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                                                                 EXHIBIT 10.31.1


                              EMPLOYMENT AGREEMENT

                  THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into effective as of JANUARY 2, 1997 by and between STERLING WEST
BANCORP, a California corporation, hereinafter referred to as the "Employer,"
and ALLAN E. DALSHAUG, hereinafter referred to as the "Employee."

                  The parties contract with reference to the following facts:

         A.       The Employer desires to appoint and employ the Employee in the
capacities of Chairman of the Board of Directors, Chief Executive Officer and
President of the Employer, and the Employee desires to accept such appointment
and employment with the Employer.

         B.       The parties are willing to enter into an agreement providing 
for such appointment and employment upon the terms and conditions hereinafter
set forth.

         NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties agree as follows:

                  1.       EMPLOYMENT. The Employer hereby agrees to appoint and
employ, and does hereby appoint and employ, the Employee as its Chairman, Chief
Executive Officer and President for and during the Employment Period (as defined
in Section 5 herein), and the Employee agrees to accept and hereby accepts such
appointment and employment by the Employer, on the terms and subject to the
conditions set forth in this Agreement.

                  2.       COMPENSATION.

                           2.1       Salary.  As compensation for the services 
to be rendered by the Employee hereunder, the Employer agrees to pay to the
Employee during the Employment Period a salary at the rate of One Hundred and
Sixty-Six Thousand Five Hundred Dollars ($166,500) per year, subject to
applicable law respecting withholding of federal, state and/or local taxes or
their equivalent. All salary, less income tax and other applicable withholding,
shall be prorated and paid out periodically in accordance with the Employer's
normal payroll procedures with respect to executive officers.

                           2.2       Incentive Compensation.  In addition to the
salary provided for in Section 2.1 above, the Employee may receive, during the
Employment Period, such incentive compensation as the Board of Directors of the
Employer (the "Board") may, in its sole and absolute discretion, determine to
pay to the Employee from time to time, in a form and in an amount to be
determined solely by the Board. However, the Board is under no obligation to
provide for any such incentive compensation.





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                  3.       DUTIES, TIME AND EFFORTS.

                           3.1       Duties.  During the Employment Period, the 
Employee shall serve as Chairman of the Board, Chief Executive Officer and
President of the Employer and shall report to the Board, and his duties shall
include generally, but without limitation, authority and responsibility for the
overall management of the affairs and business of the Employer, serving as
Chairman of the Board and Chief Executive OFFICER of Sterling Bank, serving as
Chairman of the Board and Chief Executive Officer of Sterling Business Credit,
Inc., and such additional duties as may be assigned by the Board to the
Employee. It is specifically understood that the Employee may be required to
provide services to other subsidiaries of the Employer not presently in
existence or for businesses not presently conducted by the Employer, consistent
with his status as an executive officer.

                           3.2       Time.  The Employee shall devote his full 
productive time, energies, and abilities to the proper and efficient performance
of the duties, responsibilities and authorities described above. However, the
expenditure of reasonable amounts of time by the Employee for educational,
charitable and professional activities that do not otherwise conflict with the
terms of this Agreement or the duties and responsibilities of the Employee,
including without limitation, serving as a member of the Board of Directors of
L.A. Gear, Inc. and Jalate, Ltd. (or related companies), shall not be deemed a
breach of this Agreement, provided that such activities do not materially
interfere with the services required of the Employee under this Agreement, and
shall not require the prior consent of the Employer.

                           3.3       Non-Competition.  During the Employment 
Period, the Employee may not, without the prior express authorization of the
Board, directly or indirectly engage in any activity competitive with the
Employer's businesses or those of any of its subsidiaries, whether acting alone
or as an officer, director, owner or employee of any other corporation or
business, whether professional or otherwise. Nothing contained in this Section
3.3, however, shall prevent the Employee from purchasing and/or holding less
than one-tenth of one percent (0.10%) of the issued and outstanding stock of a
publicly-held corporation.

                           3.4       Other.  The Employee shall, at all times 
during the Employment Period, be furnished with such office, stenographic and
other necessary and secretarial assistance, and such facilities, amenities and
services as are suitable to the Employee's position as an executive officer and
adequate for the performance of the Employee's duties under this Agreement.
Unless otherwise agreed to by the Employee, the Employee's offices shall be
maintained at the premises of the principal place of business of the Employer in
Los Angeles, California; provided, however, that in connection with the
performance of his duties and responsibilities, the Employee acknowledges that
he may be required to undertake significant travel as the needs of his position
may reasonably require.

                  4.       VACATION. The Employee shall be entitled to take 
vacation at the rate of five (5) weeks during each twelve (12) month period
during the Employment Period. The date or dates of said vacation shall be
determined by the Employee and the Board. To the extent the Employee does not
use the full amount of such vacation as provided above, the unused balance, up
to a maximum of one (1) week, shall accrue and be carried over into the
following year, if any, during which the Employee is employed by the Employer.
Under no circumstances, regardless of the Employee's failure to take vacations,
may the Employee take more than six (6) weeks vacation during any twelve (12)
month period.





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                  5.       TERM.

                           5.1       Term.  The term of the Employee's 
employment and the Employer's obligations pursuant to this Agreement shall
commence upon the date of this Agreement and terminate on January 2, 1998,
unless sooner extended by agreement between the parties or sooner terminated
upon the happening of any of the following events (the "Employment Period"):

                                     (a)  If the Employer and the Employee shall
mutually agree to such sooner termination;

                                     (b)  Conviction of the Employee for any 
crime involving a dishonest act or any behavior not befitting the Employee's
position as an executive officer of a bank or bank holding company, which could
reasonably make the continued employment of the Employee by the Employer
damaging to the Employer or its public reputation;

                                     (c)  Death of the Employee;

                                     (d)  The Employee is prevented, by reason 
of any accident. illness, or mental or physical disability, not arising out of
an injury sustained while on the Employer's business, from fully performing his
duties and responsibilities under this Agreement for a period of ninety (90)
consecutive days or an aggregate of ninety (90) days during any three hundred
and sixty-five (365) day period (not limited to any calendar or fiscal year).

                                     (e)  Commission of any dishonest or 
fraudulent act by the Employee in the course of his employment;

                                     (f)  For Good Cause, as defined in Section 
5.2 below, and pursuant to the procedures described therein and in Section 5.3;
or

                                     (g)  Due to governmental restrictions on 
continued operations of the Employer or its banking subsidiary, as more fully
set forth and provided for in Section 5.4 herein.

                  5.2      Termination for Good Cause After Notice and Failure 
to Cure. The Employer may, at any time during the Employment Period, terminate
the employment of the Employee and its obligations under this Agreement for good
cause, by written notice to the Employee in accordance with the notice
requirements and restrictions contained in Section 5.3 herein. For purposes of
illustration, good cause shall include, but shall not be limited to, the
following (collectively, "Good Cause"):

                           (a)       The persistent unwillingness or inability 
of the Employee to perform his duties or responsibilities hereunder;

                           (b)       The persistent malfeasance, misfeasance or 
nonfeasance in connection with the performance of the Employee's duties, such
conduct to be determined solely by the Employer;

                           (c)       Willful and intentional acts having the 
effect or consequence of injuring the reputation, business or business
relationships of the Employer;





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                           (d)       Breach of any material provision of this 
Agreement.

Notwithstanding the foregoing, however, Good Cause shall not exist solely due to
the financial performance or results of operation of the Employer.

                  5.3      Notice Requirement and Restrictions. Prior to 
terminating the Employee's employment pursuant to Sections 5.1 (f) or 5.2
herein, the Employer shall provide the Employee with a written notice specifying
in reasonable detail (i) the duties or responsibilities which it contends that
the Employee has not been adequately performing, (ii) why the Employer believes
that it has good cause to terminate the Employee's employment and (iii) what
actions the Employee should perform to adequately execute his obligations under
this Agreement. If the Employee corrects such performance failure within thirty
(30) days of receipt of such notice or otherwise modifies his performance to
correct the matters indicated in the notice, the Employee's breach will be
deemed cured and his employment shall not be terminated; provided, however, that
if the nature of any material performance failure by the Employee described in
the notice are such that more than thirty (30) days are reasonably required to
correct such failure, then the Employee's breach will be deemed cured and the
Employee's employment shall not be terminated if the Employee substantially
commences to correct such performance failure within thirty (30) days of receipt
of the notice and thereafter diligently prosecutes such corrective actions.
Otherwise, the Employer shall have the right to terminate the Employee's
employment and its obligations under this Agreement at the end of the thirty
(30) day period following receipt of such notice by the Employee.

                  5.4      Governmental Restrictions on Continued Operations. 
The Employee understands that the conduct of the Employer's business and that of
its banking subsidiary, Sterling Bank, is, and during the term of this Agreement
shall be, subject to the laws, rules, regulations, permits and licenses of
various governmental bodies and agencies, including without limitation, the
California State Banking Department, the Federal Deposit Insurance Corporation
and the Board of Governors of the Federal Reserve System. Notwithstanding
anything, to the contrary contained herein, if the commencement or continuation
of the Employer's business or that of Sterling Bank is, for any reason,
prohibited, prevented or substantially restricted by a court of law or any such
governmental body or agency, the Employer shall thereafter have the right to
terminate the employment of the Employee and its obligations under this
Agreement, at its sole option, by giving written notice of such termination to
the Employee, with no further liability on the part of the Employer other than
for any accrued but unpaid compensation to the Employee.

         6.      EMPLOYER'S AUTHORITY. To the extent not inconsistent with other
terms of this Agreement, the Employee agrees to observe and comply with the
reasonable rules and regulations of the Employer, as adopted by the Board,
respecting performance of his duties and to carry out and perform the reasonable
orders, directions and policies of the Employer as they may be, from time to
time, stated to him either orally or in writing.





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         7.      EXPENSES AND FRINGE BENEFITS.

                 7.1       Automobile Allowances.  The Employer and Employee 
agree that the proper discharge of the duties of the Employee will require the
frequent use of an automobile. The Employer hereby agrees to provide the
Employee with the use of an automobile chosen jointly by the Employee and the
Employer, and suitable for use by an executive officer of a bank or bank holding
company. Such automobile shall be purchased or leased by the Employer and
provided to the Employee for his exclusive use and at the termination of the
Employment Period, the Employee shall have the right to purchase such automobile
from the Bank for its depreciated book value or have the Employer take steps to
transfer such lease to him as lessee or sublessee. In lieu of the right to the
use of an automobile as provided for in this paragraph, however, at the
Employee's option he may directly purchase or lease an automobile and the
Employer shall, during the Employment Period, pay to the Employee additional
compensation of $750.00 per month and pay or reimburse all reasonable expenses
incurred by the Employee in connection with the use and operation of such
automobile, including, but not limited to insurance, licensing, taxes and other
operating expenses.

                  7.2      Business Expenses. Subject to Section 7.3 below, the
Employer shall pay or reimburse all expenses reasonably incurred by the Employee
in discharge of the Employee's duties hereunder. Such expenses shall include,
without limitation, the following:

                           (a)       Educational expenses incurred for the 
purpose of maintaining or improving the Employee's skills;

                           (b)       Expenses for travel, lodging, and related 
expenses in connection with conventions or meetings, attendance at which is
necessary or appropriate in connection with the performance by the Employee of
his duties required hereunder;

                           (c)       Expenses for meals, entertainment and 
similar items reasonably incurred by the Employee in connection with the
business of the Employer; and

                           (d)       Such other expenses incurred by the 
Employee reasonably related to the discharge by the Employee of his duties set
forth herein.

                  7.3      Expense Documentation. The Employer reserves the 
right to require, as a condition of payment or reimbursement for any item
pursuant to Section 7.2, that the Employee furnish the Employer with reasonable
written evidence of such expense and documentation of the relationship of such
item to the business of the Employer or the duties of the Employee.

                  7.4      Fringe Benefits. The Employee shall be entitled to
participate in any group life and health insurance plans offered by the Employer
to its employees. Such participation shall be on the same basis as the majority
of the other employees participating in such plan. Also, if the Employer
implements any new benefit plan for its employees generally, the Employee will
be allowed to participate in such benefit plan on the same basis as the other
employees. In addition, the Employer will provide to the Employee a $250,000
whole life insurance policy, payable as designated by the Employee. The premiums
on such policy will be paid by the Employer.




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                  7.5      Club Fees. The Employer and the Employee agree that 
it is necessary and proper for the Employee to maintain membership in the
Wilshire Country Club, and that such membership is in the best interests of the
Employer and in furtherance of the Employee's obligations hereunder. The
Employer agrees to pay or reimburse the initial and ongoing costs of an equity
membership in such club and understands that the initial cost of an equity
membership in such club was approximately $14,500. Such equity membership shall
be held in the name of the Employee during the term of the Employment Period
and, upon the termination thereof, the Employee shall have the right to retain
such equity membership upon payment to the Employer of an amount equal to the
initial cost thereof incurred by the Employer.

         8.      ADDITIONAL RIGHTS OF THE EMPLOYEE. As an additional incentive 
to the Employee, it is agreed that upon any termination, prior to January 2,
1998, of this Agreement or the Employment Period for any reason other than as
set forth in Sections 5.1(b), 5.1(e), 5.1(f) or the Employee's voluntary
termination, the Employee shall receive a lump sum payment equal to four (4)
months of his then current salary, plus any accrued and unpaid compensation.

         9.      CONFIDENTIAL DISCLOSURE. Except in the proper performance of 
the Employee's duties pursuant to this Agreement, the Employee agrees that he
will not for any reason or at any time during or subsequent to the Employment
Period disclose to any person any secret, confidential or proprietary
information relating to the products or services of the Employer or any trade
secrets of the Employer. The Employee agrees that the remedy at law for any
breach of the foregoing will be inadequate, and that the Employer shall be
entitled to injunctive relief for any such breach. The obligations of the
Employee pursuant to this Section 9 shall survive a termination of the
Employment Period and this Agreement.

         10.     MISCELLANEOUS.

                 10.1        Assignability of Agreement.  The provisions of this
Agreement shall inure to the benefit of the parties hereto, and their respective
permitted heirs, legal representatives, successors and assigns. The obligations
of the Employee under this Agreement shall be personal and not delegable by him
in any manner whatsoever.

                 10.2       Notices.  Any notice, request, instruction or other 
document to be given hereunder by either party hereto to the other shall be in
writing and delivered personally or sent by certified or registered mail,
postage prepaid, addressed as follows:

                                If to the Employee:

                                Mr. Allan Dalshaug
                                3346 Deer Creek Lane
                                Glendale, California 91208

                                If to the Employer:

                                Corporate Secretary
                                Sterling West Bancorp
                                3287 Wilshire Boulevard
                                Los Angeles, California 90010





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         Any notice so given shall be deemed received when delivered personally,
or (if mailed) when dispatched. Any party may change the address to which
notices are to be sent by giving written notice of such change of address to the
other party in the manner herein provided for giving of notice.

                  10.3     Waiver. No waiver of any breach of any warranty,
representation, covenant or other term or provision of this Agreement shall be
deemed to be a waiver of any preceding or succeeding breach of same or any
warranty, representation, covenant, term or provision. No extension of the time
for performance of any obligation or other act shall be deemed to be an
extension of the time for the performance of any other obligation or any other
act.

                  10.4     Amendment to Agreement. This Agreement contains the
entire agreement between the parties hereto with respect to the subject matter
contemplated herein, and may not be amended, supplemented or discharged except
by an instrument in writing signed by both par-ties hereto.

                  10.5     Dispute/Attorney's Fees. Should any dispute arise
concerning the terms or the interpretation of this Agreement, the prevailing
party shall be entitled to and be awarded reasonable attorney's fees and costs,
in addition to any other relief to which it may be entitled.

                  10.6     Time of the Essence. Time is of the essence of each
provision of this Agreement in which time is an element.

                  10.7     Arbitration. Any controversy or claim arising out of
or relating to this Agreement will, at the written request of any party, be
determined by binding arbitration under the auspices and rules then in effect of
the American Arbitration Association (the "Association") in Los Angeles,
California, as the same may be modified by the statues of California then in
effect. Such arbitration shall be conducted by a single arbitrator if the
parties shall agree upon one, or else by one arbitrator appointed by each party
and a third arbitrator appointed by the two arbitrators. In case of any failure
of a party to make any such appointment within two (2) weeks after written
notice of the controversy, such appointment shall be made by the Association.
All arbitration proceedings shall be held in Los Angeles, California, and each
party agrees to comply in all respects with any award made in such proceeding
and to the entry of a judgment in any jurisdiction of any award rendered in such
proceeding. All costs and expenses of the arbitration (including costs of
preparation and reasonable attorney's fees) of the party prevailing in such
arbitration shall be borne by the losing party to such arbitration, unless
directed other-wise by the arbitrators. Notwithstanding any other provision of
this paragraph, however, no party may make a request for arbitration hereunder
with respect to any matter, at any time following the expiration of thirty (30)
days after notice of filing of a legal action with respect to such matter in a
court of competent jurisdiction.

                  10.8     Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one instrument.





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         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.


STERLING WEST BANCORP                   ALLAN E. DALSHAUG
"Employer"                              "Employee"

By: /s/ AUDREY J. FIMPLER               By: /s/ ALLAN E. DALSHAUG
-------------------------               -------------------------
Name: Audrey J. Fimpler
Title: Director







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