UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the quarterly period ended September 30, 1999

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 or  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

     For the transition  period from ___________________________________________

                        Commission file number: 333-68207

                            FIRST COASTAL BANCSHARES

               CALIFORNIA NO.                              95-4693574
(State of other jurisdiction of incorporation) (IRS Employer Identification No.)


 275 Main Street, El Segundo, California                     90245
(Address of principal executive offices)                   (Zip Code)

       Registrant's telephone number, including area code: (310) 322-2222

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(c) of the Securities Exchange Act of 1934 during
the preceding 12 months (of 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 [X ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

On November 3, 1999,  there were  1,248,492  shares of First Coastal  Bancshares
Common Stock outstanding.


                                       1
<PAGE>


                            First Coastal Bancshares
                               September 30, 1999


                                      INDEX


                         PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                       <C>
Item 1 - Financial Statements
         Condensed Consolidated Balance Sheets at September 30, 1999 and
                  December 31, 1998..................................................................          3
         Condensed Consolidated Statements of Income for the three
                  months, and nine months ended September 30, 1999 and 1998..........................          4
         Condensed Consolidated Statements of Changes in Shareholders' Equity from
                  January 1, 1998 through September 30, 1999.........................................          5
         Condensed Consolidated Statements of Cash Flows for the nine
                  months ended September 30, 1999 and 1998...........................................          6
         Notes to Consolidated Financial Statements...................................................     7 - 8
Item 2 - Management's Discussion and Analysis of Financial Condition and
             Results of Operations.....................................................................   9 - 13


                           PART II - OTHER INFORMATION


Item 1 - Legal Proceedings............................................................................        14
Item 2 - Changes in Securities........................................................................        14
Item 3 - Defaults upon Senior Securities..............................................................        14
Item 4 - Submission of Matters to a Vote of Security Holders..........................................        14
Item 5 - Other Information............................................................................        14
Item 6 - Exhibits and Reports on Form 8-K.............................................................        14
</TABLE>



                                       2
<PAGE>



Item 1. Financial Statements


                    First Coastal Bancshares and Subsidiaries
                      Condensed Consolidated Balance Sheets
                    (Unaudited - Dollar Amounts in Thousands)


<TABLE>
<CAPTION>
                                                                          September 30,           December 31,
                                                                               1999                  1998
                                                                          -------------           ------------
<S>                                                                         <C>                    <C>
Cash and Due From Bank                                                      $   8,363              $   2,745
Short Term Investments                                                          7,700                    700
                                                                            ---------              ---------
                                 CASH AND CASH EQUIVALENTS                     16,063                  3,445

Investment Securities, net                                                     38,364                 14,679

Loans                                                                          68,610                 55,163
Allowance for Loan Losses                                                        (846)                  (549)
                                                                            ---------              ---------
                                                 NET LOANS                     67,764                 54,614

Premises and Equipment, net                                                       655                    386
Other Real Estate Owned, net                                                       --                    116
Goodwill, net                                                                   5,554                  1,770
Issuance Costs, net - Trust Preferred Securities                                1,001                     --
Accrued Interest and Other Assets                                               2,262                  1,725
                                                                            ---------              ---------

                                                                            $ 131,663              $  76,735
                                                                            =========              =========

Noninterest-Bearing Deposits                                                $  32,713              $  14,474
Interest-Bearing Deposits                                                      67,414                 44,117
                                                                            ---------              ---------
                                            TOTAL DEPOSITS                    100,127                 58,591

Other Borrowings                                                               17,000                 11,000
Company Obligated Mandatorily Redeemable
   Preferred Securities of Subsidiary Trust Holding
   Solely Junior Subordinated Debentures                                        6,600                     --
Accrued Interest and Other Liabilities                                            827                    884
                                                                            ---------              ---------
                                         TOTAL LIABILITIES                    124,554                 70,475

Preferred Stock                                                                 1,993                  2,658
Common Shares                                                                   6,631                  3,673
Accumulated Deficit                                                              (483)                   (40)
Accumulated Other Comprehensive Income                                         (1,032)                   (31)
                                                                            ---------              ---------

                                TOTAL SHAREHOLDERS' EQUITY                      7,109                  6,260
                                                                            ---------              ---------

                                                                            $ 131,663              $  76,735
                                                                            =========              =========
</TABLE>



               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                       3
<PAGE>


Item 1. Financial Statements - Continued


                    First Coastal Bancshares and Subsidiaries
                   Condensed Consolidated Statements of Income
        (Unaudited - Dollar Amounts in Thousands, Except Per Share Data)


<TABLE>
<CAPTION>
                                                               For the Three Months Ended        For the Nine Months Ended
                                                                     September 30                       September 30
                                                               --------------------------        ------------------------
                                                                  1999            1998            1999              1998
                                                                -------          -------         -------          -------
<S>                                                             <C>              <C>             <C>              <C>
Interest Income                                                 $ 2,242          $ 1,399         $ 5,854          $ 3,954
Interest Expense                                                  1,014              609           2,596            1,651
                                                                -------          -------         -------          -------

     Net Interest Income                                          1,228              790           3,258            2,303

Provision for Loan Losses                                            --               --              50               10
                                                                -------          -------         -------          -------

     Net Interest Income after
     Provision for Loan Losses                                    1,228              790           3,208            2,293

Noninterest Income                                                  315              154             767              416
Noninterest Expense                                               1,592              783           4,153            2,223
                                                                -------          -------         -------          -------

     (Loss) Income before Taxes                                     (49)             161            (178)             486

Income Taxes                                                         20               82              29              245
                                                                -------          -------         -------          -------

     Net (Loss) Income                                          $   (69)         $    79         $  (207)         $   241
                                                                =======          =======         =======          =======

Per Share Data:
   Net (Loss) Income - Basic                                    $ (0.10)         $  0.01         $ (0.35)         $  0.04
   Net (Loss) Income - Diluted                                  $ (0.10)         $  0.01         $ (0.35)         $  0.04
</TABLE>



               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                       4
<PAGE>


Item 1. Financial Statements - Continued


                    First Coastal Bancshares and Subsidiaries
      Condensed Consolidated Statements of Changes in Shareholders' Equity
                    (Unaudited - Dollar Amounts in Thousands)


<TABLE>
<CAPTION>
                                                                                                          Accumulated
                                                                                                             Other
                                               Preferred       Common     Comprehensive   Accumulated    Comprehensive
                                                 Stock         Shares         Income        Deficit          Income          Total
                                               ---------      -------     -------------   -----------    -------------      --------
<S>                                             <C>           <C>            <C>            <C>             <C>             <C>
January 1, 1998                                 $ 2,658       $ 3,360                       $   (13)        $     5         $ 6,010

Dividends - Preferred Stock                                                                                    (286)           (286)
Common Stock Repurchased                                          (78)                                                          (78)
Exercise of Warrants                                              250                                                           250
Recognition of Deferred Tax
   Assets Generated Prior to
   Quasi-Reorganization                                           141                                                           141
          Comprehensive Income
Net Income                                                                   $   259            259                             259
Change in Unrecognized Loss
   of Securities Available for
   Sale, Net of Taxes                                                            (36)                           (36)            (36)
                                                                             -------
                    Comprehensive Income                                     $   223
                                                                             =======

                                                -------       -------                       -------         -------         -------
                       December 31, 1998          2,658         3,673                           (40)            (31)          6,260

Proceeds from Stock Offering                                    1,901                                                         1,901
Redemption of Preferred Stock                      (586)                                        (57)                           (643)
Conversion of Preferred to
     Common Stock                                   (79)           79
Dividends - Preferred Stock                                                                    (179)                           (179)
Redemption of Common Stock                                        (12)                                                          (12)
Exercise of Warrants                                              875                                                           875
Common Shares Reissued                                            115                                                           115
          Comprehensive Income
Net Loss                                                                     $  (207)          (207)                           (207)
Change in Unrecognized Loss
   of Securities Available for
   Sale, Net of Taxes                                                         (1,001)                        (1,001)         (1,001)
                                                                             -------
                      Comprehensive Loss                                     $(1,208)
                                                                             =======

                                                -------       -------                       -------         -------         -------
                      September 30, 1999        $ 1,993       $ 6,631                       $  (483)        $(1,032)        $ 7,109
                                                =======       =======                       =======         =======         =======
</TABLE>



               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                       5
<PAGE>


Item 1. Financial Statements - Continued


                    First Coastal Bancshares and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                    (Unaudited - Dollar Amounts in Thousands)

<TABLE>
<CAPTION>
                                                                                                           For the Nine Months Ended
                                                                                                                 September 30,
                                                                                                          --------------------------
                                                                                                            1999             1998
                                                                                                          --------         --------
<S>                                                                                                       <C>              <C>
OPERATING ACTIVITIES
   Net (Loss) Income                                                                                      $   (207)        $    241
   Adjustments to Reconcile Net (Loss) Income to
      Net Cash Provided by Operating Activities:
         Depreciation and Amortization                                                                         417              194
         Provision for Loan Losses                                                                              50               10
         Other Items - Net                                                                                     (98)             372
                                                                                                          --------         --------
             NET CASH PROVIDED BY
             OPERATING ACTIVITIES                                                                              162              817

INVESTING ACTIVITIES
   Purchases of Investment Securities                                                                      (26,630)         (10,134)
   Sale and Maturities of Investment Securities                                                              4,530           14,139
   Net Cash and Cash Equivalents from AIB Acquisition                                                        8,600               --
   Net Change in Loans                                                                                       5,345          (16,317)
   Proceeds from Sale of Other Real Estate Owned                                                               150               41
   Purchase of Premises and Equipment                                                                          (65)             (52)
                                                                                                          --------         --------
                         NET CASH USED
               BY INVESTING ACTIVITIES                                                                      (8,070)         (12,323)

FINANCING ACTIVITIES
   Net Change in Deposits                                                                                    6,887           27,656
   Net Change in Other Borrowings                                                                            6,000           (3,550)
   Trust Preferred Securities, net of Costs                                                                  5,582               --
   Proceeds from Supplemental Stock Offering, net of Costs                                                   1,901               --
   Proceeds from Exercise of Warrants and Options                                                              990               --
   Redemption of Preferred and Common Stock                                                                   (655)             (80)
   Dividends                                                                                                  (179)            (214)
                                                                                                          --------         --------
                     NET CASH PROVIDED
               BY FINANCING ACTIVITIES                                                                      20,526           23,812
                                                                                                          --------         --------

                      INCREASE IN CASH
                  AND CASH EQUIVALENTS                                                                      12,618           12,306

Cash and Cash Equivalents at Beginning of Period                                                             3,445            2,954
                                                                                                          --------         --------
             CASH AND CASH EQUIVALENTS
                      AT END OF PERIOD                                                                    $ 16,063         $ 15,260
                                                                                                          ========         ========
</TABLE>


               The accompanying notes are an integral part of the
                       consolidated financial statements.



                                       6
<PAGE>


Item 1. Financial Statements - Continued

                    First Coastal Bancshares and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 1 - Basis of Presentation and Management Representation

The accompanying  financial information has been prepared in accordance with the
Securities and Exchange Commission rules and regulations for quarterly reporting
and  therefore  does  not  necessarily  include  all  information  and  footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally accepted accounting  principles.  This information should be read
in  conjunction  with the  Company's  Form 10-KSB filed on May 10, 1999 and Form
SB-2 filed on February 12, 1999.

The consolidated  financial  statements include First Coastal Bancshares and its
wholly owned  subsidiaries,  First  Coastal  Bank,  N.A.  (the "Bank") and First
Coastal Capital Trust.

Operating  results  for  interim  periods  are  not  necessarily  indicative  of
operating  results for an entire fiscal year. In the opinion of management,  the
unaudited  financial  information  for the nine month period ended September 30,
1999 and 1998,  reflect all  adjustments,  consisting  only of normal  recurring
accruals and provisions, necessary for a fair presentation thereof.

Some matters discussed in this Form 10-QSB may be  "forward-looking  statements"
within the meaning of the Private  Litigation  Reform Act of 1995 and  therefore
may involve  risks,  uncertainties  and other factors which may cause our actual
results to be materially  different from the results expressed or implied by our
forward-looking statements. These statements generally appear with words such as
"anticipate," "believe," "estimate," "may," "intend," and "expect."


Note 2 - Acquisition of American Independent Bank, N.A. ("AIB")

On March 8, 1999,  the Bank  acquired  100% of the  outstanding  common stock of
American  Independent Bank, N.A. for approximately $6.5 million in cash. AIB had
total assets of approximately  $38 million on March 8, 1999. The acquisition was
accounted  for using  the  purchase  method of  accounting  in  accordance  with
Accounting Principles Board Opinion No, 16. "Business Combinations".  Under this
method of accounting,  the purchase price was allocated to the assets,  deposits
and liabilities  assumed based on their fair values as of the acquisition  date.
The  financial  statements  include  the  operations  of AIB  from  the  date of
operations.

Due to the size and complexity of this  acquisition,  the Company  estimates the
allocation  period for evaluating and  determining the allocation of the cost of
the  acquisition  will not be  completed  prior to  issuance  of its 1999 annual
report.  Through  September  30, 1999,  goodwill  totaling  approximately  $3.85
million  has  been  recorded  and is being  amortized  over  fifteen  years on a
straight-line basis.



                                       7
<PAGE>


Note 2 - Acquisition of American Independent Bank, N.A. - Continued


The following table sets forth selected pro forma unaudited  combined  financial
results of the Company and AIB. The pro forma operating data reflects the effect
of the  acquisition  of AIB as if it was  consummated  at the  beginning of each
period  presented.  The pro forma results are not indicative of the results that
would have  occurred  had the  acquisition  been in effect for the full  periods
presented, nor are they indicative of the results of future operations.

<TABLE>
<CAPTION>
                                                                Three Months Ended              Nine Months Ended
                                                                  September 30,                   September 30,
                                                             -----------------------         -----------------------
                                                              1999            1998            1999            1998
                                                             -------         -------         -------         -------
                                                               (Dollar amounts in thousands, except per share data)
<S>                                                          <C>             <C>             <C>             <C>
Interest and Noninterest Income:
     The Company                                             $ 2,557         $ 1,553         $ 6,621         $ 4,370
     AIB - Pre-Merger                                             --             962             637           2,737
                                                             -------         -------         -------         -------
                                               Total         $ 2,557         $ 2,515         $ 7,258         $ 7,107
                                                             =======         =======         =======         =======
Net (Loss) Income:
     The Company                                             $   (69)        $    79         $  (153)        $   241
     AIB - Pre-Merger                                             --              79            (505)            147
     Interest Costs - Pro Forma, net of Tax                       --            (116)            (77)           (384)
     Goodwill Amortization- Pro Forma                             --             (65)            (42)           (191)
                                                             -------         -------         -------         -------
                                               Total         $   (69)        $   (23)        $  (777)        $  (151)
                                                             =======         =======         =======         =======

Per Share Data:
     Basic                                                   $ (0.10)        $ (0.08)        $ (0.86)        $ (0.33)
     Diluted                                                 $ (0.10)        $ (0.08)        $ (0.86)        $ (0.33)
</TABLE>

These pro forma  disclosures  include  adjustment  to interest  expense from the
funds  borrowed to fund a portion of the purchase as well as  adjustments to per
share data to reflect the  issuance  of common  stock to fund the balance of the
purchase.   No  adjustments  have  been  reflected  in  these  amounts  for  the
anticipated cost savings to be derived from this merger.


Note 3 - Earnings Per Share

Effective  December  31,  1997,  the  Company  adopted  Statement  of  Financial
Accounting Standards No. 128, "Earnings per Share." Accordingly,  basic earnings
per share are computed by dividing  income  available to common  shareholders by
the weighted average number of common shares outstanding during each period. The
computation  of diluted  earnings per share also  considers the number of shares
issuable upon the assumed  exercise of outstanding  common stock options and the
number  of  shares  issuable  upon the  assumed  conversion  of the  convertible
preferred  stock.  These items were  anti-dilutive  for the periods reported and
therefore dilutive earnings per shares is reported as the same as basic earnings
per share.



                                       8
<PAGE>


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations


Income Summary

For the three months ended  September 30, 1999, the Company  reported a net loss
of $69,000, or $(0.10) basic loss per share compared to a net income of $79,000,
or $ 0.01 basic  income per share for the same three month  period in 1998.  For
the nine months ended  September  30, 1999,  the Company  reported a net loss of
$207,000,  or $(0.35) basic loss per share compared to a net income of $241,000,
or $(0.04) basic income per share for the same nine month period in 1998.

The annualized return on average assets was (0.25)% for the first nine months of
1999  compared  to 0.45% for 1998.  Annualized  return on average  shareholders'
equity  for the  first  nine  months  of 1999 and 1998 was  (3.79)%  and  5.42%,
respectively.

Net Interest Income

Net interest income is the amount by which the interest and amortization of fees
generated  from loans and other earning assets exceeds the cost of funding those
assets, usually deposit account interest expense. Net interest income depends on
the  difference  (the  "interest  rate spread")  between gross interest and fees
earned on the loans and  investment  portfolios  and the interest  rates paid on
deposits and  borrowings.  Net interest  income was  $1,228,000  for the quarter
ended  September 30, 1999,  compared to $790,000 for the quarter ended September
30, 1998. Net interest income was $3,258,000 for the nine months ended September
30, 1999, compared to $2,303,000 for the nine months ended September 30, 1998.

The total  amount of net  interest  income  increased  for the  quarter and nine
months ended  September 30, 1999 compared to the same periods in 1998 due to the
significant  increase in  interest-earning  assets. This increase was due to the
combined  effect  of the  acquisition  of AIB  as  well  as  overall  growth  in
investments funded by short-term borrowings.

The following  table sets forth the components of net interest  income,  average
earning assets and net interest margin (dollar amounts in thousands):

<TABLE>
<CAPTION>
                                                       Three Months Ended           Nine Months Ended           Year Ended
                                                          September 30,                September 30,           December 31,
                                                      1999           1998           1999           1998           1998
                                                    --------       --------       --------       --------      ------------
<S>                                                 <C>            <C>            <C>            <C>             <C>
Interest Income                                     $  2,242       $  1,399       $  5,854       $  3,954        $  5,365
Interest Expense                                       1,014            609          2,596          1,651           2,262
                                                    --------       --------       --------       --------        --------
     Net Interest Income                            $  1,228       $    790       $  3,258       $  2,303        $  3,103
                                                    ========       ========       ========       ========        ========

Average Earning Assets                              $109,038       $ 68,481       $ 96,549       $ 64,662        $ 66,796
Net Interest Margin (1)                                 4.50%          4.61%          4.50%          4.75%           4.65%

</TABLE>

(1)  Interim periods are presented on an annualized basis.


                                       9
<PAGE>


Net Interest Income - Continued

The net interest  margin  declined in the first  quarter of 1999 compared to the
same quarter in 1998 due to the 75 basis point  decline in the prime rate during
the fourth quarter of 1998. The majority of the Bank's loans and its investments
in federal funds sold reprice daily with changes in the prime rate. This decline
continued  into the third  quarter of 1999,  but had a lesser  effect due to the
increase in interest-earning  assets from the acquisition of AIB in early March,
investments  acquired  during the second and third quarters which were funded by
short-term borrowings, the 25 basis point increase in the prime rate during July
and the gradual repricing of interest-bearing deposits.

Further  contributing  to the decrease in net  interest  margin was the interest
expense  relating to the recently  issued $6.6 million in preferred  securities.
Interest expense incurred on these securities,  net of tax effect,  was $116,000
in each of the third and second  quarter of 1999.  Had these  distributions  not
been  charged to  earnings,  the  Company  would have  recognized  net income of
$47,000  and  $71,000  in  the  third   quarter  and  second   quarter  of  1999
respectively.

The prime rate was 8.50% for the first nine months of 1998, and then experienced
25 basis point  declines in  September,  October and November to end the year at
7.75%. The prime rate increased 25 basis points in July and again in August 1999
to 8.25%.

Provision for Loan Losses

During  the second  quarter  of 1999,  the  Company  contributed  $50,000 to the
allowance for loan losses. The Company made no contribution to the allowance for
loan losses in the first and third quarters of 1999. Total  contributions to the
allowance  for loan  losses in the  first  nine  months  of 1998  were  $10,000.
Management  believes that the allowance,  which stands at 1.2% of total loans at
September 30, 1999, is adequate to cover future losses.

Changes in the  allowance  for loan losses for the quarter and nine months ended
September 30, 1999 and 1998 are as follows (dollar amounts in thousands):

<TABLE>
<CAPTION>
                                               Three Months Ended                Nine Months Ended
                                                  September 30,                    September 30,
                                             ----------------------           ----------------------
                                             1999              1998            1999             1998
                                             -----            -----           -----            -----
<S>                                          <C>              <C>             <C>              <C>
Allowance, Beginning of Period               $ 960            $ 538           $ 549            $ 615
Provision for Loan Losses                       --               --              50               10
Loans (Charged Off) - net of Recoveries       (114)              24            (155)             (63)
Allowance from AIB Acquisition                  --               --             402               --
                                             -----            -----           -----            -----

Allowance, End of Period                     $ 846            $ 562           $ 846            $ 562
                                             =====            =====           =====            =====
</TABLE>

Noninterest Income

Non Interest Income  represents  deposit account service charges and other types
of  non-loan  related  fee income.  Non-interest  income for the  quarter  ended
September  30, 1999  totaled  $315,000  compared to $154,000 for the same period
ended 1998.  Non-interest  income for the nine months ended  September  30, 1999
totaled  $767,000  compared to  $416,000  for the same  period  ended 1998.  The
increase is primarily the result of the additional noninterest income related to
operations of the AIB branches  after the  acquisition  on March 8, 1999 and the
gain on sale of $58,000 on an OREO property in June 1999.



                                       10
<PAGE>


Noninterest Expense

Noninterest  Expenses  represent  salaries,  occupancy  expenses,   professional
expenses, outside services and other miscellaneous expenses necessary to conduct
business.  Noninterest  expense for the quarter ended September 30, 1999 totaled
$1,592,000  compared to $783,000 for the same period  during  1998.  Noninterest
expense for the nine months ended September 30, 1999 totaled $4,153,000 compared
to $2,223,000 for the same period during 1998.

The increase in noninterest expense is due to 1) the acquisition of AIB on March
8, 1999 and 2) the Bank's strategic marketing plan. The majority of the increase
in each period was the additional  salaries and employee  benefits and occupancy
costs  related  to the two AIB  branches  acquired.  Additionally,  the  Company
experienced  an increase of $53,000 in other costs related to  non-capitalizable
merger related costs and goodwill  amortization  on the AIB purchase of $148,000
during the first nine months of 1999.

In connection with the Bank's marketing efforts, salaries and benefits increased
approximately  $22,000 per month  beginning the second quarter due to the hiring
of  new  marketing  officers  representing  the  "sales  force"  for  the  Bank.
Additionally,  the Company  experienced a $33,000 increase in advertising during
the first nine months of 1999.

Other  non-recurring costs incurred during the first nine months of 1999 include
an increase of $139,000 in professional  fees related to operational  audits and
Y2K  costs  and a  $78,000  write-down  in  the  carrying  value  of  its  OREO.
Additionally,  the Company discovered certain irregular operations activities at
its Gardena  branch,  which had began prior to the  acquisition of the branch in
March 1999. These  activities  resulted in losses which were charged to earnings
in the amount of $89,000 in the third quarter of 1999. The Company also recorded
an increase in Goodwill of $244,000,  net of tax effect,  to reflect the portion
of the loss  present  at AIB prior to the  acquisition  on March 8, 1999 that is
included in the  allocation  of the purchase  price.  The Goodwill  amortization
increased  $1,600 per month due to this  adjustment.  The  Company  is  pursuing
recovery of this loss through its insurance company.

Income Taxes

The Company's income tax provision for the first nine months of 1999 was $29,000
resulting  in an  effective  rate of 41.4% on income  before  taxes and goodwill
amortization.  The tax provision for the first nine months of 1998 was $245,000,
resulting  in an  effective  rate of 42.0% on income  before  taxes and goodwill
amortization.

Balance Sheet Analysis

Total assets at September 30, 1999 totaled $131.7 million, up 72% from the $76.7
million reported at December 31, 1998. A portion of this increase was the result
of the first quarter  acquisition  of AIB, which had total assets of $38 million
at the  acquisition  date of March 8, 1999. To fund this  increase,  the Company
increased  shareholders'  equity  $1.9  million  through  a  supplemental  stock
offering and issued $6.6 million in Trust Preferred Securities.



                                       11
<PAGE>


Asset Quality

The  following  table sets forth the  components  of  non-performing  assets and
related ratios: (dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                          September 30,
                                                                     -----------------------         December 31,
                                                                      1999             1998              1998
                                                                     ------           ------         ------------
<S>                                                                  <C>              <C>               <C>
Loans 90 Days Past Due and Still Accruing                            $  209           $   54            $   8
Loans on Nonaccrual                                                     590              403              726
                                                                     ------           ------            -----
             Nonperforming Loans                                        799              457              734
Other Real Estate Owned                                                  --              218              116
             Nonperforming Assets                                    $  799           $  675            $ 850
                                                                     ======           ======            =====

Nonperforming Loans as a Percent
   of Total Loans                                                      1.16%            0.81%            1.33%
Allowance for Loan Losses as a Percent
   of Nonperforming Loans                                            105.88%          122.98%           74.80%
Nonperforming Assets as a Percent
   of Total Assets                                                     0.61%            0.83%            1.11%
</TABLE>

The primary  ratios of loan  quality have  generally  improved in the first nine
months of 1999.  The  allowance  for loan  losses as a percent of  nonperforming
loans increased to 105.88% at September 30, 1999, up from 74.80% at December 31,
1998.  Likewise,  the ratio of nonperforming assets as a percent of total assets
has declined to 0.61% as of September 30, 1999 compared to 1.11% at December 31,
1998.

Other Borrowings

Other  borrowings  at September  30, 1999 consist of $10.0 million in short-term
borrowings  from the  Federal  Home  Loan  Bank and $1.0  million  in  long-term
borrowings  from a  correspondent  bank.  The Company uses these sources to fund
asset growth and offset fluctuations in demand for deposits.

Trust Preferred Securities

During the first  quarter of 1999 the  Company  completed  an  offering  of $6.6
million  in 11 7/8%  Cumulative  Preferred  Securities  through  a  wholly-owned
subsidiary,  First Coastal Capital Trust.  Under generally  accepted  accounting
policies,  the  securities  are  reported as  liabilities  of the  Company.  The
interest  payments are reported as interest  expense and the amortization of the
related costs of the offering ($1.0 million) are reported as other  non-interest
expense. The Trust Preferred Securities mature on December 31, 2028.



                                       12
<PAGE>


Capital

Total  shareholders'  equity at September 30, 1999 totaled $7.1  million,  which
represented  a 12.6%  increase  from $6.3  million at December  31,  1998.  This
increase was primarily attributable to the supplemental stock offering completed
in March 1999.

The Bank maintains capital ratios above the Federal regulatory  guidelines for a
"well-capitalized" bank. The ratios are as follows:


<TABLE>
<CAPTION>
                                                        Regulatory
                                                       Minimum Ratio
                                                            for             September 30,         December 31,
                                                     "Well-Capitalized"         1999                 1998
                                                     ------------------     -------------         ------------
<S>                                                       <C>                  <C>                  <C>
Tier 1 Capital (to Average Assets)                         5.00%                5.97%                5.39%
Tier 1 Capital (to Risk Weighted Assets)                   6.00%                9.57%                8.27%
Total Capital (to Risk Weighted Assets)                   10.00%               11.82%               11.17%
</TABLE>

The  Company's  ratios at  September  30,  1999 were 3.99% for Tier 1 capital to
average assets,  6.30% for Tier 1 capital to risk-weighted assets and 13.63% for
Total capital to risk-weighted assets.

Liquidity

Management is not aware of any future capital  expenditures or other significant
demands on commitments which would severely impair liquidity.

Year 2000 Compliance

The Company has completed the validation of its systems,  as defined under FFIEC
guidelines.  A comprehensive  plan was developed and all system  conversions and
testing were substantially completed as of December 31, 1998. Additionally,  the
Company has prepared a Y2K Disaster  Recovery  Plan and has trained its staff in
emergency  preparedness.   The  Company  estimates  its  total  costs  over  the
three-year period 1998 - 2000 will be approximately  $136,000, of which $125,000
has been incurred through September 30, 1999. None of these costs,  however, are
expected to  materially  impact the results of  operations  in any one reporting
period.

Ultimately,  the potential impact of the year 2000 issue will depend not only on
the corrective measures the Company undertakes, but also on the way in which the
year 2000 issue is addressed by  governmental  agencies,  businesses,  and other
entities who provide  data to, or receive data from the Bank or whose  financial
condition  or  operational  capability  is  important  to the  Company  such  as
suppliers or customers.  Communications  with significant  customers and vendors
have been  initiated  to  determine  the extent of risk  created by those  third
parties'  failure to remediate  their own year 2000 issues.  However,  it is not
possible,  at present, to determine the financial effect if significant customer
and/or vendor remediation efforts are not resolved in a timely manner.


                                       13
<PAGE>


PART II - OTHER INFORMATION

         Item 1 - Legal Proceedings

                  Due to the nature of the banking  business,  the Company is at
                  times party to various legal actions;  all such actions are of
                  a routine nature and arise in the normal course of business.

         Item 2 - Changes in Securities

                  None

         Item 3 - Defaults upon Senior Securities

                  None

         Item 4 - Submission of Matters to a Vote of Security Holders

                  None

         Item 5 - Other Items

                  None

         Item 6 - Exhibits and Reports on Form 8-K

         A)       Financial Data Schedule - Exhibit 27

         B)       Reports on Form 8-K

                  None



                                       14
<PAGE>



Signatures

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


                                                     First Coastal Bancshares


Date:       November 15, 1999                        _________________________
                                                     Don M. Griffith
                                                     Chief Executive Officer,
                                                     Chairman and Director


Date:       November 15, 1999                        _________________________
                                                     Deborah A. Marsten
                                                     Chief Financial Officer,
                                                     Vice Chair of the Board
                                                     and Secretary



                                       15