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                                                                  EXHIBIT 10.16


                   1998 MANAGEMENT INCENTIVE COMPENSATION PLAN


I.      OBJECTIVE

        The objective of this plan is to provide incentives to those senior
        executives of FP Bancorp and First Pacific National Bank who can most
        directly impact the profitability, return to shareholders and other
        performance criteria of the corporation. The plan is designed to reward
        these individuals for attaining and sustaining high levels of
        performance and profitability, and for meeting and exceeding the short
        and long term goals of the corporation. The Board believes that this
        plan is desirable and necessary in order to attract, retain and motivate
        high quality executives to manage the corporation.

II.     DURATION

        This is an annual performance plan. Although it is the company's
        intention to offer this plan, or a similar one, on an ongoing basis,
        there is no guarantee that it will be extended beyond the current year.
        All participants will be notified of any extension, change or
        termination prior to the end of the first quarter of the calendar year.

III.    PLAN DESCRIPTION

        The plan is designed to reward participants based upon the company's
        performance versus financial goals established as part of the annual
        budget and Strategic Plan.

        In order to protect shareholder interests, the plan requires a minimum
        return on assets and equity before any incentive award can be paid. As
        the returns rise above the minimum thresholds, incentives also rise
        accordingly. The award levels will be spelled out in a separate document
        prior to the end of the first quarter of the calendar year.

        The plan will also identify key benchmark operating ratios that must be
        met in order for the plan to pay out in full. These benchmarks may
        include the CAMEL rating, efficiency ratio, ratio of non-performing
        assets to total assets, ratio of loan loss reserve to non-performing
        loans and the delinquency ratio. Failure to achieve any of the
        benchmarks may result in the elimination or lowering of the plan award
        at the discretion of the Compensation Committee.

IV.     PLAN ADMINISTRATION

        The Compensation Committee of the Board of Directors has the
        responsibility for designing and administering the plan. Before the
        beginning of each year, the Committee will review and revise the plan,
        and establish specific goals and award thresholds. The Committee may
        adjust the plan and/or payouts accordingly for extraordinary events
        during the year which could affect the plan either positively or
        negatively.



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V.      PLAN PARTICIPANTS

        Key executives of FP Bancorp and First Pacific National Bank who are
        responsible for directing significant management functions within the
        company are eligible for participation. Before the beginning of each
        year, the Compensation Committee shall review the recommendations of the
        company's executive management for participants and award levels.
        Participants may be added during the plan year at the discretion of the
        Compensation Committee, with their incentive awards prorated
        accordingly.

VI.     PAYMENT SCHEDULE

        The company will pay out the incentive awards as soon as practical after
        the end of the calendar year and after the company's outside auditors
        have reviewed the earnings and award calculations. All participants must
        be employed by the company on the final day of the plan year to be
        included in the incentive plan payout. Participants leaving the bank
        voluntarily or for cause prior to year end will be ineligible for any
        awards under this plan.

VII.    IMPACT OF MERGERS

        In the event the company becomes involved in a merger or acquisition,
        the Compensation Committee may, at its discretion, adjust and continue
        the plan accordingly.




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                                FP BANCORP, INC.
               1998 SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN
                         BENCHMARKS FOR 1998 BONUS POOL

<TABLE>
<CAPTION>
                                                                    ------------------------------------------------
                                                                              PLAN                     FP

                                                                           BENCHMARK                  PLAN*

         -----------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                            <C>
         1)    a)   Safety and Soundness CAMEL Rating (at FPNB)                   "2" or better                  2

               b)   CRA Rating (at FPNB)                               "Satisfactory" or better       Satisfactory

               c)   Compliance Rating (at FPNB)                        "Satisfactory" or better       Satisfactory

               d)   FRB Overall Rating (at FP Bancorp)                 "Satisfactory" or better       Satisfactory

         2)         Efficiency Ratio (average prior to closing)                     60% or less             59.00%

         3)         Nonperforming assets/Total assets                             1.00% or less              0.67%

         4)         Delinquency ratio                                             1.75% or less              1.75%

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

--------------------------------------------------------------------------------

*FP plan at March 31, 1998.

        Budget includes $1.26 million of OREO, $650,000 of nonaccrual and
$500,000 of > 90 day accruing.

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                                FP BANCORP, INC.
                       BONUS POOL CALCULATION - 1998 PLAN


<TABLE>
<CAPTION>
                                                                                    FINDLAY
                                                                                 SUPER PREMIER                FP BUDGET
--------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                <C>                <C>                <C>                <C>            
Net income (after tax)*          $   3,500,000      $   4,000,000      $   4,500,000      $   5,000,000      $   5,425,700  

add: incentive pool              $           0      $     267,000      $     293,500      $     320,000      $     300,000  

add:  provision for loan         $   1,078,300      $   1,078,300      $   1,078,300      $   1,078,300      $   1,078,300  
      losses

ADJUSTED PROFIT                  $   4,578,300      $   5,345,300      $   5,871,800      $   6,398,300      $   6,804,000  
--------------------------------------------------------------------------------------------------------------------------
ROA**                                     0.92%              1.05%              1.18%              1.31%              1.42% 

AROA**                                    1.20%              1.40%              1.54%              1.68%              1.79% 

ROE***                                   13.36%             15.27%             17.18%             19.09%             20.72% 

AROE ***                                 17.48%             20.41%             22.42%             24.43%             25.98% 

Bonus %                                    0.0%               5.0%               5.0%               5.0%               5.0% 
--------------------------------------------------------------------------------------------------------------------------

BONUS AMOUNT                     $           0      $     267,265      $     293,590      $     319,915      $     340,200  
==========================================================================================================================  
                                                                                                                    ****
</TABLE>


<TABLE>
--------------------------------------------------------------------------------------
<S>                                <C>                <C>                <C>          
Net income (after tax)*            $   6,500,000      $   7,000,000      $   7,500,000

add: incentive pool                $     399,000      $     425,000      $     452,000

add:  provision for loan           $   1,078,300      $   1,078,300      $   1,078,300
losses

ADJUSTED PROFIT                    $   7,977,300      $   8,503,300      $   9,030,300
--------------------------------------------------------------------------------------
ROA**                                       1.71%              1.84%              1.97%

AROA**                                      2.09%              2.23%              2.37%

ROE***                                     24.82%             26.73%             28.64%

AROE ***                                   30.46%             32.47%             34.48%

Bonus %                                      5.0%               5.0%               5.0%
--------------------------------------------------------------------------------------

BONUS AMOUNT                       $     398,865      $     425,165      $     451,515
======================================================================================
</TABLE>



*         Actual income to be annualized based on number of days in operating
          period.
**        Based on average assets of $380,800,000.
***       Based on beginning equity of $26,189,000 (unaudited 12/31/97).
****      Per Definitive Agreement, not to exceed $308,000 - payout to be pro
          rated by number of days in operating period.

          Note: Findlay Super Premier Performing Banks have an ROE of 17.50% or
                greater (when leverage ratio is 8% or less) and are in the top
                5-8% of all California Banks.