As filed with the Securities and Exchange
                         Commission on March 29, 2002.

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                     Annual Report Under Section 13 or 15(d)
             Of the Securities and Exchange Act of 1934, as amended
                   For the Fiscal Year Ended December 31, 2001

                        COMMISSION FILE NUMBER: 000-31747

                         Banner Central Finance Company

                               5480 Ferguson Drive
                               Commerce, CA 90040
               (Address of principal executive offices) (Zip Code)

          Delaware                                     95-4821101
(State of Incorporation)                   (I.R.S. Employer Identification No.)

                                 (323) 720-8600
                          (Registrant's Telephone No.)

Securities Registered under Section 12(b) of the Act:None
Name of each exchange on which registered:           None
Securities Registered under Section 12(g) of the Act:Common Stock,
                                                     par value $0.01 per share

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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
                      -----                  -----

Check if there is no disclosures of delinquent filers in response to Item 405 of
Regulation S-B in this form, and no disclosure will be contained, to the best of
registrant's   knowledge,   in  definitive  proxy  or  information   statements,
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year:$14,982,000

State the  aggregate  market  value of the voting  stock held by non  affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days.

At March  15,  2002,  the  aggregate  market  value of the  voting  stock of the
registrant  held by  non-affiliates  of the registrant was $6,037,200  (computed
based on the closing share price of the Common Stock on March 15, 2002)

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the  number of  shares  outstanding  of each  issuer's  classes  of common
equity, as of the latest practicable date: 7,417,400 at March 15, 2002

                       DOCUMENTS INCORPORATED BY REFERENCE

Document Incorporated               Part of Form 10-KSB into which Incorporated
--------------------------------    -------------------------------------------
Definitive Proxy Statement for the      Definitive Proxy Statement for the
2002 Annual Meeting of Stockholders                Part III

<PAGE>



                             TABLE OF CONTENTS

<TABLE>
<CAPTION>



                                                                           Page
<S>                                                                          <C>
PART I   ..................................................................... 1

         Item 1. Description of Business.....................................  1

         Item 2. Properties.................................................. 11

         Item 3. Legal Proceedings........................................... 12

         Item 4. Submission of Matters to a Vote of Security Holders......... 12

PART II...................................................................... 12
         Item 5. Market for Registrants' Common Equity and Related
                 Stockholder Matters ........................................ 12

         Item 6. Management's Discussion and Analysis and Results
                 of Operations .............................................. 13

         Item 7. Financial Statements........................................ 20

         Item 8. Changes in and Disagreements with Accountants and
                 Financial Disclosure ....................................... 39

Part III .....................................................................39

         Item 9. Directors, Executive Officers, Promotoers and Control Persons;
                 Compliance with Section 16(a) of the Exchange Act........... 39

         Item 10.Executive Compensation...................................... 39

         Item 11.Security Ownership of Certain Beneficial Owners
                 and Management ............................................. 39

         Item 12.Certain Relationships and Related Transactions.............. 39

         Item 13.Exhibits and Reports on Form 8-K............................ 40

         Signatures.......................................................... 41
</TABLE>

<PAGE>
                                       1













                                     PART I

Item 1.  Description of Business


Introduction

     Certain  matters  discussed  in  this  Annual  Report  on Form  10-KSB  may
constitute forward-looking statements under Section 27A of the Securities Act of
1933,  as amended  (the  "Securities  Act"),  and Section 21E of the  Securities
Exchange Act of 1934, as amended (the  "Exchange  Act").  These  statements  may
involve risks and  uncertainties.  These  forward-looking  statements relate to,
among other things,  expectations  of the business  environment  in which Banner
Central  Finance  Company and its  subsidiaries  (the  "Company"  which may be
referred to as "we," "our" and "us," or "Banner  Central  Finance")  operate in,
projections of future  performance,  perceived  opportunities  in the market and
statements regarding our mission and vision. Our actual results, performance, or
achievements  may  differ  significantly  from  the  results,   performance,  or
achievements  expressed  or  implied  in such  forward-looking  statements.  For
discussion  of the  factors  that  might  cause  such a  difference,  see  "Item
1.Description  of Business -- Business  Considerations  and Certain Factors that
May Affect Future Results of Operations and Stock Price."

Company Overview

     On February 28, 2001, Central Financial Acceptance Corporation,  or Central
Financial,   completed  a  Plan  of  Complete   Dissolution,   Liquidation   and
Distribution, or the Plan, which provided for the dissolution and liquidation of
Central Financial,  and the liquidating  distribution to its stockholders of all
the  common  stock of the two  subsidiaries  that were  wholly-owned  by Central
Financial,  one of which was our company,  Banner Central Finance, and the other
of which was Hispanic Express, Inc., or Hispanic Express. In connection with the
Plan,  Central  Financial  contributed  all of its assets and business to Banner
Central Finance and Hispanic Express. Specifically:

          - Central  Financial  contributed to Banner Central Finance all of the
          issued and  outstanding  capital stock of Central  Installment  Credit
          Corporation, Central Financial Acceptance/Insurance Agency and Central
          Premium Finance Company,  each of which are wholly-owned  subsidiaries
          of Banner Central Finance. In addition,  Central Financial contributed
          to Central  Installment  Credit Corporation the assets and liabilities
          of the mortgage business owned by Central Consumer Finance Company. As
          a result of these  contributions,  Banner Central  Finance through its
          subsidiaries  is  engaged  in  the  purchased   consumer   receivables
          business,  the  mortgage  business  and  the  sale  and  financing  of
          automobile  insurance at the time of the  liquidating  distribution to
          shareholders.

          - Central Financial  contributed to Hispanic Express all of the issued
          and outstanding  capital stock of Central  Consumer  Finance  Company,
          Centravel,  Inc.  and BCE  Properties  I, Inc.,  each of which are now
          wholly-owned   subsidiaries  of  Hispanic  Express.  Central  Consumer
          Finance Company has four wholly-owned  subsidiaries,  namely,  Central
          Check  Cashing,   Inc.,  Central  Financial   Acceptance   Corporation
          Accidental & Health Reinsurance, Limited, Central Finance Reinsurance,
          Ltd.  and  Central  Consumer  Company of Nevada.  As a result of these
          contributions, Hispanic Express through its subsidiaries is engaged in
          the  consumer  financial  products  business  and the travel  services
          business at the time of the liquidating distribution to shareholders.

     Set forth  below are charts that  illustrate  the  relationships  among the
companies discussed above, before and after the consummation of the Plan.



<PAGE>
                                       2






                                  [FLOW CHART]

                                    BEFORE*


                                  [FLOW CHART]


                                     AFTER*



*Each subsidiary is wholly-owned by its respective parent company.



<PAGE>
                                       3







     Our shares of common stock trade on the OTC Bulletin Board under the symbol
"BCFN". Our principal executive offices are located at 5480 East Ferguson Drive,
Commerce, California 90022, and our telephone number is (323)720-8600.

Company Business

Retail Sales and Related Consumer Receivables

     Historically,  we have purchased consumer finance receivables pursuant to a
Financing  Agreement with Banner's Central  Electric,  Inc., or Banner's Central
Electric, an affiliate of ours, which granted us the exclusive right to purchase
the  receivables it originated  when it sold its inventory at its retail stores.
These purchased  receivables are referred to as the Consumer Products Portfolio.
Banner's Central Electric operated four retail stores in the greater Los Angeles
area,  and its  inventory  consisted  of consumer  electronics,  appliances  and
furniture.  The  receivables in the Consumer  Products  Portfolio are held until
they  mature  and we earn  interest  income  on them  during  the time  they are
outstanding.  On February 28, 2001, Central Financial  purchased and contributed
to us the business and assets of the largest of Banner's Central Electric retail
stores for which it paid  $392,000  and  assumed a related  lease from  Hispanic
Express and in December, 2001 Banner's Central Electric ceased operations at two
of its remaining  retail  stores.  Pursuant to the Financing  Agreement  that we
entered  into with  Banner's  Central  Electric,  we agreed to acquire  and have
available to transfer to Banner's Central Electric up to $6 million of inventory
which  they  sell to their  customers.  On  December  31,  2001,  the  Financing
Agreement  was  terminated  by mutual  agreement of the  parties.  See "Item 12.
Certain Relationships and Related Party Transactions."

     Our customers are typically  low-income  Hispanics,  between the ages of 21
and 45,  earn less than  $25,000 per year,  have little or no savings,  and have
limited or short term employment histories. In addition, our customers typically
have no or limited prior credit  histories  and are  generally  unable to secure
credit from traditional lending sources.

     We base our credit  decisions on our assessment of a customer's  ability to
repay the obligation.  In making a credit  decision,  in addition to the size of
the  obligation,  we generally  consider a customer's  income level,  type,  and
length of employment,  stability of residence,  personal  references,  and prior
credit  history with us. We also obtain a credit  bureau  report and rating,  if
available,  and seek to confirm other credit-related  information.  We, however,
are more  susceptible  to the risk that our  customers  will not  satisfy  their
repayment  obligations than are less specialized  consumer finance  companies or
consumer finance companies that have more stringent underwriting criteria.

Mortgage Business

     In mid-1998,  we started to provide  second trust  mortgages on residential
properties ranging from $5,000 to $12,000 to Hispanic customers primarily in the
Los Angeles area. Our primary source of income on these mortgages is origination
fees  and  the  interest  income  we  earn  during  the  time  the  mortgage  is
outstanding.  In August 2000, we suspended  making second mortgage loans pending
evaluations  of whether  we could  obtain  long-term  financing  from  financial
institutions to support future growth and to evaluate future economic conditions
which could negatively impact our business.  In September 2000, we also began to

<PAGE>
                                       4




originate  mortgage loans for other financial  institutions for which we earn an
origination fee. Currently,  we continue the evaluation of our mortgage business
and for the  foreseeable  future  we  anticipate  that  we will  only  originate
mortgage loans for other financial institutions.

Other Business Activity

     We began to offer  financing for the sale of  automobile  insurance in 1996
that we sell as a broker for major  automobile  insurers.  We  continue  to sell
automobile  insurance to low-income  Hispanics and operate through three offices
in the greater Los Angeles area. In recent years, the large automobile insurance
companies have started to offer direct financing,  and accordingly,  our premium
financing activity has declined  significantly and we ceased our premium finance
operations in 2000.

Business Strategy

     Historically,  our major business activity has been to provide financing to
low-income  Hispanic  customers  who purchased  consumer  products from Banner's
Central Electric.  In 1997,  Banner's Central Electric made a strategic decision
to de-emphasize this business line.  Accordingly,  since 1997,  Banner's Central
Electric's  retail  sales  have  declined  significantly  with  a  corresponding
decrease  in the level of consumer  receivables  purchased  by us from them.  In
February  28,  2001,  Central  Financial  purchased  and  contributed  to us the
business and assets of the largest of Banner's  Central  Electric  retail stores
which will permit us to have greater  control over  operating  decisions,  which
impact our purchase receivables business and the levels of inventory we finance.
Also in December 2001, Banner's Central Electric ceased operations at two of its
remaining retail stores.  Although declining, we anticipate that interest income
earned on the our consumer receivables and retail sales will generate a majority
of our future income.  Our business  strategy is to operate this retail business
and evaluate potential growth possibility for this or related retail businesses.
See Item 1. "Business  Considerations and Certain Factors that May Affect Future
Results of Operations and Stock Price ."

     Since mid-1998,  when we commenced our mortgage business,  our portfolio of
second trust  mortgages have grown  significantly;  however,  in August 2000, we
suspended making any new second mortgage loans pending  evaluation of whether we
could obtain long-term  financing from financial  institutions to support future
growth and to evaluate future economic  conditions which could negatively impact
this  business.  In  September  2000,  we began to  originate  first and  second
mortgage loans for other financial institutions for which we earn an origination
fee.  Currently,  our business  strategy is to  concentrate  our  activities  on
building  our  origination   business   through  internal  growth  and  possible
acquisitions. Accordingly for the foreseeable future, we anticipate that we will
let our mortgage portfolio liquidate over the life of the outstanding  mortgages
which generally have an average life of three years remaining.

Company Operations

     In order to provide cost  savings and  operating  efficiencies,  we entered
into an operating  agreement with Hispanic  Express under which Hispanic Express
provides us with certain services,  including,  credit applications,  receivable
servicing,  payment applications,  accounting,  legal and management information
systems. See "Item 12. Certain Relationships and Related Party Transactions."

<PAGE>
                                       5



Credit Procedures

     Consumer  Finance  Receivables - We have developed  uniform  guidelines and
procedures for evaluating credit  applications.  We take credit  applications at
our store and then generally transmit them  electronically  through our computer
system to our credit  department,  where all credit approval and verification is
centralized.  We believe that our underwriting  policies and procedures allow us
to respond quickly to credit requests. We typically respond to credit applicants
within one hour. We believe that because of our prompt response,  many customers
prefer to deal with us instead of our competitors.

     Our credit managers and credit  approvers make their decisions on a case by
case basis and are influenced by, among other things,  whether an applicant is a
new  or  existing  customer.   New  applicants   complete   standardized  credit
applications  which contain  information  concerning  income  level,  employment
history, stability of residence,  driver's license or state identification card,
social security number, capacity to pay and personal references.  We also verify
the applicant's  employment and residence and depending on the relevant  factors
may verify other  pertinent  information.  We also obtain a credit bureau report
and rating, if available, and seek to confirm other credit-related information.

     For an established customer, the credit process currently includes a review
of the customer's  credit and payment history with us, and depending on the size
of the  transaction an updated  verification  of employment  and  residence.  In
instances where the applicant has no or limited credit history, we may require a
co-signer  with  appropriate  credit status to sign the contract and may, in the
installment credit business,  also require a down payment. In the fourth quarter
of  2000,  our  consumer   receivables  business  and  delinquency  trends  were
negatively  impacted  by a bus  strike in the Los  Angeles  area,  which  lasted
approximately  five  weeks,  and by  deteriorating  economic  conditions,  which
continued  into 2001.  As a result,  we tightened  our credit  guidelines in the
fourth quarter of 2000 and throughout 2001. See Item 1. "Business Considerations
and Certain Factors that May Affect Future Results of Operations and Stock Price
- Credit Risk Associated with Customer; Lack of Collateral."

Payment and Collections

     Industry  studies  estimate  that a  significant  percentage  of the  adult
population in the United States does not maintain a checking account, which is a
standard  prerequisite for obtaining a consumer loan,  credit card or other form
of credit from most consumer credit sources.  Our customers are required to make
their monthly  payments  using a payment  schedule that we provide to them.  The
vast majority of our customers  make their  payments in cash at our locations or
at our payment facilities in Hispanic Express' locations.

     We consider  payments  past due if a borrower  fails to make any payment in
full on or before its due date,  as specified in our  receivables  contract that
the customer signs. We currently attempt to contact borrowers whose payments are
not  received  by the due date  within 10 days after  such due date.  We contact
these  borrowers by both letter and  telephone.  If no payment is remitted to us
after the initial  contact,  we make additional  contacts every seven days, and,
after a loan becomes 31 days  delinquent,  we generally turn over the account to
our credit  collectors.  Under our guidelines,  we generally charge off and turn
over an account to a  collection  agency when we  determine  that the account is
uncollectible.

<PAGE>
                                       6


Finance Contracts and Mortgage Loans

     Each of our finance  contracts and mortgage loans is in Spanish and English
and requires monthly financing  payments.  State and federal  regulations govern
many of the terms,  conditions,  and disclosures in the finance  contracts.  See
"Regulation."  When a qualifying  customer with an open account finance contract
balance  increases the amount  outstanding with an additional  purchase or loan,
the customer  executes a new finance contract for the new aggregate balance and,
with the proceeds, pays off the original contract.

Insurance

     We maintain  various  insurance  policies of the type,  and in the amounts,
which  are  usual  for  our   business.   We  maintain   coverage  for  business
interruptions,  including  interruptions  resulting  from computer  failure.  We
believe that our insurance coverage is adequate.

Management Information Systems

     Under  an  operating  agreement  with  Hispanic  Express,  we use  Hispanic
Express'  management   information   systems.   Hispanic  Express  has  invested
significant  resources to develop a proprietary system that integrates all major
aspects of our business.  The computer system uses a mid-range IBM AS-400 as our
server,  which provides on-line,  real-time  information  processing services to
terminals located in each of our locations and in Hispanic Express's centralized
credit-processing facility. The system allows for complete processing of our:

          - consumer product finance contracts, including application processing
          and credit approval;

          - acquisition of credit bureau reports,  accessing the payment history
          of all active accounts;

          - preparation of contracts;

          - payment posting; and

          - all other collection-monitoring activities.

     In addition,  the system provides customized reports to analyze each of our
portfolios on a daily,  weekly and monthly  basis.  We believe that the computer
system is sufficient to maintain our business lines and  portfolios  without the
need for a material  additional  investment in management  information  systems.
Hispanic  Express has  adopted  procedures  designed  to minimize  the effect of
systems failures and other types of potential problems, including routine backup
and off-site storage of computer tapes, as well as redundancy and "mirroring" of
certain computer processes.

<PAGE>
                                       7


Advertising

     We actively  advertise  primarily  in Hispanic  television  and radio,  and
through  newspapers  and  direct  mail  targeting  both our  present  and former
customers,  and  potential  customers  who have used other  sources of  consumer
credit. We believe that our advertising  significantly  increases our ability to
compete effectively with other providers of credit.

Employees

     At December 31, 2001,  we employed a total of 71 full-time  employees and 7
part time  employees.  None of our employees are  represented  by a union or are
covered by a collective bargaining agreement. We believe that our relations with
our employees are good.

Regulation

General

     Our finance operations are subject to extensive  regulation,  as summarized
below.  Violation of statutes  and  regulations  applicable  to us may result in
actions for  damages,  claims for refunds of payments  made,  certain  fines and
penalties, injunctions against certain practices and the potential forfeiture of
rights  to  repayment  of  loans.  Changes  in state and  federal  statutes  and
regulations  may affect us. We,  together with industry  associations,  actively
lobby in the  states  in  which we  operate.  Although  we are not  aware of any
pending or proposed legislation that could have a material adverse effect on our
business,  we cannot  assure that future  regulatory  changes will not adversely
affect our lending practices, operations, profitability or prospects.

State Regulation

          Consumer  Product  Portfolio.  In California,  the  California  Retail
     Installment  Sales Act, or the "Unruh Act," regulates our consumer  product
     financing business. The Unruh Act requires us to disclose to our customers,
     among other matters:

          - the conditions under which we may impose a finance change;

          - the method of determining  the balance which is subject to a finance
          charge;

          - the method used to determine the amount of the finance charge; and

          - the minimum periodic payment required.

          In addition, the Unruh Act provides consumer protection against unfair
     or deceptive business practices by:

          - regulating the contents of retail installment sales contracts;

          - setting forth the  respective  rights and  obligations of buyers and
          sellers; and

<PAGE>
                                       8



          -  regulating  the maximum  legal  finance rate or charge and limiting
          other fees on installment credit sales.

     Mortgage  Business.  Historically,  we have originated  mortgages under the
California Finance Lender's License issued by the Department of Corporations. We
were monitored and regulated by the Department of  Corporations  and are subject
to annual audits.  Under the  jurisdiction  of the Department of Corporations we
were regulated on such items as minimum loan amounts,  restrictions  on mortgage
companies to which we can deliver  loans,  and certain  fees and charges.  These
fees and charges include appraisal fees, escrow and reconveyance fees.  Interest
rate and finance charges are not regulated by the Department of Corporations. In
2001, we commenced  originating loans for other financial  institutions pursuant
to a California Department of Real Estate License.

Federal Regulation

     We are subject to  extensive  federal  regulation  as well,  including  the
Truth-in-Lending  Act,  the Equal  Credit  Opportunity  Act and the Fair  Credit
Reporting Act and the regulations  thereunder and the Federal Trade Commission's
Credit  Practices Rule.  These laws require us to provide full disclosure of the
key  terms  of each  loan to every  prospective  borrower,  prohibit  misleading
advertising,  protect  against  discriminatory  lending  practices and proscribe
unfair   credit   practices.   Among  the  key   disclosure   items   under  the
Truth-in-Lending  Act are the terms of repayment,  the total finance  charge and
the annual rate of finance charge or "Annual  Percentage Rate" on each loan. The
Equal Credit  Opportunity Act prohibits  creditors from  discriminating  against
loan  applicants  on the  basis of race,  color,  sex,  age or  marital  status.
Regulation B issued under the Equal Credit Opportunity Act requires creditors to
make certain  disclosures  regarding  consumer rights and advise consumers whose
credit applications are not approved of the reasons for the rejection.  The Fair
Credit  Reporting Act requires us to provide  certain  information  to consumers
whose credit  applications  are not  approved on the basis of a report  obtained
from a consumer-reporting  agency. The Credit Practices Rule limits the types of
property a creditor may accept as collateral to secure a consumer loan.

<PAGE>
                                       9

Business Considerations and Certain Factors That May Affect Future Results
of Operations and Stock Price

Absence of Operating History

     We were  formed  on  September  5,  2000 and we did not  have an  operating
history as a separate  stand-alone  company prior to that date. Our success will
depend,  in large  part,  on the  ability of our  management  to  implement  its
business strategy.

Absence of Dividend

     We do not  currently  intend to pay regular  cash  dividends  on our common
stock.  Our dividend  policy will be reviewed  from time to time by our Board of
Directors  in light of our earnings and  financial  position and other  business
considerations that our Board of Directors considers relevant.

Credit Risk Associated With Purchased Accounts Receivables; Lack of Collateral

     Our customers  are typically  between the ages of 21 and 45, earn less than
$25,000  per year,  have little or no savings,  and have  limited or  short-term
employment histories.  In addition, our customers typically have no prior credit
histories and are unable to secure credit from traditional  lending sources.  We
base our credit decisions primarily on our assessment of a customer's ability to
repay the obligation.  In making a credit  decision,  in addition to the size of
the obligation, we generally consider a customer's income level, type and length
of  employment,  stability of residence,  personal  references  and prior credit
history  with us.  We,  however,  are  more  susceptible  to the  risk  that our
customers will not satisfy their repayment obligations than are less specialized
consumer  finance  companies  or  consumer  finance  companies  that  have  more
stringent underwriting criteria.

     Because we rely on the  creditworthiness of our customers for repayment and
do not rely on  collateral  securing  the debt,  we  experience  actual rates of
losses  higher than lenders who have  collateral  that they can repossess in the
event of a  borrower's  default.  At  December  31,  2001 and 2000,  net finance
receivables of our consumer products portfolio, which accounts for a substantial
portion of our net receivables,  had accounts with payments 31 days or more past
due as a  percentage  of end of  period  gross  receivables  of 1.5%  and  1.2%,
respectively.  For the year  ended  December  31,  2001 and 2000,  the  consumer
products  portfolio  had  net  write-offs  of $2.1  million  and  $3.3  million,
respectively.  In the fourth quarter of 2000, our consumer  receivables business
was  negatively  impacted by a bus strike in the Los Angeles  area which  lasted
approximately  five  weeks.  As a result  of the bus  strike  and  deteriorating
economic conditions,  our delinquencies  increased in the fourth quarter of 2000
and this trend  continued in 2001. We cannot assure that we will not  experience
increases in delinquencies  and net write-offs,  which would require  additional
increases in the provisions for credit losses.  For  information  concerning our
credit quality experience, see Item 6. "Management's Discussion and Analysis and
Results of  Operations - Consumer  Products  Portfolio  Trend" and  "Delinquency
Experience and Allowance for Credit Losses."

<PAGE>
                                       10



General Economic Risk

     The risks  associated  with our  business  become  more  significant  in an
economic slowdown or recession. During periods of economic slowdown or recession
we  have  experienced  and may  again  experience  a  decreased  demand  for our
financial  products and services and an increase in rates of  delinquencies  and
the  frequency  and severity of losses.  Our actual rates of  delinquencies  and
frequency  and severity of losses have been in the past and may be in the future
higher under adverse economic conditions than those generally experienced in the
consumer  finance  industry.  Any  sustained  period  of  economic  slowdown  or
recession could materially  adversely affect its financial condition and results
of operations.  See Item 6. "Management's Discussion and Analysis and Results of
Operations - Consumer Products Portfolio Trend" and "Delinquency  Experience and
Allowance for Credit Losses."

Dependence on California Market

     All of our businesses are located, and all of our revenues are generated in
California.  To date,  substantially all of our operations have been in Southern
California.  Therefore,  our  performance  depends upon  economic  conditions in
California,  and in Southern  California  in  particular,  and may be  adversely
affected by social and economic  factors or natural  disasters in California.  A
decline in the  California  economy could have a material  adverse effect on our
results of operations and financial condition.

     Historical  Dependence on Consumer  Products  Portfolio of Banner's Central
Electric and Changing Business Focus

     Historically,  our  major  source  of  revenue  has been  derived  from our
Consumer Products Portfolio.  Since 1997, Banner's Central Electric's sales have
declined  significantly with a corresponding decline in the level of receivables
we purchase  from them and,  accordingly,  we have begun to change our strategic
business focus away from the purchase of these  receivables  toward our mortgage
business.  On February 28, 2001, Central Financial  purchased and contributed to
us the business and assets of the largest of Banner's  Central  Electric  retail
stores and in December 2001 Banner's Central  Electric ceased  operations at two
of its remaining retail stores.

Seasonal Fluctuations in Quarterly Operating Results

     We historically  experience the highest demand for retail sales and related
finance  receivables  between  October and December,  and  experience the lowest
demand  receivables  between  January  and  March.  These  significant  seasonal
fluctuations  in our business  directly  impact our  operating  results and cash
needs.

Competition

     The  installment  credit  business is highly  competitive.  We compete with
those  department  stores,  discount  stores and other retail outlets which also
provide  credit to  low-income  consumers.  The largest  national  and  regional
competitors have  significantly  greater  resources than we do.  Competition may
arise from new sources  having the  expertise and resources to enter our markets
either through  expansion of operations or acquisitions.  Our competitors in the

<PAGE>
                                       11



mortgage  business  include other consumer finance  companies,  mortgage banking
companies,  commercial banks, credit unions,  savings associations and insurance
companies. The largest national and regional competitors have more capital, more
locations and greater economic resources than we do.

Impact of Government Regulation

     Our  operations  are  regulated  by  federal,  state and  local  government
authorities  and are subject to various  laws and  judicial  and  administrative
decisions imposing various requirements and restrictions. These requirements and
restrictions include, among other things:

          - regulating credit granting activities;

          - establishing maximum interest rates and charges;

          - requiring disclosures to customers;

          - governing secured transactions;

          - setting collection repossession and claims handling procedures; and

          - regulating  insurance  claims  practices and  procedures,  and other
          trade practices.

     Although we believe that we are in compliance in all material respects with
applicable  local,  state and federal  laws,  rules and  regulations,  we cannot
assure that more restrictive  laws, rules and regulations will not be adopted in
the future which may make compliance  more difficult or expensive,  restrict our
ability to purchase or finance installment sales,  further limit or restrict the
amount of interest and other charges imposed in installment  sales originated by
us or by third-party  retailers,  or otherwise  materially  adversely affect our
business or prospects. See "Business - Regulation."

Dependence Upon Key Personnel

     Our  success  depends  substantially  on  certain  members  of  our  senior
management, in particular Mr. Cypres, our Chairman of the Board, Chief Executive
Officer,  and Chief  Financial  Officer.  The loss of the services of Mr. Cypres
could materially  adversely affect our business and financial  condition.  We do
not maintain key man life insurance.

Item 2.  Properties

     Our executive and administrative  offices occupy approximately 5,000 square
feet  of a  building  which  located  at 5480  East  Ferguson  Drive,  Commerce,
California 90022. We believe that our executive offices are adequate for current
and future  needs.  We lease  certain  facilities  of our  automobile  insurance
operations under month to month contracts.

<PAGE>
                                       12



Item 3.  Legal Proceedings

     We are involved in certain legal  proceedings  arising in the normal course
of our  business.  We do not believe the  outcome of these  matters  will have a
material adverse effect on us.

Item 4.  Submission of Matters to A Vote of Security Holders

                  None.

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

Market Information

     Our common stock is listed on the OTC  Bulletin  Board and trades under the
symbol  "BCFN".  There was no public market for our shares of common stock prior
to the completion of the Plan on February 28, 2001. As of March 20, 2002,  there
were approximately, 123 beneficial holders and approximately six initial holders
of record of our common stock.

     During 2001, the range of high and low sales price (not including  markups,
markdowns  or  commission)  for each  quarterly  period  was,  according  to OTC
Bulletin Board, the following:
<TABLE>
<CAPTION>

                                                    High          Low
                                                   --------     -------
<S>                      <C>                      <C>          <C>
Quarter ended            March 31, 2001 (1)        $    --      $    --
Quarter ended            June 30, 2001             $   1.04     $   0.73
Quarter ended            September 30, 2001        $   1.30     $   0.94
Quarter ended            December 31, 2001         $   1.60     $   1.12

</TABLE>


          (1) There were no shares traded in the quarter ended March 31, 2001.



Dividend Information

     We have never paid and have no present  intention of paying cash  dividends
on our common stock.  We anticipate  that we will retain all earnings for use in
our business, and we do not anticipate paying cash dividends for the foreseeable
future.  Any  determination  in the future to pay  dividends  will depend on our
financial condition,  capital requirements,  results of operations,  contractual
limitations,  legal  restrictions  and any other  factors our Board of Directors
deems relevant.

<PAGE>
                                       13

Item 6. Management's Discussion and Analysis and Results of Operations

     The following discussion should be read in conjunction with the information
in our Consolidated  Financial  Statements and Notes thereto and other financial
data included  elsewhere in this Annual Report.  Certain  statements  under this
caption  relate to matters  that  involve  risks and  uncertainties.  Our actual
results may differ significantly from the results discussed in these statements.
Factors  that might  cause such a  difference,  include  but are not limited to,
credit quality, economic conditions,  competition in the geographic and business
areas in which we conduct our  operations,  fluctuations  in interest  rates and
government  regulation.  For additional information concerning these factors see
Item 1. "Business - Business  Considerations and Certain Factors that May Affect
Future Results of Operations and Stock Price."

Overview

     Our  aggregate  portfolio  of gross  receivables  from which we derived the
majority of our revenues declined to $12.1 million at December 31, 2001 compared
to $25.0 million at December 31, 2000, primarily reflecting continued decline in
our Consumer  Products  Portfolio.  In 1997,  Banner's  Central  Electric made a
strategic  decision to  de-emphasize  this business and,  since then, its retail
sales have declined  significantly with a corresponding decrease in the level of
consumer  receivables that we purchased from them. On February 28, 2001, Central
Financial purchased and contributed to us the business and assets of the largest
of  Banner's  Central  Electric  retail  stores for which it paid  $392,000  and
assumed a related  lease from  Hispanic  Express and in December,  2001 Banner's
Central Electric ceased  operations at two of its remaining  retail stores.  Our
gross receivables of the Consumer Products Portfolio declined to $8.9 million at
December 31, 2001 compared to $18.9  million at December 31, 2000.  Our Consumer
Products  Portfolio  historically  increases  during the period between  October
through December reflecting higher holiday retail credit sales.

     Our  Mortgage  Portfolio  decreased  to $3.0  million at December  31, 2001
compared to $5.6  million and at December 31,  2000.  In August 2000,  we made a
decision to suspend making any new mortgage  loans.  In September 2000, we began
to originate first and second  mortgage loans for other  financial  institutions
for which we earn an  origination  fee.  For the  foreseeable  future  will only
originate mortgage loans for other financial institutions.



<PAGE>
                                       14






Results of Operations

<TABLE>
<CAPTION>


                        CONSOLIDATED STATEMENTS OF INCOME
                      (In thousands, except per share data)

                                                            Year Ended
                                                            December 31,
                                                    ----------------------------
                                                        2001            2000
                                                    -----------     ------------
<S>                                                    <C>               <C>
Revenues:
   Retail sales                                     $     8,009      $      --
   Interest income                                        4,361            6,785
   Other income                                           2,612            2,389
                                                    -----------      -----------
      Total revenue                                      14,982            9,174
                                                    -----------      -----------

Costs and expenses:
   Operating expenses                                     7,505            5,837
   Cost of sales                                          5,415             --
   Provision for credit losses                            2,445            2,707
                                                    -----------      -----------
      Total costs and expenses                           15,365            8,544
                                                    -----------      -----------
Income (loss) before taxes                                 (383)             630
Provision (benefit) for income taxes                       (153)             252
                                                    -----------      -----------
Net income (loss)                                   $      (230)     $       378
                                                    ===========      ===========

Per Share Data:
Net loss per common share:
    Basic                                           $     (0.03)
    Diluted                                         $     (0.03)
Weighted average shares outstanding:
    Basic                                             7,312,000
    Diluted                                           7,312,000

Pro Forma Per Share Data (Unaudited):
Net income per common share:
    Basic                                                            $      0.05
    Diluted                                                          $      0.05
Weighted average shares outstanding:
    Basic                                                              7,166,000
    Diluted                                                            7,166,000

</TABLE>


<PAGE>
                                       15



Consumer Products Portfolio Trend

<TABLE>
<CAPTION>

                           Consumer Products Portfolio
             (Dollars in thousands, except average contract balance)

                                                              Years Ended
                                                              December 31,
                                                          ---------------------
                                                            2001          2000
                                                          --------     --------
<S>                                                        <C>          <C>
Gross receivable (at end of period)                        $ 8,938      $18,942
Deferred insurance revenues (at end of period)                  12           40
                                                           -------      -------
Net carrying value                                         $ 8,926      $18,902
                                                           =======      =======
Average net receivable                                     $13,890      $23,649
Number of contracts (at end of period)                      21,736       40,154
Average net contract balance (at end of period)            $   411      $   589

Total interest income                                        3,657        5,557
Late charge and extension fee income                           648        1,189

Provision for credit losses                                  2,172        2,531
Provision for credit loss as a percentage
    of average net receivable                                 15.6%        10.7%
Net write-offs                                               2,089        3,292
Net write-offs as a percentage of average
    net receivable                                            15.0%        13.9%

Average interest rate on average net
    receivable                                                26.3%        25.1%
</TABLE>


Mortgage Portfolio


     At  December  31,  2001 and 2000,  the gross  receivables  of the  mortgage
portfolio  were $3.0  million,  and $5.6  million,  respectively.  The number of
mortgage  loans  outstanding  at  December  31,  2001 and 2000 were 448 and 688,
respectively.  The average  interest  rate on the  portfolio for the years ended
December 31, 2001 and 2000 was 16.9% and 17.3% respectively.

     At December  31, 2001 and 2000,  there was $0.3 million and $0.4 million of
receivables with balances over 31 days past due.

Delinquency Experience and Allowance for Credit Losses

     Borrowers  under our contracts are required to make monthly  payments.  The
following table sets forth our delinquency experience for accounts with payments
31 days or more  past  due and  allowance  for  credit  losses  for our  finance
receivables.

<PAGE>
                                       16



<TABLE>
<CAPTION>


                                                         Finance Receivables(1)
                                                        (Dollars in Thousands)
                                                        Years Ended December 31,
                                                        ------------------------
                                                          2001            2000
                                                        --------        --------
<S>                <C>                                  <C>            <C>
Past due accounts  31 days or more (gross receivable):  $    140       $    263

Accounts with  payments 31 days or more past due as a
    percentage of end of period gross receivables            1.5%           1.2%

Allowance for credit losses                             $    614       $    508

Allowance for credit losses as a percentage of net
    receivables                                              6.7%           2.1%
</TABLE>


(1) Includes our consumer  products,  independent  retailer and premium  finance
portfolios.


     Our  finance  receivables  accounts  which  were 31 days or more  past  due
decreased  to $0.1  million at the end of  December  31,  2001  compared to $0.3
million at the end of December 31, 2000.  These declines  primarily  reflect the
decline in the  aggregate  level of our finance  receivables  portfolios  during
these periods and accelerated write-offs during 2001. As a percentage of the end
of period  gross  finance  receivables,  accounts  with 31 days or more past due
increased  to 1.5% at  December  31,  2001 from 1.2% at December  31,  2000.  We
believe  the  rise in the  provision  for  credit  losses  and  write-offs  as a
percentage  of average net  receivables  during  2001 was a result of  excessive
credit burdens for some customers  partly due to an aggressive over extension of
credit in the  marketplace  in which we compete and partly due to soft  economic
conditions.  As a result of these  trends,  the  allowance  for credit losses at
December  31, 2001  increased  to $0.6 million from $0.5 million at December 31,
2000, expressed as percentage of net receivables the allowance for credit losses
increased to 6.7% at December 31, 2001 compared to 2.1% at December 31, 2000.

Year Ended December 31, 2001 Compared to the Year ended December 31, 2000

     Total  revenue in the year  ended  December  31,  2001  increased  to $15.0
million  from $9.2 million in the year ended  December 31, 2000,  an increase of
$5.8 million.

     Retail sales amounted to $8.0 million for 2001,  reflecting our purchase of
the assets of a retail store acquired from an affiliated company on February 28,
2001.

     Interest  income for the year ended  December  31, 2001  decreased  to $4.4
million  from $6.8  million in the year ended  December  31, 2000, a decrease of
$2.4  million.  This  decrease was  primarily  due to a decrease in our Consumer
Products  Portfolio as a result of a decreased  level of  receivables  purchased
from Banner's Central Electric, reflecting Banner's Central Electric's declining
retail sales.  For the year ended December 31, 2001,  our net consumer  products
portfolio  averaged  $13.9  million  compared to $23.6 million in the year ended
December 31, 2000.  Also  contributing to the decline was a decrease in interest
income earned on our independent  retailers and premium finance portfolio,  as a
result of our  decision  to phase out of  substantially  all of our  independent

<PAGE>
                                       17


retailer  relationships  and  insurance  companies  (for which we act as broker)
because they are offering financing directly to customers.

     Other income for the year ended December 31, 2001 increased to $2.6 million
from $2.4  million in the year ended  December  31,  2000,  an  increase of $0.2
million.  Other income  primarily  includes  fees earned in the  origination  of
mortgages,  late charges and other fees charged on the receivables portfolio and
the sale of automobile  insurance.  Of the increase  $0.8 million  related to an
increase in mortgage loan  origination fees offset by a decrease of $0.6 million
due to a  decline  in late  charges  and other  fees  primarily  reflecting  the
decreased level of the finance receivables portfolio.

     Operating  expenses for the year ended  December 31, 2001 increased to $7.5
million  from $5.8 million in the year ended  December 31, 2000,  an increase of
$1.7 million or 28.6%. Of this increase,  approximately  $3.5 million was due to
the operating  expenses of the retail store in the year ended December 31, 2001,
offset by a reduction  in  operating  expenses of $1.8  million  relating to the
consumer finance receivables business.

     Cost of sales  include the cost of retail  sales from the retail  store for
the year ended  December 31, 2001.  Cost of sales as a percentage  of net retail
sales was 67.6% in 2001.

     The  provision  for credit  losses  decreased  to $2.4 million for the year
ended December 31, 2001 from $2.7 million in the year ended December 31, 2000, a
decrease of $0.3 million or 9.7%.  As a percentage  of interest and other income
the provision for credit losses increased in the year ended December 31, 2001 to
35.1% from 29.5% in the year ended December 31, 2000. The increase in percentage
was due to a rise in  delinquencies  in 2001 as a  result  of  excessive  credit
burden for some  customers due to an aggressive  over extension of credit in the
market  place  in which we  complete  and to a bus  strike  which  commenced  in
September 2000 and lasted approximately five weeks.

     As a result of the foregoing  factors,  net loss in the year ended December
31, 2001 was $0.2  million  compared  to net income of $0.4  million in the year
ended December 31, 2000.

Year Ended December 31, 2000 Compared to the Year ended December 31, 1999

     Total revenue in the year ended December 31, 2000 decreased to $9.2 million
from $11.4  million in the year ended  December  31,  1999,  a decrease  of $2.2
million or 19.7%.

     Interest  income for the year ended  December  31, 2000  decreased  to $6.8
million  from $7.8  million in the year ended  December  31, 1999, a decrease of
$1.0  million or 13.2%.  This  decrease was  primarily  due to a decrease in our
Consumer  Products  Portfolio  as a result of a decreased  level of  receivables
purchased from Banner's Central Electric, reflecting Banner's Central Electric's
declining  retail sales.  For the year ended December 31, 2000, our net consumer
products  portfolio averaged $23.6 million compared to $26.4 million in the year
ended  December 31,  1999.  Also  contributing  to the decline was a decrease in
interest  income  earned  on  our  independent  retailers  and  premium  finance
portfolio,  as a result of our decision to phase out of substantially all of our
independent retailer  relationships and insurance companies (for which we act as
broker) because they are offering financing directly to customers.

<PAGE>
                                       18


     Other income for the year ended  December 31, 2000 declined to $2.4 million
from $2.8  million in the year  ended  December  31,  1999,  a decrease  of $0.4
million or 14.8%.  Other income  primarily  includes late charges and other fees
charged on the receivables  portfolio and the sale of automobile  insurance.  Of
the decrease approximately $0.2 million was due to a decline in late charges and
other fees primarily  reflecting the decreased level of the finance  receivables
portfolio  and $0.2  million  was  primarily  due to a decrease  in the level of
automobile  insurance  sold. The agreement  under which we charged a transaction
fee to Banner's Central Electric was terminated effective January 1, 2000.

     Operating  expenses for the year ended  December 31, 2000 decreased to $5.8
million  from $6.7  million in the year ended  December  31, 1999, a decrease of
$0.9 million or 13.0%. Of this decrease, approximately $1.9 million was due to a
reduction  in salary and  overhead  expenses  corresponding  to the  decrease in
revenues  in  the  year  ended  December  31,  2000,   offset  by  a  charge  of
approximately $1.0 million for the early termination of a lease. As a percentage
of interest and other income,  operating  expenses (net of the lease termination
charge)  were  52.8% and 63.2% in the year  ended  December  31,  2000 and 1999,
respectively.

     The  provision  for credit  losses was to $2.7 million in each of the years
ended  December 31, 2000 and 1999.  As a percentage of interest and other income
the provision for credit losses increased in the year ended December 31, 2000 to
29.5% from 25.6% in the year ended December 31, 1999. The increase in percentage
was due to a rise in  delinquencies  in 2000 as a  result  of  excessive  credit
burden for some  customers due to an aggressive  over extension of credit in the
market  place  in which we  complete  and to a bus  strike  which  commenced  in
September 2000 and lasted approximately five weeks.

     As a result of the foregoing factors, net income in the year ended December
31, 2000  decreased to $0.4 million from $1.2 million in the year ended December
31, 1999.



Liquidity and Capital Resources

     We have  historically  financed our operations  primarily through cash flow
generated from operations and borrowings  under our notes payable.  During 2001,
as a result of the  deteriorating  economic  climate  the Company  continued  to
tightened  its  credit  guidelines,   and  this  coupled  with  a  reduction  in
receivables we have  purchased  from Banner  Central  Electric and a decision to
curtail  originating  mortgages has resulted in a continued  contraction  in our
receivable portfolios.  The Company has cash and short-term investments of $14.7
million at December 31, 2001.  These cash balances and cash flows generated from
operations and contraction of our receivable  portfolios will be used to finance
our operations and to fund future investments which the Company may make.

     Net cash flow provided from operations totaled $3.0 million and 3.3 million
in the year ended  December  31, 2001 and 2000,  respectively.  In each of these
periods the source of cash  primarily  consisted of net  operating  income after
non-cash items.  Non-cash items in each of the periods included depreciation and
amortization, provision for credit losses and deferred income taxes. Other items
affecting cash flows from operating  activities in each of the periods  included

<PAGE>
                                       19



cash flows from increases  (decreases) in notes  receivable  from related party,
prepaid  expenses and other current assets,  inventory and accounts  payable and
accrued expenses.

     Net cash used by  investing  activities  totaled  $1.3 million for the year
ended December 31, 2001. Net cash provided by investing  activities totaled $3.8
million for the year ended  December  31, 2000.  Net cash  provided by investing
activities in each of the periods  consisted of installment  contracts and other
contract  receivables,  offset by  capital  expenditures,  and cash flows from a
decrease in notes receivable and an increase in short-term investments in 2001.

     Net cash provided by financing activities totaled $0.3 million for the year
ended  December 31, 2001.  Net cash used in  financing  activities  totaled $7.1
million for the year ended December 31, 2000, respectively. Net cash provided by
financing activities in 2001 consisted of issuance of common stock totaling $0.3
million. Net cash used in financing activities in 2000 consisted of repayment of
notes  payable  totaling  $1.8 million and capital  distributions  totaling $5.3
million to Central Financial for the year ended December 31, 2000, respectively.

     We  presently  do not have a bank line of credit.  Pursuant to an operating
agreement with Hispanic Express,  Hispanic Express has agreed to guarantee up to
$4 million of bank borrowings to acquire consumer receivables.  Should we decide
to expand our mortgage business, we may need to obtain a bank line of credit.

     We expect that our existing capital  resources will adequately  satisfy our
working capital  requirements for the next 12 months. Our capital resources will
be further enhanced as we liquidate our portfolio of second trust mortgages.  To
date we have not identified  any other  businesses in which to invest our excess
capital resources.

     Our Board of  Directors  has  authorized  open-market  purchases of up to 3
million  shares of our common stock,  subject to applicable law and depending on
market  considerations  and other  considerations  that may affect  open  market
repurchases  of such shares  pursuant to  authorization  from time to time.  Any
decision to  purchase  such shares will be based on the price of such shares and
whether we have capital available for such purchase.

<PAGE>
                                       20






Item 7.  Financial Statements

<TABLE>
<CAPTION>


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS




                                                                            Page

<S>                                                                          <C>
Report of Independent Public Accountants......................................21
CONSOLIDATED FINANCIAL STATEMENTS
  Consolidated Balance Sheet..................................................22
  Consolidated Statements of Income...........................................23
  Consolidated Statements of Stockholders' Equity.............................24
  Consolidated Statements of Cash Flows.......................................25
  Notes to Consolidated Financial Statements..................................26

</TABLE>


<PAGE>
                                       21




                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS





To the Board of Directors and Stockholders of Banner Central Finance Company:

We have audited the  accompanying  consolidated  balance sheet of Banner Central
Finance Company, a Delaware corporation,  and subsidiaries (the "Company") as of
December  31,  2001,  and  the  related   consolidated   statements  of  income,
stockholders'  equity  and cash  flows for each of the two  years in the  period
ended December 31, 2001. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Banner Central Finance Company
and  subsidiaries  as of December 31, 2001, and the results of their  operations
and their cash flows for each of the two years in the period ended  December 31,
2001, in conformity with accounting  principles generally accepted in the United
States.

/s/ ARTHUR ANDERSEN LLP
-----------------------
Los Angeles, California
March 22, 2002




<PAGE>
                                       22




                 BANNER CENTRAL FINANCE COMPANY AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                    December 31,
                                                                       2001
                                                              ---------------------
ASSETS
<S>                                                                  <C>
  Cash                                                               $ 1,987,000
  Short term investments                                              12,694,000
  Finance receivables, net                                            11,047,000
  Prepaid expenses and other current assets                              218,000
  Notes receivable from affiliates                                       997,000
  Inventory                                                            1,297,000
  Deferred income taxes                                                  594,000
  Property and equipment, net                                          3,742,000
  Intangible and other assets, net                                       635,000
                                                                     -----------
     TOTAL ASSETS                                                    $33,211,000
                                                                     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Accounts payable and accrued expenses                              $ 1,185,000
                                                                     -----------
     Total liabilities                                                 1,185,000

  Minority interest                                                      497,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Common stock, $0.01 par value, 10,000,000 shares authorized,
      7,417,400 shares issued                                             74,000
  Additional paid-in capital                                          21,814,000
  Retained earnings                                                    9,641,000
                                                                     -----------
     Total stockholders' equity                                       31,529,000
                                                                     -----------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $33,211,000
                                                                     ===========

</TABLE>





             The accompanying notes are an integral part of this consolidated
balance sheet.


<PAGE>
                                       23




                 BANNER CENTRAL FINANCE COMPANY AND SUBSIDIARIES


                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>


                                                          Years Ended December 31,
                                                       -----------------------------
                                                           2001              2000
                                                       ------------     ------------
Revenues
<S>                                                     <C>             <C>
    Retail Sales                                        $  8,009,000    $       --
    Interest income                                        4,361,000
                                                                           6,785,000
    Other income                                           2,612,000       2,389,000
                                                        ------------    ------------
    Total revenues                                        14,982,000       9,174,000
                                                        ------------    ------------
Costs and Expenses
    Operating expenses                                     7,505,000       5,837,000
    Cost of sales                                          5,415,000            --
    Provision for credit losses                            2,445,000       2,707,000
                                                        ------------    ------------
    Total costs and expenses                              15,365,000       8,544,000
                                                        ------------    ------------
    Income (loss) before provision for income taxes         (383,000)        630,000
    Provision (benefit) for income taxes                    (153,000)        252,000
                                                        ------------    ------------
    Net income (loss)                                   $   (230,000)   $    378,000
                                                        ============    ============
Per Share Data:
Net loss per common share:
    Basic                                               $      (0.03)
    Diluted                                             $      (0.03)
Shares used in calculating net loss per common share:
    Basic                                                  7,312,000
    Diluted                                                7,312,000

Pro Forma Per Share Data (Unaudited):
Pro forma net income per common share:
    Basic                                                               $       0.05
    Diluted                                                             $       0.05
Pro forma shares used in calculating pro forma
   net income per common share:
    Basic                                                                  7,166,000
    Diluted                                                                7,166,000

</TABLE>




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.





<PAGE>
                                       24




                 BANNER CENTRAL FINANCE COMPANY AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>


                                               Common Stock
                                            ---------------------         Paid-in        Retained
                                            Shares         Amount         Capital        Earnings         Total
                                          ----------    -----------     ------------    ------------   ------------
<S>                                      <C>           <C>             <C>              <C>           <C>
Balance, December 31, 1999                      --      $       --      $ 24,936,000    $  9,493,000   $ 34,429,000
Pro forma issuance of common stock         7,166,000          72,000         (72,000)                         --
Capital distribution to related party                                     (5,266,000)                    (5,266,000)
Net income                                                                                   378,000        378,000
                                        ------------    ------------    ------------    ------------   ------------
Balance, December 31, 2000                 7,166,000          72,000      19,598,000       9,871,000     29,541,000
Contribution from related party                                            1,967,000                      1,967,000
Exercise of stock options                    251,400           2,000         249,000                        251,000
Net loss                                                                                    (230,000)      (230,000)
                                        ------------    ------------    ------------    ------------   ------------
Balance, December 31, 2001                 7,417,400    $     74,000    $ 21,814,000    $  9,641,000   $ 31,529,000
                                        ============    ============    ============    ============   ============
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


<PAGE>
                                       25




                 BANNER CENTRAL FINANCE COMPANY AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>


                                                                                     Years Ended December 31,
                                                                                   ----------------------------
                                                                                       2001            2000
                                                                                   ------------     -----------
 <S>                                                                                <C>             <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                                              $   (230,000)   $    378,000
    Adjustments to reconcile net income (loss) to net cash
      provided by operating activities:
      Loss on disposal of fixed assets                                                     --            60,000
      Depreciation and amortization                                                     173,000          70,000
      Provision for credit losses                                                     2,445,000       2,707,000
      Deferred income taxes                                                            (264,000)        230,000
    Changes in assets and liabilities:
      Receivable from related party                                                    (997,000)     (2,493,000)
      Prepaid expenses and other current assets                                        (142,000)        116,000
      Inventory                                                                       2,262,000       1,334,000
      Accounts payable and accrued expenses                                            (274,000)        860,000
                                                                                   ------------    ------------
       Net cash provided by operating activities                                      2,973,000       3,262,000
                                                                                   ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Installment contracts and other contract receivables
     collected, net of recoveries                                                    10,217,000       3,815,000
    Increase in short-term investments                                              (12,694,000)           --
    Decrease in note receivable from affiliate                                        1,212,000            --
    Capital expenditures, net                                                           (49,000)         (6,000)
                                                                                   ------------    ------------
        Net cash provided by (used in) investing
         activities                                                                  (1,314,000)      3,809,000
                                                                                   ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Repayment of notes payable                                                             --        (1,800,000)
    Proceeds from exercise of stock options                                             251,000            --
    Capital distribution to related party                                                  --        (5,266,000)
                                                                                   ------------    ------------
        Net cash provided by (used in) financing
          activities                                                                    251,000      (7,066,000)
                                                                                   ------------    ------------

NET INCREASE IN CASH                                                                  1,910,000           5,000
CASH, BEGINNING OF PERIOD                                                                77,000          72,000
                                                                                   ------------    ------------
CASH, END OF PERIOD                                                                $  1,987,000    $     77,000
                                                                                   ============    ============

CASH PAID DURING THE PERIOD FOR:
    INTEREST                                                                       $       --      $       --
    INCOME TAXES                                                                   $     80,000    $      9,000

</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


<PAGE>
                                       26







                 BANNER CENTRAL FINANCE COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.       Basis of Presentation and Nature of Operations

     Basis of  Presentation - Banner Central Finance  Company  ("Banner  Central
Finance" or the "Company") in September  2000 and was a wholly-owned  subsidiary
of Central Financial Acceptance Corporation ("Central Financial").  On September
6, 2000 the Board of  Directors  of  Central  Financial  Acceptance  Corporation
("Central Financial") approved a Plan of Complete  Dissolution,  Liquidation and
Distribution  (the "Plan") under which  Central  Financial's  subsidiaries  were
reorganized  into two public  companies,  Banner  Central  Finance and  Hispanic
Express, Inc. ("Hispanic Express"). On February 28, 2001, the Plan was completed
and Central  Financial  was  dissolved  and  liquidated  and  Central  Financial
distributed to its stockholders  100% of the outstanding  Common Stock of Banner
Central Finance and Hispanic  Express.  Pursuant to the Plan,  Central Financial
contributed to Banner Central Finance its investment in subsidiaries,  which are
engaged in selling and financing of automobile insurance,  its consumer products
receivable  portfolio  and its  mortgage  business and  contributed  to Hispanic
Express its investment  subsidiaries  that are engaged in the small loan, travel
finance, check cashing and travel services businesses.

     In  addition,  pursuant to the Plan,  Banner  Central  Finance and Hispanic
Express  entered  into  certain  agreements  for the purpose of  defining  their
ongoing  relationship  (See Note 6), including  provisions for the allocation of
certain costs and expenses.  Management of Banner Central Finance  believes that
such agreements provide for reasonable  allocation of costs and expenses between
the parties.

     The  formation  of  Banner  Central  Finance  has  been  accounted  for  at
historical cost, in a manner similar to a pooling of interests. The accompanying
condensed  consolidated  financial statements reflect the combined operations of
Banner Central Finance and its subsidiaries, as if they had been consolidated at
the beginning of the periods presented.

     On February 28, 2001, Central Financial  contributed 80% of the outstanding
common stock of BCE Properties II, Inc. to the Company.  For financial reporting
purposes the  contribution  was recorded on a historical cost basis and resulted
in an increase in stockholders' equity of $1,967,000.  On February 28, 2001, the
Company  purchased  certain assets and assumed  certain  obligations of a retail
store previously  operated by Banner's Central Electric,  Inc.  ("Central"),  an
affiliated company, for approximately $392,000.

     Nature of Operations - The Company: (i) provides consumer financing related
to the  sale of high  quality  brand  name  consumer  products,  appliances  and
furniture  sold by our retail store and  historically  by retail stores owned by
Central; (ii) provides automobile insurance products; and (iii) originates first
and second trust mortgages. The Company generally experiences the highest demand
for its financial products and services between October and December.


<PAGE>
                                       27




                 BANNER CENTRAL FINANCE COMPANY AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED




2.       Summary of Significant Accounting Principles

     Principles  of  Consolidation  - The  accompanying  consolidated  financial
statements  include the accounts of Banner Central  Finance and its wholly owned
subsidiaries.  All significant  intercompany balances and transactions have been
eliminated in consolidation.

     Finance  Receivables - Finance  receivables  primarly  include  installment
contracts that have been  historically  purchased from Central,  and installment
contracts originated by the Company after the acquisition of a retail store from
Central on  February  28,  2001  (referred  to herein as the  "Consumer  Product
Portfolio"),  and mortgage loan receivables  originated by the Company (referred
to herein as the  "Mortgage  Portfolio").  The  annual  percentage  rate  varies
depending on the length of the contract and the amount of  administrative  fees.
The contracts provide for scheduled monthly payments and mature generally from 1
to 24  months  in the  Consumer  Product  Portfolio,  and 48 to 60 months in the
Mortgage Portfolio.

     Certain direct loan  origination  costs are capitalized and recognized into
expense over the life of the related loan using a method that  approximates  the
interest method.

     The  allowance  for credit  losses is provided  for loans based on previous
experience or when the events giving rise to credit losses are estimated to have
occurred.   The  Company's   portfolios   comprise  generally   smaller-balance,
homogeneous  loans that are evaluated  collectively  to determine an appropriate
allowance for credit losses.  The allowance for credit losses is maintained at a
level  considered  adequate  by  management  to  cover  losses  in the  existing
portfolios.  Collection of past due accounts is pursued by the Company, and when
the  characteristics  of an  individual  account  indicates  that  collection is
unlikely,  the account is charged off and turned  over to a  collection  agency.
Accounts  are  generally  charged off when they are between 60 and 150 days past
due.

     Allowance  for credit  losses is increased by charges to the  provision for
credit  losses and decreased by  charge-offs,  net of  recoveries.  Management's
periodic  evaluation  of the adequacy of the allowance is based on the Company's
past loan loss  experience,  known and inherent risks in the portfolio,  adverse
situations that may affect the borrower's  ability to repay and current economic
conditions.  The Company's non-mortgage customers are typically between the ages
of 21 and 45 and earn less than $25,000 per year,  have little or no savings and
limited short-term  employment histories.  In addition,  the Company's customers
typically  have no prior credit  histories  and are unable to secure credit from
traditional lending sources. The Company makes its credit decisions primarily on
its  assessment  of a customer's  ability to repay the  obligation.  In making a
credit  decision,  in  addition  to the  size  of the  obligation,  the  Company
generally  considers a customer's  income level,  type and length of employment,
stability of residence,  personal  references  and prior credit history with the
Company.  As a result,  the  Company  is more  susceptible  to the risk that its
customers will not satisfy their repayment obligations than are less specialized
consumer  lending  companies  or  consumer  finance  companies  that  have  more
stringent   underwriting   criteria.   Because   the   Company   relies  on  the

<PAGE>
                                       28


creditworthiness  of its customers for repayment and does not rely on collateral
securing the debt,  the Company  experiences  actual rates of losses higher than
lenders  who  have  collateral  which  they  can  repossess  in the  event  of a
borrower's default.

     Recoveries on  charge-offs  are  recognized as an addition to the allowance
for credit losses on the cash basis of accounting and at the time the payment is
received.  Expenses  related to recoveries  are included in operating  expenses.
Recoveries for the years ended December 31, 2001 and 2000,  amounted to $995,000
and $644,000, respectively.

     Deferred  insurance  revenue arises from the deferral of the recognition of
revenue from certain credit insurance  contracts.  Insurance  premium revenue is
recognized  over  the  life  of  the  related   contract  using  a  method  that
approximates the interest method.

     Inventories - The Company purchases  consumer product inventory for sale in
its retail business. Inventories are stated at the lower of cost or market. Cost
is determined by the average cost method.

     Property  and  Equipment  - Property  and  equipment  are  carried at cost.
Long-lived  property is reviewed for  impairment  whenever  events or changes in
circumstances  indicate  that the  carrying  amount  of such an asset may not be
recoverable  in  accordance  with  Statement of Financial  Accounting  Standards
(SFAS) No. 121,  "Accounting  for the  Impairment of Long Lived  Assets." If the
carrying  amount of the asset  exceeds the  estimated  undiscounted  future cash
flows to be  generated  by the asset,  an  impairment  loss would be recorded to
reduce the asset's carrying value to its estimated fair value.

     Depreciation   and   amortization   are   computed   primarily   using  the
straight-line method over the estimated lives of the assets, as follows:
<TABLE>
<CAPTION>


<S>                                                             <C>
        Furniture, equipment and software....................... 5 to 10 years
        Leasehold improvements.................................. Life of lease
        Building and improvements............................... 30 years

</TABLE>

     Intangible  Assets - Intangible  assets  primarily arose in connection with
the Company's  acquisition of the net assets of an automobile insurance business
during 1996.  The excess of the purchase price over the fair value of net assets
acquired is being amortized using the  straight-line  method over 30 years.  The
recoverability  of the excess of the  purchase  price over the fair value of net
assets acquired is analyzed annually based on undiscounted future cash flows. If
the carrying  value of the intangible  asset exceeds the estimated  undiscounted
future cash flows,  an  impairment  loss would be recorded to reduce the asset's
carrying value to its estimated fair value. No impairment loss has been recorded
to date.  Accumulated  amortization  of  intangibles as of December 31, 2001 was
$145,000.

     Income  Recognition - Interest income on the Consumer Product Portfolio and
Mortgage  Portfolio is recognized  using the interest  method.  Origination fees

<PAGE>
                                       29



earned on mortgages are deferred and recognized  over the life of the loan using
the interest method.  Commissions  income and broker fee income from the sale of
automobile  insurance  products is deferred and recognized over the terms of the
contracts, typically 12 months.

Other income consists of:
<TABLE>
<CAPTION>


                                                      Years ended December 31,
                                                    ---------------------------
                                                       2001              2000
                                                    ----------        ----------
<S>                                                  <C>              <C>
  Other Income:
  Late and extension charges                         $  653,000       $1,234,000
  Mortgage loan origination fees                        933,000          148,000
  Insurance products and other                        1,026,000        1,007,000
                                                     ----------       ----------
                                                     $2,612,000       $2,389,000
                                                     ==========       ==========
</TABLE>


     Income Taxes - The Company,  Central  Financial  and Hispanic  Express have
entered into a Tax Sharing  Agreement (See Note 6). The Company follows SFAS No.
109,  "Accounting  for Income  Taxes."  Under SFAS No.  109,  income tax expense
includes  income  taxes  payable for the current year and the change in deferred
income tax assets and liabilities for the future tax consequences of events that
have been  recognized  in the  Company's  financial  statements  or  income  tax
returns. A valuation allowance is recognized to reduce the carrying value of the
deferred  tax  assets  if it is more  likely  than not  that  some or all of the
deferred tax assets will not be realized.  At December 31, 2001, in management's
opinion, the asset is realizable.

     Advertising - The Company advertises  primarily on Hispanic  television and
radio,  and  through  newspapers  and direct  mail.  All  advertising  costs are
expensed as incurred.  Advertising expense for the years ended December 31, 2001
and 2000 were $170,000 and $111,000, respectively.

     Concentration  of Credit Risk - The Company  places its temporary  cash and
cash investments with high quality financial  institutions.  Management monitors
the financial  creditworthiness of these financial institutions.  As of December
31, 2001,  such  investments  of  $1,907,000  were in excess of insured  limits.
Short-term  investments  are comprised of investments  in high grade  commercial
paper with a maturity of less than 30 days. The Company's purchased  receivables
business activity is with low-income  customers located primarily in the greater
Los Angeles area. A significant portion of the customers' ability to repay their

<PAGE>
                                       30



loans is dependent upon general economic factors within the geographical area in
which the Company  operates.  The Company's loans are considered  unsecured and,
thereby,  the  Company's  ability to get repaid is  totally  dependent  upon the
general financial strength of the borrower.  To mitigate a portion of this risk,
the  Company  generally  limits the amount of a loan to a single  customer to an
amount  not to exceed  $1,300.  The  Company's  mortgage  business  is also with
customers  located  primarily  in the greater Los Angeles  area.  A  significant
portion of the  customers'  ability to repay their  mortgage  loans is dependent
upon general  economic  factors  within the area in which the Company  operates.
Although  these  loans are  secured,  the  Company is still  dependent  upon the
general  financial  strength of the  borrowers  and the value of the  borrowers'
residential property.

     Fair Value of Financial  Instruments - The carrying  value of the Company's
finance receivables approximates their fair value due to their short term nature
and the generally stable rates of interest currently being charged in comparison
to the rates  reflected in the existing  portfolios.  The  Company's  management
believes that the fair value of the Company's financial instruments approximates
their carrying values as of December 31, 2001.

     The fair value of mortgages is  estimated  by utilizing  discounted  future
cash flow calculations  using interest rates currently being offered for similar
loans to borrowers  with similar  credit risks and for the  remaining  estimated
maturities.  Management  believes the carrying  value of the mortgage  portfolio
approximates its carrying value as of December 31, 2001.

     Use of Estimates - The  preparation  of financial  statements in conformity
with  accounting  principles  generally  accepted in the United States  requires
management to make estimates and  assumptions.  Such  estimates and  assumptions
affect the reported  amounts of assets and  liabilities  and the  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

     New  Accounting  Pronouncements  - In July 2001,  the Financial  Accounting
Standards  Board issued  Statement of Financial  Accounting  Standards  No. 141,
Business   Combinations  (SFAS  141),  and  Statement  of  Financial  Accounting
Standards No. 142,  Goodwill and Other  Intangible  Assets (SFAS 142). They also
issued  Statement of Financial  Accounting  Standards  No. 143,  Accounting  for
Obligations  Associated with the Retirement of Long-Lived Assets (SFAS 143), and
Statement  of  Financial  Accounting  Standards  No.  144,  Accounting  for  the
Impairment  or Disposal of  Long-Lived  Assets (SFAS 144), in August and October
2001, respectively.

     SFAS 141 requires all business  combinations  initiated after June 30, 2001
be accounted for under the purchase method.  SFAS 141 supersedes APB Opinion No.
16, Business  Combinations,  and Statement of Financial Accounting Standards No.
38, Accounting for Preacquisition Contingencies of Purchased Enterprises, and is
effective for all business combinations initiated after June 30, 2001.

     SFAS 142  addresses  the  financial  accounting  and reporting for acquired
goodwill  and other  intangible  assets.  Under the new  rules,  a company is no
longer required to amortize goodwill and other intangible assets with indefinite
lives,  but  will be  subject  to  periodic  testing  for  impairment.  SFAS 142
supersedes APB Opinion No. 17, Intangible Assets. Effective January 1, 2002, the
Company  will adopt  SFAS 142.  Adoption  of SFAS 142 will  result in a goodwill
impairment  charge of approximately  $635,000,  because of a decline in the fair
value of the Company's insurance business.

<PAGE>
                                       31



     SFAS  143  establishes   accounting   standards  for  the  recognition  and
measurement  of  an  asset  retirement   obligation  and  its  associated  asset
retirement  cost. It also  provides  accounting  guidance for legal  obligations
associated  with the  retirement  of  tangible  long-lived  assets.  SFAS 143 is
effective in fiscal years  beginning  after June 15, 2002,  with early  adoption
permitted.  The Company  expects that the provisions of SFAS 143 will not have a
material impact on its consolidated results of operations and financial position
upon adoption. The Company plans to adopt SFAS 143 effective January 1, 2003.

     SFAS 144  establishes  a single  accounting  model  for the  impairment  or
disposal of  long-lived  assets,  including  discontinued  operations.  SFAS 144
superseded  Statement of Financial  Accounting Standards No. 121, Accounting for
the Impairment of Long-Lived  Assets and for Long-Lived Assets to Be Disposed Of
(SFAS 121),  and APB  Opinion No. 30,  Reporting  the  Results of  Operations  -
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently  Occurring Events and  Transactions.  The provisions of
SFAS 144 are effective in fiscal years  beginning  after December 15, 2001, with
early adoption permitted,  and in general are to be applied  prospectively.  The
Company  plans to adopt SFAS 144  effective  January 1, 2002 and does not expect
that the adoption  will have a material  impact on its  consolidated  results of
operations and financial position.

<PAGE>
                                       32






3.       Finance Receivables

<TABLE>
<CAPTION>

                                                                    December 31,
                                                                       2001
                                                                    -----------
<S>                                                                  <C>
Finance Receivables consist of:

Consumer  Product  Portfolio                                         $ 8,938,000
 Mortgage  Portfolio                                                   3,028,000
 Other portfolios                                                        180,000
                                                                     -----------
                                                                      12,146,000

Less:  deferred insurance                                                 12,000
Less:  deferred loan origination fees                                    246,000
Less:  allowance for credit losses                                       841,000
                                                                     -----------

                                                                     $11,047,000
                                                                     ===========
</TABLE>



Customers are required to make monthly payments on installment contracts. The
aggregate gross balance of accounts with payments 31 days or more past due are:

<TABLE>
<CAPTION>


                                                                     December 31,
                                                                         2001
                                                                --------------------

<S>                                                                  <C>
Consumer Product Portfolio:
  Past due 31 days or more                                              $140,000
                                                                        ========

Mortgage Portfolio:
  Past due 31 days or more                                              $281,000
                                                                        ========

Other Portfolios:
  Past due 31 days or more                                              $   --
                                                                        ========
</TABLE>



<PAGE>
                                       33





The allowance for credit losses includes the following:
<TABLE>
<CAPTION>


                                                       Years Ended December 31,
                                                       ------------------------
                                                        2001            2000
                                                      ---------     ----------

<S>                                                  <C>            <C>
Allowance for credit losses, beginning of period     $   683,000    $ 1,668,000
Provision for credit losses                            2,445,000      2,707,000
Charge-offs, net                                      (2,287,000)    (3,692,000)
                                                     -----------    -----------
Allowance for credit losses, end of period           $   841,000    $   683,000
                                                     ===========    ===========

</TABLE>


4.          Property and Equipment

                  Property and equipment, net consists of:


<TABLE>
<CAPTION>

                                                                    December 31,
                                                                         2001
                                                                    ------------

<S>                                                                   <C>
Land                                                                  $1,203,000
Building and improvements                                              3,188,000
Furniture, equipment and software                                        179,000
                                                                      ----------
                                                                       4,570,000
Less: accumulated depreciation                                           828,000
                                                                      ----------
</TABLE>
                                                                      $3,742,000
                                                                      ==========
5.       Income Taxes

     The Company, Central Financial and Hispanic Express have entered into a Tax
Sharing  Agreement  (See Note 6). The income tax  provision  as presented in the
accompanying  consolidated  financial  statements  are based upon the amount the
Company  would  have paid as if it filed  separate  income tax  returns  for the
periods presented.

         The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                          December 31,
                                                   -----------------------------
                                                        2001           2000
                                                   ----------         ----------
<S>                                                 <C>                <C>
Current:
Federal                                             $ 108,000          $  19,000
State                                                   3,000              3,000
                                                    ---------          ---------
                                                      111,000             22,000
Deferred:
Federal                                              (234,000)           196,000
State                                                 (30,000)            34,000
                                                    ---------          ---------
                                                     (264,000)           230,000
                                                    ---------          ---------
Provision (benefit) for income taxes                $(153,000)         $ 252,000
                                                    =========          =========
</TABLE>

<PAGE>
                                       34

A reconciliation of the provision for income taxes to the statutory rates is as
follows:
<TABLE>
<CAPTION>

                                                            December 31,
                                                  ------------------------------
                                                       2001            2000
                                                  ------------      -----------

<S>                                                    <C>             <C>
Federal income taxes at statutory rate                 35.0%           35.0%
State franchise taxes, net of federal
  benefit                                               5.0%            5.0%
                                                       -----           -----
                                                       40.0%           40.0%
                                                       =====           =====

</TABLE>

The tax effects of temporary differences giving rise to the deferred income tax
assets and (liabilities) are as follows:
<TABLE>
<CAPTION>


                                                                    December 31,
                                                                       2001
                                                                    -----------
<S>                                                                   <C>
Deferred tax assets:
   Allowance for credit losses                                        $ 358,000
   Inventory                                                            118,000
   Deferred loan origination fees                                       131,000
   Accrued expenses                                                      73,000
   Other                                                                 80,000
                                                                      ---------
     Total deferred tax assets                                          760,000

Deferred tax liabilities:
   Intangible assets                                                   (141,000)
   Other                                                                (25,000)
                                                                      ---------
      Total deferred tax liabilities                                   (166,000)
                                                                      ---------
Net deferred tax asset                                                $ 594,000
                                                                      =========

</TABLE>




6.       Related Party Transactions

     In  connection  with the Plan,  the Company,  Central  Financial,  Hispanic
Express and Central  entered into certain  agreements,  including the "Financing
Agreement," the "Tax Sharing Agreement" and the "Operating Agreement".

<PAGE>
                                       35


     The Financing  Agreement granted the Company the exclusive right to provide
financing to Central customers for a term of ten years from the date of the Plan
and provides that any contracts  purchased pursuant to this agreement will be at
face  value.  As part of the  Financing  Agreement,  the  Company  has agreed to
provide  Central with up to $6.0 million of inventory or inventory  financing as
long as the  Financing  Agreement  remains in effect and  Central  has agreed to
provide the Company,  at no charge, an amount of floor space at Central's stores
as the Company from time to time  requests.  In  connection  with the  Financing
Agreement,  the Company  purchased  $3.8 million and $15.6  million of inventory
during the years ended December 31, 2001 and 2000, respectively. On December 31,
2001, the Financing Agreement was terminated by mutual consent of the parties.

     The Operating Agreement provides, among other things, that Hispanic Express
or its  affiliates  are obligated to provide to the Company,  and the Company is
obligated  to  utilize,  certain  services,   including  receivables  servicing,
collections, payments, applications,  accounting, management information systems
and employee  benefits.  The  Operating  Agreement  also  provides that Hispanic
Express will  guarantee  up to  $4,000,000  of bank or similar  financing of the
Company,  pursuant  to  certain  conditions.  To the extent  that such  services
directly  relate  to the  finance  portion  of the  consumer  products  business
contributed  by Central  Financial to the  Company,  or to the extent that other
costs are incurred by Hispanic Express or its affiliates that directly relate to
the Company,  the Company is obligated to pay Hispanic Express or its affiliates
the actual  cost of  providing  such  services  or  incurring  such  costs.  The
Operating Agreement continues until terminated by either the Company or Hispanic
Express  upon one year's  prior  written  notice.  Termination  may be made on a
service-by-service  basis or in total. Allocated expenses from services utilized
under the Operating Agreement totaled  $2,050,000,  and $3,150,000 for the years
ended December 31, 2001 and 2000, respectively.

     The Company,  Central  Financial  and Hispanic  Express  entered into a Tax
Sharing  Agreement  which  provides,  among  other  things,  for the  payment of
federal,  state and other income tax  remittances  or refunds for periods during
which the Company was included in the same consolidated group for federal income
tax  purposes,  the  allocation  of  responsibility  for the  filing of such tax
returns  and  various  related  matters.  For  periods in which the  Company was
included in Central  Financial's  consolidated  federal income tax returns,  the
Company  will be  required  to pay its  allocable  portion  of the  consolidated
federal,  state  and  other  income  tax  liabilities  of the  group and will be
entitled to receive  refunds  determined  as if the  Company had filed  separate
income tax returns. With respect to Central Financial's liability for payment of
taxes for all  periods  during  which the  Company  was so  included  in Central
Financial's  consolidated federal income tax returns, the Company will indemnify
Central Financial for all federal, state and other income tax liabilities of the
Company for such periods.  The date of the  consummation of the Plan will be the
last day on which  the  Company  will be  required  to be  included  in  Central
Financial's consolidated federal income tax returns.

     In connection with the contribution of the business,  assets and assumption
of certain  obligations by Central Financial of a retail store owned by Central,
an  affiliated  company,  Central and the Company have agreed to use  allocation

<PAGE>
                                       36



methods  agreeable  to both  parties  for the  allocation  of certain  corporate
expenses of Central. In connection with the acquisition of the retail store, the
Company has agreed to assume the obligation of Central to sell certain inventory
at cost and provide  certain retail space at the retail store to Credit Starters
LLC, an affiliated company,  controlled by Gary Cypres, Chairman of the Company,
in  return  for a  percentage  of the  pre-tax  profit of this  business,  which
amounted to $41,000 for the year ended December 31, 2001.

     In connection with the adoption of the Plan,  Hispanic Express entered into
a new lease with BCE  Properties  II, Inc., a subsidiary  of the Company for its
executive and administrative  offices. The new lease is for a period of 15 years
with annual  rent of $300,000  per year  subject to CPI  increases.  Rent income
related to this lease was $300,000 in 2001.  On February  28, 2001,  the Company
assumed a 15-year agreement to lease approximately  30,000 square feet of retail
space in  connection  with the  purchase of certain net assets of a retail store
previously owned by Central with annual rent of $200,000 per year subject to CPI
increases. Rent expense related to this lease was $167,000 in 2001.

     For  the  year  ended  December  31,  2000,  the  Company  made  a  capital
distribution to Central  Financial of $5,266,000.  The capital  transactions for
the periods presented reflect  contributions and distributions  arising from the
changing levels of the Company's receivables portfolios.

     At December  31,  2000,  the Company had a note  receivable  from  Hispanic
Express in the amount of $1,213,000  which bears  interest at 7.5% per annum and
was paid on  September  30, 2001.  At December 31, 2000,  the Company also had a
note receivable  from BCE Properties II, Inc. in the amount of $1,280,000  which
bore interest at 7.5% per annum.

7.       Stock Option Plan

     On February 28, 2001, in connection  with the Plan, the Company adopted the
2000 Stock Option Plan (the "2000 Plan"). Subject to the terms of the 2000 Plan,
a total of 1,100,000  shares of  authorized  Common Stock have been reserved for
issuance  pursuant  to  terms  and  conditions  as  determined  by the  Board of
Directors.  During the duration of the 2000 Plan, no  individual  may be granted
options of more than 550,000 shares.  All options  previously granted by Central
Finance under its Stock Option Plan were terminated and certain  optionees under
such Stock Option Plan were granted  options to purchase  shares of common stock
of Banner  Central  Finance  under the 2000 Plan.  Options to  purchase  491,000
shares of Common  Stock of Banner  Central  Finance  were  granted  to  eligible
participants  $1.00 per  share  under  the 2000  Plan.  On  February  28,  2001,
executive  officers and employees  receiving options were vested in such options
in an amount that they would have been vested under the Central  Financial Stock
Option Plan at the time of completion of the Plan, except for those officers and
employees which had been with Central  Financial or its predecessor for a period
in excess of five  years,  were 60%  vested in total  options  granted  to them.
Additional  options to purchase  225,000  shares of common  stock of the Company
were granted at $0.94 per share in 2001.  In 2001,  options to purchase  251,400
shares of common  stock of the Company  were  exercised  at $1.00 per share.  At
December 31, 2001,  384,000  shares of Common Stock remain  available for future
grants of options  under the 2000 Plan.  The  weighted  average  share  price of
vested and unvested shares are $1.00 and $0.97, respectively. The options have a
maximum  duration  of  five  years  and  are  subject  to  certain  vesting  and
cancellation provisions, and may not be granted at less than the market value of
the Company's Common Stock on the date of grant of the option.

     None of the  options  granted  have been  included  in the  computation  of
diluted earnings per share reflected in the  Consolidated  Statements of Income.
Upon  issuance of the options in future  periods,  the earnings per share may be
diluted to the extent  that the  average  market  value of the  Company's  stock
exceeds the option exercise price.


<PAGE>
                                       37


     SFAS 123 defines a fair value based method of accounting for employee stock
compensation plans, but allows for the continuation of the intrinsic value based
method of  accounting  to measure  compensation  cost  prescribed  by Accounting
Principles  Board  Opinion No. 25. For  companies  electing  not to change their
accounting, SFAS 123 requires pro-forma disclosures of earnings and earnings per
share as if the change in accounting provision of SFAS 123 has been adopted.

     Had  compensation  cost for this plan been determined  consistent with SFAS
123,  the  Company's  net loss and net loss per share  common  share  would have
increased to the following pro forma amounts:

<TABLE>
<CAPTION>


                                                                2001
                                                        ----------------
<S>                                                         <C>
Net loss                               As Reported          $ (230,000)
Net loss                               Pro forma            $ (309,000)

Per Common share - Basic:
Net loss                               As Reported          $    (0.03)
Net loss                               Pro forma            $    (0.04)

Per Common share - Diluted:
Net loss                               As Reported          $    (0.03)
Net loss                               Pro forma            $    (0.04)

</TABLE>


     The fair value of each option grant is estimated on the date of grant using
an option pricing model with the following weighted average assumptions used for
grants: dividend yield of 0.0%, expected volatility of 37.9%, risk-free interest
rate of 5.0% and lives of five years. The weighted average remaining contractual
life is 9.3 years.

8.       Segment Information

     The  Company's  reportable  segments  are (i)  consumer  receivables,  (ii)
mortgage  loans,  (iii)  other  and  (iv)  corporate  overhead.  Other  includes
primarily the operations of the retail store and automobile insurance operations
in 2001 and the automobile  insurance and insurance premium financing operations
in 2001.  Information about these segments for years ended December 31, 2001 and
2000 is as follows:

<TABLE>
<CAPTION>

                                         Consumer                                       Corporate
                                        Receivables       Mortgage         Other        Overhead        Total
                                     ----------------- -------------- --------------- --------------- -------------
<S>                                    <C>            <C>             <C>            <C>             <C>
For the Year Ended December 31, 2001
Interest income                        $  3,657,000   $    654,000    $     50,000   $       --      $  4,361,000
Other income                                689,000      1,169,000       8,763,000           --        10,621,000
                                       ------------   ------------    ------------   ------------    ------------
   Total revenue                       $  4,346,000   $  1,823,000    $  8,813,000   $       --      $ 14,982,000
                                       ============   ============    ============   ============    ============
Pre-tax segment earnings (loss)        $    405,000   $    629,000    $   (953,000)  $   (464,000)   $   (383,000)
Segment assets                         $  8,714,000   $  2,921,000    $  5,738,000   $ 15,838,000    $ 33,211,000

For the Year Ended December 31, 2000
Interest income                        $  5,557,000    $   938,000    $    290,000   $       --      $  6,785,000
Other income                              1,197,000        346,000         846,000           --         2,389,000
                                       ------------   ------------    ------------   ------------    ------------
  Total revenue                        $  6,754,000     $1,284,000    $  1,136,000   $       --      $  9,174,000
Pre-tax segment earnings (loss)        $    429,000   $    362,000    $    142,000   $   (303,000)   $    630,000
Segment assets                         $ 24,886,000   $  4,913,000    $  1,156,000   $       --      $ 30,955,000

</TABLE>

<PAGE>
                                       38




9.       Commitments and Contingencies

     The Company leases office space for its automobile insurance business under
operating  leases on a  month-to-month  basis.  Aggregate rental expense for the
years ended December 31, 2001 and 2000 were $67,000 and $70,000, respectively.

     In August 2000,  the Company  entered into an agreement  which provides for
the early  termination  of a lease with a third party where it was  conducting a
significant portion of its business.  In connection  therewith,  the Company has
recorded a charge of $997,000,  which is included in operating  expenses  during
2000. The Company  presently  conducts these  operations in a newly  constructed
facility.

     The  Company  entered  into an Guaranty  Agreement  with  Hispanic  Express
pursuant to which it agreed to assume all liabilities and responsibilities under
the Central Financial  Supplemental  Executive  Retirement Plan, or SERP, solely
and  exclusively  for  Mr.  Cypres,  should  Hispanic  Express  default  on  its
obligations to pay the benefits due Mr. Cypres under the SERP.

     The Company is from time to time involved in routine litigation  incidental
to the  conduct  of  its  business.  Management  of the  Company  believes  that
litigation  currently  pending  will not have a material  adverse  effect on the
Company's financial position or results of its operations.

10.      Executive Deferred Salary and Bonus Plan

     On January 1, 2002, the Company  adopted the Executive  Deferred Salary and
Bonus Plan, or the EDP,  which covers the  executive  officers and certain other
executives,  elected  to  participate  in  the  EDP.  Pursuant  to  the  EDP,  a
participant may elect to defer up to 50% of the participant's base salary and up
to 100% of any bonus awarded pursuant to the Executive  Incentive Bonus Program.
Elections  under the EDP to defer base salary and bonus are made annually  prior
to the  commencement  of each year.  Executives  electing to  participate in the
program may invest deferred  amounts in either of two accounts:  (1) which earns
interest based upon the prime rate; or (2) which mirrors the  performance of the
Company's common stock price.  Amounts deferred are generally  payable in a lump
sum within 30 days after the  participant's  termination of employment  with the
Company for any reason.  The EDP is administrated by the Compensation  Committee
of the Board of  Directors.  The Chairman of the Board of Directors  and another
executive  officer  elected  to defer  100% of their  bonus  for the year  ended
December  31,  2001 and  elected  to  invest in an  account  which  mirrors  the
performance  of the  Company's  common  stock.  At December 31,  2001,  deferred
compensation  for these  accounts  were  $147,000,  which is included in accrued
expenses and other current liabilities.

                                    * * * * *
<PAGE>
                                       39











Item 8.  Changes in and Disagreements With Accountants and Financial Disclosure

                  None.

                                    Part III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act

     We incorporate by reference in this Annual Report the information  required
by this Item 9 contained  in the  sections  entitled  "Discussion  of  Proposals
Recommended  by the Board --  Proposal  1: Elect Four  Directors  --  Nominees,"
"Information  About Directors and Executive  Officers," and  "Information  About
Banner  Central  Finance  Common  Stock  Ownership -- Did  Directors,  Executive
Officers and Greater-Than-10%  Stockholders Comply With Section 16(a) Beneficial
Ownership  Reporting in 2001?" of our definitive  proxy  statement,  to be filed
pursuant to Regulation 14A with the SEC within 120 days after December 31, 2001.

Item 10.  Executive Compensation

     We incorporate by reference in this Annual Report the information  required
by this Item 10 contained in the sections entitled  "Information About Directors
and Executive  Officers" and  "Information  About Banner Central  Finance Common
Stock Ownership -- Compensation  Committee Interlocks and Insider Participation"
of our definitive proxy  statement,  to be filed pursuant to Regulation 14A with
the SEC within 120 days after December 31, 2001.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

     We incorporate by reference in this Annual Report the information  required
by this Item 12  contained  in the section  entitled  "Information  About Banner
Central Finance Common Stock Ownership" of our definitive proxy statement, to be
filed pursuant to Regulation 14A with the SEC within 120 days after December 31,
2001.

Item 12.  Certain Relationships and Related Transactions

     We  incorporate  herein by reference in this Annual Report the  information
required by this Item 12 contained in the section  entitled  "Information  About
Directors  and  Executive   Officers  --  Certain   Relationships   and  Related
Transactions"  of our  definitive  proxy  statement,  to be  filed  pursuant  to
Regulation 14A with the SEC within 120 days after December 31, 2001.



<PAGE>
                                       40




Item 13.  Exhibits and Reports on Form 8-K

          Form 8-K. No reports on Form 8-K were filed by the registrant.

          List of Exhibits.  The following is a list of exhibits filed as a part
          of this report,  including any  management  contracts or  compensatory
          plans or  arrangements  required  to be filed  as an  exhibit  to this
          report.   Such   management   contracts  or   compensatory   plans  or
          arrangements are identified in the list below.


                                   Description

Exhibit No.

3.1      Certificate of Incorporation,  as amended  (incorporated by reference
         to Exhibit 2.1 filed with the Registration  Statement on Form 10-SB
         filed on October 11, 2000 ("Form 10-SB"))

3.2      Bylaws (incorporated by reference to Exhibit 2.2 filed with the
         Form 10-SB)

4        Form of specimen common stock certificate (incorporated by reference
         to Exhibit 3 filed with the Form 10-SB)

10.1     Banner Central Finance Company 2000 Stock Option Plan (incorporated by
         reference to Exhibit 6.1 filed with the Form 10-SB)

10.2     Contribution Agreement dated September 6, 2000 among Central Financial
         Acceptance Corporation and Banner Central Finance Company (incorporated
         by reference to Exhibit 6.2 filed with the Form 10-SB)

10.3     Financing  Agreement  dated  September 6, 2000 between Banner Central
         Finance  Company and Banner's  Central  Electric,  Inc.
         (incorporated by reference to Exhibit 6.3 filed with the Form 10-SB)

10.4     Operating  Agreement dated September 6, 2000 between Hispanic Express,
         Inc. and Banner Central Finance Company  (incorporated by reference to
         Exhibit 6.4 filed with the Form 10-SB)

10.5     Tax-Sharing  Agreement dated September 6, 2000 among Hispanic Express,
         Inc. among Central Financial  Acceptance  Corporation, Hispanic
         Express,  Inc. and Banner  Central  Finance  Company  (incorporated
         by reference to Exhibit 6.5 filed with the Form 10-SB)

10.6     Service Mark License  dated  September 6, 2000 among  Banner's  Central
         Electric,  Inc. and Banner  Central  Finance  Company
         (incorporated by reference to Exhibit 6.7 filed with the Form 10-SB)

10.7     Form of Indemnification Agreement between Banner Central Finance
         Company and certain directors and/or officers (incorporated by
         reference to Exhibit 6.8 filed with the Form 10-SB)

10.8     Supplemental  Executive  Retirement Plan Guaranty Agreement between
         Banner Central Finance Company and Hispanic Express,  Inc.
         (incorporated by reference to Exhibit 6.9 filed with an amendment to
         the Form 10-SB as filed on January 5, 2001)

10.9     Banner Central Finance Company Executive Deferred Salary and Bonus Plan

99       Letter from Registrant to Securities and Exchange Commission





<PAGE>
                                       41







                                   SIGNATURES

     In accordance  with Section 12 of the  Securities  Exchange Act of 1934, as
amended,  the registrant caused this registration  statement to be signed on its
behalf by the undersigned, thereunto duly authorized.

                         BANNER CENTRAL FINANCE COMPANY


Date:  March 29, 2002       By: /s/ Gary M. Cypres
                               ------------------------------
                                Gary M. Cypres
                                Chairman, Chief Executive Officer
                                and Chief Financial Officer
<TABLE>
<CAPTION>


Signature                                            Title                              Date

<S>                                         <C>                                     <C>
/s/ Gary M. Cypres                          Chairman of the Board of Directors,      March 29, 2002
---------------------------------------     and Chief Financial Officer
Gary M. Cypres

/s/ Salvatore J. Caltagirone                             Director                    March 29, 2002
------------------------------------------
Salvatore J. Caltagirone

/s/ William R. Sweet                                     Director                    March 29, 2002
----------------------------------------
William R. Sweet

</TABLE>



<PAGE>









                                                                   EXHIBIT 99

                         BANNER CENTRAL FINANCE COMPANY
                    5480 FERGUSON DRIVE,  COMMERCE,  CA 90022








Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

March 29, 2002

Ladies and Gentlemen:

This will confirm that Banner  Central  Finance  Company.  (the  "Company")  has
received a letter from Arthur  Andersen LLP ("Arthur  Andersen") with respect to
Arthur Andersen's audit of the Company's  consolidated  financial statements for
the year ended December 31, 2001.  Arthur  Andersen's  letter certifies that the
audit was  subject  to Arthur  Andersen's  quality  control  system for the U.S.
accounting  and  auditing  practice  to provide  reasonable  assurance  that the
engagement was conducted in compliance with professional  standards,  that there
was appropriate continuity of Arthur Andersen personnel working on the audit and
availability  of national  office  consultation.  Availability  of  personnel at
foreign affiliates is not relevant to this audit.

Very truly yours,


/s/  Gary M. Cypres
------------------------------------
Gary M. Cypres
Chief Financial Officer


<PAGE>


                                    EXHIBIT 10.9


                         BANNER CENTRAL FINANCE COMPANY
                    EXECUTIVE DEFERRED SALARY AND BONUS PLAN

                            EFFECTIVE JANUARY 1, 2002




<PAGE>


                                  EXHIBIT 10.9



                         BANNER CENTRAL FINANCE COMPANY

                    EXECUTIVE DEFERRED SALARY AND BONUS PLAN

 1.       Purpose.  The purpose of the Plan is to attract competent  officers
          and key executives by offering flexible compensation opportunities; to
          motivate these  executives to promote the growth and  profitability of
          the Company;  and to associate the interests of these  executives with
          those of the Company.

2.        Definitions.  When used in this Plan, unless the context otherwise
          requires:

         (a)      "Account" shall mean the record maintained by the Company
                  reflecting Executive's Deferred Amounts and the interest
                  credited thereon, as provided for in this Plan.

         (b)      "Account Balance" shall mean at any time the total of the
                  amounts credited to the Executive's Account and any accrued
                  but not credited interest in accordance with the provisions of
                  the Plan.

         (c)      "Board of Directors" shall mean the Board of Directors of
                   Banner Central Finance Company

         (d)      "Bonus" shall mean, at any time, the gross amount of the bonus
                  payable to the Executive under the Company's Executive
                  Incentive Bonus Program (or any other similar bonus program
                  hereafter established by the Company), before giving effect to
                  any deferral agreement hereunder.

         (e)      "Committee" shall mean the Compensation Committee appointed
                   by the Board of Directors.

         (f)      "Company" shall mean Banner Central Finance Company.

         (g)      "Deferred Amount" shall mean the amount by which the Salary
                  and/or Bonus is reduced from time to time as agreed upon by
                  the Executive and the Company and deferred in accordance with
                  the terms of the Plan. The Deferred Amount may be a dollar
                  amount or a percentage of Salary and/or Bonus.

         (h)      "Employee" shall mean any person  (including an officer)
                   actively  employed by the Company on a full-time,  salaried
                   basis.

         (i)      "Employed" or "Employment" shall mean performing services
                   as an employee on a full time basis for the Company.

         (j)      "Executive"  shall mean an Employee  who is an officer or key
                   executive  of the Company  Employed in a  high-ranking
                   executive or managerial capacity.

         (k)      "Participant" shall mean an Executive selected by the
                  Committee and whose participation in the Plan for a calendar
                  year has been approved.

         (l)      "Plan" shall mean this Executive Deferred Salary and Bonus
                  Plan, as from time to time amended and in effect.

         (m)      "Salary" shall mean, at any time, the gross amount of base
                  compensation being paid to the Executive for Employment,
                  before giving effect to any deferral agreement hereunder.

 3.       Administration.  The Plan shall be  administered by the Committee,
          which shall have full and  discretionary  authority to  interpret  the
          Plan,  to establish  rules and  regulations  relating to the Plan,  to
          determine the criteria for  eligibility to participate in the Plan, to
          select Participants in the Plan, and to make all other  determinations
          and take all other  actions  necessary or  appropriate  for the proper
          administration  of the Plan.  The  Committee's  interpretation  of the
          Plan, and all actions taken within the scope of its  authority,  shall
          be final and binding on the Company,  its stockholders,  Participants,
          Employees, former Employees and beneficiaries.

4.        Eligibility  and  Participation.  Participation  in the Plan for a
          calendar year (and for the period  beginning on the effective  date of
          the  Plan  and  ending  December  31,  of  each  year  the  Plan is in
          existence),  shall  be  limited  to  those  key  Executives  whom  the
          Committee shall select, on the basis of such Executive's impact on the
          long-term  success  of the  Company,  and who might  benefit  from the
          deferral of amounts otherwise constituting current compensation.

5.        Deferral of Salary and/or Bonus. A Participant  may, subject to the
          terms and conditions of this Plan, elect to defer payment of a maximum
          of 50% of Salary,  and/or a maximum of 100% of Bonus,  annually  under
          this Plan by completing the form prescribed by the Committee. The form
          shall constitute an agreement  between the Company and the Employee as
          to the amount of Salary  and/or  Bonus to be deferred  pursuant to the
          Plan.   The  Committee  may  further  limit   deferral  by  individual
          Participants, for any reason it deems advisable.

          (a)  Election.  An election to defer Salary shall be made on or before
          the last  regular  working  day of the  Company of the  calendar  year
          preceding  the  calendar  year  for  which  the  Salary  and/or  Bonus
          agreement  is to be made and shall be effective  upon  delivery (or in
          the  event  the form is  mailed  by  certified  mail,  return  receipt
          requested,  on the  date  of  mailing)  of the  deferral  form  to the
          Company.  Notwithstanding the preceding sentence, in the calendar year
          in  which  this  Plan  is  initially  adopted  and in the  case  of an
          individual  who  becomes  an  Executive  during  a  calendar  year,  a
          Participant's election to defer Salary that would otherwise be payable
          after the date of the  election,  and/or all or a portion of the Bonus
          payable with respect to the period after the date of the election, may
          be made up to 30 days  after  the  effective  date of the  Plan or the
          individual  becomes an Executive and eligible to  participate  herein,
          whichever is  applicable.  The election  made to reduce  Salary and/or
          Bonus by a  Participant  must remain in effect for an entire  calendar
          year  (or,  in the case of the  calendar  year in which  this  Plan is
          adopted  or the  calendar  year in  which  an  individual  becomes  an
          Executive,  the  remaining  portion of such calendar year to which the
          deferral  election relates) and may not be changed by any action taken
          by the Participant thereafter.

6.        Executive  Deferred  Amounts.  The  Participant,  after making the
          election  under 5(a) above,  may elect to have the Executive  Deferred
          Amounts  invested in an account that accrues  interest as set forth in
          (a) below or invested in an account which measures the  performance of
          the Company's common stock price as set forth in (b) below.

          (a) Accounts and Interest  Credited on Deferred  Accounts.  A separate
          Account shall be  established  and  maintained  for each  Participant,
          which  Account  shall  reflect the  Deferred  Amount and all  interest
          credited thereon from time to time. Each Participant's Account Balance
          shall  be  credited  quarterly  with  interest  as of the  end of each
          calendar  quarter,  with the first such credit  being made as of March
          31, 2002. In the event a  Participant's  Account Balance is paid other
          than at the end of any  calendar  quarter,  he shall be credited  with
          interest  thereon  from  the  end of  the  immediately  preceding  the
          calendar quarter to the date of payment. No interest shall be credited
          to a  Participant's  Account  after the payment of such  Participant's
          Account Balance.  Interest to be credited for any period shall be at a
          rate equal to the average  prime rate which Union Bank of  California,
          N.A.  charged from time to time during a 360-day year of twelve 30-day
          months.

          (b)  Accounts  and  Changes in the  Company's  Common  Stock  Price on
          Deferred  Accounts.   A  separate  amount  shall  be  established  and
          maintained for each Participant,  which the accounts shall reflect the
          Participant's  deferred  amount  as if it  had  been  invested  in the
          Company's common stock.  Each  Participant's  account balance shall be
          credit or debited  as of the end of each  calendar  quarter,  with the
          changes in the Company's  common stock price, as reflected on the OTB,
          that accrued from the time the Executive  established  such account to
          the end of the calendar year quarter.

7.        Payment on Deferred  Amount.  The Deferred  Amount,  plus  interest
          credited thereon pursuant to Subsection 6(a) or increases or decreases
          credited or charged therein  pursuant to Subsection 6(b) hereof,  upon
          the  Participant's  termination  of Employment  for any reason will be
          paid to the Participant (or, in the event of the Participant's  death,
          the person or estate  determined under Section 6 hereof) in a lump sum
          within 30 days after such termination.

8.        Acceleration of Payment of Deferred Amount. Payment of the Deferred
          Amount plus interest  changes  thereto  pursuant to 6(a) or 6(b) above
          may occur prior to the  Participant's  termination of Employment under
          the following circumstances:

          (a) At any time prior to complete payment of the Participant's Account
          Balance,  the Company may pay to the Participant an amount not greater
          than  that  portion  of  the  Deferred   Amount  that  the   Committee
          determines,   in  its  sole  discretion,   is  necessary  to  meet  an
          Unforeseeable   Emergency.   For  purposes  of  this   paragraph,   an
          Unforeseeable  Emergency shall mean an unanticipated emergency that is
          caused by an event  beyond  the  control of the  Participant  and that
          would result in severe financial  hardship to the Participant if early
          withdrawal of the  Participant's  Account  Balance were not permitted.
          The  Participant  shall  apply in  writing  to the  Committee  for any
          payment under this  paragraph and shall furnish to the Committee  such
          information as the Committee  deems  necessary and appropriate to make
          its determination; and,

          (b) In no event may  payment  of the  Deferred  Amount,  and  interest
          thereon,  or any portion  thereof,  be accelerated in any manner other
          than as provided above.

9.        Designation  Of  Beneficiary.   A  Participant  may  designate  a
          beneficiary or  beneficiaries  who, in the event of the  Participant's
          death prior to full payment of his Account  Balance  hereunder,  shall
          receive  payment  of the  Account  Balance  due under  the Plan.  Such
          designation  shall be made by the  Participant on a form prescribed by
          the Committee. The Participant may, at any time, change or revoke such
          designation.  A  beneficiary  designation,  or  revocation  of a prior
          beneficiary  designation,  will  be  effective  only  if it is made in
          writing on a form provided by the Company,  signed by the  Participant
          and received by the Company.  If the Participant  does not designate a
          beneficiary or the beneficiary  dies prior to receiving any payment of
          the Account Balance,  the Account Balance payable under the Plan shall
          be paid to the Participant's estate.

10.       Amendment and Termination.  The Board of Directors may at any time
          amend or  terminate  this Plan.  No  amendment  or  termination  shall
          adversely affect a Participant's  rights to or interest in the Account
          Balance credited prior thereto without the Participant's consent.

11.      Miscellaneous Provisions.

          (a) This Plan is not a contract for  employment  of the Employee for a
          certain period of time.  Neither the  establishment  of this Plan, nor
          any action taken hereunder,  shall be construed as giving any Employee
          any right to be retained in the Employ of the Company.

          (b) A Participant's rights and interest under the Plan are not subject
          in any manner to anticipation, alienation, sale, transfer, assignment,
          pledge,  encumbrance,  attachment,  or garnishment by creditors of the
          Participant or the Participant's beneficiary.

          (c) It is the  intention  of the parties that the Plan be unfunded for
          tax purposes  and for  purposes of Title I of the Employee  Retirement
          Income Security Act of 1974, as amended  ("ERISA").  The Company shall
          not be required to establish any special or separate  fund, or to make
          any other  segregation  of assets,  to assure  payment of the  Account
          Balance.  Participants have the status of general unsecured  creditors
          of the Company and the Plan  constitutes a mere promise by the Company
          to make benefit payments in the future.

          (d) To the  extent  that  the  Plan  is  considered  to be a plan  for
          purposes of ERISA,  it shall be considered an unfunded plan maintained
          primarily  for the purpose of providing  deferred  compensation  for a
          select group of management or highly compensated employees, within the
          meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

12.       Withholding  and  Payments.  The Company  shall have the right to
          deduct from any amount to be paid to any  Participant  or  beneficiary
          any taxes or other amounts required by law to be withheld.

13.       Effective  Date. The Plan shall be effective on and after January
          1, 2002 and shall  include  bonus awards  earned in 2001,  but paid in
          2002.