================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                      FOR THE QUARTER ENDED MARCH 31, 2000


                         COMMISSION FILE NUMBER: 0-11223

                           PROFESSIONAL BANCORP, INC.
             (Exact name of registrant as specified in its charter)



               PENNSYLVANIA                         95-3701137
 (State or other jurisdiction of                 (I.R.S. Employer
     incorporation or organization)              Identification No.)




         606 BROADWAY
    SANTA MONICA, CALIFORNIA                                     90401
  (Address of principal executive offices)                     (Zip Code)


       Registrant's telephone number, including area code: (310) 458-1521


INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO


                As of May 1, 2000, 2,030,754 shares of the Registrant's $0.008
par value common stock were outstanding.

================================================================================



                           PROFESSIONAL BANCORP, INC.
                                      INDEX
<TABLE>
<CAPTION>



                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                              <C>
PART I.    FINANCIAL INFORMATION

           Item 1.    Financial Statements

                      Independent Accountants Report                                                  3

                      Consolidated Balance Sheets as of
                      March 31, 2000 and December 31, 1999                                            4

                      Consolidated Statements of Operations
                      for the three months ended March 31, 2000 and 1999                              5

                      Consolidated Statements of Comprehensive Income
                      for the three months ended March 31, 2000 and 1999                              6

                      Consolidated Statements of Changes in
                      Shareholders Equity for the three months ended March 31, 2000 and 1999          7

                      Consolidated Statements of Cash Flows for the three months
                      ended March 31, 2000 and 1999                                                   8

                      Notes to Consolidated Financial Statements                                      9


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

                      and Results of Operations                                                      10


           Item 3.    Quantitative and Qualitative Disclosures About Market Risk                     26


PART II.   OTHER INFORMATION


           Item 1.    Legal Proceedings                                                              28

           Item 2.    Changes in Securities                                                          28

           Item 3.    Defaults Upon Senior Securities                                                28

           Item 4.    Submission of Matters To A Vote of Security Holders                            28

           Item 5.    Other Information                                                              28
           Item 6     Exhibits and Reports on Form 8-K                                               29

SIGNATURES                                                                                           32

</TABLE>





                                       2

<PAGE>



PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENTS



                         Independent Accountant's Report


To the Board of Directors and Shareholders
Professional Bancorp, Inc. and Subsidiary

We have reviewed the accompanying condensed consolidated balance sheet of
Professional Bancorp, Inc. and Subsidiary as of March 31, 2000 and the related
condensed consolidated statements of operations and comprehensive loss, changes
in shareholder's equity, and cash flows for the three months ended March 31,
2000. These financial statements are the responsibility of the Company's
management.

Our review was conducted in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our review we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Professional Bancorp, Inc. and
Subsidiary as of December 31, 1999, and the related consolidated statements of
operations and comprehensive loss, stockholders' equity and cash flows for the
year then ended not presented herein; and in our report dated January 28, 2000
(except for Note 8 and Note 11 as to which the dates are February 1, 2000 and
March 22, 2000, respectively) we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of December 31, 1999,
is fairly presented, in all material respects, in relation to the balance sheet
from which it has been derived.

Moss Adams LLP

Los Angeles, California
May  11, 2000





                                       3


<PAGE>







<TABLE>
<CAPTION>

                    PROFESSIONAL BANCORP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

     (In thousands)                                                     MARCH 31,             DECEMBER 31,
                                                                          2000                    1999
                                                                          ----                    ----
                                                                       (UNAUDITED)             (AUDITED)
     ASSETS
     Cash and due from banks:
<S>                                                              <C>                     <C>
          Noninterest-bearing                                      $       26,817          $      15,721
          Interest-bearing                                                    797                    697
     Federal funds sold                                                    38,500                 27,000
                                                                      -----------          -------------
     Cash and cash equivalents                                             66,114                 43,418

     Securities available-for-sale (cost of $48,803 and
          $48,187 in 2000 and 1999, respectively)                          45,949                 45,525
     Securities held-to-maturity (fair value of $17,232
          and $17,901 in 2000 and 1999, respectively)                      17,519                 18,200
     Loans (net of allowance for loan losses of $6,984
          and $5,873 in 2000 and 1999, respectively)                       48,339                156,484
     Premises and equipment, net                                            1,084                  1,152
     Deferred tax asset                                                     2,844                  2,844
     Accrued interest receivable and other assets
                                                                            5,922                  5,867
                                                                      -----------          -------------
     TOTAL ASSETS                                                     $   287,771          $     273,490
                                                                      ===========          =============

     LIABILITIES AND SHAREHOLDERS' EQUITY
     Liabilities
     Deposits:
          Demand, noninterest-bearing                                 $   115,130          $     109,561
          Demand, interest-bearing                                         15,787                 16,033
          Savings and money market                                         94,044                 84,783
          Time deposits                                                    45,583                 45,651
                                                                      -----------          -------------
     Total deposits                                                       270,544                256,028

     Convertible notes                                                        679                    679
     Accrued interest payable and other liabilities
                                                                            1,864                  1,915
                                                                      -----------          -------------
     Total liabilities                                                    273,087                258,622
                                                                      -----------          -------------

     Commitments and contingent liabilities

     Shareholders' equity:
     Common stock, $.008 par value; 12,500,000 shares
          Authorized; 2,100,221 issued
          and  2,030,754  outstanding in both 2000 and                         17                     17
     Additional paid-in-capital                                            21,271                 21,271
     Accumulated deficit                                                   (3,210)                (3,221)
     Treasury stock, at cost  (69,467 shares in  both 1999                   (537)                  (537)
     Unrealized loss on securities available-for-sale, net
     of taxes                                                              (2,857)                (2,662)
                                                                      -----------          -------------
     Total shareholders' equity                                            14,684                 14,868
                                                                      -----------          -------------
     TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                       $                    $
                                                                          287,771                273,490
                                                                      ===========          =============

</TABLE>

          See accompanying notes to consolidated financial statements.






                                       4
<PAGE>


<TABLE>
<CAPTION>


                       PROFESSIONAL BANCORP AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                                     THREE MONTHS ENDED
                                                                         MARCH 31,
                (In thousands)                                  --------------------------
                                                                   2000          1999
                                                                ------------  ------------
                INTEREST INCOME
<S>                                                         <C>           <C>
                Loans                                         $       3,575 $       2,884
                Securities                                            1,007         1,322
                Federal funds sold and securities purchased
                     under agreements to resell                         472            83
                Interest-bearing deposits in other banks                  5            32
                                                                ------------  ------------
                TOTAL INTEREST INCOME                                 5,059         4,321
                                                                ------------  ------------

                INTEREST EXPENSE
                Deposits                                                998           724
                Convertible notes                                        11            16
                Federal funds purchased and securities
                     sold under agreements to repurchase                  -           109
                                                                ------------  ------------
                TOTAL INTEREST EXPENSE                                1,009           849
                                                                ------------  ------------
                NET INTEREST INCOME                                   4,050         3,472
                Provision for loan losses                             1,093           125
                                                                ------------  ------------
                NET INTEREST INCOME AFTER PROVISION
                   FOR LOAN LOSSES                                    2,957         3,347
                                                                ------------  ------------

                OTHER OPERATING INCOME
                Net gain (loss) on sale securities                        -            35
                available-for-sale
                Merchant discount                                        72            62
                Mortgage brokering fees                                   5            55
                Service charges on deposits                             235           229
                Other income                                            138           135
                                                                ------------  ------------
                TOTAL OTHER OPERATING INCOME                            450           516
                                                                ------------  ------------

                OTHER OPERATING EXPENSES
                Salaries and employee benefits                        1,847         1,705
                Occupancy                                               367           387
                Furniture and equipment                                 174           209
                Meetings and business development                        15            73
                Donations                                                11            24
                Other promotion                                          64            70
                Legal fees                                              130            92
                Audit, accounting and examinations                       52            43
                Professional services                                   313           308
                Strategic planning and other outside                     28             6
                consulting
                Office supplies                                          52            63
                Telephone                                                98            62
                Postage                                                  33            36
                Messenger service                                        16             6
                FDIC assessment                                          29             6
                Other assessments                                        40            44
                Other expense                                           127           160
                                                                ------------  ------------
                TOTAL OTHER OPERATING EXPENSES                        3,396         3,294
                                                                ------------  ------------
                Earnings before taxes                                    11           569
                Provision for income taxes                                -           233
                                                                ============  ============
                NET EARNINGS                                  $          11 $         336
                                                                ============  ============

                EARNINGS PER SHARE
                    Basic                                     $           0 $       $0.17
                    Diluted                                   $           0 $       $0.16


</TABLE>




                                       5
<PAGE>

<TABLE>
<CAPTION>


                    PROFESSIONAL BANCORP, INC. AND SUBSIDAIRY
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (UNAUDITED)

                                                         Three Months Ended
                                                              March 31,
                                                   --------------------------------
                                                       2000              1999
                                                   --------------    --------------
(In thousands)
<S>                                           <C>               <C>
Net earnings                                    $             11   $          336
Other comprehensive income, net of tax                         -                 -
Unrealized holding gains (losses) arising
       during the period                                    (195)            (179)
Reclassification adjustment                                    -                 -
                                                   --------------    --------------
Other comprehensive income                                  (195)            (179)
                                                   --------------    --------------

Comprehensive income (Loss)                     $           (184)  $          157
                                                   ==============    ==============

</TABLE>


          See accompanying notes to consolidated financial statements.
















                                       6



<PAGE>



<TABLE>
<CAPTION>

                    PROFESSIONAL BANCORP, INC. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY


                    THREE MONTH PERIOD ENDING MARCH 31, 2000



                                                                               RETAINED                ACCUMULATED
                                                                ADDITIONAL     EARNINGS                   OTHER
                                           COMMON STOCK           PAID-IN    (ACCUMULATED   TREASURY  COMPREHENSIVE
(in thousands)                          SHARES       AMOUNT       CAPITAL      DEFICIT)      STOCK    INCOME (LOSS)      TOTAL
                                        ------       ------       -------      --------      -----    -------------      -----
<S>                                 <C>            <C>       <C>           <C>           <C>          <C>            <C>
Balance, December 31, 1999            2,030,754      $   17    $   21,271    $  (3,221)    $   (537)    $ (2,662)      $ 14,868

Conversion of Notes (Note 12)
Cash Dividends                            -            -             -             -              -            -             -
Change in net unrealized holding
  loss on securities available-for-sale   -            -             -             -              -         (195)          (195)
Net earnings (loss)                       -            -             -              11            -            -             11
                                     -----------------------------------------------------------------------------------------------
Balance, March 31, 2000               2,030,754      $   17    $   21,271    $  (3,210)    $   (537)    $ (2,857)     $  14,684
                                     ===============================================================================================



          See accompanying notes to consolidated financial statements.






                    THREE MONTH PERIOD ENDING MARCH 31, 1999



                                                                               RETAINED                ACCUMULATED
                                                                ADDITIONAL     EARNINGS                   OTHER
                                           COMMON STOCK           PAID-IN    (ACCUMULATED   TREASURY  COMPREHENSIVE
(in thousands)                          SHARES       AMOUNT       CAPITAL      DEFICIT)      STOCK    INCOME (LOSS)      TOTAL
                                        ------       ------       -------      --------      -----    -------------      -----
Balance, December 31, 1999            1,996,344    $     17    $   20,874    $   5,239    $    (537)    $   (271)    $   25,321


Conversion of Notes (Note 12)            18,663                       215            -            -            -            215
Cash Dividends                                -           -             -            -            -            -              -
Change in net unrealized holding
  loss on securities
  available-for-sale                          -           -             -            -            -         (179)          (179)
Net earnings (loss)                           -           -             -          336            -            -            336
                                     -----------------------------------------------------------------------------------------------
Balance, March 31, 2000               2,015,007   $      17   $    21,089    $   5,575     $   (537)    $   (450)    $   25,693
                                     ===============================================================================================

</TABLE>

          See accompanying notes to consolidated financial statements.








                                       7
<PAGE>


<TABLE>


                                    PROFESSIONAL BANCORP, INC. AND SUBSIDAIRY
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS


  (UNAUDITED)  (IN THOUSANDS)                                                  T      THREE MONTHS ENDED MARCH 31,
                                                                                         2000              1999
                                                                                         -----             ----
  CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                            <C>                <C>
     Net earnings                                                              $             11   $          336
     Adjustments to reconcile net earnings to net
      Cash provided by operating activities:

       Depreciation and amortization                                                        96               113
       Provision for loan losses                                                         1.094               125
       (Gain) loss on sales of securities available-for-sale                                 -              (35)
       Amortization of convertible note expense                                             11                 5
       Increase in deferred tax asset                                                        -             (137)
       Decrease (increase) in accrued interest receivable and other assets                (56)               366
       Increase (decrease) in accrued interest payable and other                          (62)             (175)

  liabilities
       Net amortization of premiums and discounts
          on securities held-to-maturity                                                    34                65
       Net amortization of premiums and discounts
          on securities available-for-sale                                                  36                90
                                                                                --------------      ------------
          Net cash provided by operating activities                                      1,164               753

  CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from:
      Maturities of securities held-to-maturity                                              -               250
      Maturities of securities available-for-sale                                            -                 -
      Sales of securities available-for-sale                                                 -            25,592
    Principal payments and maturities of:
      Mortgage-backed securities held-to-maturity                                          647             1,746
      Mortgage-backed securities available-for-sale                                        643             3,871
    Purchases of securities available-for-sale                                          (1,305)             (499)
    Net (increase) decrease in loans                                                     7,052           (15,852)
    Purchase of bank premises and equipment, net                                           (28)             (113)
                                                                                --------------      ------------
    Net cash provided by investing activities                                            7,016            14,995
                                                                                --------------      ------------
  CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase (decrease) in demand deposits and savings accounts                     14,584           (14,257)
    Net increase (decrease) in time deposits                                               (68)            3,827
    Cash dividends                                                                           -                 -

                                                                               ----------------  ----------------
  Net cash provided by (used in) in financing activities                                14,516           (10,430)
  NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                  22,696             5,318
                                                                               ----------------  ----------------
  CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                        43,419            31,965
                                                                               ----------------  ----------------
  CASH AND CASH EQUIVALENTS, END OF PERIOD                                   $          66,114            37,283
                                                                               ================  ================

  Supplemental disclosure of cash flow information Cash paid during the period
       for:
       Interest                                                                            865               697
       Income taxes                                                                          -               145
  Supplemental disclosure of noncash items:
   Pretax change in unrealized losses on securities available for sale                    (195)             (179)
  securities
       Conversion of notes                                                                  -                215



</TABLE>

          See accompanying notes to consolidated financial statements.




                                       8

<PAGE>



                    PROFESSIONAL BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION

         The unaudited consolidated financial statements included herein have
been prepared by Professional Bancorp, Inc. (the "Company") pursuant to the
rules and regulations of the Securities and Exchange Commission. In the opinion
of management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the results of operations for the periods covered
have been made. Certain information and note disclosures normally included in
financial statements presented in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. Management believes that the disclosures are adequate to make the
information presented not misleading.

         The financial position at March 31, 2000, and the results of operations
for the three months ended March 31, 2000 are not necessarily indicative of the
results of operations that may be expected for the year ending December 31,
2000. These unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles on a basis
consistent with the Company's audited financial statements, and these interim
financial statements should be read in conjunction with the Company's audited
financial statements and notes thereto included in the Company's Form 10-K for
the year ended December 31, 1999.







                                       9



<PAGE>

NOTE 2 - EARNINGS PER SHARE

         The actual number of shares outstanding at March 31, 2000 was
2,030,754. Basic earnings per share excludes dilution and is computed by
dividing income available to common stockholders by the weighted average number
of common shares outstanding for the period. Diluted earnings per share reflects
the potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock or resulted
from issuance of common stock that then shared in earnings.


<TABLE>
<CAPTION>

                                                            THREE MONTHS ENDED
                                                                  MARCH 31,
                                                     ----------------------------------
                                                     ----------------- ----------------
                                                           2000             1999
(In thousands)
<S>                                                  <C>           <C>
Net Income
   used in basic earnings per share computation      $         11  $           336
Adjustments to net income per
   assumed effect of dilutive securities:
   Interest on convertible notes, net of tax effect             -               16
                                                        ----------    -------------
Adjusted earnings used in diluted earnings per
   share computation                                 $         11  $           352
                                                        ----------    -------------

Weighted average number of shares
   outstanding for computation basic earnings
   per share                                            2,030,754        2,007,127
Effect of dilutive securities:
   Options and warrants                                       (a)           65,018
   Convertible notes                                          (a)           77,101
                                                        ----------    -------------
Weighted average number of shares
   outstanding for calculation of diluted
   earnings per share                                   2,030,754        2,149,246

Basic earnings per share                             $       0.00  $          0.17

Diluted earnings per share                           $       0.00  $          0.16

<FN>

(a) No effect has been given to dilutive securities because the impact is
anti-dilutive.
</FN>
</TABLE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


         Professional Bancorp, Inc. (the "Company") is the holding company for
First Professional Bank, N.A. (the "Bank"). Since the Bank constitutes
substantially all the business of the Company, references to the Company in this
Item 2 reflect the consolidated activities of the Company and the Bank. For a
more complete understanding of Professional Bancorp and its operations,
reference should be made to the financial statements in this report and in the
Company's 1999 Annual Report on Form 10K. Certain statements in this report on
Form 10Q constitute "forward-looking statements" under the Private Securities
Litigation Reform Act of 1995 which involve risks and uncertainties. The
Company's actual results may differ significantly from the results discussed in
such forward-looking statements. Factors that might cause such a difference
include, but are not limited to, economic conditions, competition in the
geographic and business areas in which the Company conducts operations,
fluctuations in interest rates, credit quality, year 2000 data systems
compliance, and government regulations. For additional information concerning
these factors, see "Item 1. Business - Factors That May Affect Results"
contained in the Company's Annual Report on Form 10K for the year ended December
31, 1999.




                                       10


<PAGE>

RESULTS OF OPERATIONS


         The Company recorded net earnings of $11,000 for the first quarter of
2000, compared with net earnings of $336,000 or $0.17 per basic share for the
first quarter of 1999. The Company had total assets of $287.8 million at March
31, 2000, compared to $249.2 million at March 31, 1999.

         Return on average shareholders' equity for the first quarter of 2000
and 1999, were 0.29% and 5.19%, respectively. Additionally, return on average
assets for the first quarter of 2000 and 1999 were 0.02% and 0.53%,
respectively.

         Total assets increased $14.3 million, or 5.2%, to $287.8 million at
March 31, 2000 from $273.5 million at December 31, 1999. Total cash and cash
equivalents increased $22.7 million, or 52.3% to $66.1 million from $43.4
million at December 31, 1999.

         Total investment securities decreased $257,000, or 0.4% to $63.5
million at March 31, 2000 compared to $63.7 million at December 31, 1999.

         Net loans decreased $8.1 million, or 5.2%, to $148.3 million at March
31, 2000 compared to $156.5 million at December 31, 1999. Commercial loans
decreased $5.3 million, or 4.3% to $119.1 million from $124.4 million at
December 31, 1999. At March 31, 2000 and December 31, 1999, there was a single
cash secured loan of $12.8 million which was paid off in April 2000. Real estate
secured loans increased $820,000, or 3.0%, to $28.4 million at March 31, 2000
compared to $27.5 million at December 31, 1999.

         At March 31, 2000, nonperforming loans totaled $9.9 million, or 6.4%,
of gross loans compared with $8.4 million or 5.2% of gross loans at December 31,
1999. The allowance for loan losses as a percent of nonperforming loans was
70.7% at March 31, 2000 compared to 69.8% at December 31, 1999.

         Total deposits increased $14.5 million, or 5.7%, to $270.5 million at
March 31, 2000 from $256.0 million at December 31, 1999.

         Other operating expense increased $102,000, or 3.1%, to $3.4 million
for the first quarter of 2000 compared to $3.3 million for the same period in
1999. The increase was due primarily to higher staffing levels and increased
legal fees associated with loan workout activities.

         The decrease of net earnings in the first quarter of 2000 is primarily
due to increased provisions for loan losses. The Company recorded provisions for
loan losses of $1.1 million for the three-month period ended March 31, 2000.
This compares to a $125,000 provision recorded for the same period in 1999. The
additional provision is primarily due to the deterioration of two large loans
and a general increase in the allowance for loan losses during the quarter.



NET INTEREST INCOME

         The Company's earnings depend primarily on net interest income, which
is the difference between the interest and fees earned on loans and investments
less the interest paid on deposits, borrowings and convertible notes. For the
quarter ended March 31, 2000, net interest income increased 17.1% to $5.1
million from $4.3 million for the quarter ended March 31, 1999. The increase in
net interest income for the first quarter of 2000 as compared to the same period
in 1999 is primarily the result of a $30.6 million, or 13.4 %, increase in
average interest earning assets.



                                       11


<PAGE>





         Net interest income, when expressed as a percentage of average total
interest earning assets, is referred to as the net interest margin. The
Company's net interest income is affected by the change in the amount and mix of
interest-earning assets and interest-bearing liabilities. It is also affected by
changes in yields earned on interest-earning assets and rates paid on deposits
and other borrowed funds. The net interest margin was 6.27%, for the first
quarter of 2000 compared to 6.18% for the same period in 1999.

         Average yield on interest earning assets increased 14 basis points to
7.83% for the three months ended March 31, 2000 from 7.69% for the same period
in 1999. Average cost on interest bearing liabilities decreased 5 basis points
to 2.55% for the three months ended March 31, 2000 from 2.60% for the same
period in 1999. Average noninterest bearing demand deposits for the first
quarter of 2000 increased $18.0 million, or 18.9%, to $113.6 million from $95.6
million for the same period in 1999.

         Average federal funds sold increased $25.7 million, or 363.5%, to $32.8
million for the three months ended March 31, 2000 from $7.1 million for the same
period in 1999. The average yield on federal funds increased 99 basis points to
5.77% for the first quarter of 2000 from 4.78% for the same period in 1999. The
result was an increase in interest on federal funds sold to $472,000 for the
first quarter of 2000 compared to $83,000 for the same period.

         Average total investment securities decreased $28.5 million, or 31.0%,
to $63.3 million for the three months ended March 31, 2000 from $91.8 million
during the same period in 1999. The average yield on securities increased 52
basis points to 6.36% for the first quarter of 2000 from 5.84% for the same
period in 1999. The net result was a decrease in interest on securities of
$315,000 to $1.0 million for the first quarter of 2000 compared to $1.3 million
for the same period in 1999.

         Average loans increased $34.4 million, or 27.0%, to $162.0 million for
the three months ended March 31, 2000 from $127.6 million during the same period
in 1999. While the volume of loans increased substantially, the benefit was
partially offset by a decline in the yield on loans of 34 basis points to 8.83%
for the first quarter of 2000 from 9.17% for the same period in 1999. The net
result was an increase in interest on loans of $691,000 to $3.6 million for the
first quarter of 2000 compared to $2.9 million for the same period in 1999.

         Average convertible notes decreased $279,000, or 29.1%, to $679,000 for
the three months ended March 31, 2000 from $958,000 during the same period in
1999.

         Average securities sold under agreements to repurchase decreased to
zero for the three months ended March 31, 2000 from $8.8 million during the same
period in 1999. These borrowings were used primarily in the first quarter of
1999 to temporarily fund asset growth. The result of not borrowing in the first
quarter of 2000 was a decrease in interest expense of $109,000 compared to the
same period in 1999.







                                       12


<PAGE>




         The following tables present the distribution of average assets,
liabilities and shareholders' equity as well as the total dollar amount of
interest income from average interest-earning assets and resultant yields, and
the dollar amounts of interest expense and average interest-bearing liabilities,
expressed both in dollars and rates for the three months ended March 31, 2000
and 1999.

<TABLE>
<CAPTION>


                                                                           THREE MONTHS ENDED MARCH 31,
                                                              2000                                  1999
                                             ----------------------------------------    ---------------------------------------

                                                AVERAGE     YIELD/                          AVERAGE    YIELD/
(in thousands)                                  BALANCE      RATE           INTEREST        BALANCE     RATE           INTEREST
                                                -------      ----           --------        -------     ----           --------

Assets
Interest-earning assets:
<S>                                        <C>              <C>       <C>           <C>               <C>       <C>
   Securities                              $       63,308      6.36 %    $     1,007   $       91,809    5.84 %    $      1,322
   Loans(1)                                       162,007      8.83            3,575          127,615    9.17             2,884
   Federal funds sold                              32,766      5.77              472            7,069    4.78                83
   Interest-earning deposits - banks                  421      4.97                5            1,400    9.11                32
                                             ------------                   --------        ---------                 ---------
        Total interest-earning assets             258,502      7.83            5,059          227,893    7.69             4,321
                                             ------------                   --------        ---------                 ---------
Deferred loan fees                                  (193)                                       (204)
Allowance for loan losses                         (5,998)                                     (1,873)
Noninterest-earning assets:
   Cash and due from banks                         26,737                                      23,864
   Premises and equipment                           1,114                                       1,440
   Other assets                                     9,083                                       6,021
                                             ------------                                ------------
        Total assets                       $      289,245                              $      257,141
                                             ============                                ============

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
   Interest-bearing demand deposits        $       14,300      0.69  %   $        25   $       13,716    0.76   %  $         26
   Savings and money market deposits               98,301      2.03              499           80,617    1.99               396
  Time deposits under $100,000                      6,505      3.93               64            8,699    4.32                93
  Time deposits of $100,000 and over               38,794      4.23              410           19,776    4.28               208
   Convertible notes                                  679      6.71               11              958    7.10                17
   Repurchase agreements                                -         -                -            8,784    5.02               109
                                             ------------                   --------        ---------                 ---------
        Total interest-bearing                    158,579      2.55            1,009          132,550    2.60               849
           liabilities                       ------------                   --------        ---------                 ---------


Noninterest-bearing liabilities:
   Noninterest-bearing demand deposits            113,632                                      95,602
   Other liabilities                                1,891                                       3,078
   Shareholders' equity                            15,143                                      25,911
                                             ------------                                ------------
        Total liabilities and              $      289,245                              $      257,141
          shareholders' equity               ============                                ============

Interest income as a percentage of
average
   Earning assets                                              7.83  %                                   7.69   %
Interest expense as a percentage of
average
   Interest-bearing liabilities                                2.55  %                                   2.60   %
Net interest margin and income                                 6.27  %   $    $4,050                     6.18   %  $     $3,472
                                                                              ======                                     ======


<FN>
(1) Nonaccrual loans are included in average balances and rate calculations.
</FN>
</TABLE>



                                       13


<PAGE>





         The Company's net interest income is affected by changes in the amount
and mix of interest-earning assets and interest-bearing liabilities, referred to
as "volume change." It is also affected by changes in yields earned on
interest-earning assets and interest rates paid on interest-bearing deposits and
other borrowed funds, referred to as a "rate change." The following table sets
forth changes in interest income and interest expense for each major category of
interest-earning assets and interest-bearing liabilities, and the amount of
change attributable to volume and rate changes for the three months ended March
31, 2000 and 1999. The changes due to both rate and volume have been allocated
to rate and volume in proportion to the relationship between their absolute
dollar amounts.

<TABLE>
<CAPTION>

                                                     THREE MONTHS ENDED                   THREE MONTHS ENDED
                                                        MARCH 31, 2000                      MARCH 31, 1999

(in thousands)                                 VOLUME         RATE       TOTAL        VOLUME         RATE       TOTAL
                                               ------         ----       -----        ------         ----       -----
<S>                                        <C>         <C>          <C>           <C>         <C>          <C>
Increase (decrease) in interest income:
     Securities                            $     (443)  $      129   $    (314)    $      99  $      (62)  $       37
     Loans                                        760          (71)        689           572        (163)         409
     Federal funds sold                           367           22         389          (136)        (27)        (163)
     Interest-bearing deposits - banks            (16)         (10)        (26)           24           5           29
                                              --------    --------     ------        -------     --------     -------
                                           $      668  $        70   $     738           559        (247)         312
                                              --------    --------     ------        -------     --------     -------


Increase (decrease) in interest expense:
     Interest-bearing demand deposits      $        1  $        (2)  $     (1)    $        -  $       (6)  $      (6)
     Savings and money market deposits             88            2         90              1         (15)        (14)
     Time deposits under $100,000                 (25)           8        (17)            13          (6)          7
     Time deposits of $100,000 and over           201            -        201            (34)        (19)        (53)
     Convertible notes                             (5)           -         (5)           (78)        (14)        (92)
     Repurchase agreements                        (54)         (54)      (108)           106            -        106
                                              --------    --------     ------        -------     --------     -------
                                                  206          (46)       160              8         (60)        (52)
                                              --------    --------     ------        -------     --------     -------
Increase (decrease) in net interest        $      462    $     116    $   578     $      551    $   (187)  $     364
  income                                     ========     ========     ======        =======     ========     =======


</TABLE>



                                       14



<PAGE>




PROVISION FOR LOAN LOSSES

         The provision for loan losses is determined by management based upon
the Company's loan loss experience, the performance of loans in the Company's
portfolio, the quality of loans in the Company's portfolio, evaluation of
collateral for such loans, the economic conditions affecting collectibility of
loans, the prospects and financial condition of the respective borrowers or
guarantors and such other factors which in management's judgment deserve
recognition in the estimation of probable loan losses. In addition, regulatory
agencies, as an integral part of their examination process, periodically review
the Bank's allowance for loan losses. Such agencies may require the Bank to
recognize additions to the allowance or to take charge-offs (reductions in the
allowance) in anticipation of losses.

         The Company recorded provisions for loan losses of $1.1 million and
$125,000 for the three month period ended March 31, 2000 and 1999, respectively.
The provision for loan loss for the first quarter of 2000 was due primarily to
the deterioration of two loans and a general increase in the allowance for loan
losses. Net recoveries to average outstanding loans for the first three months
of 2000 and 1999 were 0.01% and 0.03%, respectively.

OTHER OPERATING INCOME

         For the three months ended March 31, 2000, other operating income
totaled $450,000 compared with $516,000 for the same period in 1999. The
decrease was primarily related to a $50,000 reduction in mortgage brokering fees
on a comparative basis, for the periods presented.

OTHER OPERATING EXPENSE

         Other operating expenses for the first three months of 2000 increased
to $3.4 million from $3.3 million for the same period in 1999. The increase
primarily occurred in salaries and other employee benefits and legal fees.

         Salaries and other employee benefits increased approximately $142,000
to $1.8 million for the first three months of 2000 from $1.7 million for the
same period in 1999. The increase primarily relates to an increase in staff and
salaries and increased group health insurance expenses. Legal fees and
audit/accounting fees increased $47,000 during the first three months of 2000 as
compared to the same period in 1999, primarily due to an increase of $38,000 in
legal expenses related to lending activities. Legal expenses related to the
workout of problem loans may be recovered after the loan is fully paid.

INCOME TAXES

         For the three months ended March 31, 2000, there was no provision for
income taxes compared to $233,000 for the same period in 1999.







                                       15




<PAGE>




BALANCE SHEET ANALYSIS

INVESTMENT SECURITIES

         The Company reported total investment securities of $63.5 million at
March 31, 2000. This represented a decrease of $257,000, or 0.4% from $63.7
million at December 31, 1999.

         Securities available-for-sale increased $424,000, or 0.9%, to $45.9
million at March 31, 2000. The unrealized loss on securities held-for-sale was
$2.9 million at the end of the first quarter. The following table sets forth the
amortized cost and fair value of securities available-for-sale as of March 31,
2000 and December 31, 1999.

<TABLE>
<CAPTION>
                                                                           MARCH 31, 2000
                                                 -----------------------------------------------------------------

                                                                      GROSS            GROSS
                                                   AMORTIZED       UNREALIZED       UNREALIZED            FAIR
(in thousands)                                        COST            GAIN             LOSS              VALUE
--------------                                        ----            ----             ----              -----

<S>                                         <C>              <C>             <C>             <C>
U.S. Government securities                     $          1,291 $             - $              1 $          1,290
U.S. Government agency and
   mortgage-backed securities                            36,737               -            2,122           34,615
Small Business Administration securities                    636               -               10              626
Municipal securities                                      2,551               -              175            2,375
Federal Reserve Bank Stock                                  439               -               18              421
Collateralized mortgage obligations                       7,152               -              531            6,622
                                                 --------------   -------------  ---------------   --------------
        Total                                  $         48,806  $            -  $         2,857 $         45,949
                                                 ==============  ===============    ============= ===============

                                                                        DECEMBER 31, 1999
                                                 -----------------------------------------------------------------
                                                                      GROSS            GROSS
                                                   AMORTIZED       UNREALIZED       UNREALIZED           FAIR
(in thousands)                                        COST            GAIN             LOSS             VALUE
--------------                                        ----            ----             ----             -----

U.S. Government securities                     $             -  $             -  $             - $              -
U.S. Government agency and
   mortgage-backed securities                            37,393               -            1,924           35,469
Small Business Administration securities                    647               -               16              631
Municipal securities                                      2,551               -              173            2,378
Federal Reserve Bank Stock                                  439               -                -              439
                                                         7,157                -              549            6,608
                                                 -------------    --------------  --------------   --------------
        Total                                  $        48,187   $            -  $         2,662 $         45,525
                                                 =============    ==============  ==============   ==============
</TABLE>


         During the three months ended March 31, 2000, no securities
available-for-sale were sold. Also, during the first quarter, $1.3 million in U.
S. treasury bills were purchased with a maturity date of June 6, 2000 and a
yield of 5.77%.






                                       16
<PAGE>


         Securities held-to-maturity decreased $681,000, or 3.7%, to $17.5
million at March 31, 2000, from $18.2 million at December 31, 1999. The
amortized cost and fair value of securities held-to-maturity as of March 31,
2000, and December 31, 1999 are as follows:


<TABLE>
<CAPTION>


                                                                          MARCH 31, 2000
                                                 -----------------------------------------------------------------
                                                                      GROSS            GROSS
                                                   AMORTIZED       UNREALIZED       UNREALIZED          FAIR
(in thousands)                                        COST            GAIN             LOSS            VALUE
--------------                                        ----            ----             ----            -----

<S>                                           <C>              <C>              <C>              <C>
U.S. Government securities                     $          3,029 $             -  $            29  $         3,000
U.S. Government agency securities                         1,750               -               30            1,720
U.S. Government agency
   mortgage-backed securities                            12,740              26              255           12,511
                                                  -------------    -------------    ------------   ---------------
        Total                                  $         17,519 $            26  $           314   $       17,231
                                                  =============    =============    ============   ===============

                                                                        DECEMBER 31, 1999
                                                 -----------------------------------------------------------------

                                                                      GROSS            GROSS
                                                   AMORTIZED       UNREALIZED       UNREALIZED          FAIR
(in thousands)                                        COST            GAIN             LOSS            VALUE
--------------                                        ----            ----             ----            -----

U.S. Government securities                     $         3,032 $            10  $           25  $         3,017
 U.S. Government agency securities                       1,750               -              31            1,719
U.S. Government agency                                       -               -               -                -
   mortgage-backed securities                           13,418                             253           13,165
                                                 -------------    ------------    ------------    -------------
        Total                                  $        18,200  $           10  $          309  $        17,901
                                                 =============    ============    ============    =============

</TABLE>



                                       17


<PAGE>



LOANS

         The following table sets forth the amount of loans outstanding by
category and the percentage of each category to the total loan portfolio.

<TABLE>
<CAPTION>

                                                     MARCH 31, 2000             DECEMBER 31, 1999
                                                     ---------------            -------------------
         (in thousands)                        AMOUNT     % OF TOTAL          AMOUNT    % OF TOTAL
                                               ------     ----------          ------    ----------

<S>                                        <C>                <C>       <C>               <C>
         Commercial                        $     119,115        76.60 %   $     124,403     76.52%
         Real estate secured                      28,358        18.24            27,538     16.94
                                              ----------       -------     ------------     ------
                                                 147,473        94.84           151,941     93.46
         Equity lines of credit                    3,614         2.32             4,330      2.66
         Other lines of credit                     2,920         1.88             4,689      2.88
         Installment                               1,502          .96             1,608      1.00
                                              ----------       -------     ------------    ------
         Gross loans                             155,509       100.00 %         162,568    100.00  %

         Less:
              Allowance for loan losses           (6,984)                        (5,873)
              Deferred loan fees, net
                                              ----------       -------     ------------    ------
                                                    (186)                          (211)
                                              -----------                  ------------
        Net loans                         $      148,339                        156,484
                                              ===========                  ============


</TABLE>


         Gross loans outstanding decreased by $7.0 million, or 4.34 %, to $155.5
million at March 31, 2000 compared to $162.6 at December 31, 1999. The table
above indicates that the loan portfolio mix at March 31, 2000 was substantially
the same as December 31, 1999.


         Commercial loans consist primarily of short to medium term financing
for small to medium sized health care-related companies and professionals
located in Southern California. The commercial loans are primarily concentrated
in the same sectors of the medical community from which the Company's deposit
base is drawn and consists of medical practitioners, small groups practices,
large single-specialty groups, multi-specialty medical groups and other
outpatient health care service companies. Approximately 77% of gross loans at
March 31, 2000 and December 31, 1999 were commercial loans which were unsecured
or collateralized by various business and personal property assets, including
equipment and accounts receivable, contracts, and the proceeds thereof,
including capitation payments. As a matter of policy, the Company's commercial
loan borrowers are required to submit financial statements and other financial
data (for example, accounts receivable agings and enrollment summaries) on a
periodic basis, in conformity with loan policies and procedures and regulatory
guidelines, to loan officers for their review in monitoring the financial
position and cash flow trends of borrowers. Under this policy, management
generally gives a higher level of attention to borrowers failing to submit the
required financial information. Senior lending officers review delinquency
reports, overdrafts, borrowers' payment histories and periodic financial data to
monitor creditworthiness and identify potential problem loans.

         In accordance with management's credit administration and regulatory
policy, loans are placed on nonaccrual status when the collection of principal
or interest is questionable. Generally, this means that loans are placed on
nonaccrual status when interest is 90 days or more past due, unless the loan is
well secured and in the process of collection or in the process of renewal.
Nonperforming loans and nonperforming assets do not include accruing loans 90
days or more past due where loan quality is not impaired, but rather the renewal
in process is pending receipt of the borrower's updated financial information.

         Credit administrative policies discourage the use of "short-term"
extensions while awaiting receipt of updated financial packages from borrowers.
The policy is aimed at facilitating timely credit renewals. However, as a result
of this policy, aggregate "past due" volumes will not necessarily be correlative
to absolute asset quality measurement.




                                       18
<PAGE>



         The following table sets forth information about nonperforming assets
(which include nonaccrual loans, other real estate owned and other repossessed
assets), accruing loans 90 days or more past due, and certain ratios.


<TABLE>
<CAPTION>

                                                                       MARCH 31,            DECEMBER 31,
       (in thousands)                                                    2000                  1999
                                                                         ----                  ----
<S>                                                            <C>                  <C>
       Nonperforming loans                                        $         9,884      $           8,412
       Other real estate owned (OREO)                                           -                      -
       Other repossessed assets                                                 -                      -
                                                                    -------------          -------------
            Total nonperforming assets                           $          9,884      $           8,412
                                                                   ==============          =============

       Accruing loans 90 days or more past due                    $         7,372                  2,891
                                                                    =============          =============

       Allowance for loan losses as a percent of nonperforming
       loans                                                                70.66  %              69.82 %
       Nonperforming loans to gross loans(1)                                 6.36  %               5.17 %
       Nonperforming assets(1)
            to gross loans                                                   6.36  %               5.17 %
            to gross loans, OREO and repossessed assets                      6.36  %               5.17 %
            to total assets                                                  3.43  %               3.08 %


<FN>
(1) Nonperforming loans and nonperforming assets do not include
    accruing loans 90 days or more past due.
</FN>
</TABLE>

         Nonperforming loans increased to $9.9 million at March 31, 2000 from
$8.4 million at December 31, 1999. This increase was primarily due to a single
borrower being placed on nonaccrual status during the first quarter of 2000.


         The $7.4 million in accruing loans over 90 days or more past due and
still accruing as of March 31, 2000 were all in the process of being collected,
renewed, paid off or the credit quality was not impaired. Of the $2.9 million in
accrual loans over 90 days or more past due at December 31, 1999 one loan for
$1.5 million remained in the category at March 31, 2000. Two additional large
loans totaling $5.1 million were included in this category at March 31, 2000.
Subsequent to March 31, 2000 one loan for $2.3 million was renewed and is
current. The two other loans totaling $4.3 million have been placed on
nonaccrual status. It is the Company's practice to discourage "short-term"
extensions, these loans are carried as "past due" to ensure proper underwriting
and administrative controls.


ALLOWANCE FOR LOAN LOSSES

         Management's determination of the allowance for loan losses requires
the use of estimates and assumptions related to the actual and inherent risks in
the loan portfolio. Actual results may, however, differ significantly from such
estimates. In connection with the determination of the allowance for loan losses
where real estate secures the loan, management generally obtains independent
appraisals for all properties. Management believes its current appraisal policy
conforms to regulatory guidelines.

         An evaluation of the overall quality of the portfolio is performed at
least quarterly to determine the level of the allowance for loan losses. This
evaluation takes into consideration the classification of loans and the
application of loss estimates attributable to these classifications. The Company
classifies loans as pass, watch, special mention, substandard, doubtful, or loss
based on classification criteria believed by management to be consistent with
the criteria applied by regulatory agencies and consistent with sound banking
practices.



                                       19


<PAGE>


         These classifications and loss estimates take into consideration all
sources of repayment, underlying collateral, the value of the collateral,
current and anticipated economic conditions, trends and uncertainties and the
historical accuracy of specific reserves attached to loans with serious
perceived weakness.

         Additionally, the Company utilizes "migration analysis" as another
means to assist management in estimating the level of the allowance for loan
losses. Migration analysis is a statistical method that examines historic
charge-off and classification trends prior to charge-off to estimate potential
losses inherent in the loan portfolio. In addition, the Company utilizes a
comprehensive program that considers numerous variables, of which migrations is
one, to determine the adequacy of the allowance for loan losses for reserves
nonspecific to certain credits.

         This program is consistent with the methodologies in Banking Circular
201. Amongst others, considerations is given to historical and current trends in
past due loans, charged-off loans, nonaccruals, and the nature and mix of the
loan portfolio; local, regional, industry, and national economic trends in
determining loan loss adequacy. Finally, credit administration, corresponding
loan polices and procedures, and timely problem loan identification are integral
to the sound determination of the allowance for loan losses. Based on
information available at March 31, 2000, management believes that a $7.0 million
allowance for loan losses, which constitutes 4.49% of gross loans, was adequate
as an allowance against probable and estimable losses.

         While the Company's policy is to charge-off in the current period those
loans for which a loss is considered probable, there also exists the risk of
future losses which cannot be precisely quantified or attributed to particular
loans. As this risk continually changes in response to factors beyond the
control of the Company, such as the state of the economy, management's judgement
as to the adequacy of the allowance for loan losses in future periods, while
approximate, is in part based on a reasonable methodology. In addition, various
regulatory agencies, as an integral part of their examination process, review
the Company's allowance for loan losses. Such agencies may require the Bank to
record additions or deletions to the allowance based on their judgements of
information available to them at the time of their examination.
















                                       20


<PAGE>

         The following table provides a summary of the Company's allowance for
loan losses and charge-off and recovery activity during the three months ended
March 31, 2000, and the three months ended March 31, 1999:

<TABLE>
<CAPTION>


                                                                           PERIOD ENDED
                                                                           ------------

                                                                   MARCH 31,           MARCH 31,
   (in thousands)                                                    2000                1999
                                                                     ----                ----

<S>                                                          <C>               <C>
   Balance at beginning of period                            $          5,873  $           2,200
   Provision for loan losses                                            1,093                125
                                                               --------------     --------------
                                                                        6,966              2,325
                                                               --------------     --------------
   Loan charge-offs                                                       276                 15
   Recoveries on loans previously charged-off                            (294)               (50)
                                                               --------------     --------------
      Net charge-offs (recoveries)                                        (18)               (35)
                                                               --------------     --------------
   Balance at end of period                                  $          6,984              2,360
                                                               ==============     ==============
   Gross loans outstanding at end of period                  $        155,509  $         133,818
   Average gross loans outstanding during period                      162,007            127,615

   Net charge-offs (recoveries) to average gross loans
   outstanding                                                             -  %            -0.30 %
   Allowance for loan losses:
        to gross loans                                                   4.49 %             1.76 %
        to nonperforming loans(1)                                       70.66 %            97.40 %
        to nonperforming assets(1)                                      70.66 %            87.57 %

<FN>
   (1) Nonperforming loans and nonperforming assets do not include accruing
   loans 90 days or more past due.
</FN>
</TABLE>

         The allowance for losses on loans was $7.0 million at March 31, 2000,
an increase of $1.1 million from at December 31, 1999. The increase was
primarily due to the deterioration of two loans and an increase in the provision
for loan losses relating to identified weaknesses in a small number of loans, of
substantial dollar amounts, which may take an extended period of time to
resolve.

         Net loan recoveries for the three months ended March 31, 2000 amounted
to $18,000, as compared to $35,000 for the same period in 1999.


         Management considers a loan to be impaired when, based upon available
information and current events, it believes that it is probable the Company will
be unable to collect all amounts due on a timely basis in accordance with the
contractual terms of the loan agreement. Impairment of a loan is measured by the
present value of expected future cash flows discounted at the loan's effective
interest rate, the loan's observable market price, or the fair value of the
collateral if the loan is collateral dependent. Impairment is recognized by the
establishment of a valuation allowance equal to the excess of the Company's
recorded investment in the loan over its measured value.

         The Company had $10.9 million in impaired loans as of March 31, 2000.
The carrying value of impaired loans for which there is a related allowance for
loan losses was $4.5 million, with the amount of specific allowance for loan
losses allocated to these loans of $2.2 million. There was $6.4 million in
impaired loans for which there were a general allowance allocated consistent
with the Company's allowance for loan loss methodology. The average recorded
investment in impaired loans during the first three months of 2000 was
approximately $9.8 million and there was no income recorded utilizing either the
cash basis and accrual basis method of accounting. Impaired loans at March 31,
2000 included $9.8 million of nonaccrual loans.



                                       21

<PAGE>


         The Company had approximately $8.7 million in impaired loans as of
December 31, 1999. The carrying value of impaired loans for which there is a
related allowance for loan losses was $414,000, with the amount of specific
allowance for loan losses allocated to these loans of $134,000. There were $8.3
million in impaired loans for which there was no related specific allowance for
loan losses. The average recorded investment in impaired loans during 1999 was
$4.4 million and there was no income recorded utilizing either the cash basis or
accrual basis method of accounting. Impaired loans at December 31, 1999,
included $8.4 million of nonaccrual loans.

DEPOSITS

         Total deposits at March 31, 2000 were $270.5 million, an increase of
$14.5 million or 5.7% from $256.0 at December 31, 1999. The Company attracts
deposits primarily from individuals and businesses related to the health care
services industry, as well as other professionals and professional services
firms. The Company has no brokered deposits and the Company's practice is to not
purchase brokered deposits.

         The following table sets forth the amount of deposits by category and
the percentage of each category to total deposits as of March 31, 2000 and
December 31, 1999:


<TABLE>
<CAPTION>

                                 MARCH 31, 2000

                            DECEMBER 31, 1999
 (in thousands)                                   AMOUNT      % OF TOTAL                 AMOUNT      % OF TOTAL
                                                  ------      ----------                 ------      ----------

<S>                                     <C>                   <C>           <C>                      <C>
Demand, noninterest-bearing                $      115,130        42.55  %      $         109,561         42.79 %
Demand, interest-bearing                           15,787          583                    16,033          6.26
Savings deposits                                   14,811         5.47                    12,606          4.92
Money market deposits                              79,233        29.29                    72,177         28.19
Time deposits under $100,000                        7,400         2.74                     7,222          2.82
Time deposits of $100,000 and over                 38,183        14.12                    38,429         15.02
                                             ------------   -----------             ------------   -----------
                                           $      270,544       100.00  %      $         256,028        100.00 %
                                             =============  ===========            =============   ===========

</TABLE>

          At March 31, 2000 and December 31, 1999, there was a $12.8 million
time deposit which was collateral for a loan of the same amount. The loan was
paid off with this deposit in April, 2000.

CAPITAL

         The Office of the Comptroller of the Currency (the "OCC"), the Bank's
primary regulator, has established minimum leverage ratio guidelines for
national banks. These guidelines provide for a minimum Tier 1 capital leverage
ratio (Tier 1 capital to adjusted average total assets) of 3.0% for national
banks that meet certain specified criteria, including having the highest
regulatory rating. All other national banks will generally be required to
maintain a minimum Tier 1 capital leverage ratio of 3.0% plus an additional
cushion of 100 to 200 basis points.

         The Federal Reserve Bank, as Bancorp's primary regulator, has similarly
established minimum leverage ratio guidelines for bank holding companies. These
guidelines also provide for a minimum Tier 1 leverage ratio of 3.0% for bank
holding companies that meet certain specified criteria, including having the
highest regulatory rating. All other bank holding companies will generally be
required to maintain a minimum Tier 1 capital leverage ratio of 3.0% plus an
additional cushion of 100 to 200 basis points.

         Federal banking agencies risk-based capital standards were implemented
on December 31, 1992. Since December 31, 1992, banking organizations have been
expected to meet a minimum ratio for qualifying total capital to risk-weighted
assets of 8.0%, 4.0% of which must be Tier 1 capital. A banking organization's
risk-based capital ratios are obtained by dividing its qualifying capital by its
total risk-adjusted assets and risk-weighted off-balance sheet items.


                                       22


<PAGE>


         The Federal Deposit Insurance Act of 1991 contains "prompt corrective
action" provisions pursuant to which insured depository institutions are to be
classified into one of five categories based primarily upon capital adequacy,
ranging from "well-capitalized" to "critically undercapitalized" and which
require, subject to certain exceptions, the appropriate federal banking agency
to take prompt corrective action with respect to an institution which becomes
"undercapitalized" and to take additional actions if the institution becomes
"significantly undercapitalized" or "critically undercapitalized."

         The following table presents the capital ratios for the Company and the
Bank, compared with the standards for "well-capitalized" depository institutions
(which standards do not apply to bank holding companies) and the minimum
required capital ratios to be deemed "adequately capitalized" under applicable
federal regulations, as of March 31, 2000.

<TABLE>
<CAPTION>
                                                                                                       TO BE WELL
                                                                                                    CAPITALIZED UNDER
                                                                      FOR CAPITAL                   PROMPT CORRECTIVE
                                        ACTUAL                     ADEQUACY PURPOSES                ACTION PROVISIONS
                                ------------------------       --------------------------    ---------------------------------
(in thousands)                      AMOUNT      RATIO              AMOUNT       RATIO               AMOUNT       RATIO
                                    ------      -----              ------       -----               ------       -----
COMPANY
<S>                        <C>                  <C>       <C>                    <C>        <C>                    <C>
Leverage (1)                  $       14,983       5.23 %    $      11,449         4.00  %   $       14,311         5.00  %
Tier 1 Risk-Based                     14,983       9.25 %            6,479         4.00  %            9,718         6.00  %
Total Risk-Based                      17,748      10.96 %           12,958         8.00  %           16,197        10.00  %

BANK
Leverage                              13,822       4.85 %           11,407         4.00  %           14,259         5.00  %
Tier 1 Risk-Based                     13,822       8.55 %            6,466         4.00  %            9,698         6.00  %
Total Risk-Based                      15,889       9.83 %           12,931         8.00  %           16,164        10.00  %

<FN>
(1) The minimum required by the FRB is 3%; for all but the most highly rated bank
    holding companies, the FRB expects a leverage ratio of 3% plus 100 to 200 basis
    points.
</FN>
</TABLE>

         As the Bank's principal regulator, the OCC examines and evaluates the
financial condition, operations and policies and procedures of nationally
chartered banks on a regular basis as part of its legally prescribed oversight
responsibilities. The OCC conducted an examination of the Bank in 1999 and
determined that the Bank required special supervisory attention. To implement
this corrective action, the OCC and the Bank entered into a formal agreement
("Formal Agreement") on March 22, 2000.

         Pursuant to the Formal Agreement, the Bank is required to: maintain
certain regulatory capital levels; appoint a full time president and a full time
senior lending officer; establish a loan workout department; implement an
overdraft policy; improve the management of the loan portfolio; establish an
independent loan review system; immediately take action to protect the Bank's
interest in criticized assets; establish an organizational structure with clear
lines of authority for the CEO and President; develop a conflict of interest
policy which includes relationships with officers, directors and consultants;
develop a three year strategic plan; develop a profit plan to improve and
sustain earnings and a capital plan to meet and maintain a well capitalized
regulatory requirements. The agreement also establishes a schedule for
compliance and requires additional regulatory reporting by the Bank.

         In early November, the Board hired Gene Gaines as Chief Executive
Officer of the Bank; and effective February 1, 2000, Mr. Gaines was also
appointed as the full time President and Chairman of the Board of the Bank and
the Chairman of the Board and the Chief Executive Officer of the Company.
Following that hiring, current management and the Boards of the Company and the
Bank have implemented significant changes to the policies and organization of
the Bank and the Company. In early December 1999, the Bank established a loan
workout department and hired a senior vice president to review, develop and
implement loan workout policies. In February, 2000, The Bank hired a full time
Senior Lending Officer.



                                       23


<PAGE>


         On February 15, 2000, the credit administration department revised and
implemented certain policies regarding extensions of credit. On March 1, 2000,
the Board revised the Bank's organizational structure to clarify the roles and
responsibilities of the Bank's CEO and its President. On March 6, 2000, the
Board authorized the 30-day notification for termination of the consulting
agreement with Network Health Financial Services, Inc.

         In connection with the Formal Agreement, the Bank is preparing
additional organizational and policy revisions, is hiring a permanent senior
lending officer and is revising and expanding the Bank's loan portfolio
management program. As a further commitment in its Formal Agreement, the Bank is
developing and implementing a three-year strategic plan as well as profit and
capital plans. These efforts are intended to meet the OCC's requirement that the
Bank achieve the "well-capitalized" standard by September 30, 2000.

         The Formal Agreement requires the Bank to achieve by September 30, 2000
and to maintain (i) a capital leverage ratio equal to at least 5%, (ii) Tier 1
capital to risk weighted assets ratio equal to at least 6%, and (iii) a total
capital to risk weighted assets of at least 10%.

         The following table sets forth the capital ratio for the Bank as of
March 31, 2000 and the required ratios by September 30, 2000:
<TABLE>
<CAPTION>


                                                                   REQUIRED BY THE
                                                                       FORMAL                         EXCESS
                                           ACTUAL                     AGREEMENT                    (DEFICIENCY)
                                 ------------ ---------         ----------- ----------        ------------ ----------
(In thousands)                      AMOUNT        RATIO            AMOUNT      RATIO             AMOUNT       RATIO
                                 ------------ ---------         ----------- ----------        ------------ ----------
<S>                           <C>                 <C>       <C>                 <C>      <C>                 <C>
Leverage                      $       13,822       4.85      $       14,259      5.00     $         (437)       -0.15
Tier 1 Risk Based                     13,822       8.55               9,698      6.00               4,124        2.55
Total Risk Based                      15,889       9.83              16,164     10.00               (275)       -0.17
</TABLE>


         The Company and the Bank, at March 31, 2000, were considered
"adequately-capitalized". Capital requirements of the federal banking
regulators, however, could limit the Company's future growth if the Company were
to rely solely on the retention of earnings to generate additional capital or
rapid growth.

         As the Company's principal regulator, the Federal Reserve Bank of San
Francisco ("FRB") examines and evaluates the financial condition, operations and
policies and procedures of bank holding companies on a regular basis as part of
its legally prescribed oversight responsibilities. The FRB conducted an
examination of the Company in 2000 and determined that the Company required
special supervisory attention. To implement this corrective action, the FRB and
the Company entered into a Memorandum of Understanding ("MOU") on April 26,
2000.

         Pursuant to the MOU, the Company is required to: obtain prior approval
for dividend declarations or payments, increasing any borrowing or incurring any
debt, repurchasing any of its stock, engaging in new lending activities,
engaging in any new line of business, appoint a new director, or hiring or
promoting any new senior executive officer; submit an acceptable capital plan to
improve and maintain required capital levels and submit an acceptable plan to
enhance the board's supervision of operations and management of the consolidated
organization, including the policies and procedures related to credit
administration. The agreement also establishes a schedule for compliance and
requires additional regulatory reporting by the Company.

          On May 29, 1998, the Company gave notice of its' call for partial
redemption of $2,625,000 principal amount of the Professional Bancorp, Inc.,
8.50% Convertible Subordinated Reset Notes due March 1, 2004. As a result of
this call, approximately $2,552,000 of the notes converted to 200,955 shares of
common stock and $73,000 in notes were redeemed by the June 30, 1998 redemption
date. For the first three months ended March 31, 2000, no notes were converted
into shares of common stock. The principal balance of notes outstanding at March
31, 2000 were $679,000.



                                       24


<PAGE>

          LIQUIDITY

          The Company's primary source of liquidity is dividends from the Bank.
Dividends from the Bank to the Company are subject to certain regulatory
restrictions. Under federal banking law, dividends declared by the Bank in any
calendar year may not, without the approval of the OCC, exceed its net earnings,
as defined, for that year combined with its retained net earnings for the
proceeding two years.

          The Bank's primary sources of liquidity are federal funds sold to
other banks and the investment securities portfolio. For the three months ended
March 31, 2000, federal funds sold averaged $32.8 million, compared to $7.1
million for the same period in 1999. In addition, securities in the
available-for-sale portfolio can be sold in response to liquidity needs or used
as collateral under reverse repurchase agreements. Securities held-to-maturity
are available for liquidity needs primarily as collateral for reverse repurchase
agreements. The fair value of securities available-for-sale and securities
held-to-maturity at March 31, 2000, were $45.9 million and $17.2 million,
respectively.

          The Bank sells securities under agreements to repurchase. Securities
sold under repurchase agreements are recorded as short-term obligations. During
the first three months of 2000, there were no securities sold under agreements
to repurchase.

          On a stand-alone basis, the Company's primary source of liquidity is
dividends from the Bank. Dividends by the Bank to the Company are subject to
regulatory restrictions. At March 31, 2000, the Company had cash of $432,000.
Under applicable law, the Bank cannot currently, and for the next several years
will probably not be able to, pay dividends to the Company with out the prior
approval of the OCC. No assurance can be given that the OCC will permit the
payment of dividends and the refusal to do so may require the Company to look to
other sources of liquidity such as borrowings or the issuance of various types
of securities.


          YEAR 2000

         The Year 2000 issue presented a very real and significant challenge to
the Company, along with the entire financial services industry. This problem had
the potential to affect a wide range of systems and equipment, including
software and hardware, utilities, communications platforms and devices, and
facilities. The Year 2000 issue is the result of computer programs being written
using two digits rather than four to represent the calendar year. Software so
developed and not corrected could have produced inaccurate or unpredictable
results when dates change in the year 2000. Such occurrences could have had a
material adverse effect on the Company's financial condition, results of
operations, or business as the Company, like most financial organizations, was
significantly subject to the potential Year 2000 issues due to the nature of
financial information.

         Management had successfully developed and implemented a Year 2000
Preparedness Plan. There is no known impact on the Company related to the Year
2000 issue. The Company will continue to monitor and test systems for each new
century date milestone, including October 1, 2000.



                                       25



<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         INTEREST RATE SENSITIVITY

         The table below provides information about the Company's derivative
financial instruments and other financial instruments that are sensitive to
changes in interest rates, including interest rate swaps. Investment securities
and loans are presented based upon contractual maturity and related weighted
average interest rates by expected maturity dates. The information is presented
in US dollar equivalents, which is the Company's reporting currency.


<TABLE>
<CAPTION>

                                                                                                         THERE                FAIR
                                          2000         2001        2002         2003        2004        AFTER       TOTAL     VALUE
                                          ----         ----        ----         ----        ----        -----       -----     -----
                                                                                    (U.S. $ EQUIVALENT IN THOUSANDS)
 ASSETS (1)

<S>                                <C>          <C>         <C>          <C>        <C>           <C>          <C>         <C>
 SECURITIES
   U.S. government securities
           Fixed                    $    1,291   $    1,010  $            $    2,019  $       -     $      -     $ 4,320     $ 4,289

               Weighted average
                     interest rate        5.77   %     6.81  %                  5.89  %                             6.07   %

   U.S. government agency and
     mortgage-backed securities
           Fixed                             -            -           -        1,750        219       34,755      36,724      34,563
               Weighted average interest rate                                   5.65  %    7.02   %     6.44  %     6.18   %
           Variable                          -            -           -            -          -       14,503      14,503      14,284
               Weighted average interest rate                                                           5.97  %     5.97   %

 Municipal securities
            Fixed                            -            -           -            -          -        2,551       2,551       2,375
               Weighted average interest rate                                                           4.27  %     4.27   %
   Small Business Administration  securities
           Variable                          -            -           -            -          -          636         636         626
               Weighted average interest rate                                                           7.13  %     7.13   %
   Collateralized mortgage securities
           Fixed                             -            -           -            -          -        7,152       7,152       6,622
               Weighted average interest rate                                                           6.32  %     6.32   %
           Variable                          -            -           -            -          -            -           -           -
               Weighted average interest rate
   Federal Reserve Bank Stock
           Fixed                                          -           -            -          -          439         439         439
               Weighted average interest rate                                                           6.08  %     6.08   %

                                             -            -           -            -          -

 LOANS
           Fixed                         8,346       15,103       4,530        3,589      8,998        4,174      44,740      44,291
               Weighted average
                   interest rate          7.54   %     5.98  %     8.09   %     8.59  %    8.16   %     8.11  %     7.33   %

           Variable                     45,999       18,915      10,116        9,796     18,292        7,651     110,769    110,769
               Weighted average
                    interest rate         9.82   %    10.00  %    10.17   %    10.18  %   10.17   %     9.87  %     9.97   %


</TABLE>




                                       26



<PAGE>



         The table below provides information about the Company's derivative
financial instruments and other financial instruments that are sensitive to
changes in interest rates, including rate interest swaps. Certificates of
deposit and convertible notes are presented based upon contractual maturity and
related weighted average interest rates by expected maturity dates. For interest
rate swaps and caps, the table present notional amounts and weighted average
interest rates by contractual maturity dates. The information is presented in US
dollar equivalents, which is the Company's reporting currency.

<TABLE>
<CAPTION>

                                                                                                     THERE                    FAIR
                                         2000        2001         2002         2003       2004       AFTER       TOTAL        VALUE
                                         ----        ----         ----         ----       ----       -----       -----        -----
                                                                   (U.S. $ EQUIVALENT IN THOUSANDS)

 LIABILITIES (1)

 DEPOSITS
   Noninterest-bearing transaction
<S>                                     <C>      <C>          <C>         <C>       <C>       <C>      <C>           <C>
     accounts                           115,129  $         -  $       -   $      -  $      -  $       - $$   115,129  $  115,129
      Weighted average interest rate       0.00  %         -          -          -         -          -        0.00  %
   Interest-bearing transaction
         accounts                        15,787            -          -          -         -          -       15,787      15,787
      Weighted average interest rate       0.76  %         -          -          -         -          -         0.76  %
   Savings and money market accounts     94,044            -          -          -         -          -       94,044      94,044
      Weighted average interest rate       2.20  %         -          -          -         -          -         2.20  %
   Certificates of deposit and
         other time deposits
      Fixed                              43,873         1,710         -          -         -          -       45,583      45,666
      Weighted average interest rate       4.25  %       4.49         -          -         -          -         4.25  %

 CONVERTIBLE NOTES                            -           -           -          -         -        6.79         679         679
      Weighted average interest rate          -           -           -          -         -        8.09. %     8.09  %

 OFF-BALANCE SHEET ASSETS                     -           -           -          -         -          -          -           -
 ------------------------

<FN>
         (1) The Company used certain assumptions to estimate fair values and
expected maturities. For loans, expected maturities are contractual maturities
adjusted for estimated prepayments of principal based on market indicators.
Investment securities are at quoted market rates and stated maturities. For loan
fair value computations, the company used a discounted cashflow model with
discount rates based upon prevailing market rates for similar types of loans,
incorporating adjustments for credit risk. For deposit liabilities, fair values
were calculated using discounted cashflow models based on market interest rates
for different product types and maturity dates for which the deposits are held.
</FN>
</TABLE>

         EXCHANGE RATE SENSITIVITY

         All of the Company's derivative financial instruments and other
financial instruments are denominated in US dollars. The Company does not have,
or anticipate having, any foreign currency exchange rate exposure.

         COMMODITY PRICE SENSITIVITY

The Company does not have, or anticipate having, any derivative commodity
instruments.




                                       27
<PAGE>



                           PART II - OTHER INFORMATION




ITEM 1.  LEGAL PROCEEDINGS

         None.

ITEM 2.  CHANGES IN SECURITIES

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION

         Form 8-K filed on January 5, 2000, announcing the engagement of
         Moss Adams LLP as its Independent Auditors.







                                       28
<PAGE>



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

EXHIBIT NO.
-----------

      3.1         Articles of Incorporation (filed as Exhibit 3.3 to the
                  Company's 1989 10-K Report and incorporated herein by this
                  reference).

      3.2         Amendment to Articles of Incorporation, dated September 8,
                  1992 (filed as Exhibit 3.3 to the Company's 1995 10-K/A Report
                  filed on June 3, 1996 and incorporated herein by this
                  reference).

      3.3         Bylaws adopted April 25, 1990, as amended July 25, 1990 (filed
                  as Exhibit 3.2 to the Company's 1995 10-K/A Report filed on
                  June 3, 1996 and incorporated herein by this reference).

      4.1         Warrant to purchase 100,000 shares of Common Stock dated
                  12-31-92, issued to Robert H. Leshner (filed as Exhibit 4.1 in
                  the Company's 1992 10-K Report and incorporated herein by this
                  reference).

      4.2         Warrant to purchase 12,500 shares of Common Stock dated
                  12-31-92 issued to Andrew E. Haas. (Filed as Exhibit 4.2 in
                  the Company's 1998 Form 10-K and incorporated herein by this
                  reference)

      4.3         Warrant to purchase 12,500 shares of Common Stock dated
                  12-31-92, issued to Curtis Swindall. (Filed as Exhibit 4.1 in
                  the Company's 1992 10-K Report and incorporated herein by this
                  reference).

      10.1*       Indemnity Agreement entered into with directors and certain
                  officers dated October 25, 1989 (filed as Exhibit 10.11 to the
                  Company's 1995 10-K/A Report filed on June 3, 1996 and
                  incorporated herein by this reference).

      10.2*       1990 Stock Option Plan (filed as Exhibit 28.A in the Company's
                  1990 10-K Report on Form 8, Amendment No. 1 dated April 29,
                  1991 and incorporated herein by this reference).

      10.3*       1992 Stock Option Plan (filed as Exhibit A in the Company's
                  1992 Proxy Statement and incorporated herein by this
                  reference).

      10.4*       1998 Stock Option Plan (filed as an Exhibit "A" to the
                  Company's 1998 Proxy Statement and incorporated herein by this
                  reference).

      10.5*       Stock repurchase agreement (filed as Exhibit 10.1 in Form 8-K,
                  dated December 18, 1990 and incorporated herein by this
                  reference).

      10.6        Consulting Agreement dated as of August 12, 1996 between
                  Bancorp, First Professional Bank, N.A. and Network Health
                  Financial Services, Inc. (filed as Exhibit 10.6 to the
                  Company's 1996 Form 10-K Report and incorporated herein by
                  this reference).

      10.7        Amendment No. 1 to Consulting Agreement dated as of August 12,
                  1996 between Professional Bancorp, Inc., First Professional
                  Bank, N.A. and Network Health Financial Services, Inc. (Filed
                  as Exhibit 10.7 in the Company's 1998 Form 10-K and
                  Incorporated herein by reference.)

      10.8*       Salary Continuation Agreement entered into between the Bank
                  and Joel W. Kovner dated May 1, 1992 (filed as Exhibit 10.25
                  to the Company's 1992 10-K Report and incorporated herein by
                  this reference).



                                       29



<PAGE>



      10.9        Settlement Agreement dated as of July 8, 1996 among Bancorp,
                  the Bank, the Shareholders Protective Committee and certain
                  officers and directors (filed as Exhibit 1 to the Company's
                  Form 8-K filed July 22, 1996 and incorporated herein by this
                  reference).

      10.10       Lease for premises at 606 Broadway, Santa Monica, California
                  (filed as Exhibit 10(a) to the Company's Registration
                  Statement on Form S-1, File No. 2-76371 filed March 8, 1982
                  and incorporated herein by this reference).

      10.11       Lease for premises at 520 Broadway, Santa Monica, California
                  (filed as Exhibit 10.5 in the Company's 1983 10-K Report and
                  incorporated herein by this reference).

      10.12       Lease for premises at 8600 West 3rd Street, Suite #1, Los
                  Angeles, California (filed as Exhibit 10.6 in the Company's
                  1983 10-K Report and incorporated herein by this reference.

      10.13       Lease for second floor premises and extension of lease of
                  entire premises at 606 Broadway, Santa Monica, California
                  (filed as Exhibit 10.8 in the Company's 1984 10-K Report and
                  incorporated herein by this reference).

      10.14       Lease for premises at 9629 Brighton Way, Beverly Hills,
                  California (filed as Exhibit 10.9 in the Company's 1984 10-K
                  Report and incorporated herein by this reference).

      10.15       Lease for premises at 5525 Etiwanda Street, Tarzana,
                  California (filed as Exhibit 10.8 in the Company's 1986 10-K
                  Report and incorporated herein by this reference).

      10.16       Lease for premises at 55 E. California, Pasadena, California
                  (filed as Exhibit 10.65 in the Company's 1991 10-K Report and
                  incorporated herein by this reference).

      10.17       Lease for premises at 10 North 5th Street, Redlands,
                  California, (filed as Exhibit 10.7 in the Company's 1991 10-K
                  Report and incorporated herein by this reference).

      10.18       Lease for premises at 9900 Norwalk Boulevard, Santa Fe
                  Springs, California, (filed as Exhibit 10.75 in the Company's
                  1992 10-K Report and incorporated herein by this reference).

      10.19*      Employment agreement dated November 1, 1999 with Larry
                  Patapoff (filed as Exhibit 10.19 in the Company's September
                  30, 1999 10-Q and incorporated herein by this reference).

      10.20*      Employment agreement dated October 21, 1999 with Gene Gaines
                  (filed as Exhibit 10.20 in the Company's September 30, 1999
                  10-Q and incorporated herein by this reference).

      10.21*      First amendment to Employment Agreement with Gene Gaines
                  effective February 1, 2000 (filed as Exhibit 10.21 in the
                  Company's 1999 10-K Report and incorporated herein by this
                  reference).

      10.22*      First amendment to Employment Agreement with Larry Patapoff
                  effective February 1, 2000 (filed as Exhibit 10.22 in the
                  Company's 1999 10-k Report and incorporated herein by this
                  reference.)

      10.23       Regulatory Agreement with OCC dated March 22, 2000 (filed as
                  Exhibit 10.23 in the Company's 1999 10-k Report and
                  incorporated herein by this reference.)

      10.24       Key Employee Incentive Agreement between the Bank and Nancy
                  Ferretti-Foster dated December 21, 2000 (filed as Exhibit
                  10.24 in the Company's 1999 10-k Report and incorporated
                  herein by this reference.)


                                       30


<PAGE>


      10.25       Key Employee Incentive Agreement between the Bank and Sharon
                  Schmidt dated December 21, 1999 (filed as Exhibit 10.25 in the
                  Company's 1999 10-k Report and incorporated herein by this
                  reference).

      21          Subsidiaries of the Registrant (filed as Exhibit in the
                  Company's 1986 10-K Report and incorporated herein by this
                  reference).

      23.1        Consent of Moss Adams LLP (filed as Exhibit 23.1 in the
                  Company's 1999 10-k Report and incorporated herein by this
                  reference).

      23.2        Consent of KPMG LLP (filed as Exhibit 23.2 in the Company's
                  1999 10-k Report and incorporated herein by this reference).

      23.3        Memorandum of Understanding between Professional Bancorp, Inc.
                  and The Federal Reserve Bank of San Francisco

      27          Financial Data Schedule



*Identified as a management contract or compensatory agreement.





                                       31

<PAGE>







(B) REPORTS ON FORM 8-K: FORM 8K FILED ON JANUARY 6, 2000 ANNOUNCING THE
ENGAGEMENT OF MOSS ADAMS LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANT.



                                   SIGNATURES



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



                                   PROFESSIONAL BANCORP, INC.
                                  (Registrant)



Date:    May 15, 2000              /S/GENE F. GAINES
                                   Gene F. Gaines
                                   Chief Executive Officer and President


Date:    May 15, 2000              /S/ LARRY PATAPOFF
                                   Chief Financial Officer








                                       32