurance   Continuation  Benefits  -
Termination  by Bancorp and Bank. In the event of  termination  by Bancorp and
Bank  pursuant  to  paragraph  16  (b) or  automatic  termination  based  upon
paragraph  16 (a) (1),  (4) or (11,  to the  extent  of  Bancorp's  or  Bank's
breach) of this Agreement,  Executive  shall be entitled to receive  severance
pay  (in  addition  to any  base  salary,  incentive  compensation,  or  other
payments, if any, due Executive) equal to six (6) months base salary,  payable
by Bancorp and Bank in accordance with the Allocation in  substantially  equal
installments on the fifteenth and last days of each month  commencing with the
month  immediately  following  such  termination.   Executive  shall  also  be
entitled to receive  continuation  of group  insurance  coverages in effect at
the date of termination  for Executive and his  dependents,  at the expense of
Bancorp  and Bank in  accordance  with  the  Allocation,  for a period  of one
hundred eighty (180) days from the date of  termination.  Notwithstanding  the
foregoing,  in the event of a "change in control"  as defined in  subparagraph
(e) below,  Executive  shall not be entitled to severance pay or  continuation
of group insurance  coverages pursuant to this subparagraph (d) and any rights
of  Executive  to  severance  pay or other  benefits  shall be limited to such
rights and benefits as are  specified  in  subparagraph  (e) below.  Executive
acknowledges   and  agrees  that  severance  pay  and  continuation  of  group
insurance  coverages  pursuant  to  this  subparagraph  (d) is in  lieu of all
damages,  payments and liabilities on account of the early termination of this
Agreement  and the sole and exclusive  remedy for Executive  terminated at the
will of Bancorp and Bank  pursuant to  paragraph 16 (b) or pursuant to certain
provisions of paragraph 16 (a) described herein.

            (e)   Severance  Pay -  Change  in  Control.  In  the  event  of a
"change in control" as defined herein and within a period of twenty-four  (24)
months  following  consummation  of such a change in control  (i)  Executive's
employment is terminated;  or (ii) any adverse change occurs in the nature and
scope  of  Executive's  position,   responsibilities,   duties,  base  salary,
benefits  or  location  of  employment;   or  (iii)  any  event  occurs  which
reasonably  constitutes a demotion,  significant  diminution  or  constructive
termination   (by   resignation  or  otherwise)  of  Executive's   employment,
Executive shall be entitled to receive  severance pay in addition to any bonus
or incentive  compensation payments due Executive.  Any such severance pay due
Executive  shall be in an amount  equal to twelve (12)  months of  Executive's
base  salary  at  the  rate  in  effect   immediately  prior  to  termination.
Executive  shall also be entitled to receive  continuation  of group insurance
coverages  in  effect  at the  date  of  termination  for  Executive  and  his
dependents,  at the  expense  of  Bancorp  and  Bank in  accordance  with  the
Allocation,  for a period of one  hundred  eighty  (180) days from the date of
termination.

            Notwithstanding  the  foregoing  provisions  of  paragraph 16 (e),
Executive may resign his position at any time during the period  commencing on
the expiration of six (6) months  following a "change in control"  through the
expiration  of twelve  (12) months  following  a "change in control"  and upon
such  resignation  receive the  severance  pay  specified  in paragraph 16 (e)
above  without  regard to whether an event  described in paragraph 16 (e) (i),
(ii) or (iii) has occurred;  provided, however, that Executive shall deliver a
letter of  resignation  that  clearly  states the  intention to resign as of a
date specified  therein and such date of resignation  shall be at least thirty
(30) days after the date of receipt of the  resignation  letter by Executive's
employer following such "change in control."

                                                                   Page 56 of 87
<PAGE>

            Any such  severance  shall be payable  in lump sum by Bancorp  and
Bank in accordance with the Allocation,  within thirty (30) days following the
occurrence  of  an  event  described  in  paragraph  16  (e).  Such  severance
payments,  if any, shall be in lieu of all damages,  payments and  liabilities
on account of the events  described  above for which such severance  payments,
if any, may be due  Executive and any  severance  payment  rights of Executive
under  paragraph  16 (d) of this  Agreement.  This  paragraph  16 (e) shall be
binding  upon and inure to the benefit of the parties  and any  successors  or
assigns of the parties or any "person" as defined herein.

            Notwithstanding the foregoing,  Executive shall not be entitled to
receive nor shall Bancorp or Bank,  their  respective  successors,  assigns or
any  "person"  as  defined  herein  be  obligated  to pay  severance  payments
pursuant to this  paragraph 16 (e) in the event of an occurrence  described in
paragraph  16  (a)  (5),  (7)  (8),  (9),  (10),  or  (11,  to the  extent  of
Executive's  breach),  or in the  event  Executive  terminates  employment  in
accordance  with  paragraph 16 (c) and the  termination  is not a result of or
based upon the  occurrence of any event  described in paragraph 16 (e) (ii) or
(iii) above.

      17.   Change in Control  Definition.  The term "change in control" shall
mean the  first  to  occur of any of the  following  events  with  respect  to
Bancorp or Bank:

            (a)   Any  "person"  (as  such  term is used  in  sections  13 and
14(d)(2) of the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act"),  becomes the beneficial owner (as that term is used in section 13(d) of
the Exchange  Act),  directly or indirectly,  of twenty-five  percent (25%) or
more of Bancorp's or Bank's capital  stock,  other than a group of two or more
persons  not (i) acting in concert for the  purpose of  acquiring,  holding or
disposing of such stock or (ii) otherwise  required to file any form or report
with any governmental agency or regulatory  authority having jurisdiction over
Bancorp or Bank which requires the reporting of any change in control;

            (b)   During  any  period  of not more  than  two (2)  consecutive
years,  not  including  any  period  prior  to the  date  of  this  Agreement,
individuals  who, at the  beginning  of such period,  constitute  the Board of
Directors of Bancorp or Bank,  cease for any reason to  constitute  at least a
majority thereof;

            (c)   The  effective  date  of  any  consolidation  or  merger  of
Bancorp or Bank (after all requisite  shareholder,  applicable  regulatory and
other approvals and consents have been  obtained),  other than a consolidation
or merger of Bancorp or Bank in which the holders of the voting  capital stock
of Bancorp or Bank immediately  prior to the consolidation or merger hold more
than fifty percent (50%) of the voting  capital stock of the surviving  entity
immediately after the consolidation or merger;

            (d)   The  shareholders  of  Bancorp or Bank  approve  any plan or
proposal for the liquidation or dissolution of Bancorp or Bank; or

            (e)   The  shareholders  of  Bancorp or Bank  approve  the sale or
transfer of  substantially  all of Bancorp's or Bank's  assets to parties that
are not within a "controlled  group of corporations"  (as that term is defined
in section 1563 of the Code) in which  Bancorp or, as  applicable  Bank,  is a
member.

                                                                 Page 57 of 87
<PAGE>

            Notwithstanding  the foregoing or anything else  contained  herein
to the  contrary,  there  shall not be a "change in control"  for  purposes of
this  Agreement if the event which would  otherwise come within the meaning of
the term "change in control"  involves (i) an Employee  Stock  Ownership  Plan
sponsored by the Bancorp,  which Plan is the party that acquires  "control" or
is the principal  participant  in the  transaction  constituting  a "change in
control," as described  above, or (ii) a  reorganization  in which the Bank or
any bank  subsidiary  of the  Bancorp  is merged  with and into  another  bank
subsidiary  of Bancorp to  consolidate  operations  under the  charter of such
other bank subsidiary.

      18.   Notices.  Any notices to be given  hereunder by a party to another
party shall be in writing and may be  transmitted  by personal  delivery or by
U.S.  mail,  registered  or  certified,  postage  prepaid with return  receipt
requested.  Mailed  notices shall be addressed to the parties at the addresses
listed as follows:

            Bancorp or Bank:  Principal place of business address.

            Executive:        Principal   residence   address   as   shown  in
                              Bancorp's   Personnel  Records  and  Executive's
                              personal file.

            Each  party may  change  the  address  for  receipt  of notices by
written  notice  in  accordance  with this  paragraph  18.  Notices  delivered
personally  shall be deemed  communicated  as of the date of  actual  receipt;
mailed  notices  shall be deemed  communicated  as of three (3) days after the
date of mailing.

      19.   Arbitration.  All claims,  disputes and other  matters in question
arising out of or relating to this  Agreement or the breach or  interpretation
thereof,  other than those  matters  which are to be determined by the Bancorp
in its sole and absolute discretion,  shall be resolved by binding arbitration
before a  representative  member,  selected  by the  mutual  agreement  of the
parties,  of the  Judicial  Arbitration  and  Mediation  Services,  Inc.,  San
Francisco,  California  ("JAMS"),  in accordance with the rules and procedures
of JAMS then in effect.  In the event JAMS is unable or  unwilling  to conduct
such arbitration,  or has discontinued its business,  the parties agree that a
representative  member,  selected by the mutual  agreement of the parties,  of
the American  Arbitration  Association,  San  Francisco,  California  ("AAA"),
shall  conduct  such  binding  arbitration  in  accordance  with the rules and
procedures  of the AAA then in effect.  Notice of the  demand for  arbitration
shall be filed in  writing  with the other  party to this  Agreement  and with
JAMS (or AAA, if necessary).  In no event shall the demand for  arbitration be
made after the date when institution of legal or equitable  proceedings  based
on such  claim,  dispute or other  matter in  question  would be barred by the
applicable  statute of  limitations.  Any award  rendered by JAMS or AAA shall
be final and binding upon the parties,  and as  applicable,  their  respective
heirs, beneficiaries,  legal representatives,  agents, successors and assigns,
and may be entered in any court having  jurisdiction  thereof.  The obligation
of the parties to  arbitrate  pursuant to this  clause  shall be  specifically
enforceable in accordance with, and shall be conducted  consistently with, the
provisions  of Title 9 of Part 3 of the  California  Code of Civil  Procedure.
Any arbitration hereunder shall be conducted in Stockton,  California,  unless
otherwise agreed to by the parties.

                                                                 Page 58 of 87
<PAGE>

      20.   Attorneys'   Fees  and   Costs.   In  the  event  of   litigation,
arbitration  or  any  other  action  or  proceeding  between  the  parties  to
interpret or enforce this  Agreement or any part thereof or otherwise  arising
out of or relating to this Agreement,  the prevailing  party shall be entitled
to  recover  its  costs  related  to any such  action  or  proceeding  and its
reasonable  fees of attorneys,  accountants and expert  witnesses  incurred by
such party in connection  with any such action or  proceeding.  The prevailing
party shall be deemed to be the party which obtains  substantially  the relief
sought by final resolution,  compromise or settlement,  or as may otherwise be
determined  by order  of a court of  competent  jurisdiction  in the  event of
litigation,  an award or decision of one or more  arbitrators  in the event of
arbitration,  or a decision of a comparable official in the event of any other
action or  proceeding.  Every  obligation  to indemnify  under this  Agreement
includes the obligation to pay reasonable  fees of attorneys,  accountants and
expert witnesses  incurred by the indemnified party in connection with matters
subject to indemnification.

      21.   Entire  Agreement.  This  Agreement  supersedes  any and all other
agreements,  either oral or in writing,  between the parties  with  respect to
the  employment  of Executive  hereunder and contains all of the covenants and
agreements  between the parties  with respect to the  employment  of Executive
hereunder.   Each  party  to  this  Agreement   acknowledges   that  no  other
representations,  inducements,  promises,  or  agreements,  oral or otherwise,
have been made by any party,  or anyone  acting on behalf of any party,  which
are not set forth herein, and that no other agreement,  statement,  or promise
not  contained  in this  Agreement  shall  be  valid  or  binding  on a party.
Notwithstanding  the  foregoing or any contrary  term or provision  hereunder,
this  Agreement  shall be  construed  in light of the  Allocation  in order to
avoid  duplication of payments and benefits to which Executive may be entitled
as set forth in paragraph 28 below.

      22.   Modifications.   Any   modification  of  this  Agreement  will  be
effective  only if it is in writing  and  signed by a party or its  authorized
representative.

      23.   Waiver.  The  failure of any party to insist on strict  compliance
with any of the terms, provisions,  covenants, or conditions of this Agreement
by the other  party  shall  not be  deemed a waiver  of any  term,  provision,
covenant, or condition,  individually or in the aggregate,  unless such waiver
is in writing,  nor shall any waiver or  relinquishment  of any right or power
at any one time or times be deemed a waiver or  relinquishment  of that  right
or power for all or any other times.

      24.   Partial  Invalidity.  If any  provision in this  Agreement is held
by a court of competent  jurisdiction to be invalid,  void, or  unenforceable,
the remaining provisions shall nevertheless  continue in full force and effect
without being impaired or invalidated in any way.

      25.   Advice  of  Counsel  and  Advisors.   Executive  acknowledges  and
agrees  that he has read and  understands  the  terms and  provisions  of this
Agreement  and  prior to  signing  this  Agreement,  he has had the  advice of
counsel and such other advisors as he deemed  appropriate  in connection  with
his review and analysis of such terms and provisions of this Agreement.

      26.   Governing  Law and  Venue.  The laws of the  State of  California,
other than  those  laws  denominated  choice of law  rules,  shall  govern the
validity,  construction and effect of this Agreement.  Any action which in any
way involves the rights,  duties and obligations of the parties  hereunder and

                                                                 Page 59 of 87
<PAGE>

is not resolved by  arbitration as set forth in paragraph 19 of this Agreement
shall be brought in the  courts of the State of  California  and venue for any
action or  proceeding  shall be in San Joaquin  County or in the United States
District Court for the Eastern District of California,  and the parties hereby
submit to the personal jurisdiction of said courts.

      27.   Payments Due Deceased  Executive.  If Executive  dies prior to the
expiration  of the  term  of his  employment,  any  payments  that  may be due
Executive  under  this  Agreement  as of the  date of  death  shall be paid to
Executive's  executors,   administrators,   heirs,  personal  representatives,
successors, or assigns.

      28.   Limitation Upon Payments and Benefits.  Notwithstanding  any other
term or provision of this Agreement,  each and all of the payments or benefits
to which  Executive may be entitled  under this Agreement  including,  without
limitation,  payments or benefits described in paragraphs 9 through 16 of this
Agreement,  shall be made in  accordance  with the  Allocation  and  shall not
result in any  duplicative  payments or benefits to Executive.  Bancorp,  Bank
and  Executive  intend that the  Allocation  applicable  to such  payments and
benefits under this  Agreement  will, on a combined  basis,  equal one hundred
percent (100%) of Executive's entitlement thereto.

      29.   Regulatory  Approval.   Bancorp,   Bank  and  Executive  agree  to
cooperate in obtaining  any required  regulatory  approvals of this  Agreement
from the BGFRS,  CDFI,  FDIC or other  governmental  or  regulatory  authority
having  jurisdiction  over Bancorp or Bank at the earliest  practicable  date.
Notwithstanding any other term or provision of this Agreement,  Bancorp,  Bank
and Executive  further  agree that no benefits,  rights or  obligations  shall
accrue to the parties  hereunder in the absence of obtaining any such required
regulatory   approvals  and  in  the  event  that  any  such  governmental  or
regulatory  authority shall  disapprove any provision of this Agreement,  then
the parties  hereto  will use their best  efforts,  acting in good  faith,  to
amend this  Agreement in a manner that will be  acceptable  to the parties and
to such governmental or regulatory authorities.

                                                                 Page 60 of 87
<PAGE>

      IN  WITNESS  WHEREOF,  the  parties  have  executed  this  Agreement  in
Stockton, California, as of the date set forth above.

BANCORP:                                        EXECUTIVE:

Service 1st Bancorp

By:  ------------------                         ---------------
     John O. Brooks                             Robert E. Bloch
     Chairman and Chief
     Executive Officer


BANK:

Service 1st Bank

By:
     ------------------
     John O. Brooks
     Chairman

                                                                 Page 61 of 87