<PAGE>

                                      FORM 10-Q
                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC. 20549
                                           
                                           
(Mark One)
( X  )    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES   
                         EXCHANGE ACT OF 1934

For the quarterly period ended  September 30, 1997
                                ------------------
                                          OR
(   )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
                         EXCHANGE ACT OF 1934

For the transition period from ___________________to _______________________.

Commission File Number 0-265520
                       --------
                            CALIFORNIA INDEPENDENT BANCORP
                            ------------------------------
                (Exact name of registrant as specified in its charter)
                                           
                              CALIFORNIA                    68-0349947
                              ----------                    ----------
                    (State or other jurisdiction of         (I.R.S. Employer
                    incorporation or organization)           Identification No.)


                1227 BRIDGE ST., SUITE C, YUBA CITY, CALIFORNIA 95991
                -----------------------------------------------------
                       (Address of principal executive offices)
                                      (Zip Code)
                                           
                                    (916) 674-4444
                                    --------------
                 (Registrant's telephone number, including area code)
                                           
                                         N/A
                                         ---
      (Former name, former address and former fiscal year, if changed since last
       report)
                                           
               Indicate by check mark whether the registrant (1) has filed 
all reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter 
period that the registrant was required to file such reports), and (2) has 
been subject to such filing requirements for the past 90 days.

Yes        X                No 
   ----------------           ------------------

                        APPLICABLE ONLY TO CORPORATE ISSUERS:
                                           
               Indicate the number of shares outstanding of each of the 
issuer's classes of common stock, as of the latest practicable date.
                                                       Outstanding at
               Class                                   September 30, 1997
               -----                                   ------------------
               Common stock, no par value              1,634,621 Shares

This report contains a total of 23 pages
                                --------

                                       1

<PAGE>

                            PART I- FINANCIAL INFORMATION
                                           

<TABLE>
<CAPTION>

ITEM 1                                                           PAGE
<S>                                                              <C>
CALIFORNIA INDEPENDENT BANCORP AND
SUBSIDIARIES FINANCIAL STATEMENTS

   CONSOLIDATED BALANCE SHEETS                                      3

   CONSOLIDATED STATEMENTS OF INCOME FOR THREE MONTHS               4


   CONSOLIDATED STATEMENTS OF INCOME FOR NINE MONTHS                5

   CONSOLIDATED STATEMENTS OF CASH FLOWS                            6


   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                     7-8


ITEM 2

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                 
     CONDITION AND RESULTS OF OPERATIONS                         9-21


                        PART II- OTHER INFORMATION


ITEM 6

Exhibits and Reports on Form 8K                                    22


SIGNATURES                                                         23

</TABLE>

                                    2

<PAGE>

PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS

                   CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (UNAUDITED)
                       (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                    SEPTEMBER 30,  DECEMBER 31,
                                                         1997         1996
                                                   -------------   ------------
<S>                                                 <C>            <C>
ASSETS
Cash and due from banks                               $   18,521   $  22,928 
Federal funds sold                                        29,700      41,300 
                                                   -------------   ----------
  Total Cash and Equivalents                              48,221      64,228 
Investment securities:
 Available-for-sale securities, at fair value             14,256      11,374 
 Held-to-maturity securities, at amortized cost
  (fair value of $23,963 and $23,511 respectively)        23,839      23,289 
Loans:
 Commercial                                               98,612      73,620 
 Consumer                                                  2,237       2,984 
 Real Estate-mortgage                                     14,801      28,564 
 Real Estate-construction & land development              34,832      29,916 
 Leases and Other                                         32,752      16,016 
                                                   -------------   ----------
  Total loans                                            183,234     151,100 
 Less allowance for possible loan losses                  (4,146)     (4,053)
                                                   -------------   ----------
  Net Loans                                              179,088     147,047 
Premises and equipment, net                                8,091       7,420 
Accrued interest receivable and other assets               9,242       9,244 
                                                   -------------   ----------
  Total other assets                                      17,333      16,664 
                                                   -------------   ----------
TOTAL ASSETS                                          $  282,737   $ 262,602 
                                                   -------------   ----------
                                                   -------------   ----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Demand, non-interest bearing                         $   55,348   $  55,117 
 Demand, interest bearing                                 36,573      33,659 
Savings and Money Market                                  67,278      67,756 
Time certificates                                         97,795      81,360 
                                                   -------------   ----------
  Total deposits                                         256,994     237,892 
Accrued interest payable and other liabilities             3,660       2,824 
                                                   -------------   ----------
TOTAL LIABILITIES                                        260,654     240,716 
Shareholders' equity:
Common stock, no par value; 20,000,000 shares authorized;
 1,634,621 and 1,546,032 shares issued and outstanding at
 September 30, 1997 and at December 31, 1996, 
respectively                                              12,116      11,088 
Retained earnings                                          9,974      10,816 
Net unrealized gains (losses) on available-for-sale 
securities                                                    (7)        (18)
                                                   -------------   ----------
Total shareholders' equity                                22,083      21,886 
                                                   -------------   ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY            $  282,737   $ 262,602 
                                                   -------------   ----------
                                                   -------------   ----------

</TABLE>

See accompanying notes to consolidated financial statements     

                                            3

<PAGE>

                 CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                 (UNAUDITED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                       THREE MONTHS          THREE MONTHS
                                           ENDED                ENDED
                                    SEPTEMBER 30, 1997    SEPTEMBER 30, 1996
                                    ------------------------------------------
<S>                                 <C>                   <C>
Interest income:
 Interest and fees on loans                  $    5,395          $    4,805 
 Interest on investment securities                  573                 404 
 Interest on federal funds sold                     194                 103 
                                    -------------------   ------------------
  Total interest income                           6,162               5,312 
                                    -------------------   ------------------
Interest expense:
 Demand, interest bearing                           326                 280 
 Savings                                            627                 596 
 Time certificates                                1,447                 993 
 Other                                                6                  15 
                                    -------------------   ------------------
  Total interest expense                          2,406               1,884 
                                    -------------------   ------------------
  Net interest income                             3,756               3,428 
Provision for possible loan losses                    -                 (80)
                                    -------------------   ------------------
Net interest income after provision for
 possible loan losses                             3,756               3,348 
                                    -------------------   ------------------

Other income:
 Service charges                                    274                 190 
 Net gain (loss) on securities transactions           -                   1 
 Other                                            1,184                 485 
                                    -------------------   ------------------
  Total other income                              1,458                 676 
                                    -------------------   ------------------

Other expenses:
 Salaries and benefits                            1,988               1,336 
 Occupancy                                          203                 137 
 Equipment                                          331                 250 
 Advertising and promotion                           85                  56 
 Stationery and supplies                             63                  54 
 Legal and professional fees                         95                  83 
 Other operating expenses                           811                 667 
                                    -------------------   ------------------
  Total other expenses                            3,576               2,583 

Earnings before income taxes                      1,638               1,441 
Income taxes                                        650                 537 
                                    -------------------   ------------------
Net Income                                   $      988          $      904 
                                    -------------------   ------------------
                                    -------------------   ------------------

Primary earnings per share                   $     0.63          $     0.62 
                                    -------------------   ------------------
                                    -------------------   ------------------
 Weighted average shares outstanding          1,571,498           1,461,760 
                                    -------------------   ------------------
Fully Diluted:
 Earnings per share                          $     0.55          $     0.54 
                                    -------------------   ------------------
                                    -------------------   ------------------
 Weighted average shares outstanding          1,809,409           1,683,448 
                                    -------------------   ------------------
Cash dividend paid per share of common stock $     0.11          $     0.11 
                                    -------------------   ------------------
                                    -------------------   ------------------
</TABLE>
See accompanying notes to consolidated financial statements

                                           4
<PAGE>

                  CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                        NINE MONTHS          NINE MONTHS
                                            ENDED                ENDED
                                     SEPTEMBER 30, 1997   SEPTEMBER 30, 1996
                                     ----------------------------------------
<S>                                  <C>                  <C>
Interest income:
 Interest and fees on loans                   $   14,646          $   12,753 
 Interest on investment securities                 1,867               1,325 
 Interest on federal funds sold                    1,026                 924 
                                     -------------------  -------------------
  Total interest income                           17,539              15,002 
                                     -------------------  -------------------
Interest expense:
 Demand, interest bearing                          1,038                 775 
 Savings                                           1,945               1,799 
 Time certificates                                 3,975               2,772 
 Other                                                18                  27 
                                     -------------------  -------------------
  Total interest expense                           6,976               5,373 
                                     -------------------  -------------------
  Net interest income                             10,563               9,629 
Provision for possible loan losses                (3,336)               (180)
                                     -------------------  -------------------
Net interest income after provision
 for possible loan losses                          7,227               9,449 
                                     -------------------  -------------------

Other income:
 Service charges                                     760                 673 
 Net gain (loss) on securities transactions            -                   5 
 Other                                             2,853               1,226 
                                     -------------------  -------------------
  Total other income                               3,613               1,904 
                                     -------------------  -------------------

Other expenses:
 Salaries and benefits                             5,585               3,758 
 Occupancy                                           527                 415 
 Equipment                                           941                 716 
 Advertising and promotion                           309                 270 
 Stationery and supplies                             242                 191 
 Legal and professional fees                         232                 189 
 Other operating expenses                          2,081               1,751 
                                     -------------------  -------------------
  Total other expenses                             9,917               7,290 

Earnings before income taxes                         923               4,063 
Income taxes                                         311               1,585 
                                     -------------------  -------------------
Net Income                                    $      612          $    2,478 
                                     -------------------  -------------------
                                     -------------------  -------------------
Primary earnings per share                    $     0.39          $     1.70 
                                     -------------------  -------------------
                                     -------------------  -------------------
Weighted average shares outstanding            1,556,873           1,453,404 
                                     -------------------  -------------------
Fully Diluted:
 Earnings per share                           $     0.34          $     1.47 
                                     -------------------  -------------------
                                     -------------------  -------------------
 Weighted average shares outstanding           1,798,145           1,688,438 
                                     -------------------  -------------------
Cash dividend paid per share of common stock  $     0.33          $     0.33 
                                     -------------------  -------------------
                                     -------------------  -------------------

</TABLE>

See accompanying notes to consolidated financial statements

                                          5

<PAGE>

                   CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
         FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
                                     (UNAUDITED)
                                    (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                       SEPTEMBER 30,  SEPTEMBER 30,
                                                             1997         1996
                                                       -------------  -------------
<S>                                                    <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                               $    612     $  2,187 
Adjustments to reconcile net income to net cash
  provided by operating activities- 
 Depreciation and amortization                                718          513 
 Provision for possible loan losses                         3,336          775 
 Provision for deferred taxes                                   9       (1,023)
(Increase) decrease in assets-
 Interest receivable                                         (455)        (616)
 Other assets                                                 336        1,050 
Increase (decrease) in liabilities-
 Interest payable                                             329          638 
 Other liabilities                                            507          (60)
                                                       -------------  -------------
  Net cash provided by operating activities                 5,392        3,464 

CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in loans                          (35,444)      (9,015)
Purchase of investments                                   (18,100)     (11,660)
Proceeds from maturity of HTM Securities                   11,406        5,965 
Proceeds from sales/maturity of AFS Securities              3,273       14,605 
Proceeds from sales of other real estate owned                178          543 
Purchases of premises and equipment                        (1,388)        (791)
                                                       -------------  -------------
  Net cash used for investing activities                  (40,075)        (353)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in noninterest bearing deposits                  231       (7,734)
Net increase in interest bearing deposits                  18,871       12,334 
Cash dividends                                               (512)        (457)
Stock options exercised                                       101          122 
Cash paid in lieu of fractional shares                        (15)          (9)
                                                       -------------  -------------
  Net cash provided by financing activities                18,676        4,256 

NET INCREASE (DECREASE)                                   (16,007)       7,367 
                                                       -------------  -------------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD             64,228       22,579 
                                                       -------------  -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                   48,221       29,946 
                                                       -------------  -------------
                                                       -------------  -------------


</TABLE>

                                              6

<PAGE>

                                           
                   CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES
                                           
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           
                                     (UNAUDITED)
                                           
                                           

NOTE 1 -  BASIS OF PRESENTATION

     In the opinion of the Company, the unaudited consolidated financial
     statements, prepared on the accrual basis of accounting, contain all
     adjustments (consisting of only normal recurring adjustments) which are
     necessary to present fairly the financial position of the Company and its
     subsidiaries at September 30, 1997 and December 31, 1996, and the results
     of its operations for the periods ended September 30, 1997 and 1996,
     respectively.

     Certain information and footnote disclosures normally presented in
     financial statements prepared in accordance with generally accepted
     accounting principles have been omitted.  The  results of operations for
     the period ended September 30, 1997  are not necessarily indicative of the
     operating results for the full year ending December 31, 1997.

NOTE 2 -  CONSOLIDATION

     The consolidated financial statements include the accounts of the Company
     and its wholly-owned subsidiary Feather River State Bank, and EPI Leasing
     Company Inc., a subsidiary of Feather River State Bank.  All material
     intercompany accounts and transactions have been eliminated in
     consolidation.

     .
NOTE 3 -  LOANS TO DIRECTORS

     In the ordinary course of business, the Company makes loans to directors
     of the Company, which on September 30, 1997, amounted to a total of
     approximately $7,419,636.

NOTE 4 -  COMMITMENTS & CONTINGENT LIABILITIES

     In the normal course of business, there are outstanding various
     commitments and contingent liabilities, such as commitments to extend
     credit and letters of credit, which are not reflected in the financial
     statements.  Management does not anticipate any material loss as a result
     of these transactions.

NOTE 5 -  NET INCOME PER SHARE

     Net Income per share is computed using the weighted average number of
     shares of common stock outstanding (as adjusted retroactively to reflect
     the 5% stock dividends paid on August 16, 1996 and September 12, 1997).

                                     7

<PAGE>

NOTE 6 -  CASH DIVIDENDS

     The Company paid an eleven cent per share dividend in February 1997, May
     1997 and August 1997, respectively.

NOTE 7-  EARNINGS PER SHARE

     Effective December 31, 1997, the Bank is required to adopt Financial
     Accounting Standards Board No. 128, Earnings Per Share (EPS).  Among other
     things, the new standard requires replacement of primary EPS with basic
     EPS.  Basic EPS is computed by dividing reported earnings available to
     common stockholders by weighted average shares outstanding.  No dilution
     for any potentially dilutive securities is included.  Fully diluted EPS,
     now called diluted EPS, is still required.  The Bank has not quantified
     the effect of applying the new standard.

                                     8

<PAGE>

                                           
ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
                                           
                                           
                                           
OVERVIEW OF CHANGES IN THE FINANCIAL STATEMENTS


Net income for the third quarter was $988,000 for fully-diluted earnings of $.55
per share, representing an increase of 9.3% over the third quarter 1996, which
saw net income of $904,000, or $.54 per share on a fully-diluted basis.

Year-to-date, the nine months ending September 30, 1997, saw net income of
$612,000, or $.34 per share on a fully-diluted basis as compared to the same
period in 1996, at which time the Company reported net year-to-date earnings of
$2,478,000, or $1.47 per share on a fully-diluted basis.

During the second quarter of 1997, the Company determined that additional
contributions to Loan Loss Reserves were required in order to recognize the
increased risk exposure for a small number of sizable loans in its portfolio. 
Management's action resulted in a one -time $3,200,000 contribution to Loan Loss
Reserves.  As a result, the second quarter operating results showed a loss and
year-to-date net income for 1997 over 1996 shows a decline.

Total assets at September 30,1997, were $282,737,000, an increase of 7.7% over
December 31, 1996, total assets of $262,602,000.

Outstanding net loans were $179,088,000 at September 30, 1997, compared to
$147,047,000 at December 31, 1996, an increase of $32,041,000 or 21.8%.

The Company's investment portfolio at September 30, 1997, was $38,095,000, or
13.5% of total assets, an increase from $34,663,000 or 13.2% of total assets at
December 31, 1996, as the Company shifted assets from overnight Federal Funds to
longer term, higher yielding investments.  At September 30, 1997, Federal Funds
Sold  were $29,700,000 as compared to $41,300,000 at December 31, 1996.  

Total deposits at  September 30, 1997, were $256,994,000 compared to
$237,892,000 at December 31, 1996, an increase of 8.0%.  At September 30, 1997,
interest-bearing deposits were $201,646,000, as compared to $182,775,000 at
December 31, 1996, an increase of 10.3%.  This increase was primarily due to an
increase of $16,435,000 or 20.2% from December 31, 1996, to September 30, 1997, 
in Time Certificates of Deposit.  This growth is attributed to the opening of
the new Wheatland Branch and the Bank's aggressive marketing efforts  and
competitive rates.

The total loan-to-deposit ratio was 71.3% at September 30, 1997, compared to
63.5% at December 31, 1996.  This increase is the result of normal lending
cycles of agricultural loans, real estate loans and the purchase of leases.

                                         9

<PAGE>

LOANS

Total gross loans outstanding as of September 30, 1997 were $183,234,000 
representing an increase of $32,134,000 or 21.27%  over December 31, 1996.  
The increase is attributable to three principal events.

1. The Company's lease portfolio increased from $16,016,000 on December 31, 
   1996 to $32,752,000  on September 30, 1997 representing growth of 104.5%. 
   The Company originates commercial and industrial equipment leases through 
   its subsidiary EPI Leasing Company (EPI) located in Sacramento.  EPI was 
   acquired by the Company during the fourth quarter of 1996 and lease 
   origination volume has increased substantially during the first nine 
   months of 1997. One of the Company's loan portfolio management strategies 
   has been to increase the lease portfolio in order to increase net interest 
   margin and diversify the portfolio.

2. Agricultural and Commercial loans have increased $24,992,000 or 33.9% as 
   of September 30, 1997, over December 31 1996.  The Company provides a wide 
   range of loan products to farmers and agri-businesses throughout its trade 
   area. Agricultural loans are reported under the "Commercial Loans" 
   category in the consolidated balance sheet.  The increase is ascribed to 
   increased market penetration in the Sacramento and San Joaquin Valleys.  
   Agricultural and Commercial loan volume increased in concentration between 
   September 30, 1997 and December 31, 1996. Agricultural loans as a percent 
   of the Company's total loan portfolio increased from 49% to 62% between 
   these two time periods. These two periods however, represent the highest 
   point of the agricultural loans outstanding which occurs in September, and 
   the lowest point of agricultural loans outstanding typically occurring in 
   December.  The fourth quarter is customarily the time when revenue for 
   numerous crops are received and applied to loans outstanding. Despite the 
   reflected increase due to timing, Management has made a conscious effort 
   to minimize portfolio risk concentrations.

3. Real estate construction loans increased by $4,916,000 or 16.4% from 
   December 31, 1996, nine months prior.  The Company extends construction 
   loans primarily to builders of single family houses.  Loans are made to 
   individual borrowers and to real estate developers. As a strategy to 
   increase loan volume, the Company has attempted to diversify its 
   construction loan activity into several new market areas.   The Company 
   originates construction loans from its Real Estate Department in Yuba City 
   and its loan production offices in Chico, Roseville and Madera.  The 
   Company's efforts have resulted in increased market share in the Davis, 
   Chico and greater Sacramento area markets.  Construction loan growth has 
   occurred primarily in these regions.

                                    10

<PAGE>

The Company lends primarily to small and medium sized businesses, small to large
sized farmers and consumers within its market area, which is comprised
principally of Sutter, Yuba, Colusa and Yolo counties and secondarily Butte,
Glenn, Sacramento, Placer, Madera and Fresno counties.


LOAN QUALITY

The Company places loans on nonaccrual status if (1) principal or interest has
been in default for 90 days or more, unless the loan is both well secured and in
the process of collection; (2) payment in full of principal or interest is not
expected; or (3) the financial condition of the borrower has significantly
deteriorated.

The table set forth below summarizes the composition of nonperforming loans as
of September 30, 1997, December 31, 1996 and September 30, 1996.

<TABLE>
<CAPTION>
                           --------------------------------------------------------------------------------------------------
ACCRUING LOANS PAST        $  Amt.       Change         % of      $  Amt.       Change         % of      $  Amt.         % of
DUE 90 DAYS                9/30/97   Prior Per.        Class     12/31/96   Prior Per.        Class      9/30/96        Class
OR MORE:                   --------------------------------------------------------------------------------------------------
<S>                        <C>       <C>                <C>      <C>        <C>               <C>        <C>            <C>
Commercial                   428.0       (57.5%)        1.5%        1,006       100.0%         3.9%           62          .2%
Agricultural                  (-0-)     (100.0%)        0.0%          981       509.3%         2.0%          -0-         0.0%
Real Estate                  379.0       100.0%          .7%         (-0-)                                   220          .4%
Leases                       260.0        23.8%          .8%          210       500.0%         1.3%          116          .6%
Consumer                      54.0      +100.0%         2.2%
                           --------------------------------------------------------------------------------------------------
       TOTAL                 1,121         (49%)         .6%        2,197      1020.9%         1.5%          399          .3%
                           --------------------------------------------------------------------------------------------------
NONACCRUAL LOANS
                           --------------------------------------------------------------------------------------------------
Commercial                   1,221       692.8%         4.1%          154       340.0%         0.5%          192          .7%
Agricultural                 3,480      9842.9%         5.6%           35       (96.3%)        0.0%          417          .7%
Real Estate                  2,258       243.7%         4.0%          657       731.6%         1.2%          773         1.5%
Leases                        (-0-)        0.0%         0.0%         (-0-)        0.0%         0.0%          -0-         0.0%
Consumer                      (-0-)        0.0%         0.0%         (-0-)        0.0%         0.0%          -0-         0.0%
                           --------------------------------------------------------------------------------------------------
       TOTAL                 6,959       722.6%         3.8%          846       (20.9%)        0.6%         1382          .9%
                           --------------------------------------------------------------------------------------------------

                           --------------------------------------------------------------------------------------------------
TOTAL NON-
PERFORMING                   8,080       165.5%         4.4%        3,043       140.6%         2.1%         1781         1.1%
                           --------------------------------------------------------------------------------------------------

</TABLE>

The trend in nonperforming loans has clearly escalated over the past year as
nonperforming loans increased from 1.1% of the portfolio on September 30, 1996
to 4.4% of the portfolio on September 30, 1997.  This trend is attributable to
increased risk exposure present in five loan relationships.  During the second
quarter of 1997, the Company identified increased credit risk exposure in four
large loan relationships and thirteen leases.  Management elected to entirely
charge off twenty assets with a book value of $1,144,077 and write-down four
other assets in the aggregate 

                                     11

<PAGE>

amount of $1,980,435.  The partially charged-off loans have been written down 
to an estimate of the remaining collateral value.  

For the nine months ending September 30, 1997, the Company charged off 
$3,200,000 while the total charge-offs for all of 1996 were $327,000.  As a 
result, Management believes that a low loss exposure rests in the remaining 
nonperforming loans.  Progress has been made during the first nine months of 
1997.  Many of the nonperforming loans are now operating under either Workout 
Agreements, Restructure Agreements or Liquidation Agreements.  All of these 
loans are in the process of collection. Management projects some progress 
toward the reduction of nonperforming assets by year end 1997. However, the 
Company is posed with lengthy solutions with a number of their larger workout 
loans due to the complex nature of the credits.  The overall duration of 
these workouts is therefore difficult to predict.  As a result, Management 
projects a higher level of nonperforming loans (compared to historical 
amounts) in the forthcoming two to three quarters. 

Management's decision to charge down nonperforming loans, during the second 
quarter, significantly reduced the Company's Allowance for Loan Loss 
Reserves. Instead of rebuilding the reserve account over a period of time, 
Management elected to make a contribution to Loan Loss Reserves of $3,200,000 
during the second quarter of 1997.  As a result, the Company posted second 
quarter 1997 losses of $1,193,000 and six month year to date net loss of 
$375,000. Third quarter profitability of $988,000 has restored the nine month 
year to date net income to $612,000.  The Company uses the allowance method 
in providing for possible loan losses.  Loan losses are charged to the 
allowance for possible loan losses and recoveries are credited to it.  The 
allowance for loan losses at September 30, 1997 was $4,146,000, an increase 
of $93,000 from December 31, 1996.  The allowance equates to 2.3% of the 
Bank's outstanding loans at September 30, 1997.  Management believes that the 
total allowance for loan losses is adequate to cover potential losses in the 
loan portfolio.  While Management uses available information to provide for 
loan losses, future additions to the allowance may be necessary based on 
changes in economic conditions and other factors.   The allowances and loss 
estimates are reviewed constantly, and adjustments, as necessary, are charged 
to operations in the period in which they become known.

Additions to the allowance for loan losses are made by provisions for 
possible loan losses.  The provision for possible loan losses is charged to 
operating expense and is based upon past loan loss experience and estimates 
of potential loan losses which, in Management's judgment, deserve current 
recognition.  Other factors considered by Management include growth, 
composition and overall quality of the loan portfolio, review of specific 
problem loans and current economic conditions that may affect the borrower's 
ability to repay the loan.  Actual losses may vary from current estimates.  
The estimates are reviewed constantly, and 

                                   12

<PAGE>

adjustments, as necessary, are charged to operations in the period in which 
they become known.

In addition to the above, the Company holds real estate properties as "Other
Real Estate Owned" (OREO) recorded at $927,000 at September 30, 1997.  In all
cases, the amount recorded on the books is the lesser of the loan balance or the
fair market value obtained from a current appraisal.  Therefore, any identified
losses have already been recognized.  The Bank is in the process of marketing
the OREO properties.

                                        13

<PAGE>

                                RESULTS OF OPERATIONS
                                           
                        Three months ended September 30, 1997
                                    compared with
                        Three months ended September 30, 1996
                                           
                                           
                                           
During the three-month period ending September 30, 1997, the Company showed a 
net income of $988,000, an increase of $84,000 over the same period in 1996.

Net interest income before provisions for loan losses increased from 
$3,428,000 for the three months ended September 30, 1996, to $3,756,000 for 
the same period in 1997, an increase of  $328,000 or 9.6%.   This additional 
income is partially due  to an increase of 15.3% in average outstanding loans 
during the third quarter of 1997 over the same period  in 1996.  In addition, 
the average prime rate was .25% higher in the third quarter of 1997 over  the 
same period in 1996.

Other income increased by $782,000 over the same period in 1996, mostly as 
the result of increased commission and fees on leases earned by the Bank's 
subsidiary, EPI Leasing Company.  In addition the Company recognized an 
increase in loan servicing fee income, brokered loan fee income and fee 
income generated from the bank's alternative financial investment services. 
                                           
Other expenses for the three months ended September 30, 1997, were 
$3,576,000, an increase of $993,000 over the same period in 1996, mostly due 
to increases in salaries and benefits.  A major contributor to this increase 
was the purchase of EPI Leasing Company and the opening of a new branch in 
Wheatland, California, in March 1997.  In addition, the Bank opened a new 
loan production office in Madera, California, in March 1997.
                                           
The yield on average earning assets for the three-month period ended 
September 30, 1997, compared to the same period in 1996, is set forth in the 
following table (in thousands except for percentages):

<TABLE>
<CAPTION>

                            Three months ended          Three months ended 
                            September 30, 1997          September 30, 1996 
<S>                         <C>                         <C>
Average loans
   outstanding                  $  195,101                 $  169,271 
Average yields                      11.06%                     11.35%
Amount of interest
  & fees earned                   $  5,395                   $  4,805 
Average prime rate                   8.50%                      8.25%

</TABLE>

                                          14

<PAGE>

A large portion of the Company's loan portfolio is based upon the Bank's
reference rate, adjusted on a daily basis so that  rate changes have an
immediate effect on the loan interest yield.  The Bank's reference rate closely
tracks the prime rate.

Rates and amounts paid on average deposits, including noninterest-bearing
deposits for the three-month period ended September 30, 1997, compared to the
same period in 1996, are set forth in the following table (in thousands except
for percentages):

<TABLE>
<CAPTION>

                            Three months ended          Three months ended 
                            September 30, 1997          September 30,1996 
<S>                         <C>                         <C>
Average deposits
  outstanding                   $  250,167                  $  199,898
Average rates paid                   3.84%                       3.74%
Amount of interest
  paid or accrued                 $  2,400                    $  1,869 

</TABLE>

The following table summarizes the principal elements of operating expenses and
discloses the increases (decreases) and percent of increases (decreases) for the
three-month period ended September 30, 1997 and 1996 (in thousands except for
percentages):

<TABLE>
<CAPTION>

                            Three months ended September 30, 1997   Increase (Decrease)
                                                                      1997 over 1996
                                   1997         1996
                            -------------------------------------------------------------
<S>                         <C>              <C>                   <C>           <C>
Salaries and benefits           $  1,988     $  1,336              $  652        48.8%
Occupancy                            203          137                  66        48.2%
Equipment                            331          250                  81        32.4%
Advertising and promotion             85           56                  29        51.8%
Stationery & supplies                 63           54                   9        16.7%
Legal and professional fees           95           83                  12        14.5%
Other operating expenses             811          667                 144        21.6%
                            -------------------------------------------------------------
  Total other expenses          $  3,576     $  2,583              $  993        38.4%
                            -------------------------------------------------------------
                            -------------------------------------------------------------

</TABLE>

Applicable income taxes for the three-month period ended September 30, 1997,
were $650,000, as compared to the September 30, 1996 amount of $537,000.  

                                          15

<PAGE>

                                RESULTS OF OPERATIONS
                                           
                         Nine months ended September 30, 1997
                                    compared with
                         Nine months ended September 30, 1996
                                           
                                           
Year-to-date, the nine months ending September 30, 1997, saw net income of
$612,000, or $.34 per share on a fully-diluted basis as compared to the same
period in 1996, at which time the Company reported net year-to-date earnings of
$2,478,000, or $1.47 per share on a fully-diluted basis.
                                           
During the second quarter, the Bank determined that additional contributions to
loan loss reserves were required to recognize the increased risk exposure for a
small number of sizable loans in its portfolio.  This action resulted in a
second quarter loss of ($1,193,440), which, despite improved first and third
quarter earnings, depressed earnings for the nine months ending September 30,
1997.

Net interest income before provisions for loan losses increased from $9,629,000
for the nine months ended September 30, 1996 to $10,563,000 for the same period
in 1997, an increase of  $934,000.   This additional income is  partially due 
to an increase of 19.3% in average outstanding loans during the third quarter of
1997 over the same period in 1996.  In addition, the average prime rate was .17%
higher at the end of the third quarter of 1997 over the same period in 1996.

Other income increased by $1,709,000 over the same period in 1996, mostly as the
result of increased commission and fees on leases earned by the Bank's
subsidiary, EPI Leasing Company. In addition the Company recognized an increase
in loan servicing fee income, brokered loan fee income and fee income generated
from the bank's alternative financial investment services. 

Other expenses for the nine months ended September 30, 1997, were $9,917,000, an
increase of $2,627,000 over the same period in 1996, mostly due to increases in
salaries and benefits and occupancy and equipment.  A major contributor to this
increase was the purchase of EPI Leasing Company and the opening of a new branch
in Wheatland, California,  in March 1997.  In addition, the Bank opened a new
loan production office in Madera, California in March 1997.

                                 16

<PAGE>

The yield on average earning assets for the nine-month period ended September
30, 1997, compared to the same period in 1996, is set forth in the following
table (in thousands except for percentages):

<TABLE>
<CAPTION>

                          Nine months ended        Nine months ended 
                          September 30, 1997       September 30, 1996 
<S>                       <C>                      <C>
Average loans outstanding     $  175,596               $  147,214
Average yields                    11.12%                   11.55%
Amount of interest
  & fees earned                $  14,646               $   12,753
Average prime rate                 8.42%                    8.25%

</TABLE>

A large portion of the Company's loan portfolio is based upon the Bank's
reference rate, adjusted on a daily basis so that  rate changes have an
immediate effect on the loan interest yield.  The Bank's reference rate closely
tracks the prime rate.

Rates and amounts paid on average deposits, including noninterest bearing
deposits for the nine-month period ended September 30, 1997, compared to the
same period in 1996, are set forth in the following table (in thousands except
for percentages):

<TABLE>
<CAPTION>

                         Nine months ended      Nine months ended 
                         September 30, 1997     September 30,1996 
<S>                      <C>                    <C>
Average deposits                        
  outstanding                 $  243,566            $  194,702
Average rates paid                 3.82%                 3.66%
Amount of interest
  paid or accrued               $  6,976              $  5,346

</TABLE>

                                          17

<PAGE>

The following table summarizes the principal elements of operating expenses and
discloses the increases (decreases) and percent of increases (decreases) for the
nine- month periods ended September 30, 1997 and 1996, respectively (in
thousands except for percentages):

<TABLE>
<CAPTION>

                            Nine months ended September 30,  Increase (Decrease)
                                                              1997 over 1996
                                    1997         1996
                            ---------------------------------------------------
<S>                             <C>          <C>          <C>             <C>
Salaries and benefits           $  5,585     $  3,758     $  1,827        48.6%
Occupancy                            527          415          112        27.0%
Equipment                            941          716          225        31.4%
Advertising and promotion            309          270           39        14.4%
Stationery & supplies                242          191           51        26.7%
Legal and professional fees          232          189           43        22.8%
Other operating expenses           2,081        1,751          330        18.8%
                            ---------------------------------------------------
  Total other expenses          $  9,917     $  7,290     $  2,627        36.0%
                            ---------------------------------------------------
                            ---------------------------------------------------

</TABLE>

The increases in salaries and benefits resulted from normal salary increases and
increased staffing for the opening of the new Wheatland Branch and the addition
of the employees at EPI Leasing Company, the Bank's subsidiary.  Additional
staff has also been added to the new office location in Marysville, California
and new loan production office in Madera, California. 

The Company employed 191 full-time equivalent employees on September 30, 1997,
compared to 179 on December 31, 1996, and 153 on September 30, 1996.

The increase in occupancy and equipment expense over 1996 is attributable to the
purchase, relocation and remodeling of a new building for the Bank's Marysville
Branch which opened in the second quarter of 1996, the opening of the Bank's new
Wheatland Branch, and the addition of the Bank's subsidiary, EPI Leasing
Company.  In addition, the Company purchased Automated Teller Machines (ATM's)
for each of its seven branches.  The Bank also purchased a bank building in Yuba
City to provide much needed space for its Residential and Ag Real Estate
Departments and also installed  walk-up and drive-up ATM's at the new Real
Estate Loan Center.  In addition, during the second quarter of 1997, the Company
remodeled and relocated its Administrative Office to a complex owned by the
Company.

Applicable income taxes for the nine-month period ended September 30, 1997, were
$311,000 as compared to the September 30, 1996, amount of $1,585,000.  The
decrease of $1,274,000 was attributed to a tax credit during the second quarter
of 1997 as a result of a loss recognized during that quarter.

                                     18

<PAGE>

LIQUIDITY

During the first two quarters and in to the third quarter of each year, the Bank
tends to have excess liquidity.  The Bank's seasonal agricultural loan demand
tends to challenge the Bank's liquidity position  beginning in the second
quarter and continuing into the third quarter of each year.  The Bank's liquid
assets consist of cash and due from banks, federal funds sold and investment
securities with maturities of one year or less (exclusive of pledged
securities).  

The Bank has formal and informal borrowing arrangements with the Federal Reserve
Bank and its correspondent bank to meet unforeseen deposit outflows or  seasonal
loan funding demands.   As of  September 30, 1997, and December 31, 1996,
respectively, the Bank had no balances outstanding on these lines.

The Bank has also entered into an agreement with Lehman Brothers for a standby
short-term loan secured by U.S. Government and Agency Obligations in the Bank's
investment portfolio, in order to fund any liquidity needs not met by other 
sources of funding as warranted by loan demand.

RATE SENSITIVITY

On a monthly basis, the Bank tracks its RSA's (Rate Sensitive Assets) and RSL's
(Rate Sensitive Liabilities) and calculates the difference between the two (GAP)
as a percentage of total assets for various time horizons.

The Bank's goal is to maintain a cumulative one year GAP of between -10% and
+10%.  The September 30, 1997 one-year GAP was -3.8%.

Since this figure is negative, it means that when interest rates change, more
RSL's will reprice than RSA's over a one-year period.  If interest rates go up,
the Bank's net interest margin will decrease, if interest rates go down, it will
increase.

On September 30, 1997, the Bank's cumulative 90-day GAP was +5.7% which means
that an increase in rates would have a positive effect on earnings and a
decrease in interest rates in the next 90 days would have a negative effect on
earnings.

                                     19

<PAGE>

CAPITAL RESOURCES

Total shareholders' equity on September 30, 1997, increased by $197,000 over
December 31, 1996, total shareholders' equity of $21,886,000.

The Company is subject to capital adequacy guidelines issued by federal
regulators.  These guidelines are intended to reflect the degree of risk
associated with both on and off-balance sheet items.

Financial institutions are expected to comply with a minimum ratio of qualifying
total capital to risk-weighted assets of 8%, at least half of which must be in
Tier 1 Capital.

In addition, federal agencies have adopted a minimum leverage ratio of Tier 1
Capital to total assets of 4%, which is intended to supplement risk-based
capital requirements and to ensure that all financial institutions continue to
maintain a minimum level of core capital.

As can be seen by the following tables, the Company exceeded all regulatory
capital ratios on September 30, 1997, and on December 31, 1996:

<TABLE>
<CAPTION>

RISK-BASED CAPITAL RATIO
AS OF SEPTEMBER 30, 1997
-------------------------------------------------------------------------------
                                 Company         Bank
(Dollars in thousands)            Amount        Ratio       Amount        Ratio
-------------------------------------------------------------------------------
<S>                             <C>            <C>        <C>            <C>
Tier 1 Capital                  $ 21,866        8.90%     $ 21,736        8.85%
Tier 1 Capital
  minimum requirement              9,823        4.00%        9,820        4.00%
                                -----------------------------------------------
    Excess                      $ 12,043        4.90%     $ 11,916        4.85%
                                -----------------------------------------------
                                -----------------------------------------------
Total Capital                     24,949       10.16%       24,818       10.11%
Total Capital 
  minimum requirement             19,647        8.00%       19,639        8.00%
                                -----------------------------------------------
Excess                          $  5,302        2.16%     $  5,179        2.11%
                                -----------------------------------------------
Risk-adjusted assets            $245,586                  $245,488
                                -----------------------------------------------
                                -----------------------------------------------

LEVERAGE CAPITAL RATIO

Tier 1 Capital to quarterly     $ 21,866        7.91%     $ 21,736        7.87%
  average total assets
Minimum leverage requirement      11,060        4.00%       11,051        4.00%
                                -----------------------------------------------
Excess                          $ 10,806        3.91%     $ 10,685        3.87%
                                -----------------------------------------------
                                -----------------------------------------------
Total quarterly average assets  $276,509                  $276,269
                                --------                  --------
                                --------                  --------

</TABLE>

                                       20

<PAGE>

<TABLE>
<CAPTION>

RISK BASED CAPITAL RATIO
AS OF DECEMBER 31, 1996
-------------------------------------------------------------------------------
                                 Company         Bank
(Dollars in thousands)
                                  Amount        Ratio       Amount        Ratio
-------------------------------------------------------------------------------
<S>                             <C>            <C>        <C>            <C>
Tier 1 Capital                  $ 21,813       11.31%     $ 21,804       11.32%
Tier 1 Capital
  minimum requirement              7,713        4.00%        7,708        4.00%
                                -----------------------------------------------
    Excess                      $ 14,100        7.31%     $ 14,096        7.32%
                                -----------------------------------------------
                                -----------------------------------------------
Total Capital                     22,918       11.89%       24,225       12.57%
Total Capital minimum
      requirement                 15,426        8.00%       15,415        8.00%
                                -----------------------------------------------
Excess                          $  7,492        3.89%     $  8,810        4.57%
                                -----------------------------------------------
Risk-adjusted assets            $192,825                  $192,693
                                -----------------------------------------------
                                -----------------------------------------------

LEVERAGE CAPITAL RATIO

Tier 1 Capital to quarterly     $ 21,813        8.82%     $ 21,804        8.82%
  average total assets
Minimum leverage requirement       9,891        4.00%        9,890        4.00%
                                -----------------------------------------------
Excess                          $ 11,922        4.82%     $ 11,914        4.82%
                                -----------------------------------------------
                                -----------------------------------------------
Total quarterly average assets  $247,274                  $247,255
                                --------                  --------
                                --------                  --------

</TABLE>

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The future results of the Company's operations, the necessity of further
provisions for its loan loss reserves, quality of its loan portfolio, and
ability to pay future dividends constitute "forward-looking" information as
defined by: (1) the Private Litigation Reform Act of 1995 ("Act"); and (2)
releases made by the Securities and Exchange Commission ("SEC").  This
cautionary statement is being made pursuant to the provisions of the Act with
the express intention of obtaining the benefits of the "safe harbor" provisions
of the Act.  Investors are cautioned that any forward-looking statements made by
the Company and its Management are not guarantees of future performance and that
actual results may differ materially from those in the forward-looking
statements as a result of, but not limited to, the following factors:  the
economic environment, particularly in the region in which the Company operates;
competitive products and pricing; fiscal and monetary policies of the federal
government; changes in government regulations affecting financial institutions,
including regulatory fees and capital requirements; changes in prevailing
interest rates; acquisitions and the integration of acquired businesses; credit
risk management and asset/liability management; the financial and securities
markets; and the availability of and costs associated with sources of liquidity.

                                          21

<PAGE>

PART II  OTHER INFORMATION
ITEM 6  EXHIBITS AND REPORTS ON FORM 8K



  (a) Exhibits 

      10.1  Change in control compensation agreement.

  (b) Reports on Form 8K

            No reports on Form 8K were filed during the quarter.

                                          22

<PAGE>

                                      SIGNATURES
                                           

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

                                                California Independent Bancorp



Date   November 2, 1997          /S/ Robert J. Mulder
       ---------------------     --------------------------
                                 Robert J. Mulder
                                 President/CEO

Date   November 2, 1997          /S/ Annette Bertolini
       ---------------------     --------------------------
                                 Annette Bertolini
                                 Chief Financial Officer

                                            23