---

|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 June 30, 2000

|[_] |  | 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 90245(Address of principal executive offices) | 90245
 (Zip Code)
|------------------------------------------------------------------------------------- | -----------------

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


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


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


APPLICABLE ONLY TO CORPORATE ISSUERS


On June 30, 2000 there were 1,235,448 shares of First Coastal Bancshares
Common Stock outstanding.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|First Coastal BancsharesJune 30, 2000



INDEX


PART I. FINANCIAL
INFORMATION



Item 1  Financial Statements
|---------------------------------------------------------------------------------------------------------------

| | Condensed Consolidated Balance Sheets at June 30, 2000 and
                  December 31, 1999
| | ----------------------------------------------------------------------------------------------

| | Condensed Consolidated Statements of Income for the Three
                  Months and Six Months Ended June 30, 2000 and 1999
| | ------------------------------------------------------------------------------------------------------------------------------

| | Condensed Consolidated Statements of Changes in Shareholders Equity from
                  January 1, 1999 through June 30, 2000
| | ---------------------------------------------------------------------------------------------------------------------------------

| | Condensed Consolidated Statements of Cash Flows for the Six
                  Months Ended June 30, 2000 and 1999
| | -----------------------------------------------------------------------------------------------------------------

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

---

|Item 1. Financial Statements



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

|                                                          | June 30,2000 | December 31,1999
|--------------------------------------------------------- | ------------ | ----------------
|Cash and Due From Bank                                    |              | $    8,079      
|Short Term Investments                                    |              | 3,300           
|                                                         
|CASH AND CASH EQUIVALENTS                                 |              | 11,379          
|Investment Securities, net                                |              | 37,850          
|Federal Reserve and Federal Home Loan Bank Stock, at Cost |              | 1,630           
|Loans                                                     |              | 74,832          
|Allowance for Loan Losses                                 |              | (854            
|                                                         
|NET LOANS                                                 |              | 73,978          
|Premises and Equipment, net                               |              | 632             
|Other Real Estate Owned, net                              |              |                
|Goodwill, net                                             |              | 5,251           
|Accrued Interest and Other Assets                         |              | 4,728           
|                                                         
|                                                          |              | $135,448        
|                                                         
|Noninterest-Bearing Deposits                              |              | $  32,152       
|Interest-Bearing Deposits                                 |              | 65,405          
|                                                         
|TOTAL DEPOSITS                                            |              | 97,557          
|Other Borrowings                                          |              | 23,935          
|Company Obligated Mandatorily Redeemable                  |             
|Preferred Securities of Subsidiary Trust Holding          |             
|Solely Junior Subordinated Debentures                     |              | 6,600           
|Accrued Interest and Other Liabilities                    |              | 971             
|                                                         
|TOTAL LIABILITIES                                         |              | 129,063         
|Preferred Stock                                           |              | 1,993           
|Common Shares                                             |              | 6,537           
|Accumulated Deficit                                       |              | (906            
|Accumulated Other Comprehensive Income                    |              | (1,239          
|                                                         
|TOTAL SHAREHOLDERS EQUITY                                |              | 6,385           
|                                                         
|                                                          |              | $135,448        
|                                                         

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

---

|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 EndedJune 30, | For the Six Months Ended June 30,
|-------------------------- | ---------------------------------- | ---------------------------------
|
|Interest Income            |                                    | $2,539                           
|Interest Expense           |                                    | 1,221                            
|                          
|Net Interest Income        |                                    | 1,318                            
|Provision for Loan Losses  |                                    | 45                               
|                          
|Net Interest Income after  |                                   
|Provision for Loan Losses  |                                    | 1,273                            
|Noninterest Income         |                                    | 176                              
|Noninterest Expense        |                                    | 1,426                            
|                          
|Income (Loss) before Taxes |                                    | 23                               
|Income Taxes               |                                    | 51                               
|                          
|Net Loss                   |                                    | $   (28                          
|                          
|Per Share Data:            |                                   
|Net Loss - Basic           |                                    | $(0.07                           
|Net Loss - Diluted         |                                    | $(0.07                           

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

---

|Item 1. Financial Statements - Continued



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

|                                  | PreferredStock | CommonStock | ComprehensiveIncome | AccumulatedDeficit | AccumulatedOtherComprehensiveIncome | Total  
|--------------------------------- | -------------- | ----------- | ------------------- | ------------------ | ----------------------------------- | -------
|January 1, 1999                   |                | $2,658      |                     | $3,673             |                                     |        
|Redemption of Preferred Stock     |                | (586        | )                   |                    |                                     |        
|Conversion of Preferred to        |               
|Common Stock                      |                | (79         | )                   | 79                 |                                    
|Sale of Treasury Shares           |                |             |                     | 115                |                                     |        
|Net Proceeds from Stock Offering  |                |             |                     | 1,901              |                                     |        
|Dividends - Preferred Stock       |                |             |                     |                    |                                     |        
|Common Stock Repurchased          |                |             |                     | (116               | )                                   |        
|Exercise of Warrants              |                |             |                     | 875                |                                     |        
|Common Shares Reissued            |               
|Comprehensive Income              |               
|Net Loss                          |                |             |                     |                    |                                     | $ (391 
|Change in Unrecognized Loss       |               
|of Securities Available for       |               
|Sale, net of Taxes of $812        |                |             |                     |                    |                                     | (1,166 
|Less Reclassification Adjustments |               
|for Gains included in Net Loss    |               
|net of taxes of $9                |                |             |                     |                    |                                     | (13    
|                                 
|Comprehensive Loss                |                |             |                     |                    |                                     | $(1,570
|                                 
|December 31, 1999                 |                | 1,993       |                     | 6,527              |                                     |        
|Redemption of Common Stock        |                |             |                     | (1                 | )                                   |        
|Dividends - Preferred Stock       |                |             |                     |                    |                                     |        
|Common Shares Issued              |                |             |                     | 11                 |                                     |        
|Comprehensive Income              |               
|Net Loss                          |                |             |                     |                    |                                     | $   (77
|Change in Unrecognized Loss       |               
|of Securities Available for       |               
|Sale, net of Taxes of $20         |                |             |                     |                    |                                     | (29    
|                                 
|Comprehensive Loss                |                |             |                     |                    |                                     | $ (106 
|                                 
|June 30, 2000                     |                | $1,993      |                     | $6,537             |                                     |        
|                                 

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

---

|Item 1. Financial Statements - Continued



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

|                                                        | For the Six Months EndedJune 30,
|------------------------------------------------------- | --------------------------------
|
|OPERATING ACTIVITIES                                    |                                 
|Net Loss                                                |                                 
|Adjustments to Reconcile Net Loss to                    |                                 
|Net Cash Used by Operating Activities:                  |                                 
|Depreciation and Amortization                           |                                 
|Provision for Loan Losses                               |                                 
|Other Items - Net                                       |                                 
|                                                       
|NET CASH USED BY
OPERATING ACTIVITIES                   |                                 
|INVESTING ACTIVITIES                                    |                                 
|Purchases of Investment Securities                      |                                 
|Sale and Maturities of Investment Securities            |                                 
|Net Change in Federal Reserve and Home Loan Bank Stock  |                                 
|Net Cash and Cash Equivalents from AIB Acquisition      |                                 
|Net Change in Loans                                     |                                 
|Proceeds from the Sale of Other Real Estate Owned       |                                 
|Purchase of Premises and Equipment                      |                                 
|                                                       
|NET CASH USED BY
INVESTING ACTIVITIES                   |                                 
|FINANCING ACTIVITIES                                    |                                 
|Net Change in Deposits                                  |                                 
|Net Change in Other Borrowings                          |                                 
|Trust Preferred Securities, net of Costs                |                                 
|Proceeds from Supplemental Stock Offering, net of Costs |                                 
|Proceeds from Issuance of Common Stock                  |                                 
|Proceeds from Exercise of Warrants and Options          |                                 
|Redemption of Preferred and Common Stock                |                                 
|Dividends                                               |                                 
|                                                       
|NET CASH PROVIDED                                       |                                 
|BY FINANCING ACTIVITIES                                 |                                 
|                                                       
|INCREASE IN CASH                                        |                                 
|AND CASH EQUIVALENTS                                    |                                 
|Cash and Cash Equivalents at Beginning of Period        |                                 
|                                                       
|CASH AND CASH EQUIVALENTS                               |                                 
|AT END OF PERIOD                                        |                                 
|                                                       

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

---

|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, 2000 and Form SB-2 filed on February 12, 1999.


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


Operating results for interim periods are not necessarily indicative of
operating results for an entire fiscal year. In the opinion of management, the unaudited
financial information for the three-month periods ended June 30, 2000 and 1999, reflect
all adjustments, consisting only of normal recurring accruals and provisions, necessary
for a fair presentation thereof.


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



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


On March 8, 1999, the Bank acquired 100% of the outstanding
common stock of American Independent Bank, N.A. (AIB) for approximately $6.5 million in
cash. AIB had total assets of approximately $38 million on March 8, 1999. The acquisition
was accounted for using the purchase method of accounting in accordance with Accounting
Principles Board Opinion No, 16. Business Combinations. Under this method of
accounting, the purchase price was allocated to the assets, deposits and liabilities
assumed based on their fair values as of the acquisition date, which were not materially
different from their book values. The financial statements include the operations of AIB
from the date of the acquisition. Goodwill arising from the transaction totaled
approximately $4.0 million and is being amortized over fifteen years on a straight-line
basis.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

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



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

|                                       | Three Months Ended June 30, | Six Months Ended June 30,
|-------------------------------------- | --------------------------- | -------------------------
|
|
|Interest and Noninterest Income:       |                             |                          
|The Company                            |                             | $2,748                   
|AIB - Pre-Merger                       |                             |                         
|                                      
|Total                                  |                             | $2,748                   
|                                      
|Net Loss:                              |                            
|The Company                            |                             | $   (28                  
|AIB - Pre-Merger                       |                             |                         
|Interest Costs - Pro Forma, net of Tax |                             |                         
|Goodwill Amortization- Pro Forma       |                             |                         
|                                      
|Total                                  |                             | $   (28                  
|                                      
|Per Share Data:                        |                            
|Basic                                  |                             | $(0.07                   
|Diluted                                |                             | $(0.07                   

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



Note 3 - Earnings Per Share


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

---

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



Income Summary


For the three months ended June 30, 2000, the Company reported a net loss
of $28,000, or $0.07 basic loss per share compared to a net loss of $45,000, or $0.08
basic loss per share for the same three month period in 1999. For the six months ended
June 30, 2000, the Company reported a net loss of $77,000, or $0.15 basic loss per share
compared to a net loss of $138,000, or $0.31 basic loss per share for the same six month
period in 1999.


After adding back the amortization of intangible assets, tangible net
income was $86,000 and $66,000 for the three months ended June 30, 2000 and 1999,
respectively, and $153,000 and $27,000 for the six months ended June 30, 2000 and 1999,
respectively.


The annualized return on average assets was (0.12)% for the first half of
2000 compared to (0.14)% for 1999. Annualized return on average shareholders equity for
the first half of 2000 and 1999 was (2.37)% and (1.99)%, 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 $1,318,000 for the quarter ended June 30, 2000, compared to
$1,133,000 for the quarter ended June 30, 1999. Net interest income was $2,603,000 for
the six months ended June 30, 2000, compared to $2,030,000 for the six months ended June
30, 1999.


The total amount of net interest income increased for the quarter and six
months ended June 30, 2000 compared to the same periods in 1999 due to the significant
increase in interest-earning assets. This increase was due to the combined effect of the
acquisition of AIB as well as overall growth in earning assets funded by borrowings.


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

|                        | Three Months EndedJune 30, | Six Months EndedJune 30, | Year EndedDecember 31,
|----------------------- | -------------------------- | ------------------------ | ----------------------
|
|Interest Income         |                            | $    2,539               |                       
|Interest Expense        |                            | 1,221                    |                       
|                       
|Net Interest Income     |                            | $    1,318               |                       
|                       
|Average Earning Assets  |                            | $116,880                 |                       
|Net Interest Margin (1) |                            | 4.51                     | %                     

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

---

|Net Interest Income Continued


The net interest margin decreased in the first half of 2000 to 4.45% compared to
the same period in 1999 at 4.50% due partially to the purchase of $40 million in CAP derivatives.
The CAPs were purchased for $255,500 and are being amortized over two to three years, or
$7,368 per month.


The Company issued $6.6 million in preferred securities on March 3, 1999.
Interest expense incurred on these securities, net of tax effect, was $116,000 in the
second quarter of 2000 and $116,000 in the first quarter of 2000. Had these distributions
not been charged to earnings, the Company would have recognized net income of $88,000 in
the second quarter of 2000 and $71,000 in the second quarter of 1999.  Tangible net income
would have been $202,000 in the second quarter of 2000 and $182,000 in the second quarter
of 1999.


Provision for Loan Losses


During the first and second quarter of 2000, the Company contributed
$45,000 each quarter to the allowance for loan losses. Total contributions to the
allowance for loan losses in the first six months of 2000 and 1999 were $90,000 and
$50,000 respectively. Management believes that the allowance, which stands at 1.1% of
gross loans at June 30, 2000, is adequate to cover future losses.


Changes in the allowance for loan losses for the quarter and six months
ended June 30, 2000 and 1999 are as follows (dollar amounts in thousands):
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                | Three Months EndedJune 30, | Six Months EndedJune 30,
|------------------------------- | -------------------------- | ------------------------
|
|Allowance, Beginning of Period  |                            | $  994                  
|Provision for Loan Losses       |                            | 45                      
|Recoveries on Loans Charged Off |                            | 24                      
|Allowance from AIB Acquisition  |                            |                        
|                               
|                                |                            | 1,063                   
|Less: Loans Charged Off         |                            | (209                    
|                               
|Allowance, End of Period        |                            | $  854                  
|                               

During the first quarter of 2000, management designated certain problem
assets as held for sale. The loans were discounted and the impaired portion charged-off
of approximately $185,000.

---

|Noninterest Income


Non Interest Income represents deposit account service charges and other
types of non-loan related fee income. Non-interest income for the quarter ended June 30,
2000 totaled $176,000 compared to $312,000 for the same period ended 1999. Non-interest
income for the six months ended June 30, 2000 totaled $386,000 compared to $452,000 for
the same period ended 1999. The decrease for the six months ended June 30, 2000 compared
to the same period in 1999 is primarily the result of reduction in NSF charges due to the
closure in 2000 of selected accounts with excessive NSF activity.


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 June 30, 2000 totaled $1,426,000
compared to $1,404,000 for the same period during 1999. Noninterest expense for the six
months ended June 30, 2000 totaled $2,889,000 compared to $2,561,000 for the same period
during 1999. This increase was primarily the result of a full period of consolidated operating
costs relating to the branches acquired during March 1999, in the AIB acquisition.


Income Taxes


The Companys income tax provision for the first half of 2000 and 1999
was $87,000 and $9,000 resulting in an effective rate of 41.0% on income before taxes and
goodwill amortization.


Balance Sheet Analysis


Total assets at June 30, 2000 totaled $135.4 million, up 4.0% from the
$130.2 million reported at December 31, 1999. This increase was centered in investments,
which were funded by the overall growth in deposits that have increased 8.9% since December 31,
1999.


Asset Quality


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

|                                          | June 30, | December 31,
|----------------------------------------- | -------- | ------------
|
|Restructured Loans                        |          | $          
|Loans 90 Days Past Due and Still Accruing |          | 77          
|Loans on Nonaccrual                       |          | 279         
|                                         
|Nonperforming Loans                       |          | 356         
|Other Real Estate Owned                   |          |            
|                                         
|Nonperforming Assets                      |          | $     356   
|                                         
|Nonperforming Loans as a Percent          |         
|of Total Loans                            |          | 0.48        
|Allowance for Loan Losses as a Percent    |         
|of Nonperforming Loans                    |          | 239.89      
|Nonperforming Assets as a Percent         |         
|of Total Assets                           |          | 0.26        

---

|Asset Quality Continued


The primary ratios of loan quality have improved significantly in the
first half of 2000. Non-performing loans as a percent of total loans decreased to 0.48%
at June 30, 2000, compared to 1.31% at December 31, 1999.  The decrease is due primarily
as a result of the sale of certain classified assets.  Also as a result, the allowance for
loan losses as a percent of non-performing loans increased to 239.89 % at June 30, 2000,
up from 90.63% at December 31, 1999. A portion of this increase is also due to the $90,000
provision made to the Allowance for Loan Loss.


Other Borrowings


Other borrowings at June 30, 2000 consist of $2.0 million in federal
funds purchased, $21.0 million in short-term borrowings from the Federal Home Loan Bank
and $935,000 in long-term borrowings from a correspondent bank. The Company uses these
sources to fund asset growth and offset fluctuations in demand for deposits.


Trust Preferred Securities


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


Capital


Total shareholders equity at June 30, 2000 totaled $6.4 million compared
to $6.6 million at December 31, 1999. This decrease was primarily attributable to the
increase in net unrealized loss on available-for-sale investments of $29,000, dividends
of preferred stock of $108,000 and the net loss of $77,000.


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

|                                         | RegulatoryMinimum RatioforWell-Capitalized | June 30,2000 | December 31,1999
|---------------------------------------- | -------------------------------------------- | ------------ | ----------------
|Tier 1 Capital (to Average Assets)       |                                              | 5.00         | %               
|Tier 1 Capital (to Risk Weighted Assets) |                                              | 6.00         | %               
|Total Capital (to Risk Weighted Assets)  |                                              | 10.00        | %               

|The Companys ratios at June 30, 2000 were 3.37% for Tier 1 capital to
average assets, 4.82% for Tier 1 capital to risk-weighted assets and 11.45% for Total
capital to risk-weighted assets.


Liquidity


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

---

|Year 2000 Compliance


During the periods leading up to January 1, 2000, the Company addressed
the potential problems associated with the possibility the computers that control or
operate the Companys information technology system and infrastructure may not have been
programmed to read four-digit date codes and upon the arrival of the year 2000, may have
recognized the two-digit code 00 as the year 1900, causing systems to fail to function
or generate erroneous data.


The Company expended approximately $123,000 through the periods ended
December 31, 1999 in connection with its Year 2000 compliance program. The Company
experienced no significant problems related to its information technology systems upon
arrival of the Year 2000, nor was there any interruption in service to its customers.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|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 - | Legal Proceedings Changes in Securities

                  None
| | -------- | ---------------------------------------------------------------

| | Item 3 - | Defaults upon Senior Securities None
| | -------- | ------------------------------------

| | Item 4 - | Submission of Matters to a Vote of Security Holders
                  On May 18,  2000,  the Company  held its annual  meeting.  At that meeting  Carole  LaCaze,  Paul
                  Deters, Clifford Einstein,  Charles Fullerton,  Don Griffith,  Deborah Marsten, Thomas Spears and
                  Joseph Wender were elected directors of the Company.
| | -------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Item 5 - | Other Items None
| | -------- | ----------------

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

| | A) | Exhibits
                  Exhibit 27  Financial Data Schedule (For SEC use only)
| | -- | ----------------------------------------------------------------------------------

|Reports on Form 8-K


None
|--------------------------

---

|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: August 11, 2000 |  | /s/ Don M. Griffith     
Don M. Griffith
                                                                                Chairman and
                                                                                Chief Executive Officer
|--------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: August 11, 2000 |  | /s/ Deborah A. Marsten    
Deborah A. MarstenVice Chairman, Chief Financial
                                                                                  Officer, and Secretary
|--------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------