FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549



               Quarterly Report Under Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

                        For Quarter Ended MARCH 31, 1997


                         Commission file number 2-79261


                             DELTA NATIONAL BANCORP
             (Exact name of registrant as specified in its charter)


           California                                   94-2839814
(State or other jurisdiction of               (IRS Employer Identification No.)
 incorporation or organization)


611 North Main Street, Manteca, California                   95336-3740
 (Address of principal executive offices)                    (Zip code)


                                 (209) 824-4050
              (Registrant's telephone number, including area code)




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 [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of March 31, 1997:

Common Stock, no par value - 376,782 shares.
<PAGE>
DELTA NATIONAL BANCORP
FORM 10-Q CROSS REFERENCE INDEX


--------------------------------------------------------------------------------
PART I.  FINANCIAL INFORMATION                                         Page
--------------------------------------------------------------------------------

Item 1.           Financial Statements

                  Consolidated Balance Sheets -
                           December 31, 1996 and March 31, 1997           4

                  Consolidated Statements of Income -
                           Three months ended March 31, 1997 and 1996     5

                  Consolidated Statements of Cash Flows -
                           Three months ended March 31, 1997 and 1996     6

                  Notes to Consolidated Financial Statements              8

Item 2.           Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                  16



--------------------------------------------------------------------------------
PART II. OTHER INFORMATION                                             Page
--------------------------------------------------------------------------------

Item 1.           Legal Proceedings                                      24

Item 2.           Changes in Securities                                  24

Item 3.           Defaults Upon Senior Securities                        24

Item 4.           Submission of Matters to a Vote of Security Holders    24

Item 5.           Other Information                                      24

Item 6.           Exhibits and Reports on Form 8-K                       24
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements

                             DELTA NATIONAL BANCORP

                           CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)

                                    Unaudited

                                                              March 31,  Dec 31,
                                                                1997      1996
ASSETS

Cash and due from banks ....................................   $ 4,431   $ 5,052
Federal funds sold .........................................     9,800     7,600
                                                               -------   -------
        Total cash and cash equivalents (notes A10 and B)...    14,231    12,652
        

Interest bearing deposits in banks .........................       103       676

Securities available for sale (notes A3 and C) .............     9,490    10,350
Securities held to maturity (notes A2 and C) ...............    15,580    15,428
                                                               -------   -------
                                                                25,070    25,778

Loans, net (notes A4, A5 and D) ............................    47,668    49,394
Property and equipment (note A6) ...........................     1,697     1,720
Interest receivable, other assets and other
real estate owned (notes A7 and F) .........................     1,959     1,805
                                                               -------   -------

TOTAL ASSETS ...............................................   $90,728   $92,025
                                                               =======   =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
    Non-interest bearing ...................................    14,872    16,703
    Interest bearing .......................................    64,534    64,350
                                                               -------   -------
        Total deposits .....................................    79,406    81,053

Accrued interest/other liabilities .........................       420       365

Stockholders' equity:
    Common stock, no par value
      Authorized - 5,000,000 shares
      Issued and outstanding - 376,782 shares ..............     3,532     3,532
    Retained earnings ......................................     7,341     7,058
    Net unrealized appreciation (depreciation) on
      securities available-for-sale, net of tax of
      $20,648 and $12,302 at March 31, 1997
      and December 31, 1996, respectively ..................        29        17
                                                               -------   -------

        Total stockholders' equity .........................    10,902    10,607

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................   $90,728   $92,025
                                                               =======   =======

         The accompanying notes are an integral part of this statement.
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements

                             DELTA NATIONAL BANCORP

                        CONSOLIDATED STATEMENTS OF INCOME
                                 ( In Thousands)
                              EXCEPT PER SHARE DATA

                                    Unaudited
                                                           3 Months    3 Months
                                                            Ending      Ending
                                                           March 31,   March 31,
                                                             1997        1996
                                                           ---------   ---------
Interest income:
    Interest and fees on loans .......................       $1,366       $1,384
    Securities available-for-sale ....................          157          194
    Securities held-to-maturity ......................          191          354
    Interest-bearing deposits in banks ...............            2            1
    Federal funds sold ...............................          144           69
                                                             ------       ------
        Total interest income ........................        1,860        2,002

Interest expense on deposits .........................          642          724
                                                             ------       ------

        Net interest income ..........................        1,218        1,278

Provision for loan losses ............................            0            0
                                                             ------       ------

        Net interest income after provision
         for possible loan losses ....................        1,218        1,278

Other income
    Service charges on deposits ......................          119          128
    Other income .....................................           72           90
                                                             ------       ------
                                                                191          218
                                                             ------       ------

Other expenses
    Salaries, wages and employee benefits ............          473          521
    Occupancy and equipment ..........................          170          168
    Other operating expenses .........................          290          264
                                                             ------       ------
                                                                933          953
                                                             ------       ------

        Earning before income taxes ..................          476          543

Income taxes (note A8) ...............................          193          222
                                                             ------       ------

        NET EARNINGS .................................       $  283       $  321
                                                             ======       ======

Net earnings per share (note A9) .....................       $  .75       $  .85
                                                             ======       ======

         The accompanying notes are an integral part of this statement.
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements

                             DELTA NATIONAL BANCORP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)

                                    Unaudited

                                                       3 MONTHS ENDING MARCH 31,
                                                            1997         1996
Increase (decrease) in cash and cash equivalents

Cash flows from operating activities:
  Net earnings .......................................     $   283      $   321
    Adjustments to reconcile net earnings to net
      cash  provided by operating activities
        (Gain)/Loss on sale of assets ................          12            1
        (Gain)/Loss on sale of OREO ..................           0            0
        Provision for possible loan losses ...........           0            0
        Provision for OREO ...........................           0            0
        Provision for depreciation and amortization ..         200          123
        Decrease (increase) in interest
        receivable and other assets ..................          27         (219)
        Increase (decrease) in interest payable
         and other liabilities .......................          55          121
                                                           -------      -------
           Net cash provided by operating activities .         577          347
                                                           -------      -------

Cash flows from investing activities:
  Proceeds from maturities of securities
    available-for-sale ...............................         878            0
  Proceeds from maturities of securities
    held-to-maturity .................................       1,273        1,770
  Purchase of securities available-for-sale ..........           0            0
  Purchase of securities held-to-maturity ............      (1,535)      (1,983)
  Net (increase) decrease in loans ...................       1,726          378
  Purchase of property and equipment .................         (80)         (16)
  Purchase/additions to OREO .........................        (187)        (236)
  Proceeds from sale of property and equipment .......           0            0
  Proceeds from sale of OREO .........................           0            0
  Net (Inc.) dec. Int. Bearing Deposits Other Inst ...         573         (571)
                                                           -------      -------
           Net cash (used in) provided by
           investing activities ......................       2,648         (658)
                                                           -------      -------


         The accompanying notes are an integral part of this statement.
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements

                             DELTA NATIONAL BANCORP

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                                 (In Thousands)

                                    Unaudited

                                                       3 MONTHS ENDING MARCH 31,
                                                            1997          1996
Cash flows from financing activities:
  Net increase (decrease) in demand deposits,
    money market accounts and savings accounts .......      (1,117)      (3,459)
  Net (decrease) increase in time deposits ...........        (529)        (173)
  Cash dividends .....................................           0            0
                                                          --------     --------
           Net  cash provided by financing
           activities ................................      (1,646)      (3,632)
                                                          --------     --------
Net  increase (decrease) in cash and
cash equivalents .....................................       1,579       (3,943)

Cash and cash equivalents at beginning of period .....      12,652       11,930
                                                          --------     --------

Cash and cash equivalents at end of period ...........    $ 14,231     $  7,987
                                                          ========     ========

Supplemental disclosures of cash flow information:

    Cash paid during the period for:
        Interest .....................................         411          493
        Income Taxes .................................         197          341


Noncash investing and financing activities:

  The Bank foreclosed on loans with balances of $849,147 in 1996. No loans were
  foreclosed upon during the first quarter of 1997.

  During  1996,  the  Bank  recognized  a  decrease  in the  unrealized  gain on
  available-for-sale  securities of $47,052. As a result, the deferred tax asset
  was increased by $19,525 and equity was reduced by $27,527.

  During the first  quarter of 1997,  the Bank  recognized  an  increase  in the
  unrealized gain on available-for-sale  securities of $20,113. As a result, the
  deferred  tax asset was  decreased  by $8,347  and  equity  was  increased  by
  $11,766.

              The accompanying notes are an integral part of this statement.
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements

                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997


NOTE A - Summary of Accounting Policies

Delta  National  Bancorp (the  Company) was  incorporated  under the laws of the
State of California  on December 21, 1981,  for the purpose of serving as a bank
holding company under the Bank Holding Company Act of 1956. The Company's wholly
owned subsidiary,  Delta National Bank (the Bank), operates as a commercial bank
in the  cities of  Manteca,  Riverbank,  Denair  and  Modesto,  California.  The
Company's  headquarters  are  located  at the  Manteca  Branch at 611 North Main
Street, Manteca, California.  Through its branches the Bank provides traditional
commercial banking services to individuals and small and medium-sized businesses
located in the California Central Valley.

The accounting  and reporting  policies of the Company and the Bank conform with
generally accepted accounting principles and general practice within the banking
industry.  The  consolidated  financial  statements  of the Company  include the
accounts of the Company and the Bank.  A summary of the  significant  accounting
policies  applied in the preparation of the  accompanying  financial  statements
follows.

There have been no  material  changes in Delta  National  Bancorp's  significant
accounting policies during the three months ended March 31, 1997. Management has
presented,  for comparison purposes its unaudited  consolidated balance sheet as
of March 31, 1997,  its unaudited  consolidated  statements of earning for three
months ending March 31, 1997, and 1996 and cash flows for the three months ended
March 31, 1997 and 1996.  The financial  statements  contain,  in the opinion of
management,  all necessary normal recurring  adjustments and are not intended to
be indicative of results that can be expected for a full year.

1.     Consolidation

The consolidated financial statements of the Company include the accounts of the
Company and the Bank.  Significant  intercompany  transactions  and amounts have
been eliminated.

2.     Securities held-to-maturity

Bonds,  notes and  debentures  for which the Bank has the  positive  intent  and
ability to hold to maturity are reported at cost,  adjusted for  amortization of
premiums and  accretion of  discounts  that are  recognized  as  adjustments  to
interest income over the period to maturity.

3.     Securities available-for-sale

Available-for-sale  securities  consist  of  bonds,  notes  and  debentures  not
classified as trading  securities  or  held-to-maturity  securities.  Unrealized
holding gains and losses, net of tax, are reported as a net amount in a separate
component of stockholders'  equity until realized.  Gains and losses on the sale
of   available-for-sale   securities   are   determined   using   the   specific
identification  method.  The amortization of premiums and accretion of discounts
are recognized as adjustments to interest income over the period to maturity.
<PAGE>
                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997


4.     Loans

Loans are reported at the principal amount outstanding,  net of unearned income,
deferred  loan  fees,  and the  allowance  for loan  losses  (interim  financial
statements will also be reported net of deferred profit on OREO sales). Unearned
discounts on  installment  loans are  recognized as income over the terms of the
loans. Interest on other loans is calculated by using the simple interest method
on the daily balance of the principal amount outstanding.

Loan  fees net of  certain  direct  costs of  origination,  which  represent  an
adjustment to interest  yield,  are deferred and amortized over the  contractual
term of the loan.

Loans on which the accrual of interest has been  discontinued  are designated as
nonaccrual  loans.  Accrual of  interest  on loans is  discontinued  either when
reasonable  doubt  exists as to the full and timely  collection  of  interest or
principal or when a loan becomes  contractually  past due by ninety days or more
with  respect to  interest  or  principal.  When a loan is placed on  nonaccrual
status,  all interest  previously  accrued but not collected is reversed against
current period interest income.  Income on such loans is then recognized only to
the extent that cash is received and where the future collection of principal is
probable. Interest accruals are resumed on such loans only when they are brought
fully  current with respect to interest and  principal and when, in the judgment
of  management,  the  loans are  estimated  to be fully  collectible  as to both
principal and interest.

5.     Allowance for loan losses

The allowance for loan losses is established through a provision for loan losses
charged to expenses.  Loans are charged  against the  allowance  for loan losses
when management  believes that the  collectibility of the principal is unlikely.
The allowance is an amount that  management  believes will be adequate to absorb
losses  inherent in existing loans and  commitments  to extend credit,  based on
evaluations of collectibility and prior loss experience of loans and commitments
to extend  credit.  The  evaluations  take into  consideration  such  factors as
changes in the nature and volume of the portfolio,  overall  portfolio  quality,
loan  concentrations,  specific problem loans,  commitments and current economic
conditions that may affect the borrowers' ability to pay.

6.     Property and equipment

Premises and  equipment  are stated at cost less  accumulated  depreciation  and
amortization.   Depreciation  and  amortization  are  provided  for  in  amounts
sufficient to relate the cost of  depreciable  assets to  operations  over their
estimated service lives.  Leasehold improvements are amortized over the lives of
the improvements or the terms of the related leases,  whichever is shorter.  The
straight-line  method  of  depreciation  is  followed  for  financial  reporting
purposes,  but  accelerated  methods are used for tax purposes.  Deferred income
taxes have been provided for the resulting depreciation differences.
<PAGE>


                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997

7.     Foreclosed assets

Real estate properties  acquired through,  or in lieu of,  foreclosure are to be
sold and are  initially  recorded at the lower of carrying  amount or fair value
less cost to sell at the date of foreclosure. After foreclosure,  valuations are
periodically  performed by management.  Any subsequent revisions in estimates of
fair value less cost to sell are reported as adjustments to the carrying  amount
of the real estate  provided that the adjusted  carrying  amount does not exceed
the original  carrying amount at the date of  foreclosure.  Revenue and expenses
from  operations  and changes in the  valuation  allowance are included in other
operating  expenses.  The net  carrying  value  (included in other assets on the
balance  sheet) of  foreclosed  real estate was $688,554  for the period  ending
March 31, 1997, and $500,000 for the period ending December 31, 1996.

Other assets  repossessed by the Bank are to be sold and are initially  recorded
at the lower of  carrying  amount or fair value less cost to sell at the date of
repossession.  After  repossession,  valuations  are  periodically  performed by
management.  Any  subsequent  revisions  in estimates of fair value less cost to
sell are reported as  adjustments  to the carrying  amount of the asset provided
that the adjusted  carrying amount does not exceed the original  carrying amount
at the date of repossession. Revenue and expenses from operations and changes in
the valuation allowance are included in other operating expenses.  There were no
other repossessed assets as of March 31, 1997, and December 31, 1996.

8.     Income taxes

Deferred tax assets and  liabilities  are reflected at currently  enacted income
tax  rates  applicable  to the  period  in which  the  deferred  tax  assets  or
liabilities  are  expected to be realized or settled.  As changes in tax laws or
rates are enacted,  deferred tax assets and liabilities are adjusted through the
provision for income taxes.

9.     Earnings per share

Earnings per share  amounts are  computed on the basis of the  weighted  average
number of share  outstanding  during each year.  The weighted  average number of
shares outstanding for March 31, 1997, and December 31, 1996, was 376,782.

10.    Cash and cash equivalents

For the purposes of the  statement  of cash flow,  the Bank  considers  due from
banks and federal funds sold for one-day periods to be cash equivalents.

11.    Stock based compensation

In October  1995,  the FASB  issued SFAS No.  123,  "Accounting  for Stock Based
Compensation."  This Statement  requires  entities to disclose the fair value of
their employee stock  options,  but permits  entities to continue to account for
employee stock options under Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees." The Bank has determined that it will
continue to use the method  prescribed  by APB Opinion No. 25, which  recognizes
compensation  cost to the extent of the  difference  between  the quoted  market
price of the stock at the date of grant and the amount an  employee  must pay to
acquire the stock.  The Bank grants stock options to employees  with an exercise
price  greater than or equal to the quoted market price of the stock at the date
of grant.  Accordingly  no  compensation  cost is  recognized  for stock  option
grants.

<PAGE>

                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997

12.    New accounting pronouncement

In June 1996,  the FASB issued  SFAS No.  125,  "Accounting  for  Transfers  and
Servicing  of  Financial  Assets  and   Extinguishments  of  Liabilities."  This
Statement provides accounting and reporting standards for transfers of financial
assets and servicing of financial  assets and  extinguishments  of  liabilities.
Those  standards are based on consistent  application of a  financial-components
approach  that  focuses on  control.  Under that  approach,  after a transfer of
financial assets, an entity recognizes the financial assets and servicing assets
it controls and the liabilities it has incurred,  derecognizes  financial assets
when  control  has  been   surrendered,   and   derecognizes   liabilities  when
extinguished.  This Statement provides  consistent  standards for distinguishing
transfers of  financial  assets that are sales from  transfers  that are secured
borrowings. The Bank adopted this Statement as of January 1, 1997.

NOTE B - CASH AND DEPOSITS

The Bank is required to maintain  reserves  by the  Federal  Reserve  Bank.  The
average reserve  requirements are based on a percentage of deposit  liabilities.
The Bank has met or exceeded the average  reserve  requirements  for the periods
presented in the financial statements. In addition, the Federal Reserve requires
the  Bank  to  maintain  a  certain  minimum  balance  at all  times,  and  such
requirement  was met by the Bank during the periods  presented in the  financial
statements.

NOTE C - SECURITIES

Amortized cost (book values) and estimated fair values of investment  securities
as of March 31, 1997 and December 31, 1996, are as follows:
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
                                            March 31, 1997                     December 31, 1996
                                                 Gross                                      Gross
                                               Unrealized     Estimated                   Unrealized     Estimated
                                 Amortized       Gains          Fair       Amortized        Gains          Fair
                                   Cost         (Losses)        Value         Cost         (Losses)        Value
----------------------------------------------------------------------------------------------------------------------
<S>                               <C>          <C>           <C>           <C>            <C>            <C>   
Available-for-sale securities:
  U.S. treasury securities ...   $     -       $     -       $     -       $      -       $      -       $     -
  Obligations of other U.S. 
    government agencies ......     8,846           (72)        8,774          9,726           (105)        9,621
  Obligations of state and
    political subdivisions ...       390           122           512            390            135           525
  Corporate bonds and other ..       204             -           204            204              -           204
                                 -------       -------       -------        -------        -------       -------
Total ........................   $ 9,440       $    50       $ 9,490        $10,320        $    30       $10,350
                                 =======       =======       =======        =======        =======       =======
Held-to-maturity securities:
  U.S. treasury securities ...   $     -       $     -       $     -        $     -        $     -       $     -
  Obligations of other U.S. 

    government agencies ......    14,545           195        14,740         15,428            112        15,540
  Obligations of state and
    political subdivisions ...         -             -             -              -              -             -
  Corporate bonds and other ..     1,035           (33)        1,002              -              -             -
                                 -------       -------       -------        -------        -------       -------
Total ........................   $15,580       $   162       $15,742        $15,428        $   112       $15,540
                                 =======       =======       =======        =======        =======       =======
----------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997

NOTE D - LOANS

The  composition of the Bank's loan portfolio at March 31, 1997 and December 31,
1996, is as follows:

--------------------------------------------------------------------------------
                                                    March 31,       December 31,
                                                      1997              1996
--------------------------------------------------------------------------------
Commercial, financial and agricultural .......    $ 21,132,155     $ 21,428,989
Real estate - construction ...................      13,410,663       13,404,461
Real estate - mortgage .......................      12,950,312       14,160,539
Installment loans to individuals .............       1,743,770        1,837,465
                                                  ------------     ------------
                                                    49,236,900       50,831,454

     Unearned discount .......................         (64,930)         (61,208)
     Allowance for loan losses ...............      (1,111,456)      (1,082,278)
     Deferred loan fees ......................        (257,824)        (293,845)
     Deferred profit on OREO sales (1) .......        (134,672)
                                                  ------------     ------------
          Loans, net .........................    $ 47,668,018     $ 49,394,123
                                                  ============     ============
--------------------------------------------------------------------------------
(1) Audited financial  statements for December 31, 1996, do not include Deferred
    profit on OREO sales due to not being material in amount.

The following table  summarizes the changes in the allowance for loan losses for
the periods ending March 31, 1997, and December 31, 1996:

--------------------------------------------------------------------------------
                                                      March 31,     December 31,
                                                        1997            1996
--------------------------------------------------------------------------------
Balance at January 1 ...........................    $ 1,082,278     $ 1,219,304
Charge Offs:
    Commercial, financial and agricultural .....         (1,223)       (324,340)
    Real Estate - construction .................              -         (61,638)
    Real Estate - mortgage .....................              -         (48,696)
    Installment loans to individuals ...........        (11,420)        (53,934)
--------------------------------------------------------------------------------
        Total Charge Offs ......................        (12,643)       (488,608)
--------------------------------------------------------------------------------
Recoveries:
    Commercial, financial and agricultural .....            545               -
    Real Estate - construction .................         33,527         123,139
    Real Estate - mortgage .....................              -           2,000
    Installment loans to individuals ...........          7,749          40,903
--------------------------------------------------------------------------------
        Total Recoveries .......................         41,821         166,042
--------------------------------------------------------------------------------
Net charge offs ................................         29,178        (322,566)
Additions charged to operations ................              -         185,540
--------------------------------------------------------------------------------
                                                    $ 1,111,456     $ 1,082,278
--------------------------------------------------------------------------------
<PAGE>




                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997

Impaired Loans:  Impaired  loans, as defined,  are measured based on the present
value of expected future cash flows discounted at the loan's effective  interest
rate or, as a practical expedient,  at the loan's observable market price or the
fair value of the collateral if the loan is collateral dependent.

The carrying value of impaired  loans totaled  $2,503,306 at March 31, 1997, and
$1,183,747  at  December  31,  1996,  of  which   $1,134,700   and   $1,135,752,
respectively,  is  the  result  of a  troubled  debt  restructuring.  The  total
allowance  relating to these loans is $270,925 and $281,345,  respectively,  for
the first  quarter of 1997 and year end 1996.  Total cash  collected on impaired
loans for the first three months of 1997 approximated $18,089, none of which was
credited  to the  principal  balance  outstanding,  and the  entire  amount  was
recognized as interest income.

A loan is considered  impaired when, based on current information and events, it
is probable  that a creditor will be unable to collect all amounts due according
to the  contractual  terms of the loan  agreement.  Amounts due according to the
contractual  terms  include  both  principal  and  interest.   The  Company  has
determined  that the  definition of impaired loans will include any loans placed
on nonaccrual  status and any loans that have had a modification  of terms under
troubled  debt  restructuring.  Loans in the amount of  $300,000 or more will be
evaluated individually.  Large groups of smaller-balance homogenous loans, under
$300,000,  will be evaluated on a composite basis using historical data, such as
average  recovery  period and average amount  recovered,  along with a composite
rate of  interest as a means of  measuring  for  impairment.  Loans that are not
evaluated individually will be grouped together by similar risk characteristics.
The following categories will be grouped together: Agricultural,  Commercial, RE
Construction, Residential RE, Consumer, and Commercial RE loans.

Loan  impairment is measured by estimating the present value of expected  future
cash flows  discounted at the loan's  effective  interest  rate,  its observable
market  price,  or the  fair  value  of  collateral  if the  loan is  collateral
dependent.  When it has been  substantiated that a loss is evident and should be
recognized,  the impaired  loan will be charged off. The recorded  investment in
these  loans  and the  valuation  allowance  for  loan  losses  related  to loan
impairment are as follows:

--------------------------------------------------------------------------------
Recorded Investment                       March 31, 1997      December 31, 1996
--------------------------------------------------------------------------------
Principal amount of impaired loans        $  2,770,287           $  1,460,793
Accrued Interest                                 3,516                  4,068
Deferred loan costs                                428                    231
                                          ------------           ------------
                                             2,774,231              1,465,092
Less valuation allowance                       270,925                281,345
                                          ------------           ------------
    Total carrying value                  $  2,503,306           $  1,183,747
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Valuation Allowance                       March 31, 1997      December 31, 1996
--------------------------------------------------------------------------------
Valuation allowance at
beginning of period                       $    281,345           $    334,981
Net charges to operations
for impairment (1)                             (10,420)               307,911
Direct write-downs                                   -               (361,547)
Recoveries                                           -                      -
                                          ------------           ------------
Valuation allowance at end of period      $    270,925           $    281,345
                                                                  

--------------------------------------------------------------------------------
(1) Impaired loans is a separate component of the loan loss reserve. 
    $10,420 was re-allocated to the allowance for loan losses component.

<PAGE>



                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997



NOTE E - RELATED PARTY TRANSACTIONS

The Bank, in the ordinary course of business,  makes loans and receives deposits
from its directors and  stockholders.  The following sets forth  information for
all directors and officers (and their  families) who had loans with the bank, or
who were otherwise indebted to the Bank in an amount in excess of $60,000.

In 1997, the Bank extended  credit to Valerie  Rossi,  daughter of Andrew Rossi,
President,  Chief  Executive  Officer and  Director of the Company and sister of
Toinette  Rossi,  Vice  President/Manager  and Director of the  Company,  in the
amount of  $20,000.  As of March  31,  1997,  the  principal  balance  owing was
$19,729.  This loan is secured and bears  interest at a fixed rate of 10%.  This
loan matures on February 27, 2002.  In addition,  a loan to Valerie  Rossi which
was extended in 1991 in the amount of $16,595 was paid off in March 1997.

In 1996, the Bank  refinanced an unsecured line of credit to John Rossi,  son of
Andrew Rossi, President, Chief Executive Officer and Director of the Company and
sister of Toinette Rossi, Vice President/Manager and Director of the Company, in
the amount of $303,250. This loan was paid off in February 1997. John Rossi also
guaranteed  a small  secured  loan  which was  originated  1996 in the amount of
$5,194. This loan was also paid off in March 1997.

As of March 31, 1997,  the Bank had loans extended to Joseph Freitas and various
family  members.  The  following  table  summarizes  those  loans  with a  total
indebtedness of $36,854.


--------------------------------------------------------------------------------
                                   Balance as                   Current
                             Note   of March   Note  Maturity  Interest Secured/
Name on Loan   Relationship Amount  31, 1997   Date    Date      Rate  Unsecured
--------------------------------------------------------------------------------
Joseph Freitas    Director  $13,055 $ 2,860  4/19/96  4/21/97   7.75%  Secured
                                                                Fixed
Joseph Freitas    Director  $30,000 $28,036  10/2/96  4/3/97    8.00%  Secured
                                                                Fixed
Linda Abeldt      Daughter  $ 9,000 $ 5,958  3/22/95  3/22/00  10.00%  Unsecured
                                                                Fixed
--------------------------------------------------------------------------------
Total Indebtedness                  $36,854
--------------------------------------------------------------------------------
<PAGE>

                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997

NOTE F - FORECLOSED ASSETS

Foreclosed real estate owned includes real estate acquired through  foreclosure,
or by obtaining a deed in lieu of foreclosure.  Real estate properties  acquired
through, or in lieu of, foreclosure are to be sold and are initially recorded at
the  lower of  carrying  amount or fair  value  less cost to sell at the date of
foreclosure.  After  foreclosure,   valuations  are  periodically  performed  by
management.  Any  subsequent  revisions  in estimates of fair value less cost to
sell are  reported  as  adjustments  to the  carrying  amount of the real estate
provided that the adjusted carrying amount does not exceed the original carrying
amount at the date of  foreclosure.  Revenue and expenses  from  operations  and
changes in the  valuation  allowance are included in other  operating  expenses.
Total  foreclosed  real estate (before the valuation  allowance) was $972,747 at
March 31, 1997,  this  consisted of one piece of property which is a condominium
complex  consisting of eight units that were  completed and placed in service as
rental units by the Bank. The Bank is currently  building out twelve  additional
units at a cost of approximately  $750,000. The valuation allowance at March 31,
1997, totaled $284,193.

--------------------------------------------------------------------------------
                                         March 31, 1997        December 31, 1996
--------------------------------------------------------------------------------
Real estate owned:
    Foreclosed assets                    $      972,747         $      784,193
    Less valuation allowance                    284,193                284,193
--------------------------------------------------------------------------------
        OREO, net                        $      688,554         $      500,000
--------------------------------------------------------------------------------

Changes in the valuation  allowance for  foreclosed  real estate for the periods
ending March 31, 1997, and December 31, 1996, are as follows:

--------------------------------------------------------------------------------
                                          March 31, 1997       December 31, 1996
--------------------------------------------------------------------------------

Balance at January 1,                     $     284,193         $      295,567

Provision charged to operations                       -                112,560

Charge-offs, net of recoveries (l)                    -               (123,934)
--------------------------------------------------------------------------------
Balance at end of period                   $    284,193          $     284,193
--------------------------------------------------------------------------------
(1) Net recovery consists of one property sold in the third quarter of 1996.

Other  repossessed  assets  acquired by the Bank include all assets  except real
estate.  As with other real estate owned,  assets acquired by  repossession  are
required to be sold and are initially  recorded at the lower of carrying  amount
or fair value less cost to sell at the date of repossession. After repossession,
valuations are periodically performed by management. Any subsequent revisions in
estimates  of fair value less cost to sell are  reported as  adjustments  to the
carrying amount of the asset provided that the adjusted carrying amount does not
exceed the original  carrying  amount at the date of  repossession.  Revenue and
expenses from operations and changes in the valuation  allowance are included in
other operating expenses. There were no other repossessed assets as of March 31,
1997 and December 31, 1996.
<PAGE>


PART 1 - FINANCIAL INFORMATION
Item II - Financial Condition and Results of Operations

                             DELTA NATIONAL BANCORP

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

FINANCIAL REVIEW

PERFORMANCE SUMMARY

The following  discussion is intended to provide  information  to facilitate the
understanding  and  assessment of  significant  changes in trends related to the
financial condition of Delta National Bancorp ("the Company") and its results of
operations.  It  should  be read in  conjunction  with the  unaudited  financial
statements and footnotes appearing elsewhere in this report.

At March 31,  1997,  the  Company's  total  assets were  $90,727,873,  net loans
amounted to $47,668,018,  stockholders' equity was $10,902,307 and the allowance
for loan losses was  $1,111,456.  This compares to total assets of  $92,025,115,
net loans of $49,394,123,  stockholders' equity of $10,607,355 and allowance for
loan losses of  $1,082,278,  at December 31, 1996.  Total assets  decreased 1.4%
which  was  primarily  due to a  decrease  in the  loan  portfolio  of 3.5%  and
securities  portfolio of 2.7%. Total deposits also decreased by 2.0%,  primarily
in the non-interest bearing category.

Net income for the first three  months of 1997  amounted to $283,185 or $.75 per
share, as compared with $321,364 or $.85 per share earned for the same period in
1996. A significant  portion of the 11.9% decrease in net income from a year ago
was due to  decreased  interest  income  earned on  securities  of 20.20%  and a
decrease in  non-interest  income of 12.34%.  While  interest  and  non-interest
income decreased,  interest and non-interest expense also decreased in the first
quarter  of  1997.   Interest  expense  on  deposits   decreased  by  11.3%  and
non-interest expense decreased 2.08% over the same period in 1996.

The carrying value of nonaccrual loans at quarter end amounted to $1,639,531, up
from  $329,609 at December 31,  1996.  Nonaccrual  loans  consists of three real
estate loans and two  commercial  loans.  At March 31,  1997,  other real estate
owned ("OREO") (net of the valuation allowance) totaled $688,554,  compared with
OREO of $500,000 at December 31, 1996.  Restructured  loans,  loans  outstanding
whose original terms have been modified,  totaled  $1,134,700 at March 31, 1997,
which consisted of one real estate loan,  compared to $1,135,752 at December 31,
1996.

There was no change in the provision  for loan losses.  As of March 31, 1997 and
the same period in 1996,  there were no additional  provisions  from  operations
made to the allowance  for loan losses.  Net loans charged off amounted to a net
recovery of $29,178  for the first three  months of 1997 versus a net charge off
of $30,942 for the same period in 1996.
<PAGE>

Net interest income was $1,218,406 at March 31, 1997, compared to $1,278,556 for
March 31, 1996.  Net interest  income  decreased  due to a reduction in interest
income on securities.  Interest on securities was $494,148 and $ 619,110 in 1997
and 1996, respectively.  Interest on U.S. Government Agency securities decreased
$190,557 due to securities  that matured and were not replaced  during the year.
Interest  expense  decreased  6.99% due to lower rates on deposits and decreased
interest  bearing  balances.  Interest expense was $642,437 and $724,371 in 1997
and 1996, respectively.

Non-interest  income  amounted  to $191,094  as of March 31,  1997,  compared to
$217,988  for March 31,  1996.  Income  related to service  charges on  deposits
decreased  6.54% while  income on other real estate owned  decreased  19.59% and
mortgage  department fee income  decreased  73.18%.  Total  non-interest  income
decreased 12.34% over the same period in 1996.

Operating  expenses  amounted to $932,848 for the three months  ending March 31,
1997, compared to $952,708 for the same period in 1996 which represents an 2.08%
decrease.  Expenses  pertaining to professional fees decreased  significantly in
1997. There were no operating  expenses relating to the valuation  allowance for
other real estate owned in the first quarter of 1997 or 1996.


EARNINGS PERFORMANCE

Net Income:  Net income for the first three months of 1997  amounted to $283,185
or $.75 per share,  as compared  with  $321,364 or $.85 per share earned for the
same period in 1996. A significant  portion of the 11.9%  decrease in net income
from a year ago was due to decreased  interest  income  earned on  securities of
20.20%  and a  decrease  in  non-interest  income of  12.34%.  The  decrease  in
securities  interest  income  was  primarily  in the  U.  S.  Government  Agency
portfolio  due to bonds that  matured and were not replaced in 1996 or the first
part of 1997. While interest and  non-interest  income  decreased,  interest and
non-interest  expense  also  decreased  in the first  quarter of 1997.  Interest
expense on deposits decreased by 11.3% and non-interest  expense decreased 2.08%
over the same period in 1996.  Although net earnings were slightly  lower in the
first quarter over the same quarter in 1996,  the Bank does not  anticipate  any
changes from previous year earnings at this time.

Net Interest  Income:  The Company's  operating  results depend primarily on net
interest  income. A primary factor affecting the level of net interest income is
the Company's interest rate margin between the yield earned on  interest-earning
assets  and  the  rate  paid  on  interest-bearing  liabilities  as  well as the
difference between the relative amounts of average  interest-earning  assets and
interest-bearing  liabilities.  Net interest  income was $1,218,406 at March 31,
1997,  compared to $1,278,556 for March 31, 1996. Net interest income  decreased
due to a reduction  in interest  income on  securities.  Interest on  securities
totaled  $494,148 in March 1997 and  $619,110  in March  1996.  Interest on U.S.
Government Agency securities  decreased  $190,557 due to securities that matured
and were not replaced during the year.  Interest expense  decreased 6.99% in the
first quarter of 1997,  compared to the same period in 1996 due to reduced rates
on deposits and a decline in interest  bearing  balances.  Interest  expense was
$642,437 and $724,371 in 1997 and 1996, respectively. The decline in expense was
primarily in the certificates of deposits over $100,000 class.

Provision  for Loan  Losses:  There were no changes  in the  provision  for loan
losses.  As of March  31,  1997,  and the same  period  in 1996,  there  were no
provisions  from  operations  made to the allowance  for loan losses.  Net loans
charged off  amounted to a net recovery of $29,178 for the first three months of
1997  versus a net  charge  off of  $30,942  for the same  period  in 1996.  The
provision for loan losses reflects  management's on-going evaluation of the risk
inherent  in the  loan  portfolio,  which  includes  consideration  of  numerous
factors, such as economic conditions, relative risks in the loan portfolio, loan
loss experience and review and monitoring of individual loans for identification
and resolution of potential problems.
<PAGE>

Non-Interest  Income:  Non-interest  income amounted to $191,094 as of March 31,
1997, compared to $217,988 for March 31, 1996. Income related to service charges
on deposits  decreased  6.54% while income on other real estate  owned  declined
19.59%  and  mortgage  department  fee  income  was  reduced  by  73.18%.  Total
non-interest  income  decreased  12.34% over the same period in 1996.  Income on
other real estate  owned is expected to increase in the last quarter of 1997 due
to additional  units currently under  construction at a condominium  complex the
Bank currently  holds as OREO.  Mortgage  department  income has declined due to
increased rates in the home loan market.

--------------------------------------------------------------------------------
  (In thousands)                             March 31, 1997       March 31, 1996
--------------------------------------------------------------------------------
Service charges on deposit accounts          $     119,530        $     127,894
Mortgage department fees                             8,064               30,063
Other real estate owned (OREO)                      12,022               14,950
Other repossessed assets                             9,763                    -
Gain on sale of OREO                                    73                  144
Gain on sale of fixed assets                             -                    -
Other income                                        41,642               44,937
--------------------------------------------------------------------------------
    Total                                    $     191,094        $     217,988
--------------------------------------------------------------------------------


Non-Interest  Expense:  Non-interest  expense amounted to $932,848 for the three
months  ending March 31, 1997,  compared to $952,708 for the same period in 1996
which  represents an 2.08% decrease.  Expenses  pertaining to professional  fees
decreased  significantly in 1997. There were no significant  operating  expenses
relating to the  valuation  allowance  for other real estate  owned in the first
quarter of 1997 or 1996.

--------------------------------------------------------------------------------
(In thousands)                               March 31, 1997       March 31, 1996
--------------------------------------------------------------------------------
Salaries and wages                           $     422,182        $     465,862
Employee benefits                                   51,198               55,587
Occupancy and equipment                            175,948              173,611
Stationary and supplies                             23,665               27,763
Professional fees                                   23,262               45,070
Assessments                                          7,208               10,253
Other operating                                    206,900              165,853
Writedown of OREO                                        -                   67
OREO expenses                                        6,153                7,581
Other repossessed assets expenses                    4,249                    -
Loss on sale of other repossessed assets                 -                    -
Loss on sale of OREO                                     -                    -
Loss on sale of fixed assets                        12,083                1,061
Loss on sale of available-for-sale security              -                    -
--------------------------------------------------------------------------------
    Total                                    $     932,848        $     952,708
--------------------------------------------------------------------------------

ASSET LIABILITY MANAGEMENT

Liquidity:  For the  Company,  as with  most  commercial  banking  institutions,
liquidity  is  the  ability  to  roll  over  substantial   amounts  of  maturing
liabilities   and  to  acquire  new   liabilities  at  levels   consistent  with
management's  financial  targets.  During the first  three  months of 1997,  the
Company  continued to maintain a high level of  liquidity.  Highly liquid assets
consist of cash,  deposits placed with banks,  Federal funds sold and securities
available for sale. At quarter end, the Bank had a liquidity ratio of 22.26%.
<PAGE>
Interest Rate Sensitivity Management: The primary objectives of the asset liab-
ility management process are to provide a stable net interest margin, generate
net interest income to meet the Company's earnings' objectives and manage
balance sheet risks. These risks include liquidity risk, capital adequacy and
overall interest rate risk inherent in the Company's balance sheet. In order to
manage its interest rate sensitivity, the Company has adopted policies that at-
tempt to limit the change in pre-tax net interest income assuming various int-
erest rate scenarios. This is accomplished by adjusting the repricing character-
istics of the Company's assets and liabilities as interest rates change. The
Company's Asset Liability Committee chooses strategies in conformance with its
policies to achieve an appropriate trade off between interest rate sensitivity
and the volatility of pre-tax net interest income and net interest margin.

The following table sets out the maturity and rate  sensitivity of the Company's
interest-earning  assets and interest-bearing  liabilities as of March 31, 1997.
The  cumulative  interest  sensitivity  gap  ("gap") as  reflected  in the table
represents the difference between  interest-earning  assets and interest-bearing
liabilities  maturing or  repricing,  whichever is earlier,  at a given point in
time and is not necessarily indicative of the position on other dates.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                   0 - 30      31- 90      3 - 6       6 - 12      1 - 5      Over 5
(In Thousands)                      Days        Days       Months      Months      Years      Years        Total
----------------------------------------------------------------------------------------------------------------------
Earning Assets:
<S>                                <C>         <C>         <C>         <C>         <C>        <C>          <C>     
    Fed funds sold ..............  $  9,800    $      -    $      -    $     -     $      -   $       -    $  9,800
    Deposit accounts with
    other banks .................       103           -           -          -            -           -         103
    Securities: (3)
        U. S. gov. agencies .....         -      13,446       9,925          -            -          21      23,392
        Municipals ..............         -           -           -          -            -         390         390
        Corporate bonds (6) .....         -           -           -          -            -       1,035       1,035
----------------------------------------------------------------------------------------------------------------------
    Total securities ............  $      -    $ 13,446    $  9,925   $      -     $      -    $  1,446    $ 24,817
---------------------------------------------------------------------------------------------------------------------- 
    Loans: (1)     
        Commercial-fixed ........  $    960   $   1,020    $    924   $    556     $  3,244    $      -    $  6,704
        Commercial-variable(2)...    14,678           -           -          -            -           -      14,678
        Real estate-fixed .......       697         330           5        162          384          50       1,628
        Real estate-variable.....    25,059           -           -          -            -           -      25,059
        Installment (4) .........        44          11          33         82        1,021           -       1,191
----------------------------------------------------------------------------------------------------------------------
    Total loans .................  $ 41,438   $   1,361    $    962   $    800     $  4,649    $     50    $ 49,260
----------------------------------------------------------------------------------------------------------------------
    Total assets ................  $ 51,341   $  14,807    $ 10,887   $    800     $  4,649    $  1,496    $ 83,980
----------------------------------------------------------------------------------------------------------------------
Source of Funds:
    Deposits:
        Interest-bearing
        demand deposits .........  $ 13,954   $       -    $      -   $      -     $      -    $      -    $ 13,954
        Time deposits greater
          than $100,000 .........     5,679       4,982       1,933      7,824        1,065           -      21,483
        Time deposits less
          than $100,000 .........     1,641       5,675       2,692      2,231          918           -      13,157
        Passbook time deposits 
        - variable ..............     4,938           -           -          -            -           -       4,938
        Savings (5) .............         -       9,169           -          -            -           -       9,169
----------------------------------------------------------------------------------------------------------------------
    Total deposits ..............  $ 26,212   $  19,826    $  4,625   $ 10,055     $  1,983    $      -    $ 62,701
----------------------------------------------------------------------------------------------------------------------
    Total liabilities ...........  $ 26,212   $  19,826    $  4,625   $ 10,055     $  1,983    $      -    $ 62,701
----------------------------------------------------------------------------------------------------------------------
    Gap .........................  $ 25,129   $  (5,019)   $  6,262   $ (9,255)    $  2,666    $  1,496    $ 21,279
----------------------------------------------------------------------------------------------------------------------
    Cumulative interest
    sensitivity gap .............  $ 25,129   $  20,110    $ 26,372   $ 17,117     $ 19,783    $ 21,279    $ 21,279
----------------------------------------------------------------------------------------------------------------------
<FN>
(1)  Non-accruing loans not yet charged off are included in the loan balance.
(2)  Overdrafts are not included in the loan balance.
(3)  Securities are stated at amortized cost.
(4)  Credit Cards are not included in the loan balance.
(5)  IRA's and Christmas Club accounts are not included in the balance.
(6)  FRB and other stock is not included in the balance.
</FN>
</TABLE>
<PAGE>

The gap is considered positive when the amount of interest rate sensitive assets
which  reprice  over a given time period  exceeds  the amount of  interest  rate
sensitive  liabilities which reprice over the same time period and is considered
negative when the reverse is true.  During a period of rising  interest rates, a
positive gap tends to result in increased  net interest  income while a negative
gap would have an adverse effect on net interest  income.  As illustrated by the
table,  the Company  maintained a positive  gap at March 31, 1997.  The Company,
therefore,  was asset  sensitive and was  positioned  for increased net interest
income given a rise in interest rates in 1997. The degree of positive gap is not
so large that a  significant  detrimental  impact  would  result  from stable or
declining interest rates.


BALANCE SHEET ANALYSIS

Cash and Due from Banks: Cash and due from banks for the quarter ended March 31,
1997, was $4,430,654,  compared to $5,052,387 at December 31, 1996. Cash and due
from banks  fluctuates on an ongoing basis  depending on the Banks cash activity
at quarter end.

Securities: The fair value of available-for-sale  securities totaled $9,490,086,
compared to $10,349,542 at December 31, 1996. The decrease in available-for-sale
securities was primarily due to  investments  that matured during the first part
of 1997. The Bank had approximately  $878,000 in  available-for-sale  securities
mature in the first quarter of 1997. All new  securities  purchased in the first
three  months of 1997 were placed in the  held-to-maturity  category  due to the
Banks  intent to hold these funds until they mature.  As of March 31, 1997,  the
Bank had  approximately  $1,273,000 in  held-to-maturity  securities  mature and
approximately  $1,535,000  in  securities  purchased.  As  of  March  31,  1997,
available-for-sale  securities  made up 37% of the  securities  portfolio  while
held-to-maturity  securities  made up 63% of the portfolio.  The majority of the
securities  are variable in rate at 94% of the  securities  portfolio and 6% are
fixed rate.

The  securities   portfolio   consisted  primarily  of  U.S.  government  agency
securities and one municipal bond and one corporate  bond. The amortized cost of
held-to-maturity  securities  totaled  $15,580,289  at quarter  end  compared to
$15,428,286 at December 31, 1996.

The  following  table shows the  amortized  cost (book  value) of the  Company's
portfolio of available-for-sale and held-to-maturity  securities for the periods
ending March 31, 1997, and December 31, 1996:

--------------------------------------------------------------------------------
(In thousands)                                       March 31,      December 31,
                                                       1997           1996
--------------------------------------------------------------------------------

Available-for-sale:
    U. S. Treasury .................................   $         -   $         -
    U. S. government agencies ......................     8,846,493     9,725,856
    States & political subdivisions ................       389,570       389,776
    Corporate bonds and other ......................       204,350       204,350
--------------------------------------------------------------------------------
        Total ......................................   $ 9,440,413   $10,319,982
--------------------------------------------------------------------------------

Held-to-maturity:
    U. S. Treasury .................................   $         -   $         -
    U. S. government agencies ......................    14,545,568    15,428,286
    States & political subdivisions ................             -             -
    Corporate bonds and other ......................     1,034,721             -
--------------------------------------------------------------------------------
        Total ......................................   $15,580,289   $15,428,286
--------------------------------------------------------------------------------

<PAGE>
The  following  tables show the  amortized  cost (book value) and  maturities of
securities at March 31, 1997, and the weighted average yields (1).
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                     Securities/Maturities - March 31, 1997
                              --------------------------------------------------------------------------------------
                                                  After 1 but          After 5 but
                                 Within 1 year        Within 5 Years       Within 10 Years       After 10 Years
                              --------------------------------------------------------------------------------------
                                Amount      Yield     Amount     Yield     Amount     Yield     Amount      Yield
--------------------------------------------------------------------------------------------------------------------
Available-for-sale:(1)
<S>                           <C>           <C>      <C>          <C>     <C>          <C>     <C>           <C>  
    U. S. Treasury .......... $         -       -    $         -     -    $         -     -    $         -      -
    U.S. government
    agencies ................           -       -      3,495,455  6.73%     5,351,038  6.68%             -      -
    States & political
    subdivisions (2) ........           -       -              -     -              -     -        389,570  13.50%
    Corporate bonds(2)(3) ...           -       -              -     -              -     -              -      -
--------------------------------------------------------------------------------------------------------------------
        Total ............... $         -       -    $ 3,495,455  6.73%   $ 5,351,038  6.68%   $   389,570  13.50%
--------------------------------------------------------------------------------------------------------------------
Held-to-maturity: (1)
    U. S. Treasury .......... $         -       -    $         -     -    $         -     -    $         -      -
    U.S. government
    agencies ................           -       -      3,586,991  7.94%     9,406,619  7.18%     1,551,958   7.98%
    States & political
    subdivisions (2) ........           -       -              -     -              -     -              -      -
    Corporate bonds (2) .....           -       -              -     -      1,034,721  6.90%             -      -
--------------------------------------------------------------------------------------------------------------------
        Total ............... $         -       -    $ 3,586,991  7.94%   $10,441,340  7.15%   $ 1,551,958   7.98%
--------------------------------------------------------------------------------------------------------------------
<FN>
(1)  Yields are calculated on a tax equivalent basis using the Federal statutory rate of 34%.
(2)  There were no securities which exceeded 10% of stockholders' equity.
(3)  Federal Reserve Stock and other stock are not included in balance.
</FN>
</TABLE>
Loan  Composition:  The loan  portfolio  totaled  $47,668,018 at March 31, 1997,
compared to  $49,394,123 at December 31, 1996.  There was a slight  reduction in
real estate  mortgage  loans and a small  increase in real estate  construction.
Total gross loans  decreased  3.13% in the first three months of 1997.  Consumer
loans continue to decline due to recessionary  influences and  competition.  The
composition of the Bank's loan portfolio is as follows:
--------------------------------------------------------------------------------
                                          Percentage                Percentage
                                March 31,  of Total    December 31,  of Total
                                  1997      Loans         1996        Loans
--------------------------------------------------------------------------------
Commercial, financial
and agricultural ...........  $ 21,132,155   42.92%    $ 21,428,989   42.16%
Real Estate-construction ...    13,410,663   27.24%      13,404,461   26.37%
Real Estate-mortgage .......    12,950,312   26.30%      14,160,539   27.86%
Installment loans to
individuals ................     1,743,770    3.54%       1,837,465    3.61%
--------------------------------------------------------------------------------
                              $ 49,236,900  100.00%    $ 50,831,454  100.00%
Unearned discount ..........       (64,930)                 (61,208)
Allowance for possible
loan losses ................    (1,111,456)              (1,082,278)
Deferred loan fees .........      (257,824)                (293,845)
Deferred profit on OREO
sales (2) ..................      (134,672)                       -
--------------------------------------------------------------------------------
    Loans, net .............  $ 47,668,018             $ 49,394,123
--------------------------------------------------------------------------------
(1) There were no lease financing or foreign loans
(2) Audited financial  statements for December 31, 1996, do not include deferred
    profit on OREO sales since it is not considered material in amount.

The Bank's customers are primarily located in Stanislaus County and San Joaquin
County.  Approximately 54% of the Bank's loans are for real estate and construc-
tion and approximately 43% of the Bank's loans are for general commercial uses
including professional, retail, agricultural and small business. Generally real
estate loans are secured by real property and commercial and other loans are
secured by funds on deposit, business or personal assets. Repayment is generally
expected from the proceeds of the sales of property for real estate construction
loans, and from cash flows of the borrower for other loans.
<PAGE>

Neither  the  Bank  nor  the  regulators  have  placed  any  limitations  on the
composition of the Bank's loan portfolio.  There were no concentrations of loans
exceeding 10% of total loans that were not otherwise  disclosed as a category of
loans in the above table.  Unsecured loans are not a significant  portion of the
loan portfolio depicted in the above table. There were no other interest bearing
assets at the end of the period.

The Bank has collateral  management policies in place so that collateral lending
of all  types is on a basis  that it  believes  is  consistent  with  regulatory
lending  standards.  Valuation  analyses are utilized to take into consideration
the  potentially   adverse  economic   conditions  under  which  liquidation  of
collateral could occur. It is generally the Bank's policy to fully collateralize
all loans with  loan-to-value  ratios  determined  on an  individual  loan basis
taking into account the  financial  stability of each borrower and the value and
type of the collateral.


Allowance  for Loan  Losses:  The  allowance  for  loan  losses  is  based  upon
management's  evaluation  of the  adequacy of the existing  allowance  for loans
outstanding.  These evaluations take into  consideration such factors as changes
in the nature and  volume of the  portfolio,  overall  portfolio  quality,  loan
concentrations,  specific loan problems and current economic conditions that may
affect  the  borrower's  ability  to repay.  The  allowance  for loan  losses is
increased by provisions  charged to expense and reduced by loan  charge-offs net
of  recoveries.  Early  recognition  of  problem  credits is  critical  to avoid
shortages in the allowance.  The allowance for loan losses totaled $1,111,456 or
2.26% of total gross loans at March 31, 1997, compared to $1,082,278 or 2.13% of
total gross loans at December 31,  1996.  As of March 31,  1997,  the  allowance
primarily  consists  of  one  commercial  retail  center  that  is  experiencing
difficulty in leases and cash flow.

The allowance for loan losses is a product of the Bank's allowance for loan loss
methodology that reflects the potential losses in the loan portfolio. The Bank's
conservative  lending  philosophy  allows this allowance to be quite manageable.
Loans  totaling  $12,643  were  charged  off during the period and  $41,821  was
collected  in  recoveries  as of March 31,  1997,  compared  to $70,302 in loans
charged off and $39,360 in recoveries for the same period of 1996. Loans charged
off totaled  $488,608 as of December  31, 1996,  and  $166,042 was  collected in
recoveries.

Total loans classified for regulatory purposes as loss,  doubtful,  substandard,
or special mention (including  nonaccrual loans and troubled debt restructuring)
at March 31, 1997, were $2,790,708. At December 31, 1996, total loans classified
for regulatory  purposes was $3,945,378.  Of the total  classified,  $71,634 was
classified as doubtful at March 31, 1997,  and December 31, 1996.  Management is
not aware of any other material credit that there is serious doubt regarding the
ability to repay  other  than those  reflected  in  classified  loans and in the
allowance for possible loan losses.


Non-Accrual  Loans,  Restructured  Loans  and  Real  Estate  Owned:  Information
regarding  non-accrual loans, past due loans and restructured loans is presented
below.

--------------------------------------------------------------------------------
                                                       March 31,    December 31,
                                                         1997          1996
--------------------------------------------------------------------------------
Non-accrual loans: (1)
    Commercial, financial and agricultural .......   $    81,702    $         -
    Real estate loans ............................     1,557,829        329,609
    Consumer loans (2)............................             -              -
--------------------------------------------------------------------------------
        Total non-accrual loans ..................   $ 1,639,531    $   329,609
--------------------------------------------------------------------------------
Loans past due 90 days or more still
accruing interest                                    $     6,000              -
--------------------------------------------------------------------------------
Troubled debt restructuring (1) ..................   $ 1,134,700    $ 1,135,752
--------------------------------------------------------------------------------
(1)  Carrying value before impaired allowance
(2)  Credit cards
<PAGE>

Non-accrual  loans at quarter end amounted to  $1,639,531,  up from  $329,609 at
December 31, 1996.  The major portion of the  non-accrual  loans consists of one
real estate loan totaling $1,228,001. Gross interest income that would have been
recorded  for  non-accrual  loans if loans had been current in  accordance  with
original  terms  and  had  been  outstanding  throughout  the  period  or  since
origination  for year to date  1997 and  December  31,  1996,  was  $68,777  and
$29,694,  respectively.  There was no interest income included in net income for
the period for non-accrual loans.

Management  is  constantly  aware  of  the  need  for  maintaining  high  credit
standards.  The Company is not involved in foreign lending and is not engaged in
high yield,  high risk loans. A loan is placed on nonaccrual  status when either
principal or interest is in default for 90 days more, or when  external  factors
indicate that payment in full of principal and interest  appears unlikely unless
the loan is well secured and in the process of collection. When a loan is placed
on nonaccrual status,  all interest  previously accrued but uncollected shall be
reversed against the appropriate  income account.  In most cases, if the loan is
rated  substandard  or better,  payments  shall be applied to interest first and
then principal  provided no loss is anticipated.  If a loss is anticipated,  all
payments shall be applied to principal first and then interest. When one loan of
a customer is placed on nonaccrual  status related  borrowings will be evaluated
as to whether they should also be placed on nonaccrual status.  Nonaccrual loans
will be restored to an accruing status when principal and interest are no longer
past due and  unpaid,  or the loan  otherwise  becomes  well  secured and in the
process of collection.

A troubled debt restructuring occurs when the Bank for economic or legal reasons
related to the  debtor's  financial  difficulties,  grants a  concession  to the
debtor that it would not ordinarily  consider.  Troubled debt  restructuring can
occur in a variety of forms,  such as  transferring  assets in a full or partial
settlement of the debt,  issuing debt, or modifying terms including reducing the
stated  interest rate,  extending  maturity  dates,  reducing the face amount or
maturity of the debt, or reducing accrued interest.  Restructured  loans totaled
$1,134,700  at March  31,  1997,  and  $1,135,752  at  December  31,  1996.  All
restructured loans were current as to principal and interest.

FUNDING SOURCES

Deposits:  Total deposits amounted to $79,405,638 as of March 31,1997,  compared
to $81,052,506 at December 31, 1996, a decrease of 2.03%.  The decrease  between
December 31, 1996,  and March 31, 1997,  was primarily in  non-interest  bearing
deposits.   Historically,  the  Bank  retains  90%  or  more  of  its  deposits.
Non-interest  bearing  deposits  decreased  10.96% while interest bearing demand
deposits increased 8.10%. Total time and savings deposits remained constant at a
slight reduction of 1.61%.

Non-interest bearing demand deposits averaged approximately $13,807,325 at March
31,  1997,  and  $13,987,382  at December 31, 1996.  Interest  bearing  deposits
averaged  approximately  $67,201,711 at the end of March and $67,571,770 at year
end December 31, 1996.


--------------------------------------------------------------------------------
                                        March 31, 1997        December 31, 1996
--------------------------------------------------------------------------------
                                      Average     Average     Average    Average
                                      Balance      Rate       Balance     Rate
--------------------------------------------------------------------------------
Interest bearing deposits
         Checking accounts .....    $15,432,841    1.52%    $14,186,109    1.88%
         Savings ...............     16,234,560    4.24%     18,142,195    4.24%
         Time deposits (1) .....     35,534,310    4.97%     35,243,466    4.13%
Non-interest bearing deposits ..     13,807,325              13,987,382
--------------------------------------------------------------------------------
(1) Included at March 31, 1997 are $21,482,909 in time certificates of $100,000
or more, of which $10,660,409 matures in 3 months or less, $1,933,059 matures in
3 to 6 months,  $7,823,812  matures in 6 to 12 months, and $1,065,629 matures in
more than 12 months.

<PAGE>

Other Borrowings:  There were no other borrowings as of March 31, 1997,
or December 31, 1996.

Capital:  Retained  earnings from operations have been the primary source of new
capital  for the  Company.  As of  March  31,  1997,  stockholders'  equity  was
$10,873,283,  compared to $10,607,355 at year-end  1996.  Risk-adjusted  capital
guidelines,  issued by bank regulatory agencies, assign risk weighting to assets
and off-balance sheet items and place increased  emphasis on common equity.  The
guidelines  require  adequately  capitalized  institutions  to maintain a Tier I
(core)  capital  ratio of 4% and a combined  Tier I and Tier II capital ratio of
8%.  Institutions  whose Tier I and total  capital  ratios meet or exceed 6% and
10%,  respectively,  is deemed to be well capitalized.  For the Company,  Tier I
capital   consists  of  common   stockholders'   equity.   In  addition  to  the
risk-weighted  ratios, all banks are expected to maintain leverage ratios, to be
determined on an individual  basis, but not below a minimum of 3%. This ratio is
defined as Tier I capital to average  total assets for the most recent  quarter.
At March 31, 1997, the Company exceeded its capital  requirements.  Based on the
guidelines,  the Bank's  Tier I and  combined  Tier I and Tier II  risk-weighted
ratios at March 31, 1997, and December 31, 1996, and 1995 were as follows:

--------------------------------------------------------------------------------
                                Minimum    March 31,  December 31,  December 31,
                                             1997        1996           1995
--------------------------------------------------------------------------------
Risk Based Capital Ratio ....    8.00%      19.99%       19.76%        18.14%
Tier I Ratio ................    4.00%      18.73%       18.50%        16.88%
Leverage Ratio ..............    3.00%      11.55%       11.23%        10.02%
--------------------------------------------------------------------------------


PART II - OTHER INFORMATION

Item 1 - Legal Proceedings - None other than in the ordinary course of business.

Item 2 - Change 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 - No Change.

Item 6 - Exhibits and Reports on Form 8-K

         a)       Exhibits

                  Registrant's Articles of Incorporation and Bylaws are
                  furnished by way of incorporation by reference to Exhibit 3 to
                  registrant's  registration  statement  on Form S-14,  as filed
                  under the  Securities  Act of 1933 on September 10, 1982,  and
                  declared effective on October 8, 1982.

                  Plan of Reorganization and Agreement of Merger is furnished by
                  reference  to  registrant's  Form  S-14  as  filed  under  the
                  Securities Act of 1933 on September 10, 1982, and effective on
                  October 8, 1982.

         b)       Reports on Form 8-K

                  The registrant did not file any reports on Form 8-K during the
                  period ending March 31, 1997

<PAGE>



                                   SIGNATURES




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



                             DELTA NATIONAL BANCORP
                                                                    (Registrant)




DATE:       April 30, 1997                  /s/ Andrew Rossi
                                            Andrew Rossi
                                            President/Chief Executive Officer
                                            Director
                                            (Principal Executive Officer)



DATE:       April 30, 1997                  /s/ Warren E. Wegge
                                            Warren E. Wegge
                                            Executive Vice President
                                            (Principal Financial Officer)




DATE:       April 30, 1997                  /s/ Toinette Rossi
                                            Toinette Rossi
                                            Vice President and Manager
                                            Director