<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB

[X]   Quarterly report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 for the quarterly period ended JUNE 30, 2000

[ ]   Transition report under Section 13 or 15(d) of the Securities Exchange
      Act of 1934 for the transition period from ________ to ______________.

                         COMMISSION FILE NO. 000 - 26505
                            COMMUNITY BANCORP INC.(1)
             (Exact name of registrant as specified in its charter)

               DELAWARE                                    33-0859334
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


130 WEST FALLBROOK STREET, FALLBROOK, CA                     92028
--------------------------------------------------------------------------------
(Address of principal executive offices)                   (Zip Code)

                   Issuer's telephone number:         (760) 723-8811
                                             -----------------------------------
                                      NONE
         (Former name, former address and former fiscal year, if changed
                               since last report)

         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 [ ]

         Number of shares of common stock outstanding as of June 30, 2000:
2,536,981

         Transitional Small Business Disclosure Format (check one):
Yes [ ] No[x]


--------
(1) The Company is the successor registrant to Fallbrook National Bank, which
previously filed reports pursuant to the Securities Exchange Act of 1934 with
the Comptroller of the Currency.

<PAGE>


PART 1: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

 COMMUNITY BANCORP INC.
 CONSOLIDATED BALANCE SHEETS
 (DOLLARS IN THOUSANDS)                                                             JUNE 30,          DECEMBER 31,
 (UNAUDITED)                                                                          2000                1999
------------------------------------------------------------------------------------------------------------------
 <S>                                                                              <C>                <C>
 ASSETS

 Cash and cash equivalents                                                        $   20,548         $   15,376
 Interest bearing deposits in financial institutions                                   1,277                800
 Federal Reserve Bank stock                                                              253                253
 Investment securities held-to-maturity, at amortized cost                             6,711              6,710
 Loans held for investment                                                           187,749            142,667
    Less allowance for loan losses                                                    (1,637)            (1,327)
                                                                                  ----------         ----------
       Net loans held for investment                                                 186,112            141,340
 Loans held for sale                                                                   9,610              2,854
 Premises and equipment, net                                                           2,294              2,392
 Accrued interest and other assets                                                     3,640              2,957
 Deferred tax asset                                                                      744                744
 Servicing asset, net                                                                  1,660              1,796
 Interest-only strip, at fair value                                                      543                551
                                                                                  ----------         ----------
       Total Assets                                                               $  233,392         $  175,773
                                                                                  ==========         ==========


 LIABILITIES AND SHAREHOLDERS' EQUITY

 Deposits:
    Interest bearing                                                              $  175,174         $  129,795
    Non-interest bearing                                                              33,454             28,337
                                                                                  ----------         ----------
       Total deposits                                                                208,628            158,132
 Other borrowings                                                                     11,019              3,971
 Accrued expenses and other liabilities                                                2,396              2,333
                                                                                  ----------         ----------
       Total liabilities                                                             222,043            164,436

 SHAREHOLDERS' EQUITY
 Common stock, $0.625 par value; authorized 10,000,000 shares, issued and
    outstanding, 2,537,000 at June 30, 2000 and
    December 31, 1999                                                                  1,585              1,585
 Additional paid-in capital                                                            4,713              4,713
 Unearned ESOP contribution                                                           (1,019)              (796)
 Retained earnings                                                                     6,075              5,835
 Treasury stock, at cost - 883 shares                                                     (5)                 -
                                                                                  ----------         ----------
       Total shareholders' equity                                                     11,349             11,337
                                                                                  ----------         ----------

       Total Liabilities and Shareholders' Equity                                 $  233,392         $  175,773
                                                                                  ==========         ==========

</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       2
<PAGE>


<TABLE>
<CAPTION>

 COMMUNITY BANCORP INC.
 CONSOLIDATED STATEMENTS OF INCOME                                       FOR THE SIX MONTHS       FOR THE THREE MONTHS
 (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)                      ENDED JUNE 30,            ENDED JUNE 30,
 (UNAUDITED)                                                              2000         1999         2000         1999
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>          <C>           <C>         <C>
 Interest income:
    Interest and fees on loans                                             $  8,186     $ 5,841       $ 4,461     $ 3,003
    Interest on cash equivalents                                                345         233           242         170
    Interest on interest bearing deposits in financial institutions              24          20            15          10
    Interest on investment securities                                           203          62           105          20
                                                                           --------     -------       -------     -------
       TOTAL INTEREST INCOME                                                  8,758       6,156         4,823       3,203
                                                                           --------     -------       -------     -------

 Interest expense on deposits                                                 3,487       1,854         1,899         985
 Interest expense on other borrowed money                                       421          43           307          21
                                                                           --------     -------       -------     -------
       TOTAL INTEREST EXPENSE                                                 3,908       1,897         2,206       1,006
                                                                           --------     -------       -------     -------

 Net interest income before provision for loan losses                         4,850       4,259         2,617       2,197
                                                                           --------     -------       -------     -------
 Provision for loan losses                                                      337         315           177         165
                                                                           --------     -------       -------     -------
 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                          4,513       3,944         2,440       2,032

 Other operating income:
    Customer service charges                                                    219         178           111          96
    Other fee income                                                            452         665           157         362
    Net gain on sale of loans                                                    93       1,713            46         849
    Loan servicing fees, net                                                    323         270           163         107
                                                                           --------     -------       -------     -------
       TOTAL OTHER OPERATING INCOME                                           1,087       2,826           477       1,414
                                                                           --------     -------       -------     -------

 Other operating expenses:
    Salaries and employee benefits                                            2,628       3,145         1,259       1,574
    Occupancy                                                                   399         427           202         211
    Telephone                                                                   131         127            63          72
    Premises and equipment                                                      285         243           140         119
    Marketing and promotions                                                    152         155            83          80
    Data processing                                                             410         362           196         181
    Professional services                                                       352         237           160         130
    Director, officer and employee expenses                                     239         244           129         134
    Office expenses                                                             154         189            73          92
    ESOP loan expense                                                           102         102            51          51
    Other non-recurring expense                                                   -          20             -           -
    Other expenses                                                              340         268           228         153
                                                                           --------     -------       -------     -------
       TOTAL OTHER OPERATING EXPENSES                                         5,192       5,519         2,584       2,797
                                                                           --------     -------       -------     -------

 Income before income taxes                                                     408       1,251           333         649
 Income taxes                                                                   167         516           136         267
                                                                           --------     -------       -------     -------
 NET INCOME                                                                $    241     $   735       $   197     $   382
                                                                           ========     =======       =======     =======

 COMPREHENSIVE INCOME                                                      $    241     $   735       $   197     $   382
                                                                           ========     =======       =======     =======
 Basic earnings per share                                                  $   0.10     $  0.31       $  0.08     $  0.16
 Diluted earnings per share                                                $   0.10     $  0.30       $  0.08     $  0.16

</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       3
<PAGE>


<TABLE>
<CAPTION>

 COMMUNITY BANCORP INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (DOLLARS IN THOUSANDS)                                                                  FOR THE SIX MONTHS
 (UNAUDITED)                                                                               ENDED JUNE 30,
                                                                                        2000             1999
----------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>               <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                                          $     241         $     735
 Adjustments to reconcile net income to net cash (used in) provided
    Depreciation and amortization                                                          289               665
    Provision for loan losses                                                              337               315
    Net gain on sale of loans                                                              (93)           (1,713)
    Loans originated for sale                                                          (10,268)          (34,013)
    Unrealized gain on interest-only strips                                                (33)                -
    Capitalization of interest-only strips                                                   -                (7)
    Amortization of interest only strips                                                    41               110
    Capitalization of servicing asset                                                        -              (294)
    Amortization of servicing asset                                                        136               174
    Writedown of servicing asset                                                             -              (307)
    Proceeds from sale of loans                                                          9,067            48,242
    Decrease (increase) in accrued interest and other assets                              (683)              (79)
    Decrease in accrued expenses and other liabilities                                      63              (307)
                                                                                     ---------         ---------
       NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                                (903)           13,521

 CASH FLOWS FROM INVESTING ACTIVITIES:
    Net increase in loans                                                              (50,493)          (14,937)
    Net maturities of (additions to) interest bearing time deposits                       (477)                -
    Maturities of securities held-to-maturity                                                -               700
    Purchase of securities held-to-maturity                                                  -            (5,465)
    Net additions to premises and equipment                                               (194)             (304)
                                                                                     ---------         ---------
       NET CASH USED IN INVESTING ACTIVITIES                                           (51,164)          (20,006)

 CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in deposits:
       Interest bearing                                                                 45,379            11,470
       Non-interest bearing                                                              5,117             4,297
    Purchase of treasury stock                                                              (5)                -
    Exercise of stock options                                                                -                15
    Repayment of line of credit                                                         (3,277)             (102)
    Advances to ESOP                                                                       325                 -
    Proceeds from other borrowings                                                       9,700             3,175
                                                                                     ---------         ---------
       NET CASH PROVIDED BY FINANCING ACTIVITIES                                        57,239            18,855
                                                                                     ---------         ---------
       NET INCREASE IN CASH AND CASH EQUIVALENTS                                         5,172            12,370
 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                    $  15,376         $   6,064
                                                                                     ---------         ---------
 CASH AND CASH EQUIVALENTS AT END OF PERIOD                                          $  20,548         $  18,434
                                                                                     =========         =========

</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                       4
<PAGE>


                             COMMUNITY BANCORP INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (UNAUDITED)

NOTE 1 BASIS OF PRESENTATION:

The interim financial statements included herein have been prepared by Community
Bancorp Inc. without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC"). The interim financial statements
include Community Bancorp Inc. and its wholly owned subsidiaries Fallbrook
National Bank (the "Bank") and Community (CA) Capital Trust I (the "Trust"),
(collectively, the "Company") as consolidated with the elimination of all
intercompany transactions. Certain information and footnote disclosures,
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America, have been
condensed or omitted pursuant to such SEC rules and regulations. Nevertheless,
the Company believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the audited financial statements and notes thereto included in
the Company's latest Annual Report as found on Form 10KSB. In the opinion of
management, all adjustments, including normal recurring adjustments necessary to
present fairly the financial position of the Company with respect to the interim
financial statements and the results of its operations for the interim period
ended June 30, 2000, have been included. Certain reclassifications may have been
made to prior year amounts to conform to the 2000 presentation. The results of
operations for interim periods are not necessarily indicative of results for the
full year.

NOTE 2 LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES:

A summary of loans as of June 30, 2000 and December 31, 1999 is as follows:

<TABLE>
<CAPTION>

                                                                           June 30,         December 31,
                                                                             2000              1999
                                                                       -----------------------------------
                                                                              (dollars in thousands)
<S>                                                                            <C>                <C>
Construction loans                                                             $ 34,763           $ 27,661
Real estate one to four family                                                   28,256             21,601
Real estate commercial and multi family                                          93,044             61,263
Consumer home equity lines of credit                                              2,669              2,649
Consumer other                                                                   10,348              9,302
Aircraft                                                                         19,840             17,113
Commercial                                                                        8,565              6,064
                                                                       -----------------------------------
Total gross loans                                                               197,484            145,693
Deferred loan fees                                                                  657                688
Discount on unguaranteed portion of loans retained                                 (782)              (860)
Allowance for loan losses                                                        (1,637)            (1,327)
                                                                       -----------------------------------
Net loans                                                                      $195,722           $144,194
                                                                       ===================================

</TABLE>

The Company's lending activities are concentrated primarily in Southern
California. Although the Company seeks to avoid undue concentrations of loans to
a single industry based upon a single class of collateral, real estate and real
estate associated business areas are among the principal industries in the
Company's market area. As a result, the Company's loan and collateral portfolios
are, to some degree, concentrated in those industries. The Company evaluates
each credit on an individual basis and determines collateral requirements
accordingly. When real estate is taken as collateral, advances are generally
limited to a certain percentage of the appraised value of the collateral at the
time the loan is made, depending on the type of loan, the underlying property
and other factors.


                                       5
<PAGE>


NOTE 3 SALES AND SERVICING OF SBA LOANS:

Starting in the first quarter of 2000, the Company changed its policy to hold to
maturity the guaranteed portion of SBA 7a loans. In the past, the Company
generated revenues from the origination of loans guaranteed by the SBA and the
sale of guaranteed and unguaranteed portions of those loans in the secondary
market. The Company retained the servicing on the sale of SBA loans that creates
loan servicing income. The Company measures the servicing asset by discounting
the respective cash flow for the estimated expected life of the loans. The
Company uses industry prepayment statistics in estimating the expected life.
Servicing assets are initially measured at market rates.

If the fair value of the servicing assets is less than the amortized carrying
value, the asset is considered impaired. A valuation allowance must be
established for the impaired asset by a charge against income for the difference
between the amortized carrying value and the fair value. As of June 30, 2000,
there was no material difference between the Company's amortized carrying value
for the servicing assets and the fair value and the Company had no valuation
allowance established for these assets.

NOTE 4 CONTINGENCIES:

Because of the nature of its activities, the Company is at all times subject to
pending and threatened legal actions which arise out of the normal course of its
business. In the opinion of management, the ultimate disposition of these
matters will not have a material adverse effect on the Company's financial
position, results of operations or liquidity.

NOTE 5 FORMATION OF HOLDING COMPANY:

The Company was formed through a holding company reorganization of Fallbrook
National Bank, wherein Fallbrook National Bank became the wholly owned
subsidiary of Community Bancorp Inc. as of June 25, 1999. The transaction was
based on a one for one exchange of shares of Fallbrook National Bank stock for
shares of common stock of Community Bancorp Inc., and was not considered a
taxable event for IRS purposes. Such business combination was accounted for at
historical cost, similar to a pooling of interest. All references to periods
prior to June 30, 1999 are references to financial statements of the Bank.


                                       6
<PAGE>


NOTE 6   EARNINGS PER SHARE

The following tables are a reconciliation of the numerators and denominators of
the basic and diluted EPS computations for the net earnings for the Company
(dollars in thousands, except share data):

<TABLE>
<CAPTION>

                                                            For the six months ended June 30,
                                                            ---------------------------------
                                                   2000                                           1999
                                ----------------------------------------       ----------------------------------------
                                  Earnings        Shares       Per Share         Earnings        Shares       Per Share
                                (Numerator)    (Denominator)    Amount         (Numerator)    (Denominator)    Amount
                                -----------    -------------   ---------       -----------    -------------   ---------
<S>                             <C>            <C>             <C>             <C>            <C>             <C>
Net Earnings                    $       241                                    $       735
                                ===========                                    ===========

Basic EPS Earnings available
  to common shareholders               $241        2,418,813   $    0.10       $       735        2,397,945   $    0.31
Effect of Dilutive Securities
  Options                                 -           33,800           -                 -           58,013           -
                                -----------    -------------   ---------       -----------    -------------   ---------
Diluted EPS Earnings
  Available to common
  Shareholders plus assumed
  Conversions                   $       241        2,452,613   $    0.10       $       735        2,455,958   $    0.30
                                ===========        =========   =========       ===========        =========   =========

</TABLE>


<TABLE>
<CAPTION>

                                                           For the three months ended June 30,
                                                           -----------------------------------
                                                   2000                                           1999
                                ----------------------------------------       ----------------------------------------
                                  Earnings        Shares       Per Share         Earnings        Shares       Per Share
                                (Numerator)    (Denominator)    Amount         (Numerator)    (Denominator)    Amount
                                -----------    -------------   ---------       -----------    -------------   ---------
<S>                             <C>            <C>             <C>             <C>            <C>             <C>
Net Earnings                    $       197                                    $       382
                                ===========                                    ===========

Basic EPS Earnings available
  to common shareholders        $       197        2,403,484   $   0.08        $       382        2,400,039   $    0.16

Effect of Dilutive Securities
  Options                                 -           39,603          -                  -           55,968           -
                                -----------    -------------   ---------       -----------    -------------   ---------
Diluted EPS Earnings
  Available to common
  shareholders plus assumed
  conversions                   $       197        2,443,087   $    0.08       $       382        2,456,007   $    0.16
                                ===========        =========   =========       ===========        =========   =========

</TABLE>


                                       7
<PAGE>

NOTE 7 SEGMENT INFORMATION

The following disclosure about segments of the Company is made in accordance
with the requirements of Statement of Financial Accounting Standards ("SFAS")
No. 131, "Disclosures about Segments of an Enterprise and Related Information."
The Company changed its internal reporting in 1999, and now segregates its
operations into two primary segments: Banking Division and SBA Lending Division.
The Company determines operating results of each segment based on an internal
management system that allocates certain expenses to each.

<TABLE>
<CAPTION>

                                                          For the six months ended June 30,
                                  -----------------------------------------------------------------------------------
                                                     2000                                      1999
                                  -----------------------------------------------------------------------------------
                                    BANKING     SMALL BUSINESS      TOTAL       BANKING   SMALL BUSINESS    TOTAL
                                    DIVISION    ADMINISTRATION     COMPANY     DIVISION   ADMINISTRATION   COMPANY
                                                    LENDING                                  LENDING
                                                   DIVISION                                  DIVISION
                                                    ("SBA)                                    ("SBA)
                                  -----------------------------------------------------------------------------------
                                                                (dollars in thousands)
<S>                                  <C>            <C>            <C>           <C>         <C>           <C>
Interest income                      $   6,675      $      2,083   $    8,758    $  4,128    $     2,028   $   6,156
Interest expense                         2,377             1,531        3,908         830          1,067       1,897
                                  -----------------------------------------------------------------------------------
Net interest income before
provision                                4,298               552        4,850       3,298            961       4,259
Allowance for loan losses                  268                69          337         315              -         315
Other income                               550               537        1,087         580          2,246       2,826
Other expenses                           3,718             1,474        5,192       4,121          1,398       5,519
                                  -----------------------------------------------------------------------------------
Income before income taxes                 862              (454)         408        (558)          1,809       1,251
Income taxes                               355              (188)         167        (231)            747         516
                                  -----------------------------------------------------------------------------------
Net income                           $     507     $        (266)  $      241   $    (327)   $      1,062  $      735
                                  ===================================================================================
Asset employed at quarter end        $ 174,113     $      59,279   $  233,392   $ 122,045    $     33,563  $  155,608
                                  ===================================================================================

</TABLE>

<TABLE>
<CAPTION>
                                                         For the three months ended June 30,
                                  -----------------------------------------------------------------------------------
                                                     2000                                      1999
                                  -----------------------------------------------------------------------------------
                                    BANKING     SMALL BUSINESS      TOTAL       BANKING   SMALL BUSINESS    TOTAL
                                    DIVISION    ADMINISTRATION     COMPANY     DIVISION   ADMINISTRATION   COMPANY
                                                    LENDING                                  LENDING
                                                   DIVISION                                  DIVISION
                                                     ("SBA)                                   ("SBA)
                                  -----------------------------------------------------------------------------------
                                                                (dollars in thousands)
<S>                                  <C>           <C>             <C>          <C>           <C>          <C>
Interest income                      $   3,634     $       1,189   $    4,823   $   2,244     $      959   $   3,203
Interest expense                         1,317               889        2,206         499            507       1,006
                                  -----------------------------------------------------------------------------------
Net interest income before
provision                                2,317               300        2,617       1,745            452       2,197
Allowance for loan losses                  147                30          177         165              -         165
Other income                               269               208          477         149          1,265       1,414
Other expenses                           1,829               755        2,584       2,153            644       2,797
                                  -----------------------------------------------------------------------------------
Income before income taxes                 610              (277)         333        (424)         1,073         649
Income taxes                               251              (115)         136        (176)           443         267
                                  -----------------------------------------------------------------------------------
Net income                           $     359     $        (162)  $      197   $    (248)    $      630   $     382
                                  ===================================================================================
Asset employed at quarter end        $ 174,113     $      59,279   $  233,392   $ 122,045     $   33,563   $ 155,608
                                  ===================================================================================

</TABLE>

                                       8
<PAGE>


NOTE 8 RECENT ACCOUNTING DEVELOPMENTS

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
was issued in June 1998 and establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. SFAS No. 133 was effective for all fiscal quarters beginning after
June 15, 1999. In July 1999, SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133," was issued, which delays the effective date of SFAS No. 133
to fiscal years beginning after June 15, 2000. Earlier application is
encouraged, but it is permitted only as of the beginning of any fiscal quarter
that begins after June 1998. The adoption of the provisions of SFAS No. 133, as
amended by SFAS No. 137 and by SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities - an amendment to FASB Statement
No. 133" issued June 2000, is not expected to have a material impact on the
results of operations, the financial position, or cash flows of the Company.

In December 1999, the Securities and Exchange Committee issued Staff
Accounting Bulletin 101, Revenue Recognition ("SAB 101"). SAB 101 summarizes
certain of the SEC staff's views in applying generally accepted accounting
principles to selected revenue recognition issues in financial statements.
Implementation of SAB 101, which was delayed by the issuance of SAB 101A on
March 27, 2000 and SAB 101B on June 26, 2000 is required by the fourth
quarter of 2000. It is not expected that the adoption of SAB 101, as amended,
will have a material impact on the Company's results of operations, financial
position or cash flows.

                                       9
<PAGE>


ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following is management's discussion and analysis of the major factors that
influenced the financial performance of the Company for the six and three months
ended June 30, 2000. This analysis should be read in conjunction with the
Company's 1999 Annual Report as filed on form 10KSB and with the unaudited
financial statements and notes as set forth in this report.

Statements concerning future performance, developments or events concerning
expectation for growth and market forecasts, and any other guidance on future
periods, constitute forward-looking statements which are subject to a number of
risks and uncertainties which might cause actual results to differ materially
from stated expectations.

RESULTS OF OPERATIONS

NET INCOME

Net income decreased 67.21% to $241,000 for the six months ended June 30, 2000
compared to $735,000 for the six months ended June 30, 1999. Basic earnings per
share was $0.10 and $0.31 for the six months ended June 30, 2000 and 1999,
respectively. Diluted earnings per share was $0.10 and $0.30 for the six months
ended June 30, 2000 and 1999, respectively. Earnings per share for the six
months ended June 30, 1999 were adjusted for the effects of a stock dividend
paid in November 1999. The decrease in net income was mainly due to the decrease
in other operating income, partially offset by an increase in net interest
income after provision for loan losses and a decrease in other operating
expenses. Interest income increased due to an increase in average interest
earning assets, and other operating income decreased during the six months ended
June 30, 2000 due to the Company's change in policy from selling the guaranteed
and unguaranteed portions of SBA 7a loans to retention of the SBA 7a loans. This
change in policy became effective January 1, 2000. Although management
anticipates that earnings will improve throughout each of the remaining quarters
of 2000, the net income for the year will be significantly reduced when compared
to 1999. Management expects that earnings will improve significantly in 2001 as
the increased net interest income will more than offset the revenue from gain on
sale of loans.

Return on average assets for the six months ended June 30, 2000 was 0.23%
compared to 1.04% for the six months ended June 30, 1999. The decrease in the
return on average assets from 1999 to 2000 was due to the reduction in net
income noted above, combined with the 50% growth in total assets, which was part
of the Company's strategic plan. The return on average equity was 4.30% for the
six months ended June 30, 2000 compared to 14.77% for the six months ended June
30, 1999.

Net income decreased 48.43% to $197,000 for the three months ended June 30, 2000
compared to $382,000 for the three months ended June 30, 1999. Basic earnings
per share were $0.08 and $0.16 for the three months ended June 30, 2000 and
1999, respectively. Diluted earnings per share were $0.08 and $0.16 for the
three months ended June 30, 2000 and 1999, respectively. Earnings per share for
the three months ended June 30, 1999 were adjusted for the effects of a stock
dividend paid in December 1999. The decrease in net income was mainly due to the
decrease in other operating income, partially offset by an increase in net
interest income after provision for loan losses and a decrease in other
operating expenses. Interest income increased due to an increase in average
interest earning assets, and other operating income decreased during the three
months ended June 30, 2000 due to the Company's change in policy from selling
the guaranteed and unguaranteed portions of SBA 7a loans to retention of the SBA
7a loans. This change in policy became effective January 1, 2000.

Return on average assets for the three months ended June 30, 2000 was 0.36%
compared to 1.03% for the three months ended June 30, 1999. The decrease in the
return on average assets from 1999 to 2000 was due to the decrease in net
income, as noted above. The return on


                                       10
<PAGE>


average equity was 7.10% for the three months ended June 30, 2000 compared to
14.97% for the three months ended June 30, 1999.

INTEREST INCOME

Net interest income is the most significant component of the Company's income
from operations. Net interest income is the difference (the "interest rate
spread") between the gross interest and fees earned on the loan and investment
portfolios and the interest paid on deposits and other borrowings. Net interest
income depends on the volume of and interest rate earned on interest earning
assets and the volume of and interest rate paid on interest bearing liabilities.

The following table sets forth a summary of average balances with corresponding
interest income and interest expense as well as average yield and cost
information for the periods presented. Average balances are derived from daily
balances, and nonaccrual loans are included as interest earning assets for
purposes of this table.

<TABLE>
<CAPTION>

                                                                 FOR THE SIX MONTHS ENDED JUNE 30,
                                          ---------------------------------------------------------------------------------
                                                            2000                                   1999
                                          ---------------------------------------------------------------------------------
                                            AVERAGE       INTEREST       AVERAGE     AVERAGE      INTEREST       AVERAGE
                                            BALANCE     EARNED/PAID    RATE/YIELD    BALANCE     EARNED/PAID    RATE/YIELD
                                          ---------------------------------------------------------------------------------
<S>                                       <C>           <C>            <C>           <C>         <C>            <C>
Average assets
     Securities and time at other banks          7,924           227       5.76%      2,883               82       5.74%
     Fed funds sold                             12,085           345       5.74%     10,067              233       4.67%
     Loans
        Commercial                              72,642         3,257       9.02%     52,959            2,712      10.33%
        Real Estate                             90,792         4,610      10.21%     57,354            2,874      10.11%
        Consumer                                 7,259           319       8.84%      5,558              255       9.25%
                                             -----------------------              --------------------------
     Total loans                               170,693         8,186       9.64%    115,871            5,841      10.17%
                                             -----------------------              --------------------------
     Total earning assets                      190,702         8,758       9.24%    128,821            6,156       9.64%
     Non earning assets                         16,289                               14,055
                                             ---------                            ---------
     Total average assets                    $ 206,991                            $ 142,876
                                             =========                            =========


Average liabilities and shareholders equity
     Interest bearing deposits
        Savings and interest bearing accounts   58,749           654       2.24%     62,683              767       2.47%
        Time deposits                           98,028         2,833       5.81%     44,385            1,087       4.94%
                                             -----------------------              --------------------------
     Total interest bearing deposits           156,777         3,487       4.47%    107,068            1,854       3.49%
     Demand deposits                            28,850             -          -      23,471                -
     Sub-debt                                    5,440           302      11.16%          -
     Other borrowings                            2,360           119      10.14%        949               43       9.14%
                                             -----------------------              --------------------------
     Total interest bearing liabilities        193,427         3,908       4.06%    131,488            1,897       2.91%
     Accrued expenses and other liabilities      2,289                                1,353
     Net shareholders equity                    11,275                               10,035
                                               -------                              -------
     Total average liabilities
     shareholders equity                       206,991                              142,876
                                             =========                            =========
     Net interest spread                                                   5.18%                                   6.73%
                                                                     ==========                               =========

     Net interest income                                       4,850                                   4,259
                                                           =========                                ========
     Net yield on interest earnings assets                                 5.11%                                   6.67%
                                                                     ----------                               ---------
</TABLE>


Interest income for the six months ended June 30, 2000 increased to $8.8
million, compared to $6.2 million for the six months ended June 30, 1999. This
increase was due to an increase in the average balance of interest earning
assets, partially offset by a decrease in the yield on those assets. Average
interest earning assets increased to $190.7 million for the six months ended
June 30, 2000 compared to $128.8 million for the six months ended June 30, 1999.
The yield on interest earning assets decreased to 9.24% for the six months ended
June 30, 2000 compared to


                                       11
<PAGE>


9.64% for the six months ended June 30, 1999. During the fourth quarter of 1999,
the Company changed its estimates as to the costs of originating a loan, which
resulted in a higher monthly amortization cost being charged against interest
income. This in turn reduced the yield on the loans originated. In addition,
increased competition by other financial intermediaries has resulted in tighter
margins than had previously been experienced by the Company. The largest single
component of interest earning assets was loans receivable, which had an average
balance of $170.7 million with a yield of 9.64% for the six months ended June
30, 2000 compared to $115.9 million with a yield of 10.17% for the six months
ended June 30, 1999. The increase in the average balance of loans receivable was
attributable to the expansion of the Company as part of the Company's strategic
plan, including the retention of SBA 7a loans.

Interest expense for the six months ended June 30, 2000 increased to $3.9
million compared to $1.9 million for the six months ended June 30, 1999. This
increase was due to an increase in average deposits and other borrowings,
combined with a change in the composition of those liabilities, and by an
increase in the cost of those liabilities. Average interest-bearing
liabilities increased to $193.4 million for the six months ended June 30,
2000 compared to $131.5 million for the six months ended June 30, 1999.
Average time deposits increased to $98.0 million with a cost of 5.81% for the
six months ended June 30, 2000 compared to $44.4 million with a cost of 4.94%
for the six months ended June 30, 1999. Beginning on January 1, 2000, the
Company changed its policy regarding the sale of SBA 7a loans from one of
selling the guaranteed and unguaranteed portions to retaining the guaranteed
and unguaranteed portions. The resulting increase in total loans is being
funded by both retail and wholesale certificates of deposit, with the
wholesale deposits having a higher interest rate than the retail deposits.
Although the wholesale deposits have a higher interest rate, there is limited
operating costs associated with acquiring and managing these liabilities. As
of June 30, 2000 wholesale deposits totaled $22.1 million and have maturities
ranging from three months to one year. In addition, interest rates in general
have risen considerably from the second quarter of 1999 to the second quarter
of 2000.

Other average borrowings increased to $7.8 million with a cost of 10.85% for
the six months ended June 30, 2000, compared to $1.0 million with a cost of
9.14% for the six months ended June 30, 1999.The Company borrowed $3.2
million in June, 1999, of which $3.0 million was used to increase capital at
its Bank subsidiary. The Company's subsidiary, Community (CA) Capital Trust
I, issued $10 million of 11.0% Fixed Rate Capital Trust Pass-through
Securities ("TRUPS-Registered Trademark-"), with a liquidation value of
$1,000 per share. The Company used the proceeds to pay off the $3.2 million
in borrowed funds, and invested an additional $6.0 million in the Bank.

                                       12
<PAGE>


<TABLE>
<CAPTION>

                                           AVERAGE     INTEREST       AVERAGE     AVERAGE      INTEREST       AVERAGE
                                           BALANCE    EARNED/PAID    RATE/YIELD   BALANCE     EARNED/PAID    RATE/YIELD
<S>                                        <C>        <C>            <C>          <C>         <C>            <C>
Average Assets
     Securities and time at other banks        8,086            120        5.97%      3,157              30        3.81%
     Fed funds sold                           16,443            242        5.92%     14,535             170        4.69%
     Loans
        Commercial                            78,089          1,790        9.22%     51,761           1,384       10.72%
        Real Estate                           96,203          2,510       10.49%     58,814           1,485       10.13%
        Consumer                               7,287            161        8.89%      5,840             134        9.20%
                                           ------------------------               -------------------------
     Total loans                             181,579          4,461        9.88%    116,415           3,003       10.35%
                                           ------------------------               -------------------------
     Total earning assets                    206,108          4,823        9.41%    134,107           3,203        9.58%
     Non earning assets                       15,732                                 15,174
                                           ---------                              ---------
     Total average assets                  $ 221,840                              $ 149,281
                                           =========                              =========


Average liabilities and shareholders
equity
     Interest bearing deposits
        Savings and interest bearing
          accounts                            59,352            311        2.11%     64,769             399        2.47%
        Time deposits                        108,014          1,588        5.91%     46,494             586        5.06%
                                           ------------------------               -------------------------
     Total interest bearing deposits         167,366          1,899        4.56%    111,263             985        3.55%
     Demand deposits                          30,026              -        0.00%     25,380               -        0.00%
     Sub-debt                                 10,000            277       11.14%          -               -        0.00%
     Other borrowings                          1,055             30       11.44%        922              21        9.14%
                                           ------------------------               -------------------------
     Total interest bearing liabilities      208,447          2,206        4.26%    137,565           1,006        2.93%
     Accrued expenses and other liabilities    2,240                                  1,482
     Net shareholders Equity                  11,153                                 10,234
                                           ---------                              ---------
     Total average liabilities
       shareholders equity                   221,840                                149,281
                                           =========                              =========

     Net interest spread                                                   5.15%                                   6.65%
                                                                       ========                                ========
     Net interest income                                      2,617                                   2,197
                                                        ===========                              ==========
     Net yield on interest earnings assets                                 5.11%                                   6.57%
                                                                       ========                                ========

</TABLE>


Interest income for the three months ended June 30, 2000 increased to $4.8
million, compared to $3.2 million for the three months ended June 30, 1999. This
increase was due to an increase in the average balance of interest earning
assets, partially offset by a decrease in the yield on those assets. Average
interest earning assets increased to $206.1 million for the three months ended
June 30, 2000 compared to $134.1 million for the three months ended June 30,
1999. The yield on interest earning assets decreased to 9.41% for the three
months ended June 30, 2000 compared to 9.58% for the three months ended June 30,
1999. During the fourth quarter of 1999, the Company changed its estimates as to
the costs of originating a loan, which resulted in a higher monthly amortization
cost being charged against interest income. This in turn reduced the yield on
the loans originated. In addition, increased competition by other financial
intermediaries has resulted in tighter margins than had previously been
experienced by the Company. The largest single component of interest earning
assets was loans receivable, which had an average balance of $181.6 million with
a yield of 9.88% for the three months ended June 30, 2000 compared to $116.4
million with a yield of 10.35% for the three months ended June 30, 1999. The
increase in the average balance of loans receivable was attributable to the
expansion of the Company as part of the Company's strategic plan, including the
retention of SBA 7a loans.

Interest expense for the three months ended June 30, 2000 increased to $2.2
million compared to $1.0 million for the three months ended June 30, 1999. This
increase was due to an increase in average deposits and other borrowings,
combined with a change in the composition of those liabilities, and by an
increase in the cost of those liabilities. Average interest-bearing liabilities


                                       13
<PAGE>


increased to $208.4 million for the three months ended June 30, 2000 compared to
$137.6 million for the three months ended June 30, 1999. Average time deposits
increased to $108.0 million with a cost of 5.91% for the three months ended June
30, 2000 compared to $46.5 million with a cost of 5.06% for the three months
ended June 30, 1999. Beginning on January 1, 2000, the Company changed its
policy regarding the sale of SBA 7a loans from one of selling the guaranteed and
unguaranteed portions to retaining the guaranteed and unguaranteed portions. The
resulting increase in total loans is being funded by both retail and wholesale
certificates of deposit, with the wholesale deposits having a higher interest
rate than the retail deposits. Although the wholesale deposits have a higher
interest rate, there is limited operating costs associated with acquiring and
managing these liabilities. In addition, interest rates in general have risen
considerably from the second quarter of 1999 to the second quarter of 2000.

Other average borrowings increased to $11.1 million with a cost of 11.17% for
the three months ended June 30, 2000, compared to $1.0 million with a cost of
9.14% for the three months ended June 30, 1999.The Company borrowed $3.2
million in June, 1999, of which $3.0 million was used to increase capital at
its Bank subsidiary. The Company's subsidiary, Community (CA) Capital Trust
I, issued $10 million of 11.0% Fixed Rate Capital Trust Pass-through
Securities ("TRUPS-Registered Trademark-"), with a liquidation value of
$1,000 per share. The Company used the proceeds to pay off the $3.2 million
in borrowed funds, and invested an additional $6.0 million in the Bank.

NET INTEREST INCOME BEFORE PROVISION FOR ESTIMATED LOAN LOSSES

Net interest income before provision for estimated loan losses for the six
months ended June 30, 2000 was $4.9 million, compared to $4.3 million for the
six months ended June 30, 1999. This increase was primarily due to the increase
in average interest earning assets and partially offset by a decrease in the net
interest margin. Average interest earning assets were $190.7 million for the six
months ended June 30, 2000 with a net interest margin of 5.11% compared to
$128.8 million with a net interest margin of 6.67% for the six months ended June
30, 1999. The decline in the net interest margin was primarily due to the rising
interest rate environment, combined with the increased use of certificates of
deposits as well as other borrowed funds in order to support its expanding loan
portfolio. In addition, the decline in yield on interest earning assets due to
the change of estimates regarding the cost of originating a loan and the
increased competition in the market place contributed to the decreased margin.
Management believes that a rising interest rate environment will positively
effect the yield on interest earning assets in the future, while the increased
cost of liabilities through the additional use of wholesale deposits and
borrowed funds will offset this improvement, resulting in a slightly reduced
margin for the subsequent quarters in 2000. However, management believes that
the increased volume of interest earning assets due to the retention of SBA 7a
loans will result in a significantly higher net interest income in the future.

Net interest income before provision for estimated loan losses for the three
months ended June 30, 2000 was $2.6 million, compared to $2.2 million for the
three months ended June 30, 1999. This increase was primarily due to the
increase in average interest earning assets and partially offset by a decrease
in the net interest margin. Average interest earning assets were $206.1 million
for the three months ended June 30, 2000 with a net interest margin of 5.11%
compared to $134.1 million with a net interest margin of 6.57% for the three
months ended June 30, 1999. The decline in the net interest margin was primarily
due to the rising interest rate environment, combined with the increased use of
certificates of deposits as well as other borrowed funds in order to support its
expanding loan portfolio. In addition, the decline in yield on interest earning
assets due to the change of estimates regarding the cost of originating a loan
and the increased competition in the market place contributed to the decreased
margin.

PROVISION FOR LOAN LOSSES

Net charge offs totaled $27,000 for the six months ended June 30, 2000 compared
to $21,000 during the six months ended June 30, 1999. Due to the growth in loans
and the historical loss experience associated with the various loan types, the
provision for loan losses totaled $337,000


                                       14
<PAGE>


for the six months ended June 30, 2000 compared to $315,000 for the six months
ended June 30, 1999. As a result of the increase in total loans outstanding,
management increased the allowance for loan losses to $1.6 million as of June
30, 2000 compared to $1.3 million as of June 30, 1999. As of June 30, 2000, the
allowance was 0.83% of total gross loans compared to 1.15% as of June 30, 1999.
When excluding the guaranteed portions of loans and loans held for sale, the
allowance was 1.02% and 1.23% respectively as a percentage of total gross loans
as of June 30, 2000 and June 30, 1999. The allowance for loan losses as a
percentage of nonaccrual loans was 92.74% as of June 30, 2000 compared to
120.07% as of June 30, 1999. When excluding the guaranteed portion of nonaccrual
loans, the allowance for loan losses as a percentage of nonaccrual loans was
292.81% as of June 30, 2000 compared to 155.13% as of June 30, 1999.

For the three months ended June 30, 2000, net charge offs totaled $68,000
compared to $21,000 for the three months ended June 30, 1999. Provisions for
loan losses totaled $177,000 for the three months ended June 30, 2000 compared
to $165,000 for the three months ended June 30, 1999.

Nonaccrual loans as of June 30, 2000 were $1.8 million, of which $1.2 million is
guaranteed by the SBA, compared to $1.8 million, with $1.4 million guaranteed by
the SBA as of December 31, 1999 and $1.1 million, with $242,000 guaranteed by
the SBA as of June 30, 1999.

In determining the adequacy of the allowance for loan losses, management
initially considers the allowances specifically allocated to individual impaired
loans, and next considers the level of general loss allowances deemed
appropriate for the balance of the portfolio based on factors including the
levels of classified assets, general portfolio trends relative to asset and
portfolio size, asset categories, potential credit concentrations, nonaccrual
loan levels, historical loss experience, risks associated with changes in
economic and business conditions, and other factors. In addition, various
regulatory agencies, as an integral part of their examination process,
periodically review the Company's allowance for loan losses. Such agencies may
require the Company to make additional provisions for loan losses based upon
judgments which differ from those of management.

OTHER OPERATING INCOME

Other operating income represents non-interest types of revenue and is comprised
primarily of other fee income, loan servicing fees and service charges on
deposit accounts. Prior to January 1, 2000 gain on sale income made up a
significant portion of other fee income. Other operating income was $1.1 million
for the six months ended June 30, 2000 compared to $2.8 million months ended
June 30, 1999. This represents a decrease of $1.7 million, or 61.5%, when
comparing the six month period ended June 30, 2000 to the six month period ended
June 30, 1999. The decrease was mainly due to a decrease in the gain on sale of
loans, which totaled $93,000 for the six month period ended June 30, 2000
compared to $1.7 million for the six month period ended June 30, 1999. The
decrease in gain on sale of loans was due to a change in the Company's policy to
retain SBA 7a loans versus selling such loans in the secondary market. The
Company sold $6.4 million in mortgage loans and $2.6 million in SBA 504 loans
during the six months ended June 30, 2000 compared to $18.5 million in mortgage
loans and $28.7 million in SBA 504 and 7a loans during the six month period
ended June 30, 1999.

Other operating income was $477,000 for the three months ended June 30, 2000
compared to $1.4 million for the three months ended June 30, 1999. This
represents a decrease of $937,000, or 66.3%, when comparing the three month
period ended June 30, 2000 to the three month period ended June 30, 1999. The
decrease was mainly due to a decrease in the gain on sale of loans, which
totaled $46,000 for the three month period ended June 30, 2000 compared to
$849,000 for the three month period ended June 30, 1999. The decrease in gain on
sale of loans was due to a change in the Company's policy to retain SBA 7a loans
versus selling such loans in the secondary market. The Company sold $3.2 million
in mortgage loans and $1.6 million in SBA 504 loans during the three months
ended June 30, 2000 compared to $16.9 million in mortgage loans and $14.0
million in SBA 504 and 7a loans during the three month period ended June 30,
1999.


                                       15
<PAGE>


Prior to January 1, 2000, a major portion of other operating income was
generated through the sale of loans consisting of SBA loans and mortgage loans.
During the six months ended June 30, 2000, the Company originated $28.1 million
in SBA government guaranteed loans compared to $22.3 million during the six
months ended June 30, 1999. The Company originated $7.2 million in mortgage
loans during the six months ended June 30, 2000 compared to $18.5 million for
the six months ended June 30, 1999. The Company sold approximately $2.6 million
in SBA 504 loans and $6.4 million in mortgage loans during the six month period
ended June 30, 2000. This decrease reflects the change in the Company's strategy
when compared to sales of $28.7 million in SBA loans and $18.5 million in
mortgage loans sold during the six month period ended June 30, 1999. The sales
for the six month period ended June 30, 2000 resulted in a gain of $93,000,
compared to $1.7 million for the six month period ended June 30, 1999. Prior to
1999, the Company had not sold any unguaranteed portions of SBA loans. In the
future, the Company may, from time to time, sell unguaranteed portions of SBA
loans in order to manage its asset growth, capital and liquidity.

During the three months ended June 30, 2000, the Company originated $17.8
million in SBA government guaranteed loans compared to $10.3 million during the
three months ended June 30, 1999. The Company originated $3.6 million in
mortgage loans during the three months ended June 30, 2000 compared to $6.9
million for the three months ended June 30, 1999. The Company sold approximately
$1.6 million in SBA 504 loans and $3.3 million in mortgage loans during the
three month period ended June 30, 2000. This decrease reflects the change in the
Company's strategy when compared to sales of $14.0 million in SBA loans and $6.9
million in mortgage loans sold during the three month period ended June 30,
1999. The sales for the three month period ended June 30, 2000 resulted in a
gain of $46,000, compared to $849,000 for the three month period ended June 30,
1999. Prior to 1999, the Company had not sold any unguaranteed portions of SBA
loans. In the future, the Company may, from time to time, sell unguaranteed
portions of SBA loans in order to manage its asset growth, capital and
liquidity.


Other fee income totaled $452,000 for the six months ended June 30, 2000
compared to $665,000 for the six months ended June 30, 1999. For the three
months ended June 30, 2000 and 1999 other fee income totaled $157,000 and
$362,000 respectively. The decrease in other fee income for the three month and
six month periods reflect the decrease in fees from brokering of loans which the
Company does not directly fund.

Servicing fees, net, totaled $323,000 for the six months ended June 30, 2000
compared to $270,000 for the six months ended June 30, 1999. For the quarter
ended June 30, 2000 servicing fees, net, totaled $163,000 compared to
$107,000 for the quarter ended June 30, 1999. The increase in servicing fees
reflects the general industry trend of declining prepayment speeds on SBA
loans, which is a result of the rising interest rate environment.

Customer service charges increased to $219,000 for the six months ended June 30,
2000 compared to $178,000 for the six months ended June 30, 1999. For the
quarter ended June 30, 2000 customer service charges increased to $111,000
compared to $96,000 for the quarter ended June 30, 1999. This increase was due
to the expansion of the branch operations as part of the Company's strategic
plan.

OTHER OPERATING EXPENSES

Other operating expenses are non-interest types of expenses and are incurred by
the Company in its normal course of business. Salaries and employee benefits,
occupancy, telephone, premises and equipment, marketing and promotions, data
processing, professional services, director, officer and employee expenses,
office, ESOP loan and other expenses are the major categories of other operating
expenses. Other operating expenses decreased to $5.2 million for the six months
ended June 30, 2000 compared to $5.5 million for the six months ended June 30,
1999. For the three months ended June 30, 2000 and 1999, other operating
expenses decreased to $2.6 million from $2.8 million.

                                       16
<PAGE>


The Company's efficiency ratio, which is the ratio of recurring operating
expenses to net interest income before provision for loan losses plus
non-interest income, increased to 87.45% for the six months ended June 30, 2000
compared to 77.61% for the six months ended June 30, 1999. The increase in
efficiency ratio was due to the decrease in other operating income, and was
partially offset by the increase in net interest income and decrease in
operating expenses. Management anticipates the efficiency ratio will decline
(improve) as the net interest income increases due to the retention of SBA 7a
loans and growth in other loans. The majority of the cost decrease can be
attributed to the change of estimates of the deferred cost associated with loan
production. The effect of change of estimates was to decrease salary and benefit
expense. Salary and benefit expenses decreased to $2.6 million for the six
months ended June 30, 2000 compared to $3.1 million for the six months ended
June 30, 1999. The decrease in salaries and benefit expenses was partially
offset by an increase in other normal operating expenses, which were $2.6
million for the six months ended June 30, 2000 compared to $2.4 million for the
six months ended June 30, 1999. The largest increase in other normal operating
expenses was professional services, including legal, accounting and regulatory
expenses, which increased to $352,000 for the six months ended June 30, 2000,
compared to $237,000 for the six months ended June 30, 1999. The increase in
professional expenses was due to additional costs of operating a holding
company, along with increased litigation expenses due to the appeal of a
lawsuit.


                                       17
<PAGE>



The following table compares each of the components of other operating expenses
for the six months ended June 30, 2000 and 1999, respectively:

<TABLE>
<CAPTION>

                                              FOR THE SIX MONTHS ENDED JUNE 30,  FOR THE THREE MONTHS ENDED JUNE 30,
                                              ---------------------------------  -----------------------------------
                                                2000        1999   CHANGE $       2000        1999     CHANGE $
<S>                                            <C>          <C>     <C>           <C>         <C>        <C>
 Other operating expenses:
    Salaries and employee benefits             2,628        3,145   (517)         1,259       1,574      (315)
    Occupancy                                    399          427    (28)           202         211        (9)
    Telephone                                    131          127      4             63          72        (9)
    Premises and equipment                       285          243     42            140         119        21
    Marketing and promotions                     152          155     (3)            83          80         3
    Data processing                              410          362     48            196         181        15
    Professional services                        352          237    115            160         130        30
    Director, officer and employee
      expenses                                   239          244     (5)           129         134        (5)
    Office expenses                              154          189    (35)            73          92       (19)
    ESOP loan expense                            102          102      -             51          51         -
    Other non-recurring expense                    -           20    (20)             -           -         -
    Other expenses                               340          268   (128)           228         153        75
                                               -----        -----   ----          -----       -----      ----
       TOTAL OTHER OPERATING EXPENSES          5,192        5,519   (327)         2,584       2,797      (213)
                                               -----        -----   ----          -----       -----      ----

</TABLE>

PROVISION FOR INCOME TAXES

The effective income tax rate was 40.9% for the six months ended June 30, 2000
compared to 41.2% for the six months ended June 30, 1999. Provisions for income
taxes totaled $167,000 and $516,000 for the six months ended June 30, 2000 and
1999, respectively.

For the three months ended June 30, 2000 and 1999, the effective income tax rate
was 40.8% and 41.1%, respectively. Provisions for income taxes totaled $136,000
and $267,000 for the three months ended June 30, 2000 and 1999, respectively.

FINANCIAL CONDITION

SUMMARY OF CHANGES IN CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000 COMPARED TO DECEMBER 31, 1999

Total assets of the Company increased to $233.4 million as of June 30, 2000
compared to $175.8 million as of December 31, 1999 and $155.6 million as of June
30, 1999. This increase was due to the growth in net loans to $195.7 million as
of June 30, 2000, compared to $144.2 million as of December 31, 1999, and were
$110.7 million as of June 30, 1999.

Deposits grew to $208.6 million as of June 30, 2000 compared to $158.1 million
as of December 31, 1999 and were $139.9 million as of June 30, 1999. Cash and
cash equivalents increased to $20.5 million as of June 30, 2000 compared to
$15.4 million as of December 31, 1999 and were $28.7 million as of June 30,
1999. The increase in cash and cash equivalents was due to the increase in
deposits combined with the proceeds received from the Trust Preferred offering.
See "Capital."

Shareholders' equity was approximately the same, totaling $11.3 million as of
June 30, 2000 and of December 31, 1999, and was $10.4 million as of June 30,
1999. Please refer to the capital section of this discussion for further
information.


                                       18
<PAGE>


INVESTMENTS

The Company's investment portfolio consists primarily of certificates of deposit
with other financial institutions, agency securities and overnight investments
in the Federal Funds market. As of June 30, 2000, certificates of deposit with
other financial institutions totaled $1.3 million, compared to $800,000 as of
December 31, 1999 and June 30, 1999. At each of the periods $500,000 was pledged
as collateral for the Employee Stock Ownership Plan ("ESOP") loan from another
California bank which is funding the Company's ESOP. US Government and other
securities totaled $ 6.7 million as of June 30, 2000 and December 31, 1999, and
were $6.4 million as of June 30, 1999. These securities are held as collateral
for public funds and treasury, tax and loan deposits. Average Federal Funds sold
for the six months ended June 30, 2000 was $12.1 million compared to $10.1
million for the six months ended June 30, 1999.

LOANS

Loan balances, net of the allowance for loan losses, increased to $195.7 million
as of June 30, 2000 compared to $144.2 million as of December 31, 1999 and
$110.7 million as of June 30, 1999. A healthy loan demand resulted in a 71.4%
annualized growth rate in total gross loans for the six months ended June 30,
2000, led by a 51.9% annualized increase in real estate commercial and
multi-family loans. This rapid increase is due to the retention of the SBA 7a
loans, as part of the Company's change in strategy, which became effective
January 1, 2000. The servicing portfolio, which consists primarily of SBA loans
sold to other investors, being serviced by the Company was $87.8 million as of
June 30, 2000 compared to $92.2 million as of December 31, 1999 and $92.0
million as of June 30, 1999.










LOAN ORIGINATION AND SALE. The following table sets forth the Company's loan
originations by category and purchases, sales and principal repayments of loans
for the periods indicated:


                                       19
<PAGE>


<TABLE>
<CAPTION>

                                         At or for the six months     At or for the three months
                                                ended June 30,               ended June 30,
                                         ----------------------------------------------------------
                                              2000          1999           2000          1999
                                         ----------------------------------------------------------
                                            (dollars in thousands)
<S>                                          <C>           <C>            <C>           <C>
Beginning balance                               144,194       108,709        169,228       115,803
Loans originated:
      Commercial loans                            9,686        10,274          6,429         6,064
      Real estate:
        Construction loans                       39,280        24,761         26,176        16,227
        One-to four-family                       22,041        25,882          8,972        11,298
        Commercial                               41,132        23,433         23,625         8,491
      Consumer                                    4,294         2,326          2,136         1,069
                                         ----------------------------------------------------------
          Total loans originated                116,433        86,676         67,338        43,149
Loans sold
      Real estate:
        One-to four-family                        6,372        18,515          3,263         6,902
        Commercial                                2,601        28,730          1,562        13,986
                                         ----------------------------------------------------------
          Total loans sold                        8,973        47,245          4,825        20,888
Less:
      Principal repayments                       56,195        36,803         36,014        27,129
      Other net charges (1)                        (263)          631              5           229
                                         ----------------------------------------------------------
          Total Loans                           195,722       110,706        195,722       110,706
                                         ==========================================================

</TABLE>

-------------
(1)  Other net changes include changes in allowance for loan losses,
     deferred loan fees, loans in process and unamortized premiums and
     discounts.

NONPERFORMING ASSETS. Nonperforming assets consist of nonperforming loans and
other real estate owned ("OREO"). Nonperforming loans are those loans which have
(i) been placed on nonaccrual status, (ii) been subject to troubled debt
restructurings, or (iii) become contractually past due 90 days or more with
respect to principal or interest and have not been restructured or placed on
nonaccrual status.


                                       20
<PAGE>


         The following table sets forth the Company's non-performing assets at
the dates indicated:

<TABLE>
<CAPTION>

                                                                     JUNE 30,     DECEMBER 31,    JUNE 30,
                                                                       2000          1999           1999
                                                                   -------------------------------------------
                                                                       (dollars in thousands)
<S>                                                                <C>            <C>            <C>
Total loans ....................................................   $   197,359    $   145,521    $   111,992
Total loans held for investment ................................       187,749        142,667        104,339
Government guaranteed portion of total loans ...................        24,495         10,653          5,097
Non-accrual loans ..............................................   $     1,765    $     1,809    $     1,071
Troubled debt restructurings ...................................             -              -              -
Loans contractually past due 90 days or more with respect
     to either principal or interest and still accruing interest             -              -              -
                                                                   -----------    -----------    -----------
     Total non-performing loans ................................         1,765          1,809          1,071
Other real estate owned ........................................             -              -              -
                                                                   -----------    -----------    -----------
Total non-performing assets ....................................   $     1,765    $     1,809    $     1,071
                                                                   ===========    ===========    ===========
Non-performing loans net of government guarantees ..............   $       559    $       414    $       905
Allowance for loan losses to total loans .......................          0.83%          0.91%          1.15%

Allowance for loan losses to total loans held for
  investment, net of gov't guarantees ..........................          1.02%          1.01%          1.30%

Allowance for loan losses to nonaccrual loans ..................         92.75%         73.36%        120.07%
Allowance for loan losses to non-performing loans ..............         92.75%         73.36%        120.07%
Allowance for loan losses to non-performing  loans, net of
  gov't Guarantees ..............................................       292.84%        320.53%        142.10%
Allowance for loan losses to non-performing assets .............         92.75%        120.07%         73.36%
Total non-performing assets to total assets ....................          0.76%          1.03%          0.69%
Total non-performing loans net of gov't Guarantees, to
  total assets .................................................          0.24%          0.24%          0.58%
Total non-performing loans to total loans ......................          0.89%          1.24%          0.96%
Total non-performing loans, net of gov't Guarantees, to
  total Loans ..................................................          0.28%          0.28%          0.81%

</TABLE>

NONACCRUAL LOANS. Nonaccrual loans are impaired loans where the original
contractual amount may not be fully collectible. The Company measures its
impaired loans by using the fair value of the collateral if the loan is
collateral-dependent and the present value of the expected future cash flows
discounted at the loan's effective interest rate if the loan is not
collateral-dependent. As of June 30, 2000, December 31, 1999 and June 30, 1999,
all impaired or nonaccrual loans were collateral-dependent. The Company places
loans on nonaccrual status that are delinquent 90 days or more or when a
reasonable doubt exists as to the collectibility of interest and principal. The
Company had seven loans on nonaccrual status as of June 30, 2000, totaling $1.8
million. Of this total $1.2 million is guaranteed by the SBA. As of December 31,
1999, the Company had eight loans on nonaccrual status, totaling $1.8 million,
with $1.4 million guaranteed by the SBA. As of June 30, 1999 the Company had six
loans on nonaccrual status, totaling $1.1 million with $166,000 guaranteed by
the SBA.

ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses is established through
a provision for loan losses based on management's evaluation of the risks
inherent in its loan portfolio and the general economy. The allowance is
increased by provisions charged against earnings and reduced by net loan
chargeoffs. Loans are charged off when they are deemed to be uncollectible, or
partially charged off when portions of a loan are deemed to be uncollectible.
Recoveries are generally recorded only when cash payments are received.

In determining the adequacy of the allowance for loan losses, management
initially considers the allowances specifically allocated to individual impaired
loans, and next considers the level of general loss allowances deemed
appropriate for the balance of the portfolio based on factors including the
levels of classified assets, general portfolio trends relative to asset and
portfolio size, asset categories, potential credit concentrations, nonaccrual
loan levels, historical loss experience, risks associated with changes in
economic and business conditions, and other factors. In addition, various
regulatory agencies, as an integral part of their examination process,


                                       21
<PAGE>

periodically review the Company's allowance for loan losses. Such agencies may
require the Company to make additional provisions for loan losses based upon
judgments which differ from those of management.

The following table sets forth information regarding the Company's allowance for
loan losses at the dates and for the periods indicated:

<TABLE>
<CAPTION>

                                                                            AT OR FOR THE SIX MONTHS
                                                                                   ENDED JUNE 30,
                                                                     ----------------------------------------
                                                                             2000                1999
                                                                     ----------------------------------------
                                                                             (dollars in thousands)
<S>                                                                         <C>                    <C>
Balance at beginning of period...................                           $1,327                 $992
Chargeoffs:
     Real estate loans:
         One- to four- family....................                                -                    -
         Commercial..............................                               58                   19
     Consumer....................................                               19                    4
                                                                            ------                 ----
         Total chargeoffs........................                               77                   23
Recoveries:
     Real estate loans:
         One- to four-family.....................                                -                    -
         Commercial..............................                               49                    1
     Consumer....................................                                1                    1
                                                                            ------                 ----
                Total recoveries.................                               50                    2
                                                                            ------                 ----
Net chargeoffs...................................                               27                   21
Provision for loan losses........................                              337                  315
                                                                            ------                 ----
Balance at end of period.........................                           $1,637               $1,286
                                                                            ======               ======
Net charge offs to average loans.................                             0.03%                0.04%

</TABLE>

As of June 30, 2000 the balance in the allowance for loan losses was $1.6
million compared to $1.3 million as of June 30, 1999. As a percentage of total
loans the allowance was 0.83% as of June 30, 2000 compared to 1.15% as of June
30, 1999. As a percentage of total loans held for investment, net of the
government guarantees, the allowance was 1.02% as of June 30, 2000, compared to
1.30% as of June 30, 1999. Management believes the allowance at June 30, 2000 is
adequate based upon its ongoing analysis of the loan portfolio, historical loss
trends and other factors.

OTHER REAL ESTATE OWNED. There was no other real estate owned during the six
months ended June 30, 2000 and 1999.

CAPITAL

The Company's capital was approximately the same, totaling $11.3 million as of
June 30, 1999 and December 31, 1999. In 1997 the Company adopted an Employee
Stock Ownership Plan ("ESOP") which was funded with a $1.2 million line of
credit. As of June 30, 2000 the indebtedness of the ESOP in the amount of $1.0
million is shown as a deduction from shareholders' equity. In future years
capital will be increased as the unearned ESOP contributions are made by the
Company. During the three month period ended June 30, 2000, the Company repaid
principal totaling $51,000, and advanced $325,000 against the line. The Company
will be advancing an additional $130,000 during the remainder of 2000, and is
planning to contribute approximately $204,000 annually to this program.

As part of the Company's strategic plan, during the third quarter of 1998 the
Board elected to eliminate cash dividends in favor of retaining earnings to
support future growth. A 5% stock dividend was declared and paid to shareholders
of record as of November 30, 1999.

The Company's strategic plan addresses the future capital needs of the Company.
During March, 2000, the Company's wholly owned subsidiary, Community (CA)
Capital Trust I (the "Trust"), a


                                       22
<PAGE>


Delaware business trust, issued $10 million of 11.0% Fixed Rate Capital Trust
Pass-through Securities ("TRUPS-Registered Trademark-"), with a liquidation
value of $1,000 per share. The securities have semi-annual interest payments,
with principal due at maturity in 2030. The Trust used the proceeds from the
sale of the trust preferred securities to purchase junior subordinated
debentures of the Company. The Company received $9.7 million from the Trust upon
issuance of the junior subordinated debentures, of which $3.2 million was used
to pay off borrowings of the Company, and $6.0 million was contributed to the
Bank to increase its capital. The $10 million is shown as other borrowings on
the books of the Company, while the net $6.5 million is in cash and cash
equivalents.

At June 30, 2000 and December 31, 1999, all capital ratios were above all
current Federal capital guidelines for a "well capitalized" bank. As of June 30,
2000, the Bank's regulatory total capital to risk-weighted assets ratio was
12.09% compared to 10.87% as of December 31, 1999. The Bank's regulatory tier 1
capital to risk-weighted assets ratio was 11.22% as of June 30, 2000 compared to
9.94% as of December 31, 1999. The Bank's regulatory tier 1 capital to average
assets ratio was 9.56% as of June 30, 2000 compared to 8.5% as of December 31,
1999.

As of June 30, 2000, the Company's regulatory total capital to risk-weighted
assets ratio was 9.06% compared to 8.71% as of December 31, 1999. The
Company's regulatory tier 1 capital to risk-weighted assets ratio was 8.18%
as of June 30, 2000, compared to 7.78% as of December 31, 1999. The Company's
regulatory tier 1 capital to average assets ratio was 6.82% as of June 30,
2000, compared to 6.67% as of December 31, 1999.

LIQUIDITY

The Bank closely monitors its liquidity so that the cash requirements for loans
and deposit withdrawals are met in an economical manner. Management monitors
liquidity in relation to trends of loans and deposits for short term and long
term requirements. Liquidity sources are cash, deposits with other banks,
overnight Federal Funds investments, unpledged interest bearing deposits at
other banks, investment securities and the ability to sell loans. As of June 30,
2000 liquid assets as a percentage of deposits were 11.7% compared to 12.1% as
of December 31, 1999.

PART II OTHER INFORMATION

ITEM 1   LEGAL PROCEEDINGS

None to report.

ITEM 2   CHANGES IN SECURITIES

None to report

ITEM 3   DEFAULTS UPON SENIOR SECURITIES

None to report

ITEM 4   SUBMISSION OF MATTERS TO SECURITY HOLDERS

On May 31, 2000 the Company had its annual Shareholders Meeting. At the meeting
the shareholders elected the following directors:


                                       23
<PAGE>


<TABLE>
<CAPTION>

------------------------------ ---------------- -------------- -----------------
          DIRECTORS               VOTES FOR        VOTES       SHARES NOT VOTED
                                                  WITHHELD
------------------------------ ---------------- -------------- -----------------
<S>                            <C>              <C>            <C>
E. Steve LeFevre                     2,143,630         37,535           355,816
------------------------------ ---------------- -------------- -----------------
Corey Seale                          2,143,520         37,645           355,816
------------------------------ ---------------- -------------- -----------------
Granger Haugh                        2,165,415         15,750           355,816
------------------------------ ---------------- -------------- -----------------
Robert H.S. Kirkpatrick              2,165,282         15,883           355,816
------------------------------ ---------------- -------------- -----------------
Philip O. Oberhansley                2,165,415         15,750           355,816
------------------------------ ---------------- -------------- -----------------
Thomas E. Swanson                    2,165,415         15,750           355,816
------------------------------ ---------------- -------------- -----------------
Gary M. Youmans                      2,165,415         15,750           355,816
------------------------------ ---------------- -------------- -----------------

</TABLE>

ITEM 5   OTHER INFORMATION

None to report

ITEM 6  EXHIBITS AND REPORTS FROM 8-K

(a)      Financial Data Schedule

(b)      On April 4, 2000, the Company filed an 8-K Report, pursuant to Item 5
         thereof, discussing the trust preferred securities referred to in
         "Management's Discussion and Analysis of Financial Condition and
         Results of Operations - Capital."


                                       24
<PAGE>


                                   SIGNATURES

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



                                     COMMUNITY BANCORP INC.
                                           (Registrant)




Date  August 14, 2000                /s/ THOMAS E. SWANSON
     ----------------                -------------------------------------------
                                     Thomas E. Swanson
                                     President and Chief Executive Officer



Date  August 14, 2000                /s/ L. BRUCE MILLS, JR.
     ----------------                -------------------------------------------
                                     L. Bruce Mills, Jr.
                                     Sr. Vice President, Chief Financial Officer


                                       25
<PAGE>


                                  EXHIBIT INDEX


EXHIBIT NO.       EXHIBIT

27       Financial Data Schedule



                                       26