|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, 2002
|-------------------------------------------------

||_| |  | 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
      (State of other jurisdiction of incorporation) |                                                                                              | NO. 95-4693574
      (IRS Employer Identification No.)
|--------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------
|                                                                |                                                                                              |                                                       
|                                                                | 275
      Main Street, El Segundo, California
      (Address of principal executive offices) | 90245
      (Zip Code)                                

|Registrants telephone
number, including area code: (888) 295-2250


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 September 30, 2002 there
were 2,141,018 shares of First Coastal Bancshares Common Stock outstanding.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|First Coastal
BancsharesSeptember 30, 2001


INDEX
|--------------------------------------------------

|PART I
      - FINANCIAL INFORMATION                                           
|-------------------------------------------------------------------------------
|                                                                               
|                                                                               
|                                                                               
|Item 1
      - Financial Statements                                            
|Condensed
      Consolidated Balance Sheets at September 30, 2002 and          
|December
      31, 2001                                                        
|Condensed
      Consolidated Statements of Income for the Three                
|Months
      and Nine Months Ended September 30, 2002 and 2001                 
|Condensed
      Consolidated Statements of Changes in Shareholders Equity from
|January
      1, 2001 through September 30, 2002                               
|Condensed
      Consolidated Statements of Cash Flows for the Nine             
|Months
      Ended September 30, 2002 and 2002                                 
|Notes
      to Consolidated Financial Statements                               
|Item 2
      - Managements Discussion and Analysis of Financial Condition and 
|Results
      of Operations                                                    
|                                                                               
|PART II
      - OTHER INFORMATION                                              
|                                                                               
|Item 1
      - Legal Proceedings                                               
|Item 2
      - Changes in Securities                                           
|Item 3
      - Defaults upon Senior Securities                                 
|Item 4
      - Submission of Matters to a Vote of Security Holders             
|Item 5
      - Other Information                                               
|Item 6
      - Exhibits and Reports on Form 8-K                                

|2
|-

|Item 1.    
Financial Statements



First Coastal
Bancshares and SubsidiariesCondensed Consolidated Balance Sheets(Unaudited  Dollar
Amounts in Thousands)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                |  | September
      30,
      2002 |         | December
      31,
      2001 |  
|--------------------------------------------------------------- |  | ------------------------------ | ------- | ----------------------------- | -
|                                                                |  |                                |         |                              
|Cash
      and Due From Bank                                    |  | $                              | 3,698   |                               | $
|Federal
      Funds Sold                                        |  |                                |        |                               |  
|                                                                |  |                                |         |                              
|Cash and
      Cash Equivalents                                 |  |                                | 3,698   |                               |  
|                                                                |  |                                |         |                               |  
|Time Deposits
      in Other Financial Institutions             |  |                                | 1,865   |                               |  
|Investment
      Securities, net                                |  |                                | 12,480  |                               |  
|Federal
      Reserve and Federal Home Loan Bank Stock, at Cost |  |                                | 774     |                               |  
|Loans                                                           |  |                                | 117,978 |                               |  
|Allowance
      for Loan Losses                                 |  |                                | (1,266  | )                             |  
|                                                                |  |                                |         |                              
|NET LOANS                                                       |  |                                | 116,712 |                               |  
|                                                                |  |                                |         |                               |  
|Premises
      and Equipment, net                               |  |                                | 1,453   |                               |  
|Goodwill,
      net                                             |  |                                | 4,625   |                               |  
|Accrued
      Interest and Other Assets                         |  |                                | 3,582   |                               |  
|                                                                |  |                                |         |                              
|TOTAL
      ASSETS                                              |  | $                              | 145,189 |                               | $
|                                                                |  |                                |         |                              
|                                                                |  |                                |         |                               |  
|Noninterest-Bearing
      Deposits                              |  | $                              | 31,351  |                               | $
|Interest-Bearing
      Deposits                                 |  |                                | 92,859  |                               |  
|                                                                |  |                                |         |                              
|TOTAL
      DEPOSITS                                            |  |                                | 124,210 |                               |  
|                                                                |  |                                |         |                               |  
|Other Borrowings                                                |  |                                | 3,000   |                               |  
|Company
      Obligated Mandatorily Redeemable                  |  |                                |         |                               |  
|Preferred
      Securities of Subsidiary Trust Holding          |  |                                |         |                               |  
|Solely
      Junior Subordinated Debentures                     |  |                                | 6,600   |                               |  
|Accrued
      Interest and Other Liabilities                    |  |                                | 1,371   |                               |  
|                                                                |  |                                |         |                              
|TOTAL
      LIABILITIES                                         |  |                                | 135,181 |                               |  
|                                                                |  |                                |         |                               |  
|Preferred
      Stock                                           |  |                                | 1,993   |                               |  
|Common
      Shares                                             |  |                                | 8,121   |                               |  
|Retained
      Earnings (Deficit)                               |  |                                | 17      |                               |  
|Accumulated
      Other Comprehensive Income                    |  |                                | (123    | )                             |  
|                                                                |  |                                |         |                              
|TOTAL
      SHAREHOLDERS EQUITY                                |  |                                | 10,008  |                               |  
|                                                                |  |                                |         |                              
|TOTAL
      LIABILITIES AND SHAREHOLDERS EQUITY                |  | $                              | 145,189 |                               | $
|                                                                |  |                                |         |                              

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


3
|-----------------------------------------------------------------------------------------

|Item 1.    
Financial Statements - Continued


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

|                                  | For
      the Three Months Ended
      September 30, |       | For
      the Nine Months Ended
      September 30, |  
|--------------------------------- | ---------------------------------------------------- | ----- | --------------------------------------------------- | -
|                                  |                                                      |       |                                                     |  
|                                  | 2002                                                 |       | 2001                                                |  
|                                  |                                                      |       |                                                     |  
|Interest
      Income             | $                                                    | 2,152 |                                                     | $
|Interest
      Expense            |                                                      | 711   |                                                     |  
|                                  |                                                      |       |                                                     |  
|Net
      Interest Income         |                                                      | 1,441 |                                                     |  
|Provision
      for Loan Losses   |                                                      |      |                                                     |  
|                                  |                                                      |       |                                                     |  
|                                  |                                                      |       |                                                     |  
|Net Interest
      Income after   |                                                      |       |                                                     |  
|Provision
      for Loan Losses   |                                                      | 1,441 |                                                     |  
|Noninterest
      Income          |                                                      | 202   |                                                     |  
|Noninterest
      Expense         |                                                      | 1,489 |                                                     |  
|                                  |                                                      |       |                                                     |  
|Income
      (Loss) Before Taxes  |                                                      | 154   |                                                     |  
|Income
      Taxes                |                                                      | 55    |                                                     |  
|                                  |                                                      |       |                                                     |  
|Net
      Income (Loss)           | $                                                    | 99    |                                                     | $
|                                  |                                                      |       |                                                     |  
|                                  |                                                      |       |                                                     |  
|Per Share
      Data:             |                                                      |       |                                                     |  
|Net
      Income (Loss) - Basic   | $                                                    | 0.02  |                                                     | $
|Net
      Income (Loss) - Diluted | $                                                    | 0.02  |                                                     | $

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


4
|-----------------------------------------------------------------------------------------

|Item 1.    
Financial Statements - Continued


First Coastal
Bancshares and SubsidiariesCondensed Consolidated Statements of Changes in Shareholders Equity(Unaudited
 Dollar Amounts in Thousands)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                        |  | Preferred
      Stock |       | Common
      Stock |   | Comprehensive
      Income |   | Retained 
      Earnings since 
      September 1, 2002 |      | Accumulated
      
      Other 
      Comprehensive
      Income |   | Total  |  
|--------------------------------------- |  | --------------------- | ----- | ------------------ | - | -------------------------- | - | ------------------------------------------------------- | ---- | ---------------------------------------------------------------- | - | ------ | -
|                                        |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|January
      1, 2001                   |  | $                     | 1,993 |                    | $ | 6,551                      |   |                                                         |      |                                                                  | $ | (1,112 | )
|                                        |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|Sale
      of Treasury Shares           |  |                       |       |                    |   | 33                         |   |                                                         |      |                                                                  |   |        |  
|Dividends
      - Preferred Stock       |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   | (216   | )
|Comprehensive
      Income              |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|Net
      Loss                          |  |                       |       |                    |   |                            |   | $                                                       | (148 | )                                                                |   | (148   | )
|Change
      in Unrecognized Gains      |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|of
      Securities Available for       |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|Sale,
      net of taxes of $236        |  |                       |       |                    |   |                            |   |                                                         | 339  |                                                                  |   |        |  
|Less
      Reclassification Adjustments |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|for
      Gains included in Net         |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|Loss,
      net of Taxes of $17         |  |                       |       |                    |   |                            |   |                                                         | (25  | )                                                                |   |        |  
|                                        |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|Comprehensive
      Income              |  |                       |       |                    |   |                            |   | $                                                       | 191  |                                                                  |   |        |  
|                                        |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|                                        |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|December
      31, 2001                 |  |                       | 1,993 |                    |   | 6,584                      |   |                                                         |      |                                                                  |   | (1,476 | )
|                                        |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|Dividends
      - Preferred Stock       |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   | (160   | )
|Purchase
      of Treasury Shares       |  |                       |       |                    |   | (46                        | ) |                                                         |      |                                                                  |   |        |  
|Sale
      of Stock                     |  |                       |       |                    |   | 3,000                      |   |                                                         |      |                                                                  |   |        |  
|Quasi-Reorganization                    |  |                       |       |                    |   | (1,417                     | ) |                                                         |      |                                                                  |   | 1,417  |  
|Comprehensive
      Income              |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|Net
      Income                        |  |                       |       |                    |   |                            |   | $                                                       | 236  |                                                                  |   | 236    |  
|Change
      in Unrecognized Loss       |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|of
      Securities Available for       |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|Sale,
      net of Taxes of $8          |  |                       |       |                    |   |                            |   |                                                         | 11   |                                                                  |   |        |  
|                                        |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|Comprehensive
      Income              |  |                       |       |                    |   |                            |   | $                                                       | 247  |                                                                  |   |        |  
|                                        |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|                                        |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  
|September
      30, 2002                |  | $                     | 1,993 |                    | $ | 8,121                      |   |                                                         |      |                                                                  | $ | 17     |  
|                                        |  |                       |       |                    |   |                            |   |                                                         |      |                                                                  |   |        |  

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


5
|-----------------------------------------------------------------------------------------

|Item 1.    
Financial Statements - Continued


First Coastal
Bancshares and SubsidiariesCondensed Consolidated Statements of Cash Flows(Unaudited
 Dollar Amounts in Thousands)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                           |  | For
      the Nine Months Ended
      September 30, |        
|-------------------------------------------------------------------------- |  | --------------------------------------------------- | -------
|                                                                           |  |                                                     |        
|                                                                           |  | 2001                                                |        
|                                                                           |  |                                                     |        
|OPERATING
      ACTIVITIES                                                 |  |                                                     |        
|Net
      Income (Loss)                                                    |  | $                                                   | 236    
|Adjustments
      to Reconcile Net Income (Loss) to                        |  |                                                     |        
|Net
      Cash Provided (Used) by Operating Activities:                    |  |                                                     |        
|Depreciation
      and Amortization                                        |  |                                                     | 229    
|Provision
      for Loan Losses                                            |  |                                                     |       
|Other
      Items - Net                                                    |  |                                                     | (378   
|                                                                           |  |                                                     |        
|NET CASH
      PROVIDED (USED)                    
BY OPERATING ACTIVITIES |  |                                                     | 87     
|                                                                           |  |                                                     |        
|INVESTING
      ACTIVITIES                                                 |  |                                                     |        
|Purchases
      of Investment Securities                                   |  |                                                     | (10,799
|Sale
      and Maturities of Investment Securities                         |  |                                                     | 18,597 
|Net
      Change in Federal Reserve and Home Loan Bank Stock               |  |                                                     | 80     
|Net
      Change in Loans                                                  |  |                                                     | (25,666
|Purchase
      of Premises and Equipment                                   |  |                                                     | (1,068 
|                                                                           |  |                                                     |        
|NET CASH
      PROVIDED (USED)                    
BY INVESTING ACTIVITIES |  |                                                     | (18,856
|                                                                           |  |                                                     |        
|FINANCING
      ACTIVITIES                                                 |  |                                                     |        
|Net
      Change in Deposits                                               |  |                                                     | 17,029 
|Net
      Change in Other Borrowings                                       |  |                                                     | (73    
|Proceeds
      from Issuance of Common Stock                               |  |                                                     | 3,000  
|Purchase
      of Treasury Shares                                          |  |                                                     | (46    
|Dividends                                                                  |  |                                                     | (160   
|                                                                           |  |                                                     |        
|NET CASH
      (USED) PROVIDED                    
BY FINANCING ACTIVITIES |  |                                                     | 19,750 
|                                                                           |  |                                                     |        
|                                                                           |  |                                                     |        
|INCREASE
      IN CASH AND CASH EQUIVALENTS                                |  |                                                     | 981    
|                                                                           |  |                                                     |        
|Cash and
      Cash Equivalents at Beginning of Period                     |  |                                                     | 2,717  
|                                                                           |  |                                                     |        
|CASH AND
      CASH EQUIVALENTS                    
AT END OF PERIOD       |  | $                                                   | 3,698  
|                                                                           |  |                                                     |        

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


6
|-----------------------------------------------------------------------------------------

|Item 1.    
Financial Statements - Continued


First Coastal
Bancshares and SubsidiariesNotes 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 March 30, 2002.


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, 2002 and 2001, reflect
all adjustments, consisting only of normal recurring accruals and provisions,
necessary for a fair presentation thereof.


Note 2 -
Sale of Branch


Effective October 26, 2001,
the Bank sold its Burbank branch to another financial institution for a net gain
of $1.2 million. In connection with the sale, the Bank transferred deposits of
$19.6 million and loans of $3.5 million to the acquirer as well as loaned the
acquirer $800,000 in the form of a subordinated note which is included in
commercial loans.


Note 3 -
Earnings Per Share


Effective December 31, 1997,
the Company adopted Statement of Financial Accounting Standards
(SFAS) 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 are reported as the same as
basic earnings per share.


Note 4 -
Goodwill and Other Intangible Assets


In June 2001, the Financial
Accounting Standards Board (FASB) issued SFAS No. 142,
Accounting for Goodwill and Other Intangible Assets, (SFAS
142). Under the new rules, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized but will be subject to annual
impairment tests in accordance with the new statements.


7
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The Company adopted SFAS
142 on January 1, 2002. Upon adoption, the Company no longer amortized goodwill.
The following table represents the effect of the adoption of SFAS 142 for the
quarter and nine-months ended September 30, 2002, and the year ending December
31, 2001.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                     | Quarter
      Ended
      September 30, |      | Nine
      Months Ended
      September 30, |   | Year Ended 
      December 31,
      2001 |  
|------------------------------------ | --------------------------------------- | ---- | ------------------------------------------- | - | ----------------------------------------- | -
|                                     |                                        
|2002                                 |                                         | 2001 | 2002                                        |   | 2001                                     
|                                     |                                         |      |                                             |   |                                           |  
|                                     |                                         |      |                                             |   |                                           |  
|Net
      Income                     | $                                       | 99   |                                             | $ | (56                                       | )
|Addback:
      Goodwill Amortization |                                         |     |                                             |   | 110                                       |  
|                                     |                                         |      |                                             |   |                                           |  
|Adjusted
      Net Income            | $                                       | 99   |                                             | $ | 54                                        |  
|                                     |                                         |      |                                             |   |                                           |  
|                                     |                                         |      |                                             |   |                                           |  
|Basic Earnings
      per Share:      |                                         |      |                                             |   |                                           |  
|Net
      Income                     | $                                       | 0.02 |                                             | $ | (0.09                                     | )
|Goodwill
      Amortization          |                                         |     |                                             |   | 0.09                                      |  
|                                     |                                         |      |                                             |   |                                           |  
|Adjusted
      Net Income            | $                                       | 0.02 |                                             | $ |                                          |  
|                                     |                                         |      |                                             |   |                                           |  
|                                     |                                         |      |                                             |   |                                           |  
|Diluted
      Earnings per Share:    |                                         |      |                                             |   |                                           |  
|Net
      Income                     | $                                       | 0.02 |                                             | $ | (0.09                                     | )
|Goodwill
      Amortization          |                                         |     |                                             |   | 0.09                                      |  
|                                     |                                         |      |                                             |   |                                           |  
|Adjusted
      Net Income            | $                                       | 0.02 |                                             | $ |                                          |  
|                                     |                                         |      |                                             |   |                                           |  

|The Company performed its
initial impairment test of goodwill as of January 1, 2002 and has determined
that no goodwill impairment existed as of the initial adoption of SFAS 142.
Goodwill was tested for impairment using the combined banking operations as the
reporting unit. The fair value of the reporting unit was estimated using
multiples of earnings and tangible book value, which are commonly used for
valuation purposes and publicly reported in the community banking industry.


Note 5 -
Quasi-Reorganization


On September 30, 2002, the
shareholders of the Company approved the adjustments of its shareholder equity
accounts through a quasi-reorganization. The Company believes this action more
accurately reflects the financial position of the Company after the significant
infusion of additional capital in the second quarter of 2002.


As a result of the
quasi-reorganization, certain of the Companys assets and liabilities as of
August 31, 2002 were adjusted to market value, but not to exceed current net
book value of the Company in the aggregate. Accordingly, the Company wrote off
certain costs associated with its Trust Preferred Securities and established a
reserve for interest to reflect the current value and interest rate for similar
securities. It is the Companys intent to redeem or refinance these
Securities in early 2004. In addition, the Company wrote up its investment in
First Coastal Bank by a similar amount. After these adjustments, and as provided
under a quasi-reorganization, the deficit balance in retained earnings was
charged to common stock.


The immediate impact on
short-term future earnings from the discontinued amortization of costs
associated with its Trust Preferred Securities, plus the amortization of the
interest reserve and the amortization of the write up in First Coastal Bank will
not be material.


8
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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


Forward-Looking
Statements


This Form 10-QSB contains
various forward-looking statements and includes assumptions concerning the
Companys beliefs, plans, objectives, goals, expectations, anticipations,
estimates, intentions, operations, future results, and prospects, including
statements that include the words may, could, should, would, believe, expect,
will, shall, anticipate, estimate, intend, plan or similar expressions. These
forward-looking statements are based upon current expectations and are subject
to risk and uncertainties. In connection with the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, the Company provides the
following cautionary statement identifying important factors (some of which are
beyond the Companys control), which could cause the actual results, or
events to differ materially from those set forth in or implied by the
forward-looking statements and related assumptions.


Such factors include the
following: (i) risk and cost resulting from the opening of a new office or
offices and adding employees; (ii) the effect of changing regional and national
economic conditions, especially as they affect the income and cash flow of
business and consumer borrowers, their ability to repay loans, and their need
for borrowed funds; (iii) the effects of trade, monetary and fiscal policies and
laws, including interest rate policies of the Board of Governors of the Federal
Reserve System; (iv) significant changes in interest rates and prepayment
speeds; (v) inflation, stock and bond market, and monetary fluctuations; (vi)
credit risks of commercial, SBA, real estate, consumer, and other lending
activities, including risks related to changes in the values of real estate and
other security for loans; (vii) changes in federal and state banking and
financial services laws and regulations; (viii) the presence in the
Companys market area of competitors with greater financial resources than
the Company; (ix) the timely development of competitive new products and
services by the Company and the acceptance of those products and services by
customers and regulators (when required); (x) the secure and effective
implementation of new technology (including Internet services) for both the
delivery of services and internal operations; (xi) the willingness of customers
to substitute competitors products and services for those of the Company
and vice versa; (xii) changes in consumer and business spending and savings
habits; (xiii) unanticipated regulatory or judicial proceedings; and (xiv) other
external developments which could materially impact the Companys
operational and financial performance.


Income Summary


For the three months ended
September 30, 2002, the Company reported net income of $99,000, or $0.02 basic
income per share compared to a net loss of $56,000, or $0.09 basic loss per
share for the same three-month period in 2001. For the nine months ended
September 30, 2002, the Company reported net income of $236,000, or $0.04 basic income
per share compared to a net loss of $125,000, or $0.23 basic loss per share for
the same nine-month period in 2001. As discussed in Note 4, the primary reason
for the improvement in earnings was the discontinuance of goodwill amortization
in 2002.


The annualized return on
average assets was 0.24% for the first nine months of 2002 compared to (0.13)%
for 2001. Annualized return on average shareholders equity for the first
nine months of 2002 and 2001 was 3.71% and (2.39)%, 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 exceed 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 $1,441,000 for the quarter ended September
30, 2002, compared to $1,340,000 for the quarter ended September 30, 2001. Net
interest income was $4,060,000 for the nine months ended September 30, 2002,
compared to $3,933,000 for the nine months ended September 30, 2001.


9
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The total amount of net
interest income increased slightly for the quarter and nine months ended
September 30, 2002 compared to the same period in 2001. This increase was
primarily due to the re-positioning of the balance sheet from the sale of the
Burbank branch. Although the prime rate has declined by 125 basis points since
September 30, 2001, the Company was able to limit its decline in net interest
margin to only 2 basis points comparing the first nine-months of 2002 to the
same period in 2001. Net interest margin for the third quarter of 2002 also
declined compared to the 2001 year-to-date net interest margin by 2 basis
points.


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

|                              |  | Three
      Months Ended
      September 30, |         | Nine
      Months Ended
      September 30, |      | Year Ended 
      December 31,
      2001 |  
|----------------------------- |  | -------------------------------------------- | ------- | ------------------------------------------- | ---- | ----------------------------------------- | -
|                              | 
|2002                          |  | 2001                                         | 2002    |                                             | 2001
|                              |  |                                              |         |                                             |      |                                           |  
|Interest
      Income         |  | $                                            | 2,152   |                                             | $    | 2,378                                     |  
|Interest
      Expense        |  |                                              | 711     |                                             |      | 1,038                                     |  
|                              |  |                                              |         |                                             |      |                                           |  
|Net
      Interest Income     |  | $                                            | 1,441   |                                             | $    | 1,340                                     |  
|                              |  |                                              |         |                                             |      |                                           |  
|                              |  |                                              |         |                                             |      |                                           |  
|Average
      Earning Assets  |  | $                                            | 130,169 |                                             | $    | 120,455                                   |  
|Net
      Interest Margin (1) |  |                                              | 4.43    | %                                           |      | 4.45                                      | %

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

|Provision for
Loan Losses


The Company has not
contributed to the allowance for loan losses in the first three quarters of
2002. Total contributions to the allowance for loan losses in the first nine
months of 2001 were also zero. Management believes that the allowance, which
stands at 1.1% of gross loans at September 30, 2002, is adequate to cover future
losses.


Changes in the allowance
for loan losses for the quarter and nine months ended September 30, 2002 and
2001 are as follows (dollar amounts in thousands):
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                      | Three
      Months Ended
      September 30, |       | Nine
      Months Ended
      September 30, |  
|------------------------------------- | -------------------------------------------- | ----- | ------------------------------------------- | -
|                                      |                                              |       |                                             |  
|                                      | 2002                                         |       | 2001                                        |  
|                                      |                                              |       |                                             |  
|Allowance,
      Beginning of Period  | $                                            | 1,259 |                                             | $
|Provision
      for Loan Losses       |                                              |      |                                             |  
|Recoveries
      on Loans Charged Off |                                              | 7     |                                             |  
|                                      |                                              |       |                                             |  
|                                      |                                              | 1,266 |                                             |  
|Less: Loans
      Charged Off         |                                              |      |                                             |  
|                                      |                                              |       |                                             |  
|Allowance,
      End of Period        | $                                            | 1,266 |                                             | $
|                                      |                                              |       |                                             |  

|10
|--

|Noninterest
Income


Noninterest Income
represents deposit account service charges and other types of non-loan related
fee income. Noninterest income for the quarter ended September 30, 20021 totaled
$202,000 compared to $205,000 for the same period ended 2001. Non-interest
income for the nine months ended September 30, 2002 totaled $596,000 compared to
$558,000 for the same period ended 2001. The increase in 2002 relates to the
growth in demand deposit accounts, the primarily source of service charges and
fees.


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, 2002 totaled $1,489,000 compared to $1,546,000
for the same period during 2001. Noninterest expense for the nine months ended
September 30, 2001 totaled $4,318,000 compared to $4,518,000 for the same period
during 2001. The decrease is primarily from the discontinuance of the
amortization of goodwill, which was $110,000 in the third quarter of 2001 and
$330,000 for the first nine months of 2001. The reduction in salaries and
occupancy expense associated with the sale of the Burbank branch was offset by
additional costs that resulted from the relocation of the Marina branch, as well
as occupancy and marketing costs for the new Manhattan Beach branch.


Income Taxes


The Companys income
tax provision for the first nine-months of 2002 and 2001 was $102,000 and
$98,000 resulting in an effective rate of 30.2% and 32.3%, respectively on
income before taxes and goodwill amortization.


Balance Sheet
Analysis


Total assets at September
30, 2002 totaled $145.2 million, up $20.6 million from the $124.6 million
reported at December 31, 2001. This increase in assets was funded primarily by
deposits, which grew $17 million, of which $5.7 million was demand deposits as
the Company continued to focus on increasing its relationship based banking
services. The Company also raised $3 million of capital in a private placement.


11
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Asset Quality


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

|                                                |  | September
      30, |        | December
      31,
      2000 |  
|----------------------------------------------- |  | ------------------- | ------ | ----------------------------- | -
|                                               
|2002                                            |  | 2001               
|                                                |  |                     |        |                               |  
|Loans
      90 Days Past Due and Still Accruing |  | $                   | 4      |                               | $
|Loans on
      Nonaccrual                       |  |                     | 969    |                               |  
|                                                |  |                     |        |                               |  
|Nonperforming
      Loans                       |  |                     | 973    |                               |  
|Classified
      Investments                    |  |                     |       |                               |  
|Other Real
      Estate Owned                   |  |                     |       |                               |  
|                                                |  |                     |        |                               |  
|Nonperforming
      Assets                      |  | $                   | 973    |                               | $
|                                                |  |                     |        |                               |  
|                                                |  |                     |        |                               |  
|Nonperforming
      Loans as a Percent          |  |                     |        |                               |  
|of
      Total Loans                            |  |                     | 0.82   | %                             |  
|Allowance
      for Loan Losses as a Percent    |  |                     |        |                               |  
|of
      Nonperforming Loans                    |  |                     | 130.11 | %                             |  
|Nonperforming
      Assets as a Percent         |  |                     |        |                               |  
|of
      Total Assets                           |  |                     | 0.67   | %                             |  

|Non-performing loans as a
percent of total loans increased to 0.82% at September 30, 2002, compared to
0.25% at December 31, 2001. The allowance for loan losses as a percent of
non-performing loans decreased to 130.11% at September 30, 2002, down from
516.53% at December 31, 2001.


Other
Borrowings


The Company has a
subordinated note with a correspondent bank for $1.0 million. This note bears
interest at 2.0% above LIBOR payable quarterly. The note is due on August 29,
2012 with scheduled annual principal reductions starting in late 2004.


The Bank had $2 million
outstanding in purchased federal funds at September 30, 2002.


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.
The Trust Preferred Securities mature on December 31, 2028.


Capital


Total shareholders
equity at September 30, 2002 totaled $10.0 million compared to $7.0 million at
December 31, 2001. This increase was primarily attributable to the private
placement of 909,091 shares of common stock for $3 million.


12
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|                                               | Regulatory
      
      Minimum Ratio 
      for 
      Well-Capitalized |  | September
      30,
      2002 |  | December
      31,
      2001
|---------------------------------------------- | -------------------------------------------------------------------------- |  | ------------------------------ |  | -----------------------------
|                                               |                                                                            |  |                                |  |                              
|Tier
      1 Capital (to Average Assets)       | 5.00%                                                                      |  | 7.73%                          |  | 6.39%                        
|Tier 1
      Capital (to Risk Weighted Assets) | 6.00%                                                                      |  | 9.61%                          |  | 8.45%                        
|Total Capital
      (to Risk Weighted Assets)  | 10.00%                                                                     |  | 10.75%                         |  | 11.10%                       

|The Company is subject to
similar requirements administered by its primary regulator, the Federal Reserve
Board. For capital adequacy purposes, the Company must maintain total capital to
risk-weighted assets and Tier 1 capital to risk-weighted assets of 8.0% and
4.0%, respectively. Its total capital to risk-weighted assets and Tier 1
capital to risk-weighted assets was 10.98% and 5.49%, respectively, at September
30, 2002 and 10.7% and 3.7%, respectively, at December 31, 2001.


Liquidity


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


Disclosure
Controls and Procedures


Within the 90 days prior to
the date of this report, we carried out an evaluation, under the supervision and
with the participation of our management, including our Chief Executive Officer
and our Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures pursuant to Exchange Act
Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and the
Chief Financial Officer concluded that the Registrants disclosure controls
and procedures are effective in timely alerting them to material information
relating to the Registrant required to be included in our periodic filings with
the Securities and Exchange Commission.


13
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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
| | ------------------------------------------------------------

| | On
September 30, 2002, the shareholders  approved a  quasi-reorganization  of the Companys
 equity accounts.  See                   Note 5 to the condensed financial statements for
additional details.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Item
5 - Other Items
| | --------------------

| | None
| | ----

| | Item
6 - Exhibits and Reports on Form 8-K
| | -----------------------------------------

| |  |  |  | A) |  | Exhibits
| |  |  |  | -- |  | --------

| | 99.1
 Certification of CEO pursuant to Section 906 of Sarbanes-Oxley Act of 2002
| | ---------------------------------------------------------------------------------

| | 99.2
 Certification of CFO pursuant to Section 906 of Sarbanes-Oxley Act of 2002
| | ---------------------------------------------------------------------------------

| |  |  |  | B) |  | Reports
on Form 8-K
| |  |  |  | -- |  | -------------------

| | None
| | ----

|14
|--

|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 13, 2002 |  | /s/
      Don M. Griffith
      
      Don M. Griffith 
      Chairman and 
      Chief Executive Officer                       
|                              |  |                                                                                                                                           
|                              |  |                                                                                                                                           
|Date:
      November 13, 2002 |  | /s/
      Deborah A. Marsten 
      
      Deborah A. Marsten 
      Vice Chairman, Chief Financial
      Officer, and Secretary
|                              |  |                                                                                                                                           

|15
|--

|Form 10QSB
Certification


I, Don M. Griffith, certify that:
|------------------------------------------------------------

| |  | 1. |  | I
have reviewed this quarterly report on Form 10-QSB of First Coastal Bancshares;
| |  | -- |  | ---------------------------------------------------------------------------------

| |  | 2. |  | Based
on my knowledge, this quarterly report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this quarterly report;
| |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 3. |  | Based
on my knowledge, the financial statements, and other financial information included in
this quarterly report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, all periods
presented in this quarterly report;
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 4. |  | The
registrants other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14
and 15d-14) for the registrant and have:
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | a. |  | designed
such disclosure controls and procedures to ensure that material information relating to
the registrant,                   including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during                   the period
in which this quarterly report is being prepared;
| |  |  |  |  |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | b. |  | evaluated
the effectiveness of the registrants disclosure controls and procedures as of a date
within 90 days prior to                   the filing date of this quarterly report (the
Evaluation Date); and
| |  |  |  |  |  | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | c. |  | presented
in this quarterly report our conclusions about the effectiveness of the disclosure
controls and procedures                   based on our evaluation as of the Evaluation
Date;
| |  |  |  |  |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 5. |  | The
registrants other certifying officers and I have disclosed, based on our most
recent evaluation, to the registrants auditors and the audit committee of the
registrants board of directors (or persons performing the equivalent functions):
| |  | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | a. |  | all
significant deficiencies in the design or operation of internal controls which could
adversely affect the                   registrants ability to record, process, summarize
and report financial data and have identified for the                   registrants
auditors any material weaknesses in internal controls; and
| |  |  |  |  |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | b. |  | any
fraud, whether or not material, that involves management or other employees who have a
significant role in the                   registrants internal controls; and
| |  |  |  |  |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 6. |  | The
registrants other certifying officers and I have indicated in this quarterly report
whether or not there were significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date:
      November 13, 2002 |  | /s/
      Don M. Griffith
      
      Don M. Griffith 
      Chairman and 
      Chief Executive Officer
|----------------------------- |  | -------------------------------------------------------------------------------------------------------------------

|16
|--

|Form 10QSB
Certification


I, Deborah A. Marsten, certify that:
|---------------------------------------------------------------

| |  | 7. |  | I
have reviewed this quarterly report on Form 10QSB of First Coastal Bancshares;
| |  | -- |  | --------------------------------------------------------------------------------

| |  | 8. |  | Based
on my knowledge, this quarterly report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this quarterly report;
| |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 9. |  | Based
on my knowledge, the financial statements, and other financial information included in
this quarterly report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, all periods
presented in this quarterly report;
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 10. |  | The
registrants other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14
and 15d-14) for the registrant and have:
| |  | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | a. |  | designed
such disclosure controls and procedures to ensure that material information relating to
the registrant,                   including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during                   the period
in which this quarterly report is being prepared;
| |  |  |  |  |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | b. |  | evaluated
the effectiveness of the registrants disclosure controls and procedures as of a date
within 90 days prior to                   the filing date of this quarterly report (the
Evaluation Date); and
| |  |  |  |  |  | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | c. |  | presented
in this quarterly report our conclusions about the effectiveness of the disclosure
controls and procedures                   based on our evaluation as of the Evaluation
Date;
| |  |  |  |  |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 11. |  | The
registrants other certifying officers and I have disclosed, based on our most
recent evaluation, to the registrants auditors and the audit committee of the
registrants board of directors (or persons performing the equivalent functions):
| |  | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | a. |  | all
significant deficiencies in the design or operation of internal controls which could
adversely affect the                   registrants ability to record, process, summarize
and report financial data and have identified for the                   registrants
auditors any material weaknesses in internal controls; and
| |  |  |  |  |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  |  |  | b. |  | any
fraud, whether or not material, that involves management or other employees who have a
significant role in the                   registrants internal controls; and
| |  |  |  |  |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 12. |  | The
registrants other certifying officers and I have indicated in this quarterly report
whether or not there were significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
| |  | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date:
      November 13, 2002 |  | /s/
      Deborah A. Marsten 
      
      Deborah A. Marsten 
      Vice Chairman, Chief Financial
      Officer, and Secretary
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------

|17
|--