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 SEPTEMBER 30, 1996


                         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 September 30, 1996:

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 -
                      September 30, 1996 and December 31, 1995           4

             Consolidated Statements of Income -
                      Three months ended September 30, 1996
                        and nine months ended September 30, 1996         5
                      Three months ended September 30, 1995
                        and nine months ended September 30, 1995         6

             Consolidated Statements of Cash Flows -
                      Nine months ended September 30, 1996 and 1995      7

             Notes to Consolidated Financial Statements                  9

Item 2.      Management's Discussion and Analysis of Financial
              Condition and Results of Operations                       17



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

Item 1.      Legal Proceedings                                          26

Item 2.      Changes in Securities                                      26

Item 3.      Defaults Upon Senior Securities                            26

Item 4.      Submission of Matters to a Vote of Security Holders        26

Item 5.      Other Information                                          26

Item 6.      Exhibits and Reports on Form 8-K                           26

<PAGE>


PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements

                             DELTA NATIONAL BANCORP

                           CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)

                                    Unaudited

                                                           Sept. 30,    Dec. 31,
                                                             1996         1995
    ASSETS

Cash and due from banks ...............................    $  4,338     $  4,330
Federal funds sold ....................................       3,800        7,600
                                                           --------     --------
        Total cash and cash equivalents (notes A10
        and B) ........................................       8,138       11,930

Interest bearing deposits in banks ....................         686           51

Securities available for sale (notes A3 and C) ........      11,766       12,926
Securities held to maturity (notes A2 and C) ..........      17,126       20,351
                                                           --------     --------
                                                             28,892       33,277

Loans, net (notes A4, A5 and D) .......................      49,000       46,520
Property and equipment (note A6) ......................       1,638        1,343
Interest receivable, other assets and other
real estate owned (notes A7 and F) ....................       2,227        1,803
                                                           --------     --------

TOTAL ASSETS ..........................................    $ 90,581     $ 94,924
                                                           ========     ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
    Non-interest bearing ..............................      14,233       15,980
    Interest bearing ..................................      65,691       68,859
                                                           --------     --------
        Total deposits ................................      79,924       84,839

Accrued interest/other liabilities ....................         385          314

Stockholders' equity:
    Common stock, no par value
      Authorized - 5,000,000 shares
      Issued and outstanding - 376,782 shares .........       3,532        3,532
    Retained earnings .................................       6,787        6,194
    Net unrealized appreciation (depreciation) on
      securities available-for-sale, net of tax of
      ($33,039) and $31,827 at September 30, 1996
      and December 31, 1995, respectively .............         (47)          45
                                                           --------     --------

        Total stockholders' equity ....................      10,272        9,771

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............    $ 90,581     $ 94,924
                                                           ========     ========

         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     9 Months
                                                           Ending       Ending
                                                          Sept. 30,    Sept. 30,
                                                            1996         1996
                                                          ---------    ---------
Interest income:
    Interest and fees on loans ......................      $ 1,478       $ 4,312
    Securities available-for-sale ...................          183           565
    Securities held-to-maturity .....................          283           897
    Interest-bearing deposits in banks ..............            3             7
    Federal funds sold ..............................           69           203
                                                           -------       -------
        Total interest income .......................        2,016         5,984

Interest expense on deposits ........................          683         2,084
                                                           -------       -------
        Net interest income .........................        1,333         3,900

Provision for loan losses ...........................          (51)          160
                                                           -------       -------
        Net interest income after provision
         for possible loan losses ...................        1,384         3,740

Other income
    Service charges on deposits .....................          134           389
    Other income ....................................          301           551
                                                           -------       -------
                                                               435           940
                                                           -------       -------

Other expenses
    Salaries, wages and employee benefits ...........          535         1,542
    Occupancy and equipment .........................          200           528
    Other operating expenses ........................          512         1,166
                                                           -------       -------
                                                             1,247         3,236
                                                           -------       -------
        Earning before income taxes .................          572         1,444

Income taxes (note A8) ..............................          230           587
                                                           -------       -------
        NET EARNINGS ................................      $   342       $   857
                                                           =======       =======

Net earnings per share (note A9) ....................      $   .90       $  2.27
                                                           =======       =======

         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     9 Months
                                                           Ending       Ending
                                                          Sept. 30,    Sept. 30,
                                                            1995         1995
                                                          ---------    ---------
Interest income:
    Interest and fees on loans ......................      $ 1,414       $ 4,164
    Securities available-for-sale ...................          251           802
    Securities held-to-maturity .....................          287           638
    Interest-bearing deposits in banks ..............            0             0
    Federal funds sold ..............................           88           221
                                                           -------       -------
        Total interest income .......................        2,040         5,825

Interest expense on deposits ........................          802         2,239
                                                           -------       -------

        Net interest income .........................        1,238         3,586

Provision for loan loss .............................          100           299
                                                           -------       -------
        Net interest income after provision
         for possible loan losses ...................        1,138         3,287

Other income
    Service charges on deposits .....................          125           358
    Other income ....................................           57           173
                                                           -------       -------
                                                               182           531
                                                           -------       -------

Other expenses
    Salaries, wages and employee benefits ...........          464         1,349
    Occupancy and equipment .........................          194           509
    Other operating expenses ........................          232           794
                                                           -------       -------
                                                               890         2,652
                                                           -------       -------
        Earning before income taxes .................          430         1,166

Income taxes (note A8) ..............................          176           456
                                                           -------       -------

        NET EARNINGS ................................      $   254       $   710
                                                           =======       =======

Net earnings per share (note A9) ....................      $   .67       $  1.88
                                                           =======       =======

         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

                                                            9 MONTHS ENDING
                                                              SEPTEMBER 30,
                                                             1996         1995
Increase (decrease) in cash and cash equivalents

Cash flows from operating activities:
  Net earnings .......................................     $   857      $   710
    Adjustments to reconcile net earnings to net
      cash  provided by operating activities
        (Gain)/Loss on sale of assets ................           0           16
        (Gain)/Loss on sale of OREO ..................          (6)         (26)
        Provision for possible loan losses ...........         160          299
        Provision for OREO ...........................          92           38
        Provision for depreciation and
        amortization  ................................         418          345
        Decrease (increase) in interest
        receivable and other assets ..................        (234)        (397)
        Increase (decrease) in interest payable
         and other liabilities .......................         (21)          47
                                                           -------      -------
           Net cash provided by operating
           activities  ...............................       1,266        1,032
                                                           -------      -------

Cash flows from investing activities:
  Proceeds from maturities of securities
    available-for-sale ...............................       1,140        5,434
  Proceeds from maturities of securities
    held-to-maturity .................................       4,949        2,987
  Purchase of securities available-for-sale ..........        (149)           0
  Purchase of securities held-to-maturity ............      (1,983)      (9,473)
  Net (increase) decrease in loans ...................      (2,640)        (790)
  Purchase of property and equipment .................        (448)        (693)
  Purchase/additions to OREO .........................        (175)         (34)
  Proceeds from sale of property and equipment .......           7           10
  Proceeds from sale of OREO .........................          56          497
  Net (inc.) dec. Int. Bearing Deposits Other Inst....        (635)           0
                                                           -------      -------
           Net cash (used in) provided by
           investing activities ......................         122       (2,062)
                                                           -------      -------




         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


                                                            9 MONTHS ENDING
                                                              SEPTEMBER 30,
                                                             1996         1995
Cash flows from financing activities:
  Net increase (decrease) in demand deposits,
    money market accounts and savings accounts .......      (3,675)       3,981
  Net (decrease) increase in time deposits ...........      (1,241)         188
  Cash dividends .....................................        (264)        (264)
                                                          --------     --------
           Net  cash provided by financing
           activities ................................      (5,180)       3,905
                                                          --------     --------

Net  increase (decrease) in cash and
cash equivalents .....................................      (3,792)       2,875

Cash and cash equivalents at beginning of period .....      11,930        6,149
                                                          --------     --------

Cash and cash equivalents at end of period ...........    $  8,138     $  9,024
                                                          ========     ========

Supplemental disclosures of cash flow information:

    Cash paid during the period for:
        Interest .....................................       1,878        2,042
        Income Taxes .................................         607          736



Noncash investing and financing activities:

  The  Bank  recognized  a  decrease  of  $156,306  in  the  fair  value  of its
  available-for-sale  securities in the nine months  ending  September 30, 1996,
  and an  increase  of  $730,537  in the fair  value  of its  available-for-sale
  securities for the year ended December 31, 1995.




         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

                               SEPTEMBER 30, 1996


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 nine months ended September 30, 1996.  Management
has presented,  for comparison purposes its unaudited consolidated balance sheet
as of September 30, 1996, its unaudited  consolidated  statements of earning for
three months and nine months ending  September 30, 1996, and 1995 and cash flows
for the nine months ended September 30, 1996, and 1995. 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

                               SEPTEMBER 30, 1996




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

                               SEPTEMBER 30, 1996



7.     Foreclosed assets

Real estate properties  acquired through  foreclosure are initially  recorded at
fair value at the date of  foreclosure,  establishing  a new cost  basis.  After
foreclosure,  valuations are  periodically  performed by management and the real
estate is  carried  at the lower of (1) cost,  or (2) fair  market  value  minus
estimated costs to sell. The net carrying value (included in other assets on the
balance  sheet) of  foreclosed  real estate was $571,440  for the period  ending
September 30, 1996, and $560,600 for the period ending December 31, 1995.

Other assets repossessed by the Bank are initially recorded at fair value at the
date of repossession, establishing a new cost basis. Valuations are periodically
performed by  management  and the asset is carried at the lower of (1) cost,  or
(2) fair market value minus  estimated  costs to sell.  The net  carrying  value
(included in other assets on the balance sheet) of other repossessed  assets was
$257,272  for the  period  ending  September  30,  1996.  There  were  no  other
repossessed assets as of December 31, 1995.


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 September 30, 1996, and December 31, 1995, 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.


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.
<PAGE>


                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996

NOTE C - SECURITIES

Effective  December 31, 1993,  the Bank  adopted SFAS No. 115,  "Accounting  for
Certain  Investments  in Debt  and  Equity  Securities."  These  securities  are
classified into one of three categories:  held-to-maturity,  available-for-sale,
or trading.  Held-to-maturity  securities  are  measured at  amortized  cost and
available-for-sale and trading securities are measured at fair value. Unrealized
holding  gains and losses for  available-for-sale  securities  are excluded from
earnings and reported as a net amount in a separate  component of  stockholders'
equity until realized.

Amortized cost (book values) and estimated  fair value of investment  securities
for September 30, 1996, and December 31, 1995, are as follows:
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------
                                           September 30, 1996                  December 31, 1995
                                                 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 .      $     0     $      0    $     0      $     0      $     0       $     0
  Obligations of other U.S. 
    government agencies ....       11,252         (206)    11,046       12,189          (66)       12,123
  Obligations of state and
    political subdivisions .          390          126        516          606          142           748
  Corporate bonds and other           204            0        204           55            0            55
                                  -------      -------    -------      -------      -------       -------

Total ......................      $11,846     $   (80)    $11,766      $12,850      $    76       $12,926
                                  =======     =======     =======      =======      =======       =======

Held-to-maturity securities:
  U.S. treasury securities .      $     0     $      0    $     0      $     0      $     0       $     0
  Obligations of other U.S. 
    government agencies ....       16,846          153     16,999       18,252          142        18,394
  Obligations of state and
    political subdivisions .          280            0        280          696           (2)          694
  Corporate bonds and other             0            0          0        1,404           (8)        1,396
                                  -------      -------    -------      -------      -------       -------

Total ......................      $17,126      $   153    $17,279      $20,352      $   132       $20,484
                                  =======      =======    =======      =======      =======       =======

---------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>




                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996

NOTE D - LOANS

The composition of the Bank's loan portfolio at September 30, 1996, and December
31, 1995, is as follows:

--------------------------------------------------------------------------------
                                                September 30,      December 31,
                                                    1996               1995
--------------------------------------------------------------------------------
Commercial, financial and agricultural .....      $22,571,047      $ 22,755,013
            Real estate - construction .....       13,108,616         9,175,475
                Real estate - mortgage .....       12,930,150        14,090,502
      Installment loans to individuals .....        1,885,822         2,073,749
                                                 ------------      ------------
                                                  $50,495,635       $48,094,739

                     Unearned discount .....          (67,522)          (80,189)
             Allowance for loan losses .....       (1,059,749)       (1,219,304)
                    Deferred loan fees .....         (273,235)         (275,427)
      Deferred profit on OREO sales (1) ....          (94,894)
                                                 ------------      ------------
                            Loans, net .....      $49,000,235      $ 46,519,819
                                                 ============      ============

--------------------------------------------------------------------------------
(1) Audited financial  statements for December 31, 1995, 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 September 30, 1996, and December 31, 1995:

--------------------------------------------------------------------------------
                                                    September 30,   December 31,
                                                        1996            1995
--------------------------------------------------------------------------------
Balance at January 1 ...........................    $ 1,219,304     $   599,422
Charge Offs:
    Commercial, financial and agricultural .....       (373,037)
    Real Estate - construction .................        (61,638)
    Real Estate - mortgage .....................
    Installment loans to individuals ...........        (33,962)       (112,366)
                                                    -----------     -----------
        Total Charge Offs ......................       (468,637)       (112,366)
                                                    -----------     -----------
Recoveries:
    Commercial, financial and agricultural .....                          1,390
    Real Estate - construction .................        116,898          80,425
    Real Estate - mortgage .....................          1,600           2,200
    Installment loans to individuals ...........         30,018          24,219
                                                    -----------     ----------- 
        Total Recoveries .......................        148,516         108,234
                                                    -----------     -----------
Net charge offs ................................       (320,121)         (4,132)
Additions charged to operations ................        160,566         624,014
                                                    -----------     -----------
                                                    $ 1,059,749     $ 1,219,304
                                                    ===========     ===========
--------------------------------------------------------------------------------
<PAGE>
                              DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996

Impaired  Loans:  In May 1993, the Financial  Accounting  Standards Board (FASB)
issued  Statement  of  Financial  Accounting  Standards  (SFAS) No. 114 entitled
"Accounting by Creditors for Impairment of a Loan." This statement, which became
effective January 1, 1995, requires that impaired loans, as defined, be 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 Bank  adopted  and  implemented  SFAS No.  114 as of
January 1, 1995.

The carrying value of impaired  loans totaled  $1,541,536 at September 30, 1996,
of which $1,134,379 is the result of a troubled debt restructuring. There was no
allowance  relating to these loans as of  September  30,  1996,  due to the fair
value of the  collateral  exceeding  the carrying  value of the impaired  loans.
Total  cash  collected  on  impaired  loans  for the first  nine  months of 1996
approximated  $698,382 of which  $601,695 was credited to the principal  balance
outstanding,  and  the  remainder  was  recognized  as  interest  income.  As of
September 30, 1996,  an impaired loan in the amount of $236,238 was  transferred
to OREO of which  $61,638 was charged off and $174,600  booked as OREO.  Another
large  commercial-agricultural loan in the amount of $612,909 was transferred to
other  repossessed  assets  of  which  $299,909  was  charged  off and  $313,000
transferred.

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:

--------------------------------------------------------------------------------
                              September 30,                         December 31,
                                  1996                                  1995
--------------------------------------------------------------------------------
Principal amount of                          Principal amount of
  impaired loans ...........  $1,539,730     impaired loans........   $2,840,637
Accrued Interest ...........        1281     Accrued Interest .....          267
Deferred loan costs ........         525     Deferred loan costs ..        1,408
                              ----------                              ----------
                               1,541,536                               2,842,312
Less valuation                               Less valuation 
  allowance ................           0       allowance ..........      334,981
                              ==========                              ==========
Total carrying value .......  $1,541,536     Total carrying value .   $2,507,331
                              ==========                              ==========

Valuation allowance at                       Valuation allowance at
  beginning of period ......  $  334,981       beginning of period    $        0
Net charges to operations                    Net charges to operations
 for  impairment ...........      26,565       for impairment .....      334,981
Direct write-downs .........     361,546     Direct write-downs ...            0
Recoveries .................           0     Recoveries ...........            0
                              ----------                              ----------
Valuation allowance at                       Valuation allowance at        
  end of period ............  $        0       end of period ......   $  334,981
                              ==========                              ==========
--------------------------------------------------------------------------------
<PAGE>


                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996



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 1991 the Bank  extended  credit to Valerie  Salas,  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 $16,595.  As of September 30, 1996,  the  principal  balance owing was
$5,237.  This loan is unsecured and bears  interest at a fixed rate of 13%. This
loan matures on April 23, 1997.

In 1995,  the Bank  funded 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.  On September 30, 1996, the principal  balance owing was
$303,250.  This line of credit bears interest at the Bank's  reference rate plus
2.5% and is scheduled to mature  November 1, 1996.  John Rossi also guarantees a
small secured loan which was  originated  3/18/96 in the amount of $5,194.  This
loan has an interest rate of 14.75% and matures 3/14/97. As of September 30,
1996, the principal balance owed was $2,696.

As of  September  30, 1996,  the Bank had loans  exceeding  $60,000  extended to
Joseph Freitas and various family members.  The following table summarizes those
loans with a total indebtedness of $60,460.

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                                 Balance as                          Current
                                        Note     of Sept. 30,    Note     Maturity   Interest   Secured/
 Name on Loan        Relationship      Amount       1996         Date       Date       Rate     Unsecured
-------------------------------------------------------------------------------------------------------------
<S>                    <C>            <C>        <C>            <C>        <C>        <C>       <C>       
Joseph Freitas .....   Director       $ 13,055   $  7,518       4/19/96    4/21/97    7.75%     Secured
                                                                                      Fixed
Joseph Freitas .....   Director       $ 30,000   $ 30,000       8/26/96   10/03/96    8.00%     Secured
                                                                                      Fixed
Linda Abeldt .......   Daughter       $  9,000   $  6,787       3/22/95    3/22/00   10.00%     Unsecured
                                                                                      Fixed
Linda Abeldt .......   Daughter       $ 12,000   $  6,155       1/25/94    1/25/99    7.00%     Unsecured
                                                                                      Fixed
Melissa Braun ......   Granddaughter  $ 10,000   $ 10,000       9/26/96     7/2/97    8.00%     Secured
                                                                                      Fixed
-------------------------------------------------------------------------------------------------------------
Total Indebtedness ...........................   $ 60,460
-------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>





                             DELTA NATIONAL BANCORP

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996

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  foreclosure  are  initially  recorded  at  fair  value  at the  date of
foreclosure  establishing a new cost basis.  After  foreclosure,  valuations are
periodically  performed  and the real estate is carried at the lower of (1) cost
or (2) fair market value minus  estimated costs to sell.  Total  foreclosed real
estate (before the valuation allowance) was $958,793 at September 30, 1996, this
consisted of three  properties,  two of which  represented  bare land. The third
property is a condominium  complex consisting of eight units that were completed
and placed in service as rental units by the Bank.  The  valuation  allowance at
September 30, 1996, totaled $387,353.


--------------------------------------------------------------------------------
                                       September 30, 1996      December 31, 1995
--------------------------------------------------------------------------------
     Real estate owned:
         Foreclosed assets                $   958,793            $   856,167
         Less valuation allowance             387,353                295,567
--------------------------------------------------------------------------------
             OREO, net                    $   571,440            $   560,600
--------------------------------------------------------------------------------


Changes in the valuation  allowance for  foreclosed  real estate for the periods
ending September 30, 1996, and December 31, 1995, are as follows:


--------------------------------------------------------------------------------
                                         September 30, 1996    December 31, 1995
--------------------------------------------------------------------------------

     Balance at January 1,                $   295,567            $   257,644
     Provision charged to operations          112,560                 37,923
     Charge-offs, net of recoveries (l)       (20,774)                     0
--------------------------------------------------------------------------------
     Balance at end of period             $   387,353            $   295,567
--------------------------------------------------------------------------------
(1) Net recovery consists of one property sold in the third quarter.

Other  repossessed  assets  acquired by the Bank include all assets  except real
estate.  As with other real estate owned,  assets acquired by  repossession  are
initially recorded at fair value at the date of repossession  establishing a new
cost basis. After  repossession,  valuations are periodically  performed and the
asset is carried  at the lower of (1) cost or (2) fair  market  value  minus the
estimated costs to sell.  Total other  repossessed  assets (before the valuation
allowance) was $257,272. This consisted of cattle used in dairy production.  The
Bank has been managing the dairy  production  since  foreclosure.  As cattle are
sold at  auction,  the  asset is  reduced  and a  corresponding  gain or loss is
recorded.  The original amount taken into other repossessed  assets was $313,000
and no valuation  allowance  has been made to date.  The  corresponding  loss on
cattle sold at auction amounted to $19,200 as of September 30, 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 September 30, 1996, the Company's  total assets were  $90,581,460,  net loans
amounted to $49,000,234,  stockholders' equity was $10,272,519 and the allowance
for loan losses was  $1,059,749.  This compares to total assets of  $94,924,333,
net loans of $46,519,819,  stockholders'  equity of $9,771,029 and allowance for
loan losses of $1,219,304 at December 31, 1995.

Net income for the first nine  months of 1996  amounted to $856,676 or $2.27 per
share,  as compared  with $710,286 or $1.88 per share earned for the same period
in 1995. A significant portion of the increase in net income from a year ago was
due to increased  interest income earned on commercial and real estate loans and
a decrease in interest  expense.  Net non-interest  income also increased in the
first nine months of 1996, compared to 1995.

The carrying value of nonaccrual loans at quarter end amounted to $407,157, down
from  $1,694,556 at December 31, 1995.  Nonaccrual  loans  consisted of one real
estate loan and one  commercial  loan. At September 30, 1996,  other real estate
owned ("OREO") (net of the valuation allowance) totaled $571,440,  compared with
OREO of $560,600 at December 31, 1995.  Restructured  loans,  loans  outstanding
whose  original terms have been  modified,  totaled  $1,134,379 at September 30,
1996,  which  consisted  of one real  estate  loan,  compared to  $l,147,775  at
December 31, 1995.

There was a decrease in the provision for loan losses. As of September 30, 1996,
the provision was $160,567,  compared to a $299,000  accrual for the same period
in 1995.  Net  charge-offs  increased for the first nine months in 1996 over the
previous  year.  Net loans  charged off  amounted to $320,121 for the first nine
months of 1996 versus a net recovery of $9,550 for the same period in 1995.

Net interest income was $3,900,021 at September 30, 1996, compared to $3,585,388
for September 30, 1995. Net interest income increased due to increased  interest
income on commercial and real estate loans and a decrease in interest expense on
deposits.  Interest  expense  decreased 6.99% due to lower rates on deposits and
decreased interest bearing balances.

Non-interest  income amounted to $940,171 as of September 30, 1996,  compared to
$531,191 for September  30,1995.  Income related to service  charges on deposits
increased  8.65% while an increase in other income was  attributed  to income on
other real estate owned and other  repossessed  assets as well as an increase in
mortgage department fee income.  Total non-interest income increased 76.99% over
the same period in 1995.
<PAGE>


Operating  expenses  amounted to $3,236,186 for the nine months ending September
30 1996,  compared to $2,652,211 for the same period in 1995 which  represents a
22.02%  increase.   FDIC  assessments  decreased  significantly  in  1996  while
professional  fees and  salaries  and wages  increased  due to normal  operating
expenditures.  Other operating  expenses  increased due to additions made to the
valuation  allowance  for  other  real  estate  owned  and  expenses  for  other
repossessed assets that were not made in 1995.


EARNINGS PERFORMANCE


Net Income: Net income for the first nine months of 1996 amounted to $856,676 or
$2.27 per share,  as compared  with  $710,286 or $1.88 per share  earned for the
same period in 1995. A significant  portion of the increase in net income from a
year ago was due to increased  interest  income  earned on securities as well as
commercial  and real estate loans.  Interest on commercial and real estate loans
increased by 3.16% and 6.91%,  respectively.  Total net income  increased 20.61%
over the same period in 1995.  There were no significant  changes to information
presented for the three months ending  September 30, 1996, and 1995 that has not
been discussed elsewhere in this report.

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 increased 8.78% to $3,900,021
for the quarter ending  September 30, 1996,  compared to $3,585,388 at September
30, 1995. Net interest  income  increased  primarily due to increased  income on
commercial and real estate loans and a decrease in interest expense on deposits.
Interest  expense  decreased  6.99% over 1995 which was  primarily  due to lower
interest rates and falling interest bearing deposit balances.

Provision for Loan Losses:  The provision for loan losses totaled $160,567 as of
September 30, 1996, compared to a $299,014 accrual as of September 30, 1995. 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.

Non-Interest Income: Non-interest income amounted to $940,171 for the first nine
months of 1996, up from $531,191 in 1995.  Service charges on deposits increased
approximately 8.65% in 1996. Total non-interest income increased 76.99% over the
same period in 1995 which was due to increased income on other real estate owned
and other repossessed  assets as well as an increase in mortgage  department fee
income.


--------------------------------------------------------------------------------
                                                        Sept. 30,      Sept. 30,
(In thousands)                                            1996           1995
--------------------------------------------------------------------------------
Service charges on deposit accounts ..............       $389,158       $358,184
Mortgage department fees .........................         83,520         10,545
Other real estate owned (OREO) ...................         47,647         13,798
Other repossessed assets .........................        273,825           --
Gain on sale of OREO .............................          5,547         26,002
Gain on sale of fixed assets .....................           --             --
Other income .....................................        140,474        122,662
--------------------------------------------------------------------------------
    Total ........................................       $940,171       $531,191
--------------------------------------------------------------------------------
<PAGE>


Non-Interest  Expense:  Non-interest  expense  amounted to  $3,236,186  in 1996,
compared to $2,652,211 in 1995. FDIC assessments decreased 73.39% in 1996 due to
reduced  BIF  assessments.  Professional  fees  increased  14.78%  due to  legal
expenses incurred in 1996 and not made in 1995. Salaries and wages increased due
to normal operating expenditures. Total operating expenses increased 22.02% over
the same period in 1995.  Other  operating  expenses  increased due to additions
made to the  valuation  allowance  for other  real  estate  owned  and  expenses
relating to other repossessed assets that were not made in 1995.


--------------------------------------------------------------------------------
                                                         Sept. 30,     Sept. 30,
(In thousands)                                              1996         1995
--------------------------------------------------------------------------------
Salaries and wages ..........................            $1,366,443   $1,198,228
Employee benefits ...........................               175,149      150,444
Occupancy and equipment .....................               546,268      527,217
Stationary and supplies .....................                28,417       34,863
Professional fees ...........................               104,996       91,473
Assessments .................................                29,676      111,510
Other operating .............................               560,786      464,944
Writedown of OREO ...........................               112,560       37,923
OREO expenses ...............................                16,455       19,828
Other repossessed assets expenses ...........               275,887         --
Loss on sale of other repossessed assets ....                19,200         --
Loss on sale of OREO ........................                  --           --
Loss on sale of fixed assets ................                   349       15,781
Loss on sale of available-for-sale security .                  --           --
--------------------------------------------------------------------------------
    Total ...................................            $3,236,186   $2,652,211
--------------------------------------------------------------------------------



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  nine  months of 1996,  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 20.04%.

Interest  Rate  Sensitivity  Management:  The  primary  objectives  of the asset
liability  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
attempt to limit the change in pre-tax  net  interest  income  assuming  various
interest  rate  scenarios.  This is  accomplished  by  adjusting  the  repricing
characteristics  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.




<PAGE>
The following table sets out the maturity and rate  sensitivity of the Company's
interest-earning  assets and interest  -bearing  liabilities as of September 30,
1996. 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         5
(In Thousands)                                Days         Days       Months      Months      Years       Years      Total
-----------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>         <C>          <C>        <C>         <C>        <C>         <C>    
Earning Assets:
    Fed funds sold ........................  $ 3,800     $    --      $    --    $    --     $    --    $    --     $ 3,800
    Deposit accounts with other banks.....       686          --           --         --          --         --         686
    Securities: (3)
        U. S. government agencies..........       --      16,749       11,326         --          --         23      28,098
        Municipals ........................      280          --           --         --          --        390         670
        Corporate bonds (6) ...............       --          --           --         --          --         --          --
-----------------------------------------------------------------------------------------------------------------------------
    Total securities ......................  $   280     $16,749      $11,326    $    --     $    --    $   413     $28,768
-----------------------------------------------------------------------------------------------------------------------------
    Loans: (1)
        Commercial - fixed ................      688         350        1,004      4,678       1,948      1,206       9,874
        Commercial - variable (2)..........   11,700          --           --         --          --         --      11,700
        Real estate - fixed ...............       --          69        1,790      2,158       4,700        555       9,272
        Real estate - variable ............   17,832          --           --         --          --         --      17,832
        Installment (4) ...................       48          12           32        106       1,102         --       1,300
-----------------------------------------------------------------------------------------------------------------------------
    Total loans ...........................  $30,268     $   431      $ 2,826    $ 6,942     $ 7,750    $ 1,761     $49,978
-----------------------------------------------------------------------------------------------------------------------------
    Total assets ..........................  $35,034     $17,180      $14,152    $ 6,942     $ 7,750    $ 2,174     $83,232
-----------------------------------------------------------------------------------------------------------------------------
Source of Funds:
    Deposits:
        Interest-bearing demand deposits ..   13,581          --           --         --          --         --      13,581
        Time deposits greater than $100,000    3,149       6,849        1,345      5,211       4,159         --      20,713
        Time deposits less than $100,000 ..    1,014       3,538        2,612      5,547         906         --      13,617
        Passbook time deposits - variable .    6,151          --           --         --          --         --       6,151
        Savings (5) .......................       --       9,932           --         --          --         --       9,932
-----------------------------------------------------------------------------------------------------------------------------
    Total deposits ........................  $23,895     $20,319      $ 3,957    $10,758     $ 5,065    $    --     $63,994
-----------------------------------------------------------------------------------------------------------------------------
    Total liabilities .....................  $23,895     $20,319      $ 3,957    $10,758     $ 5,065    $    --     $63,994
-----------------------------------------------------------------------------------------------------------------------------
    Gap ...................................  $11,139     $(3,139)     $10,195    $(3,816)    $ 2,685    $ 2,174     $19,238
-----------------------------------------------------------------------------------------------------------------------------
    Cumulative interest
    sensitivity gap .......................  $11,139     $ 8,000      $18,195    $14,379     $17,064    $19,238     $19,238
-----------------------------------------------------------------------------------------------------------------------------
<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 stock is not included in the balance.
</FN>
</TABLE>


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 September 30, 1996. The Company,
therefore,  was asset  sensitive and was  positioned  for increased net interest
income given a rise in interest rates in 1996. The degree of positive gap is not
so large that a  significant  detrimental  impact  would  result  from stable or
declining interest rates.
<PAGE>






BALANCE SHEET ANALYSIS


Cash and Due from Banks: Cash and due from banks for the quarter ended September
30, 1996, was $4,338,145, compared to $4,330,351 at December 31, 1995.


Securities: The fair value of available-for-sale securities totaled $11,766,532,
compared to $12,926,352 at December 31, 1995. The decrease in available-for-sale
securities  was primarily due to  investments  that matured during the year. New
securities  purchased  in the  first  nine  months  of 1996  were  placed in the
held-to-maturity category due to the Banks intent to hold these funds until they
mature. As of September 30, 1996,  available-for-sale  securities made up 40% of
the securities  portfolio while  held-to-maturity  securities made up 60% of the
portfolio.  The majority of the securities are variable at 96% of the securities
portfolio and 4% are fixed rate.

The  securities   portfolio   consisted  primarily  of  U.S.  government  agency
securities  and two  municipal  bonds.  The amortized  cost of  held-to-maturity
securities  totaled  $17,125,667  at quarter  end  compared  to  $20,351,537  at
December 31, 1995.

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 September 30,1996 and December 31, 1995:



--------------------------------------------------------------------------------
                                                 September 30,      December 31,
(In thousands)                                       1996               1995
--------------------------------------------------------------------------------

Available-for-sale:

    U. S. Treasury                               $          0       $          0
 
    U. S. government agencies                      11,251,891         12,188,734

    States & political subdivisions                   389,985            605,656

    Corporate bonds and other                         204,350             55,350
--------------------------------------------------------------------------------
        Total                                    $ 11,846,226       $ 12,849,740
--------------------------------------------------------------------------------

Held-to-maturity:

    U. S. Treasury                               $          0       $          0
                                                                       
    U. S. government agencies                      16,845,667         18,252,276

    States & political subdivisions                   280,000            695,578

    Corporate bonds and other                               0          1,403,683
--------------------------------------------------------------------------------
        Total                                    $ 17,125,667       $ 20,351,537
--------------------------------------------------------------------------------
<PAGE>
The  following  tables show the  amortized  cost (book value) and  maturities of
securities at September 30, 1996, and the weighted average yields (1).
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                             Securities/Maturities - September 30, 1996
                        --------------------------------------------------------------------------------------
                                                  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
--------------------------------------------------------------------------------------------------------------
<S>                       <C>         <C>    <C>           <C>    <C>           <C>     <C>           <C>   
Available-for-sale:(1)
    U. S. Treasury ....  $       --          $        --          $        --    
    U.S. government
    agencies ..........   2,871,207   4.81%    1,215,770   6.67%    7,164,914   6.72%   $        --           
    States & political
    subdivisions (2)...          --                   --                   --               389,985   13.50%
    Corporate bonds(2)(3)        --                   --                   --                    --  

--------------------------------------------------------------------------------------------------------------
        Total .........   $2,871,207  4.81%  $ 1,215,770   6.67%  $ 7,164,914   6.72%   $   389,985   13.50%
--------------------------------------------------------------------------------------------------------------
Held-to-maturity:(1)
    U. S. Treasury ....   $       --         $        --          $        --           $        --
    U.S. government
    agencies ..........       40,078  8.11%    3,339,578   7.50%   11,787,311   7.29%      1,678,700   8.06%
    States & political
    subdivisions (2)...      280,000  4.89%           --                   --                     --  
    Corporate bonds (2)           --                  --                   --                     -- 
--------------------------------------------------------------------------------------------------------------
        Total .........   $  320,078  5.29%  $ 3,339,578   7.50%  $11,787,311   7.29%     $1,678,700   8.06%
--------------------------------------------------------------------------------------------------------------
<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 not included in balance.
</FN>
</TABLE>

Loan Composition:  The loan portfolio totaled $49,000,234 at September 30, 1996,
compared to  $46,519,819  at December  31,  1995.  There was a slight shift from
commercial  loans to real estate  construction  and real estate  mortgage loans.
Total gross  loans  increased  4.99% in the first nine months of 1996.  Consumer
loans continue to decline due to recessionary  influences and  competition.  The
composition of the Bank's loan portfolio is as follows:

--------------------------------------------------------------------------------
                                              Percentage              Percentage
                                  Sept.30,     of Total     Dec. 31,   of Total
                                   1996          Loans        1995       Loans
--------------------------------------------------------------------------------
Commercial, financial
  and agricultural ..........    $22,571,047     44.70%    $22,755,013    47.30%
Real Estate - construction ..     13,108,616     25.96%      9,175,475    19.10%
Real Estate - mortgage ......     12,930,150     25.61%     14,090,502    29.30%
Installment loans to individuals   1,885,822      3.73%      2,073,749     4.30%
--------------------------------------------------------------------------------
                                 $50,495,635     100.00%   $48,094,739   100.00%

Unearned discount ...........        (67,522)                  (80,189)
Allowance for possible loan
losses ......................     (1,059,749)               (1,219,304)
Deferred loan fees ..........       (273,235)                 (275,427)
Deferred profit on OREO
sales (2) ...................        (94,894)
--------------------------------------------------------------------------------
    Loans, net ..............    $49,000,235               $46,519,819
--------------------------------------------------------------------------------
(1)  There were no lease financing or foreign loans
(2)  Audited financial statements for December 31, 1995, do not include Deferred
     profit on OREO sales due to not being material in amount.


<PAGE>





The Bank's customers are primarily  located in Stanislaus County and San Joaquin
County.  Approximately  52%  of  the  Bank's  loans  are  for  real  estate  and
construction  and  approximately  45%  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.

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 $1,059,749 or
2.10% of total gross loans at September  30,1996 compared to $1,219,304 or 2.54%
of total gross loans at December 31, 1995. The increase in the allowance in 1995
was  primarily a response to the current state of the dairy  industry  which had
somewhat deteriorated and has now improved in the first nine months of 1996. One
dairy loan in particular  accounted  for a significant  portion of the allowance
for loan losses in 1995 and has since been  charged-off and transferred to other
repossessed  assets. As of September 30, 1996, 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  $468,637  were  charged off during the period and  $148,516 was
collected in recoveries.  Loans charged off totaled  $112,366 as of December 31,
1995,  and $108,234 was  collected  in  recoveries.  The increase in charged off
loans was  primarily  due to one dairy loan that was brought  down to fair value
and transferred to other repossessed assets in the second quarter of 1996.

Total loans classified for regulatory purposes as loss,  doubtful,  substandard,
or special mention (including  nonaccrual loans and troubled debt restructuring)
at  September  30, 1996,  were  $6,448,249.  At December  31, 1995,  total loans
classified for regulatory purposes was $9,189,084. Of the total classified, none
of the loans were  classified  as doubtful at the end of September  30, 1996, or
December 31, 1995.  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.




<PAGE>


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


--------------------------------------------------------------------------------
                                              September 30,         December 31,
                                                  1996                  1995
--------------------------------------------------------------------------------
Non-accrual loans: (1)
    Commercial, financial and agricultural ..   $  149,181           $ 1,200,342
    Real estate loans .......................      257,976               494,214
    Consumer loans ..........................           --                    --
                                                ----------           -----------
        Total non-accrual loans .............   $  407,157           $ 1,694,556
--------------------------------------------------------------------------------
Loans past due 90 days or more
still accruing interest (2) .................   $   11,948                    --
--------------------------------------------------------------------------------
Troubled debt restructuring .................   $1,134,379           $ 1,146,080
--------------------------------------------------------------------------------
(1)  Carrying Value
(2)  Credit Cards


Non-accrual  loans at quarter end amounted to $407,157,  down from $1,694,556 at
December  31,  1995.  One large  agricultural/commercial  loan made up the major
portion of the non-accrual  loans in 1995. 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  1996 and  December  31,  1995,  was  $22,936  and
$115,869,  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
$1,134,379  at September  30, 1996,  and  $1,147,775  at December 31, 1995.  All
restructured loans were current as to principal and interest.

<PAGE>



FUNDING SOURCES

Deposits:  Total  deposits  amounted to  $79,924,252  as of September  30, 1996,
compared to $84,839,377 at December 31, 1995, a decrease of 5.79 %. The decrease
between  December 31, 1995, and September 30, 1996, was primarily due to falling
deposit rates in the savings category.  The Bank currently has a savings product
that is tied to the prime rate.  As the prime rate  decreases,  as it has in the
last several months,  deposits are redistributed to time deposits or move out of
the bank.
Historically, the Bank retains 90% or more of its deposits.

Non-interest  bearing  demand  deposits  averaged  approximately  $13,506,674 at
September  30, 1996,  and  $12,786,000  at December 31, 1995.  Interest  bearing
deposits averaged approximately  $68,159,440 at end of September and $68,792,917
at year end December 31, 1995.


--------------------------------------------------------------------------------
                                  September 30, 1996         December 31, 1995
--------------------------------------------------------------------------------
                                  Average       Average     Average      Average
                                  Balance        Rate       Balance       Rate
--------------------------------------------------------------------------------
Interest bearing deposits
         Checking accounts ...   $14,246,880     1.88%   $14,368,972     2.12%
         Savings .............    18,526,185     4.24%    21,271,869     3.91%
         Time deposits (1) ...    35,386,375     4.13%    33,152,076     5.59%
Non-interest bearing deposits     13,506,674               12,786,029
--------------------------------------------------------------------------------
(1) Included at September 30, 1996 $20,712,824 in time certificates of
    $100,000 or more, of which  $9,997,860  matures in 3 months or less,
    $1,345,041 matures in 3 to 6 months, $5,211,182 matures in 6 to 12 months,
    and $4,158,741 matures in more than 12 months.


Other Borrowings:  There were no other borrowings as of September 30, 1996, or
December 31, 1995.


Capital:  Retained  earnings from operations have been the primary source of new
capital for the Company.  As of September  30,  1996,  stockholders'  equity was
$10,272,519,  compared to $9,771,029  at year-end  1995.  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 September 30, 1996, 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 September 30, 1996, and December 31, 1995, and 1994 were as follows:


--------------------------------------------------------------------------------
                                      September 30,   December 31,  December 31,
                            Minimum      1996            1995          1994
--------------------------------------------------------------------------------
Risk Based Capital Ratio     8.00%      19.32%          18.14%        15.47%
Tier I Ratio                 4.00%      18.06%          16.88%        14.49%
Leverage Ratio               3.00%      10.96%          10.02%         9.92%
--------------------------------------------------------------------------------
<PAGE>



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

         a)  The Annual Meeting of Shareholders of Delta National Bancorp was
             held on April 22, 1996.

         b)  The following five individuals were re-elected to the Board of
             Directors of the Company:

                      Jack Dozier               Andrew J. Rossi
                      Joseph A. Freitas         Toinette Rossi
                      Theodore Poulos

         c)  The following matters were voted upon at the annual meeting:

             1)  Election of Directors.  Election of the following five (5)
                 persons to the Board of Directors of the Company to serve until
                 the 1997 Annual Meeting of Shareholders and until their
                 successors are elected and have qualified:

                                                     No. of Votes
                                         For      Against   Withheld    Abstain
                 Jack Dozier           271,296       0       3,198          0
                 Joseph A. Freitas     271,296       0       3,198          0
                 Theodore Poulos       271,296       0       3,198          0
                 Andrew J. Rossi       271,296       0       3,198          0
                 Toinette Rossi        271,296       0       3,198          0

             2)  1996 Combined Incentive and Non-Qualified Stock Option Plan.
                 Approving the Company's 1996 Combined Incentive and
                 Non-Qualified Stock Option Plan covering thirty percent (30%)
                 of the Company's outstanding Common Stock.

                                                     No. of Votes
                                         For      Against   Withheld    Abstain

                                       254,642    13,031       0         6,821

             3)  Ratification of Appointment of Independent Public Accountants.
                 Ratifying the selection of Grant Thornton LLP as the Company's
                 independent public accountants for 1996.
                                                     No. of Votes
                                         For      Against   Withheld    Abstain

                                       271,960       0         0         2,534

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 September 30, 1996

<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:       October 23, 1996                  /s/ Andrew Rossi
                                              Andrew Rossi
                                              President/Chief Executive Officer
                                              Director
                                             (Principal Executive Officer)



DATE:       October 23, 1996                  /s/ Warren E. Wegge
                                              Warren E. Wegge
                                              Executive Vice President
                                             (Principal Financial Officer)




DATE:       October 23, 1996                  /s/ Toinette Rossi
                                              Toinette Rossi
                                              Vice President and Manager
                                              Director