SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
 FORM 10-Q x
  Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
  Act of 1934for the Quarterly
  Period Ended March 31, 2001oro
  Transition Report pursuant to Section 13 or 15(d) of the Securities
  Exchange Act of 1934for the Transition
  Period from ____________ to ____________ Commission File Number: 0-27384 CAPITAL CORP OF THE WEST(Exact
  name of registrant as specified in its charter)California
  77-0405791(State or other jurisdiction of
  incorporation or organization)
  IRS Employer ID Number550 West Main,
  Merced, CA
  95340(Address of principal executive offices)
  (zip code)(209) 725-2200Registrants telephone number, including
  area code:Not applicableFormer name, former address and former
  fiscal year, if changed since last report:
 Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yesx   No o The number of shares outstanding of the
registrants common stock, no par value, as of March 31, 2001 was
4,827,213.  No shares of preferred
stock, no par value, were outstanding at March 31, 2001.   Capital Corp of the WestTable of Contents

PART I. 
- FINANCIAL INFORMATION

Item
  1.  Financial StatementsConsolidated Balance SheetsConsolidated
  Statements of Income and Comprehensive IncomeConsolidated
  Statement of Changes in Stockholders EquityConsolidated
  Statements of Cash FlowsNotes to
  Consolidated Financial StatementsItem
  2.  Managements Discussion and
  Analysis of Financial Condition and Results of OperationsItem
  3.  Quantitative and Qualitative
  Disclosures about Market RiskPART II.  - OTHER INFORMATION

Item 1.  Legal ProceedingsItem
  2.  Changes in SecuritiesItem
  3.  Defaults Upon Senior SecuritiesItem
  4.  Submission of matters to a vote of
  Security HoldersItem 5.  Other InformationItem
  6.  Exhibits and Reports on Form 8-KSIGNATURESCapital Corp of the WestConsolidated Balance Sheets
(Unaudited)

March
  31,
  2001
  December
  31,
  2000(Dollars
  in thousands)AssetsCash and
  noninterest-bearing deposits in other banks
  $30,362
  $46,353Federal funds sold
  29,280
  1,415Time deposits at other
  financial institutions
  350
  100Investment securities
  available for sale, at fair value
  182,802
  155,830Investment securities
  held to maturity at cost, fair value of $37,313,000, and $35,412,000 at March
  31, 2001 and December 31, 2000, respectively
  36,630
  35,222Loans, net of
  allowance for loan losses of 
  $8,389,000 and $8,207,000 at March 31, 2001 and December 31, 2000
  408,397
  404,457Interest receivable
  5,059
  5,215Premises and
  equipment, net
  13,009
  13,021Intangible assets
  4,079
  4,277Other assets
  19,269
  17,131Total assets
  $729,237
  $683,021Liabilities and Shareholders EquityDepositsNoninterest-bearing demand
  $100,390
  $107,581Negotiable orders of withdrawal
  82,806
  84,521Savings
  187,973
  184,073Time, under $100,000
  147,475
  131,669Time, $100,000 and over
  105,815
  93,654Total deposits
  624,459
  601,498Short term borrowings
  33,000
  19,272Long term borrowings
  3,142
  3,155Accrued interest, taxes
  and other liabilities
  5,603
  5,645Total liabilities
  666,204
  629,570Capital Securities
  6,000
  -Preferred Stock, no
  par value; 10,000,000 shares authorized; None outstanding
  -
  -Common stock, no par
  value; 20,000,000 shares authorized; 4,827,213 and 4,779,644 issued &
  outstanding at March 31, 2001 and December 31, 2000
  39,361
  35,918Retained earnings
  16,373
  17,449Accumulated other
  comprehensive income
  1,299
  84Total shareholders equity
  57,033
  53,451Total liabilities and shareholders
  equity
  $729,237
  $683,021See accompanying notesCapital Corp of the WestConsolidated Statements of
Income and Comprehensive Income
(Unaudited)

For
  the three months ended
  March 31,(Dollars in thousands,
  except per share data)
  2001
  2000Interest income:Interest and fees on loans
  $10,780
  $8,479Interest on deposits with other financial
  institutions
  2
  12Interest on investments held to maturity:Taxable
  576
  491Non-taxable
  56
  56Interest on investments available for
  sale:Taxable
  2,256
  1,836Non-taxable
  272
  285Interest on federal funds sold
  344
  74Total interest income
  14,286
  11,233Interest expense:Interest on negotiable orders of
  withdrawal
  91
  121Interest on savings deposits
  1,807
  1,514Interest on time deposits, under $100,000
  1,491
  1,323Interest on time deposits, $100,000 and
  over
  2,092
  990Interest on other borrowings
  390
  356Total interest expense
  5,871
  4,304Net interest income
  8,415
  6,929Provision for loan
  losses
  750
  763Net interest income
  after provision for loan losses
  7,665
  6,166Noninterest income:Service charges on deposit accounts
  902
  813Other
  451
  334Total noninterest
  income
  1,353
  1,147Noninterest expenses:Salaries and related benefits
  3,313
  2,506Premises and occupancy
  465
  406Equipment
  624
  590Professional fees
  117
  161Marketing
  211
  228Goodwill and intangible amortization
  198
  198Supplies
  202
  128Dividend Expense on Capital Securities
  63
  -Other
  1,146
  926Total noninterest
  expenses
  6,339
  5,143Income before income
  taxes
  2,679
  2,170Provision for income
  taxes
  767
  656Net income
  $1,912
  $1,514Comprehensive Income:Unrealized gain (loss)
  on securities arising during the period
  1,215
  (77)Comprehensive Income
  $3,127
  $1,437Basic earnings per
  share
  $0.40
  $0.32Diluted earnings per
  share
  $0.39
  $0.31See accompanying notesCapital Corp of the WestConsolidated Statement of
Changes in Shareholders Equity
(Unaudited)

Common
  Stock
  Retained
  earnings
  Accumulated
  other
  comprehensive
  income
  Total(Amounts in thousands)
  Number
  of shares
  AmountsBalance, December 31,
  2000
  4,552
  $35,918
  $17,449
  $84
  $53,4515% stock dividend,
  including cash payment for fractional shares
  228
  2,981
  (2,988)
  -
  (7)Exercise of stock
  options
  23
  139
  -
  -
  139Issuance of shares
  pursuant to 401K and ESOP plans
  24
  323
  -
  -
  323Net Change in fair
  market value of  investment securities,
  net of tax effect of  $(814)
  -
  -
  -
  1,215
  1,215Net income
  -
  -
  1,912
  -
  1,912Balance, March 31,
  2001
  4,827
  $39,361
  $16,373
  $1,299
  $57,033See
accompanying notes

Capital Corp of the WestConsolidated Statements of Cash
Flows
(Unaudited)

(Dollars in thousands)
  3
  months ended
  March 31,
  2001
  3
  months ended
  December 31,
  2000Operating activities:Net income
  $1,912
  $1,514Adjustments to reconcile net income to
  net cash provided by operating activities:Provision for loan losses
  750
  763Depreciation, amortization and
  accretion, net
  503
  534Gain on sale of real estate held for
  sale
  -
  -Net increase in interest receivable &
  other assets
  (2,796)
  (411)Net (decrease) increase in deferred loan
  fees
  (8)
  36Net (decrease) increase in accrued
  interest payable & other liabilities
  (42)
  192Net cash provided by
  operating activities
  319
  2,628Investing activities:Investment securities purchases
  (32,987)
  (24,090)Proceeds from maturities of investment
  securities
  6,605
  2,074Proceeds from sales of AFS investment
  securities
  -
  721Net increase in time deposits in other
  financial institutions
  (250)
  -Proceeds from sales of commercial and
  real estate loans
  967
  528Net increase in loans
  (5,636)
  (17,341)Purchases of premises and equipment
  (275)
  (394)Net cash used in
  investing activities
  (31,576)
  (38,502)Financing activities:Net (decrease) increase in demand, NOW
  and savings deposits
  (5,006)
  5,149Net increase in certificates of deposit
  27,967
  11,826Net proceeds from other borrowings
  13,715
  4,581Issuance of Capital Securities
  6,000
  -Issuance of shares pursuant to 401K and
  ESOP plans
  323
  -Exercise of stock options
  139
  150Cash in lieu fractional shares from stock
  dividend
  (7)
  -Net cash provided by
  financing activities
  43,131
  21,706Net increase
  (decrease) in cash and cash equivalents
  11,874
  (14,168)Cash and cash
  equivalents at beginning of period
  47,768
  50,222Cash and cash
  equivalents at end of period
  $59,642
  $36,054Cash paid during the quarter:Interest paid
  $5,809
  $4,252Income tax payments
  1,425
  1,100Supplemental disclosure of noncash investing and financing
  activities:Investment securities net unrealized
  gains (losses); net of tax
  $1,215
  $(77)Loans transferred to other real estate
  owned
  -
  143See accompanying notesCapital Corp of the WestNotes to Consolidated
Financial Statements
March 31, 2001 and December 31, 2000
(Unaudited)

GENERAL - COMPANY

Capital
Corp of the West (the Company or Capital Corp) is a bank holding company
incorporated under the laws of the State of California on April 26, 1995.  On November 1, 1995, the Company became
registered as a bank holding company, and is a holder of all of the capital
stock of County Bank (the Bank). 
During 1998, the Company formed Capital West Group, a subsidiary that
engages in the financial institution advisory business but is currently inactive.  On February 22, 2001 the Company formed
County Statutory Trust I, a trust subsidiary of the Company, for the purpose of
issuing Trust Preferred Securities.  The
Companys primary asset is the Bank and the Bank is the Companys primary
source of income.  The Companys
securities consist of 20,000,000 shares of Common Stock, no par value,
10,000,000 shares of Authorized Preferred Stock, and 6,000 of the Trust
Preferred 10.20% Capital Securities which have a liquidation amount of $1,000
per capital security.  As of March 31,
2001 there were 4,827,213 common shares outstanding, held of record by
approximately 2,500 shareholders.  There
were no preferred shares outstanding at March 31, 2001.  The Bank has two wholly owned subsidiaries,
Merced Area Investment & Development, Inc. (MAID) and County Asset
Advisors (CAA).  CAA and MAID are
currently inactive.  All references
herein to the Company include the Bank, the Banks subsidiaries and Capital
West Group, unless context otherwise requires.

GENERAL - BANK

The
Bank was organized on August 1, 1977, as County Bank of Merced, a California
state banking corporation.  The Bank
commenced operations on December 22, 1977. 
In November 1992, the Bank changed its legal name to County Bank.  The Banks securities consist of one class
of Common Stock, no par value and is wholly owned by the Company.  The Banks deposits are insured under the
Federal Deposit Insurance Act by the Federal Deposit Insurance Corporation
(FDIC) up to applicable limits stated therein.  Like most state-chartered banks of its size in California, it is
not a member of the Federal Reserve System.

INDUSTRY AND MARKET AREA

The
Bank engages in general commercial banking business primarily in Fresno,
Madera,  Mariposa, Merced, San
Francisco, Stanislaus, Tulare, and Toulumne counties.  The Bank has seventeen branch offices: two in Merced with one
branch centrally located in Merced and the other in downtown Merced within the
Banks administrative office building, two in Modesto, two in Turlock, two in
Fresno and single offices in Atwater, Dos Palos, Hilmar, Los Banos, Livingston,
Madera, Mariposa, San Francisco, Sonora and Visalia.

OTHER FINANCIAL NOTES

All
adjustments which in the opinion of Management are necessary for a fair
presentation of the Companys financial position at March 31, 2001 and December
31, 2000 and the results of operations for the three month periods ended March
31, 2001 and 2000, and the statements of cash flows for the three months ended
March 31, 2001 and 2000 have been included. 
The interim results for the three months ended March 31, 2001 and 2000
are not necessarily indicative of results for the full year.  These financial statements should be read in
conjunction with the financial statements and the notes included in the
Companys Annual Report for the year ended December 31, 2000.

The
accompanying unaudited financial statements have been prepared on a basis
consistent with the generally accepted accounting principles and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.

Basic
earnings per share (EPS) is computed by dividing net income available to
shareholders by the weighted average number of common shares outstanding during
the period.  Diluted earnings per share
is computed by dividing net income available to common shareholders by the weighted
average number of common shares outstanding during the period plus potential
common shares outstanding.  Diluted
earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the Company.

The
following table provides a reconciliation of the numerator and denominator of
the basic and diluted earnings per share computation of the three month periods
ended March 31, 2001 and 2000:

For
  The Three Months
  Ended March 31,(Dollars in thousands,
  except per share data)
  2001
  2000Basic EPS computation:Net income
  $1,912
  $1,514Average common shares outstanding
  4,805
  4,732Basic EPS
  $0.40
  $0.32Diluted EPS
  Computations:Net income
  $1,912
  $1,514Average common shares outstanding
  4,805
  4,732Effect of stock options
  135
  1314,940
  4,863Diluted EPS
  $0.39
  $0.31On
February 22, 2001, the Company issued $6,000,000 in Capital Securities through
its 100% ownership position in the County Statutory Trust I.  The Capital Securities pay quarterly
cumulative cash distributions at an annual rate of 10.2% of the liquidation
value of $1,000 per share.  The Capital
Securities represent undivided beneficial interests in the Trust.  The Company owns all of the issued and
outstanding common securities of the Trust. 
Proceeds from the offering and from the issuance of common securities
were invested in the Trust in the Companys 10.2% Junior Subordinated
Deferrable Interest Debentures due February 22, 2031 with an aggregate
principal amount of $6,000,000.  The
primary asset of the Trust is the Junior Debentures.  The obligations of the Trust with respect to the Capital
Securities are fully and unconditionally guaranteed by us to the extent
provided in the Guarantee Agreement with respect to the Capital
Securities.  The proceeds are to be used
for general corporate purposes.  The
all-in costs of the Capital Securities was 10.39%.  The Capital Securities have the added benefit of qualifying as
Tier 1 capital for regulatory purposes.

Item 2.    
Management's Discussion And Analysis Of Financial Condition And Results Of Operations

The
following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements that are subject to
risks and uncertainties and include information about possible or assumed
future results of operations.  Many
possible events or factors could affect the future financial results and
performance of the company.  This could
cause results or performance to differ materially from those expressed in our
forward-looking statements.  Words such
as experts, anticipates, believes, estimates, variations of such words
and other similar expressions are intended to identify such forward-looking
statements.  These statements are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions which are difficult to predict. 
Therefore, actual outcomes and results may differ materially from what
is expressed or forecasted in, or implied by, such forward-looking statements.

Readers
of the Companys Form 10-Q should not rely solely on forward looking statements
and should consider all uncertainties and risks discussed throughout this
report, as well as those discussed in the Companys 2000 Annual Report on Form
10-K filed March 30, 2001.  These
statements are representative only on the date hereof, and the Company
undertakes no obligation to update any forward-looking statements made.  Some possible events or factors that could
occur that may cause differences from expected results include the following:
the Companys loan growth is dependent on economic conditions, as well as
various discretionary factors, such as decisions to sell, or purchase certain
loans or loan portfolios; participations of loans and the management of
borrower, industry, product and geographic concentrations and the mix of the
loan portfolio.  The rate of charge-offs
and provision expense can be affected by local, regional and international
economic and market conditions, concentrations of borrowers, industries,
products and geographical conditions, the mix of the loan portfolio and managements
judgements regarding the collectibility of loans.  Liquidity requirements may change as a result of fluctuations in
assets and liabilities and off-balance sheet exposures, which will impact the
capital and debt financing needs of the Company and the mix of funding
sources.  Decisions to purchase, hold,
or sell securities are also dependent on liquidity requirements and market
volatility, as well as on and off-balance sheet positions.  Factors that may impact interest rate risk
include local, regional and international economic conditions, levels, mix,
maturities, yields or rates of assets and liabilities and the wholesale and
retail funding sources of the Company.

The
Company is also exposed to the potential of losses arising from adverse changes
in market rates and prices which can adversely impact the value of financial
products, including securities, loans, and deposits.  In addition, the banking industry in general is subject to
various monetary and fiscal policies and regulations, which include those
determined by the Federal Reserve Board, the Federal Deposit Insurance
Corporation and state regulators, whose policies and regulations could affect
the Companys results.

Other
factors that may cause actual results to differ from the forward-looking
statements include the following: competition with other local and regional
banks, savings and loan associations, credit unions and other nonbank financial
institutions, such as investment banking firms, investment advisory firms,
brokerage firms, mutual funds and insurance companies, as well as other
entities which offer financial services; interest rate, market and monetary
fluctuations; inflation; market volatility; general economic conditions;
introduction and acceptance of new banking-related products, services and
enhancements; fee pricing strategies, mergers and acquisitions and their
integration into the Company and managements ability to manage these and other
risks.

The
following discussion and analysis is designed to provide a better understanding
of the significant changes and trends related to the Company and its
subsidiaries' financial condition, operating results, asset and liability
management, liquidity and capital resources and should be read in conjunction
with the Consolidated Financial Statements of the Company and the Notes
thereto.

Results
Of Operations

Three Months Ended March 31, 2001 Compared With Three
Months Ended March 31, 2000

Overview.For the three months ended March 31, 2001 the
Company reported record net income of $1,912,000.  This compares to $1,514,000 for the same period in 2000 and
represents an increase of $398,000 or 26%. 
Basic and fully diluted earnings per share were $.40 and $.39 for the
three months ending March 31, 2001. This compares to basic and fully diluted
earnings per share of $.32 and $.31 for the three months ending March 31, 2000
and represents an increase of $0.08 per share for both basic and fully diluted
earnings per share. The annualized return on average assets was 1.11% and 1.08%
for the first three months of 2001 and 2000. 
The Company's annualized return on average equity was 13.93% and 13.73%
for the three months ended March 31, 2001 and 2000.

Net
Interest Income.The Company's primary source of income is net
interest income and is determined by the difference between interest income and
fees derived from earning assets and interest paid on interest bearing
liabilities.  Net interest income for
the three months ended March 31, 2001 totaled $8,415,000 and represented an
increase of $1,486,000 or 21% when compared to the $6,929,000 achieved during
the three months ended March 31, 2000.

Total
interest and fees on earning assets were $14,286,000 for the three months ended
March 31, 2001, an increase of $3,053,000 or 27% from the $11,233,000 for the
same period in 2000.  The level of
interest income is affected by changes in volume of and rates earned on
interest-earning assets. 
Interest-earning assets consist primarily of loans, investment
securities and federal funds sold.  The
increase in interest income for the three months ended March 31, 2001 was
primarily the result of an increase in the volume of interest-earning
assets.  Average interest-earning assets
for the three months ended March 31, 2001 were $631,842,000 compared with
$505,773,000 for the three months ended March 31, 2000, an increase of
$126,069,000 or 25%.

Interest
expense is a function of the volume of and the rates paid on interest-bearing
liabilities.  Interest-bearing
liabilities consist primarily of certain deposits and borrowed funds.  Total interest expense was $5,871,000 for
the three months ended March 31, 2001, compared with $4,304,000 for the three
months ended March 31, 2000, an increase of $1,567,000 or 36%. This increase
was primarily the result of an increase in the volume of interest-bearing
liabilities. Average interest-bearing liabilities were $529,844,000 for the
three months ended March 31, 2001 compared with $436,329,000 for the same three
months in 2000, an increase of $93,515,000 or 21%.  Average interest rates paid on interest-bearing liabilities were
4.43% for the three months ending March 31, 2001 compared with 3.95% for the
same three months of 2000, an increase in interest rates paid of 48 basis
points or 12%.

The
increase in interest-earning assets and interest-bearing liabilities is
primarily the result of increased market penetration within our target markets
which has been accomplished by increasing the utilization of existing
facilities and adding a new branch in San Francisco, California.

The
Company's taxable equivalent net interest margin, the ratio of net interest
income to average interest-earning assets, was 5.39% for the three months ended
March 31, 2001 compared with 5.56% for the same period in 2000.  Net interest margin provides a measurement
of the Company's ability to employ funds profitably during the period being
measured.  The Company's decrease in net
interest margin was primarily attributable to a decrease in prevailing market
interest rates.  Loans as a percentage
of average interest-earning assets were 65% for the three months ended March
31, 2001 compared to 66% for the three months ended March 31, 2000.

Average
Balances And Rates Earned And Paid.The following table presents condensed average
balance sheet information for the Company, together with interest rates earned
and paid on the various sources and uses of its funds for each of the periods
indicated.  Nonaccruing loans are
included in the calculation of the average balances of loans, but the
nonaccrued interest on such loans is excluded.

AVERAGE
BALANCE SHEET & ANALYSIS OF NET INTEREST EARNINGS

Three months ended
  March 31, 2001
  Three months ended
  March 31, 2000Average
  Balance
  Taxable
  Equivalent
  Interest
  Taxable
  Equivalent
  Yield/rate
  Average
  Balance
  Taxable
  Equivalent
  Interest
  Taxable
  Equivalent
  Yield/rate(Dollars in thousands)AssetsFederal
  funds sold
  $24,786
  $344
  5.55%
  $5,268
  $74
  5.62%Time
  deposits at other financial institutions
  108
  2
  6.30
  850
  12
  5.65Taxable
  investment securities:
  167,391
  2,832
  6.77
  134,249
  2,327
  6.93Nontaxable
  investment securities (1)
  29,003
  422
  5.83
  29,806
  441
  5.92Loans,
  gross: (2)
  410,554
  10,780
  10.50
  335,600
  8,479
  10.11Total
  interest-earning assets:
  631,842
  14,380
  9.10
  505,773
  11,333
  8.96Allowance
  for loan losses
  (8,402)
  
  
  (6,724)Cash
  and due from banks
  22,678
  
  
  22,678Premises
  and equipment, net
  13,055
  
  
  13,169Interest
  receivable and other assets
  30,694
  
  
  26,949Total
  assets
  $689,867
  
  
  $561,845Liabilities And Shareholders' EquityNegotiable
  order of withdrawal
  $80,445
  $91
  0.45
  $71,850
  $121
  0.67Savings
  deposits
  186,824
  1,807
  3.87
  170,994
  1,514
  3.54Time
  deposits
  236,951
  3,583
  6.05
  171,804
  2,313
  5.39Other
  borrowings
  25,624
  390
  6.09
  21,681
  356
  6.57Total
  interest-bearing liabilities
  529,844
  5,871
  4.43
  436,329
  4,304
  3.95Noninterest-bearing
  deposits
  96,684
  
  
  76,905Accrued
  interest, taxes and other liabilities
  5,920
  
  
  4,515Total liabilities
  632,448
  
  
  517,749Trust
  Preferred Capital Securities
  2,533
  
  
  -Total
  shareholders' equity
  54,886
  
  
  44,096Total
  liabilities and shareholders' equity
  $689,867
  
  
  $561,845Net
  interest income and margin (3)
  
  $8,509
  5.39%
  
  $7,029
  5.56%(1)         Tax-equivalent adjustments included in
the nontaxable investment securities portfolio are $94,000 and $100,000 for
March 2001 and 2000 respectively.
(2)         Amounts of interest earned
includes loan fees of $267,000 and $136,000 for March 31, 2001 and 2000
respectively.
(3)         Net interest margin is computed
by dividing net interest income by total average interest-earning assets.

Net
Interest Income Changes Due To Volume And Rate.The
following table sets forth, for the periods indicated, a summary of the changes
in average asset and liability balances and interest earned and interest paid
resulting from changes in average asset and liability balances (volume) and
changes in average interest rates and the total net change in interest income
and expenses.  The changes in interest
due to both rate and volume have been allocated to volume and rate changes in
proportion to the relationship of the absolute dollar amount of the change in
each.

Net Interest Income
Variance Analysis:

Three months ended
  March 31, 2001 compared to March 31, 2000(Dollar
  in thousands)
  Volume
  Rate
  TotalIncrease
  (decrease) in interest income:Federal
  funds sold
  $282
  $(12)
  $270Time
  deposits at other financial institutions
  (11)
  1
  (10)Taxable
  investment securities
  685
  (180)
  505Tax-exempt
  investment securities
  (6)
  (13)
  (19)Loans
  1,957
  344
  2,301Total:
  $2,907
  $140
  $3,047Increase
  (decrease) in interest expense:Interest
  bearing demand
  $13
  $(43)
  $(30)Savings
  deposits
  147
  146
  293Time
  deposits
  959
  311
  1,270Other
  borrowings
  61
  (27)
  34Total:
  $1,180
  $387
  $1,567Increase
  in net interest income
  $1,727
  $(247)
  $1,480Provision For Loan Losses.  The provision for loan losses for the three
months ended March 31, 2001 was $750,000 compared with $763,000 for the three
months ended March 31, 2000, a decrease of $13,000 or 2%. See "Allowance
for Loan Losses" contained herein. 
As of March 31, 2001 the allowance for loan losses was $8,389,000 or
2.01% of total loans which compares to the allowance for loan losses of
$8,207,000 or 1.99% as of December 31, 2000. 
At March 31, 2001, nonperforming assets totaled $2,772,000 or .38% of
total assets, nonperforming loans totaled $2,525,000 or .61% of total loans and
the allowance for loan losses totaled 332% of nonperforming loans.  At December 31, 2000, nonperforming assets
totaled $2,588,000 or .38% of total assets, nonperforming loans totaled
$2,340,000 or .57% of total loans and the allowance for loan losses totaled
351% of nonperforming loans.  No
assurance can be given that nonperforming loans will not increase or that the
allowance for loan losses will be adequate to cover losses inherent in the loan
portfolio.

Noninterest
Income.Noninterest income increased by $206,000 or 18% to
$1,353,000 for the three months ended March 31, 2001 compared with $1,147,000
in the same period in 2000.  Service
charges on deposit accounts increased by $89,000 or 11% to $902,000 for the
three months ended March 31, 2001 compared with $813,000 for the same period in
2000.  Other income increased by
$117,000 or 35% for the three month period ended March 31, 2001 when compared
to the same period in 2000.  The primary
source of this increased income is an increase in commissions earned on the
sale of non-insured insurance annuities, mutual fund, and securities of $73,000
and an increase in gain on loan sales of $13,000 over the level achieved in
2000.



Noninterest
Expense.  Noninterest
expenses increased by $1,196,000 or 23% to $6,339,000 for the three months
ended March 31, 2001 compared with $5,143,000 for the same period in 2000.  The primary components of noninterest
expenses were salaries and employee benefits, furniture and equipment expenses,
occupancy expenses, professional fees, marketing supplies, and other operating
expenses.

For
the three months ended March 31, 2001, salaries and related benefits increased
by $807,000 or 32% to $3,313,000 from the $2,506,000 recorded for the same
period in 2000. The salary expense increase was primarily the result of
increased staffing levels needed for branch expansion into the San Francisco
market and normal salary progression. 
Premises and occupancy expenses increased by $59,000 or 15% to $465,000
for the three months ending March 31, 2001 from $406,000 during the same period
in 2000.  The primary reason for the
increase in occupancy costs in 2001 is related to retrofit charges for branch
facilities in Atwater, Fresno, and Merced. 
Equipment expenses increased by $34,000 or 6% to $624,000 during the
three months ended March 31, 2001 from the $590,000 experienced during the same
period in 2000.  When comparing the
results of the three months ending March 31, 2001 to three months ending March
31, 2000, professional fees decreased by $44,000 or 27%, marketing expenses
decreased by $17,000 or 7%, goodwill and intangible amortization expense did
not change from 2000 levels, supplies expense increased by $74,000 or 58%,
dividend expense on Capital Securities issued during 2001 and recorded in 2001
and other expenses  increased $220,000
or 24% from 2000 levels. Decreased professional fees were the result of
decreased use of consultants to identify and develop profitability enhancement
strategies, and increased supplies expense was the result of increased customer
mailings and increased use of printed promotional materials over 2000 levels.

Provision
For Income Taxes.The Company recorded a increase of $111,000 or 17%
in the income tax provision to $767,000 for the three months ended March 31,
2001 compared to the $656,000 recorded for the same period in 2000.  During the first quarter of 2001, the
Company experienced an effective tax rate of 29% compared to 30% recorded for
the same period in 2000.  The decrease
in the effective income tax rate during the first quarter of 2001 is primarily
related to increased utilization of federal low income housing credits that
were obtained from investments in limited partnerships in low-income affordable
housing projects, and increased investments in Agency Preferred Stock.  The Company had investments in affordable
housing projects of $6,800,000 as of March 31, 2001 and $5,800,000 as of March
31, 2000, resulting in tax credits of $150,000 and 140,000 respectively.

Interest
Rate Risk

Interest
rate risk is an integral part of managing a banking institution's primary
source of income, net interest income. 
The Company manages the balance between rate-sensitive assets and
rate-sensitive liabilities being repriced in any given period with the
objective of stabilizing net interest income during periods of fluctuating
interest rates.  The Company considers
its rate-sensitive assets to be those which either contain a provision to
adjust the interest rate periodically or mature within one year.  These assets include certain loans and
investment securities and federal funds sold. 
Rate-sensitive liabilities are those which allow for periodic interest
rate changes within one year and include maturing time certificates, certain
savings deposits and interest-bearing demand deposits.  The difference between the aggregate amount
of assets and liabilities that reprice at various time frames is called the
"gap." Generally, if repricing assets exceed repricing liabilities in
a time period the Company would be deemed to be asset-sensitive.  If repricing liabilities exceed repricing
assets in a time period the Company would be deemed to be
liability-sensitive.  Generally, the
Company seeks to maintain a balanced position whereby there is no significant
asset or liability sensitivity within a one-year period to ensure net interest
margin stability in times of volatile interest rates.  This is accomplished through maintaining a significant level of
loans, investment securities and deposits available for repricing within one
year.

The
following tables set forth the interest rate sensitivity of the Companys
interest-earning assets and interest-bearing liabilities as of March 31, 2001,
using the interest rate sensitivity gap ratio. 
For purposes of the following table, an asset or liability is considered
rate-sensitive within a specified period when it can be repriced or matures
within its contractual terms.

At March 31, 2001Within
  3 Months
  After 3
  But
  Within
  12 Months
  After 1
  Year But
  Within
  5 Years
  After
  5 Years
  Noninterest-
  Bearing
  Total(Dollars In Thousands)AssetsTime
  deposits at other banks
  $350
  $-
  $-
  $-
  $-
  $350Federal
  funds sold
  29,280
  -
  -
  -
  -
  29,280Investment
  securities
  6,332
  5,182
  38,056
  153,221
  16,641
  219,432Loans
  196,318
  61,006
  112,078
  47,384
  -
  416,786Total
  earning assets
  232,280
  66,188
  150,134
  200,605
  16,641
  665,848Noninterest-earning
  assets and allowances for loan losses
  -
  -
  -
  -
  63,389
  63,389Total
  assets
  $232,280
  $66,188
  $150,134
  $200,605
  $80,030
  $729,237Liabilities And Shareholders' EquityDemand
  deposits
  $-
  $-
  $-
  $-
  $100,390
  $100,390Savings,
  money market and NOW deposits
  270,779
  -
  -
  -
  -
  270,779Time
  deposits
  74,844
  139,380
  39,066
  -
  -
  253,290Other
  interest-bearing liabilities
  7,000
  -
  16,000
  13,142
  -
  36,142Other
  liabilities, capital securities and shareholders' equity
  -
  -
  -
  6,000
  62,636
  68,636Total
  liabilities, capital securities and shareholders' equity
  352,623
  139,380
  55,066
  19,142
  163,026
  $729,237Incremental
  gap
  (120,343)
  (73,192)
  95,068
  181,463
  (82,996)Cumulative
  gap
  $(120,343)
  $(193,535)
  $(98,467)
  $82,996
  $-Cumulative
  gap as a % of earning assets
  (18.07)%
  (29.07)%
  (14.79)%
  12.46%The
Company was liability-sensitive with a negative cumulative one-year gap of
$(193,535,000) or (29.07)% of interest-earning assets at March 31, 2001.  In general, based upon the Company's mix of
deposits, loans and investments, increases in interest rates would be expected
to result in a decrease in the Company's net interest margin.

The
interest rate gaps reported in the tables arise when assets are funded with
liabilities having different repricing intervals.  Since these gaps are actively managed and change daily as
adjustments are made in interest rate views and market outlook, positions at
the end of any period may not be reflective of the Company's interest rate
sensitivity in subsequent periods. 
Active management dictates that longer-term economic views are balanced
against prospects for short-term interest rate changes in all repricing
intervals.  For purposes of the analysis
above, repricing of fixed-rate instruments is based upon the contractual
maturity of the applicable instruments. 
Actual payment patterns may differ from contractual payment
patterns.  The change in net interest
income may not always follow the general expectations of an asset-sensitive or
liability-sensitive balance sheet during periods of changing interest rates,
because interest rates earned or paid may change by differing increments and at
different time intervals for each type of interest-sensitive asset and
liability.  As a result of these
factors, at any given time, the Company may be more sensitive or less sensitive
to changes in interest rates than indicated in the above tables.  Greater sensitivity would have a more
adverse effect on net interest margin if market interest rates were to
increase, and a more favorable effect if rates were to decrease.

An
additional measure of interest rate sensitivity that the Company monitors
through a detailed model is its expected change in net interest income.  This model's estimate of interest rate
sensitivity takes into account the differing time intervals and differing rate
change increments of each type of interest-sensitive asset and liability.  It then measures the projected impact of
changes in market interest rates on the Company's net interest income.  Based upon the March 31, 2001 mix of
interest-sensitive assets and liabilities, given an immediate and sustained
increase in the market interest rates of 2%, this model estimates the Company's
net interest income over the next year would decrease by $185,000 or 2% of net interest
income.  No assurance can be given that
the actual net interest income would not decrease by more than $185,000 or 2%
in response to a 2% increase in market interest rates or that actual net
interest income would not decrease substantially if market interest rates
increased by more than 2%.

Financial Condition

Total assets at March 31, 2001 were
$729,237,000, an increase of $46,216,000 or 7% compared with total assets of
$683,021,000 at December 31, 2000.  Net
loans were $408,397,000 at March 31, 2001, an increase of $3,940,000 or 1%
compared with net loans of $404,457,000 on December 31, 2000.  Deposits were $624,459,000 at March 31,
2001, an increase of $22,961,000 or 4% compared with deposits of $601,498,000
at December 31, 2000.  The increase in
total assets of the Company from December 31, 2000 to March 31, 2001 was
primarily the result of an increase in leverage that was maintained in the
Company's investment portfolio and an increase in investments derived from
increased certificates of deposit.

On
February 22, 2001, the Company issued $6,000,000 in Capital Securities through
its 100% ownership position in the County Statutory Trust I.  The Capital Securities pay quarterly
cumulative cash distributions at an annual rate of 10.2% of the liquidation
value of $1,000 per share.  The Capital
Securities represent undivided beneficial interests in the Trust.  The Company owns all of the issued and
outstanding common securities of the Trust. 
Proceeds from the offering and from the issuance of common securities
were invested in the Trust in the Companys 10.2% Junior Subordinated
Deferrable Interest Debentures due February 22, 2031 with an aggregate
principal amount of $6,000,000.  The
primary asset of the Trust is the Junior Debentures.  The obligations of the Trust with respect to the Capital
Securities are fully and unconditionally guaranteed by us to the extent
provided in the Guarantee Agreement with respect to the Capital
Securities.  The proceeds are to be used
for general corporate purposes.  The
all-in costs of the Capital Securities was 10.39%.  The Capital Securities have the added benefit of qualifying as
Tier 1 capital for regulatory purposes.

Total
shareholders' equity was $57,033,000 at March 31, 2001, an increase of
$3,582,000 or 7% from $53,451,000 at December 31, 2000. The growth in
shareholders equity from December 31, 2000 to March 31, 2001 was achieved
through the retention of accumulated earnings.



Investment Portfolio.The following table sets forth the carrying
amount (fair value) of available for sale investment securities as of March 31,
2001 and December 31, 2000.

March 31
  2001
  December 31
  2000(Dollars
  in thousands)Available for sale securities:U.S.
  Treasury and U.S. Government agencies
  $33,528
  $35,939State
  and political subdivisions
  24,772
  24,170Mortgage-backed
  securities
  62,879
  54,409Collateralized
  mortgage obligations
  29,327
  29,015Corporate
  debt securities
  15,692
  9,833Equity
  securities
  16,604
  2,464Carrying
  amount and fair value
  $182,802
  $155,830The
following table sets forth the carrying amount (amortized cost) and fair value
of held to maturity securities at March 31, 2001 and December 31, 2000.

March 31
  2001
  December 31
  2000(Dollars
  in thousands)Held To Maturity Securities:Carrying
  amount (amortized cost):U.S.
  Government agency
  $4,599
  $4,595State
  and political subdivisions
  4,372
  4,375Mortgage-backed
  securities
  24,868
  22,736Collateralized
  mortgage obligations
  2,791
  3,516$36,630
  $35,222Fair
  Value:U.S.
  Government agency
  $4,771
  $4,595State
  and political subdivisions
  4,492
  4,453Mortgage-backed
  securities
  25,204
  22,804Collateralized
  mortgage obligations
  2,846
  3,560$37,313
  $35,412The
following table sets forth the maturities of the Company's debt security
investments at March 31, 2001 and the weighted average yields of such
securities calculated on a book value basis using the weighted average yields
within each scheduled maturity grouping. Maturities of mortgage-backed
securities and collateralized mortgage obligations are stipulated in their
respective contracts.  However, actual
maturities may differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call prepayment
penalties.  Yields on municipal
securities have been recalculated on a tax-equivalent basis.

At
  March 31, 2001Within
  One Year
  One
  To 5 Years
  Five
  To Ten Years
  Over
  Ten Years
  TotalAmount
  Yield
  Amount
  Yield
  Amount
  Yield
  Amount
  Yield
  Amount(Dollars in thousands)Available for Sale Securities:Treasury and U.S. Government agency
  $-
  -%
  $21,655
  6.84%
  $11,873
  7.15%
  $-
  -
  $33,528State and political
  -
  -
  -
  -
  8,902
  4.32
  15,870
  4.43
  24,772Mortgage-backed securities
  2
  7.26
  29
  9.22
  555
  7.38
  62,293
  6.81
  62,879Collateralized mortgage obligations
  -
  -
  -
  -
  -
  -
  29,327
  6.78
  29,327Corporate debt securities
  999
  6.09
  8,320
  5.93
  -
  -
  6,373
  7.18
  15,692Carrying amount and fair value
  1,001
  7.57
  30,004
  6.49
  21,330
  6.09
  113,863
  6.20
  166,198Held to maturity securities:Treasury and U.S. Government agency
  -
  -
  4,599
  6.70
  -
  -
  -
  -
  4,599State and political
  -
  -
  -
  -
  -
  -
  4,372
  5.14
  4,372Mortgage-backed securities
  -
  -
  -
  -
  -
  -
  24,868
  7.22
  24,868Collateralized mortgage obligations
  -
  -
  -
  -
  -
  -
  2,791
  7.67
  2,791Carrying amount (amortized cost)
  -
  -
  4,599
  6.70
  -
  -
  32,031
  6.39
  36,630Total securities
  $1,001
  7.57%
  $34,603
  6.74%
  $21,330
  6.64%
  $145,894
  6.22%
  $202,828In
the preceeding table, mortgage-backed securities and collateralized mortgage
obligations are shown repricing at the time of maturity rather than in
accordance with their principal amortization schedules.  The Company does not own securities of a
single issuer whose aggregate book value is in excess of 10% of its total
equity.

Loan Portfolio.The
following table shows the composition of the Company's loan portfolio at the dates indicated.

(Dollars
  in thousands)
  At March 31,
  2001
  At December  31,
  2000Loan
  Categories:
  Dollar Amount
  Percent
  of loans
  Dollar Amount
  Percent
  of loansCommercial
  $78,272
  19%
  $71,920
  17%Agricultural
  79,703
  19
  84,032
  20Real
  estate construction
  35,612
  9
  30,133
  7Real
  estate mortgage
  142,983
  34
  141,575
  35Consumer
  80,216
  19
  85,004
  21Total
  416,786
  100%
  412,664
  100%Less
  allowance for loan losses
  (8,389)
  
  (8,207)Net
  loans
  $408,397
  
  $404,457The table that follows shows the maturity
distribution of the portfolio of commercial, agricultural, real estate
construction, real estate mortgage, and consumer loans at March 31, 2001:

At March 31, 2001After 1 but(Dollars
  in thousands)
  Within 1 year
  Within 5 years
  After 5 years
  TotalCommercial
  and agriculturalLoans with floating interest rates
  $70,039
  $28,325
  $14,433
  $112,797Loans with fixed interest rates
  7,258
  22,913
  15,007
  45,178Subtotal
  77,297
  51,238
  29,440
  157,975Real
  estate constructionLoans with floating interest rates
  23,921
  3,479
  5,330
  32,730Loans with fixed interest rates
  2,137
  210
  535
  2,882Subtotal
  26,058
  3,689
  5,865
  35,612Real
  estate mortgageLoans with floating interest rates
  7,638
  19,983
  72,741
  100,362Loans with fixed interest rates
  2,104
  3,975
  36,542
  42,621Subtotal
  9,742
  23,958
  109,283
  142,983Consumer
  InstallmentLoans with floating interest rates
  13,368
  7,613
  -
  20,981Loans with fixed interest rates
  3,198
  53,059
  2,978
  59,235Subtotal
  16,566
  60,672
  2,978
  80,216Total
  $129,663
  $139,557
  $147,566
  $416,786Off-Balance Sheet Commitments.  The following table shows the distribution
of the Company's undisbursed loan commitments at the dates indicated.

(Dollars
  in thousands)
  March 31,
  2001
  December 31,
  2000Letters
  of credit
  $2,505
  $1,320Commitments
  to extend credit
  156,802
  144,480Total
  $159,307
  $145,800Other Interest-Earning Assets.  The following table relates to other
interest-earning assets not disclosed previously for the dates indicated.  This item consists of a salary continuation
plan for the Company's executive management and deferred retirement benefits
for participating board members.  The
plan is informally linked with universal life insurance policies for the salary
continuation plan.  Income from these
policies is reflected in noninterest income.

(Dollars
  in thousands)
  At March 31,
  2001
  At December 31,
  2000Cash
  surrender value of life insurance
  $8,641
  $6,075

Nonperforming Assets.Nonperforming assets
include nonaccrual loans, loans 90 days or more past due, restructured loans
and other real estate owned.

Nonperforming
loans are those which the borrower fails to perform in accordance with the
original terms of the obligation and include loans on nonaccrual status, loans
past due 90 days or more and restructured loans.  The Company generally places loans on nonaccrual status and
accrued but unpaid interest is reversed against the current year's income when
interest or principal payments become 90 days or more past due unless the
outstanding principal and interest is adequately secured and, in the opinion of
management, is deemed in the process of collection.  Interest income on nonaccrual loans is recorded on a cash
basis.  Payments may be treated as
interest income or return of principal depending upon management's opinion of
the ultimate risk of loss on the individual loan.  Cash payments are treated as interest income where management
believes the remaining principal balance is fully collectible.  Additional loans not 90 days past due may
also be placed on nonaccrual status if management reasonably believes the
borrower will not be able to comply with the contractual loan repayment terms
and collection of principal or interest is in question.

A
"restructured loan" is a loan on which interest accrues at a below
market rate or upon which certain principal has been forgiven so as to aid the
borrower in the final repayment of the loan, with any interest previously
accrued, but not yet collected, being reversed against current income.  Interest is reported on a cash basis until
the borrower's ability to service the restructured loan in accordance with its
terms is established.  The Company had
no restructured loans as of the dates indicated in the above table.

The
following table summarizes nonperforming assets of the Company at March 31,
2001 and December 31, 2000:

March 31,
  2001
  December 31,
  2000(Dollars
  in thousands)Nonaccrual
  loans
  $2,423
  $2,243Accruing
  loans past due 90 days or more
  102
  97Total
  nonperforming loans
  2,525
  2,340Other
  real estate owned
  247
  248Total
  nonperforming assets
  $2,772
  $2,588Nonperforming
  loans to total loans
  .61%
  .57%Nonperforming
  assets to total assets
  .38%
  .38%Contractual
accrued interest income on loans on nonaccrual status as of March 31, 2001 and
2000, that would have been recognized if the loans had been current in
accordance with their original terms was approximately $276,000 and $258,000,
respectively.

At
March 31, 2001, nonperforming assets represented .38% of total assets, no
change in total assets compared to the .38% at December 31, 2000.  Nonperforming loans represented .61% of
total loans at March 31, 2001, an increase of 4 basis points compared to the
 .57% at December 31, 2000.  Nonperforming
loans that were secured by first deeds of trust on real property were $0 at
March 31, 2001 and December 31, 2000.  
Other forms of collateral such as inventory and equipment secured the
remaining nonperforming loans as of each date. 
No assurance can be given that the collateral securing nonperforming
loans will be sufficient to prevent losses on such loans.

The
increase in nonperforming loans and nonperforming assets as of March 31, 2001
compared with their levels as of December 31, 2000, was due to a growth in
nonperforming loans in the agricultural segment of the loan portfolio.

At
March 31, 2001, the Company had $247,000 invested in two properties acquired
through foreclosure.  Each property is
carried at the lower of its estimated market value, as evidenced by an
independent appraisal, or the recorded investment in the related loan, less
estimated selling expenses.  At
foreclosure, if the fair value of the real estate is less than the Company's
recorded investment in the related loan, a charge is made to the allowance for
loan losses.  The Company expects to
sell most of these properties within a twelve month period.  No assurance can be given that the Company
will sell such properties during 2001 or at any time or the amount for which
such property might be sold.

Management
defines impaired loans, regardless of past due status on loans, as those on
which principal and interest are not expected to be collected under the
original contractual loan repayment terms. 
An impaired loan is charged off at the time management believes the
collection process has been exhausted.  At March 31, 2001 and December 31, 2000, impaired loans were
measured based on the present value of future cash flows discounted at the
loan's effective rate, the loan's observable market price or the fair value of
collateral if the loan is collateral-dependent.  Impaired loans at March 31, 2001 were $2,423,000 (all of which
were also nonaccrual loans), on account of which the Company had made
provisions to the allowance for loan losses of $606,000.

Except
for loans that are disclosed above, there were no assets as of March 31, 2001,
where known information about possible credit problems of borrower causes
management to have serious doubts as to the ability of the borrower to comply
with the present loan repayment terms and which may become nonperforming assets.  Given the magnitude of the Company's loan
portfolio, however, it is always possible that current credit problems may
exist that may not have been discovered by management.

Allowance
for Loan Losses

The following table summarizes the
loan loss experience of the Company for the three months ended March 31, 2001
and 2000, and for the year ended December 31, 2000.

March 31
  December 312001
  2000
  2000(Dollars in thousands)Allowance for Loan Losses:Balance
  at beginning of period
  $8,207
  $6,542
  $6,542Provision
  for loan losses
  750
  763
  3,286Charge-offs:Commercial andagricultural
  155
  207
  423Real estate construction
  -
  -
  -Consumer
  511
  400
  1,971Total charge-offs
  666
  607
  2,394RecoveriesCommercial and agricultural
  5
  5
  410Real estate-mortgage
  -
  -
  -Consumer
  93
  89
  363Total recoveries
  98
  94
  773Net
  charge-offs
  568
  513
  1,621Balance
  at end of period
  $8,389
  $6,792
  $8,207Loans
  outstanding at period-end
  $416,786
  $347,730
  $412,664Average
  loans outstanding
  $410,554
  $335,600
  $369,367Annualized
  net charge-offs to average loans
  0.55%
  0.6%1
  0.44%Allowance
  for loan lossesTo total loans
  2.01%
  1.95%
  1.99%To nonperforming assets
  302.63%
  251.18%
  317.12%The
Company maintains an allowance for loan losses at a level considered by
management to be adequate to cover the inherent risks of loss associated with
its loan portfolio under prevailing and anticipated economic conditions. In
determining the adequacy of the allowance for loan losses, management takes
into consideration growth trends in the portfolio, examination of financial
institution supervisory authorities, prior loan loss experience for the
Company, concentrations of credit risk, delinquency trends, general economic
conditions, the interest rate environment and internal and external credit
reviews. In addition, the risks management considers vary depending on the
nature of the loan. The normal risks considered by management with respect to
agricultural loans include the fluctuating value of the collateral, changes in
weather conditions and the availability of adequate water resources in the
Company's local market area. The normal risks considered by management with
respect to real estate construction loans include fluctuation in real estate
values, the demand for improved commercial and industrial properties and
housing, the availability of permanent financing in the Company's market area
and borrowers' ability to obtain permanent financing. The normal risks
considered by management with respect to real estate mortgage loans include
fluctuations in the value of real estate. Additionally, the Company relies on
data obtained through independent appraisals for significant properties to
determine loss exposure on nonperforming loans.

The
balance in the allowance is affected by the amounts provided from operations,
amounts charged off and recoveries of loans previously charged off. The Company
recorded provisions for loan losses in the first three months of 2001 of
$750,000 compared with $763,000 in the same period of 2000. The decrease in
loan loss provisions in 2001 was recorded in relation to support needed to
adequately provide for the general loan growth of the Company that has occurred
during the quarter.

The
Company's charge-offs, net of recoveries, were $568,000 for the three months
ended March 31, 2001 compared with $513,000 for the same three months in 2000.
The increase in net charge-offs for the first quarter of 2001 was primarily due
to increased charge-offs that occurred within the consumer installment segment
of the loan portfolio. The increased charge-offs in this segment of the
portfolio are primarily attributable to the strong loan growth that has
occurred in this segment over the last several quarters.

As
of March 31, 2001, the allowance for loan losses was $8,389,000 or 2.01% of
total loans outstanding, compared with $8,207,000 or 1.99% of total loans
outstanding as of December 31, 2000 and $6,792,000 or 1.95% of total loans
outstanding as of March 31, 2000. During the period March 31, 2000 through
March 31, 2001, the allowance for loan loss increased $1,597,000 or 24%.

The
Company uses a method developed by management for determining the appropriate
level of its allowance for loan losses. This method applies relevant risk
factors to the entire loan portfolio, including nonperforming loans. The
methodology is based, in part, on the Company's loan grading and classification
system. The Company grades its loans through internal reviews and periodically
subjects loans to external reviews which then are assessed by the Company's
audit committee and management. Credit reviews are performed on a monthly basis
and the quality grading process occurs on a quarterly basis. Risk factors
applied to the performing loan portfolio are based on the Company's past loss
history considering the current portfolio's characteristics, current economic
conditions and other relevant factors. General reserves are applied to various
categories of loans at percentages ranging up to 1.8% based on the Company's
assessment of credit risks for each category. Risk factors are applied to the
carrying value of each classified loan: (i) loans internally graded
"Watch" or "Special Mention" carry a risk factor from 1.0%
to 2.0%; (ii) "Substandard" loans carry a risk factor from 15%
to 40% depending on collateral securing the loan, if any; (iii)
"Doubtful" loans carry a 50% risk factor; and (iv) "Loss"
loans are charged off 100%. In addition, a portion of the allowance is
specially allocated to identified problem credits. The analysis also includes
reference to factors such as the delinquency status of the loan portfolio,
inherent risk by type of loans, industry statistical data, recommendations made
by the Company's regulatory authorities and outside loan reviewers, and current
economic environment. Important components of the overall credit rating process
are the asset quality rating process and the internal loan review process.

The
allowance is based on estimates and ultimate future losses may vary from
current estimates. It is always possible that future economic or other factors
may adversely affect the Company's borrowers, and thereby cause loan losses to
exceed the current allowance. In addition, there can be no assurance that future
economic or other factors will not adversely affect the Company's borrowers, or
that the Company's asset quality may not deteriorate through rapid growth,
failure to enforce underwriting standards, failure to maintain appropriate
underwriting standards, failure to maintain an adequate number of qualified
loan personnel, failure to identify and monitor potential problem loans or for
other reasons, and thereby cause loan losses to exceed the current allowance.

The
allocation of the allowance to loan categories is an estimate by management of
the relative risk characteristics of loans in those categories. No assurance
can be given that losses in one or more loan categories will not exceed the
portion of the allowance allocated to that category or even exceed the entire
allowance.

External
Factors Affecting Asset Quality.As a result of the Company's loan portfolio mix,
the future quality of its assets could be affected by adverse economic trends
in its region or in the agricultural community. These trends are beyond the
control of the Company.

California
is an earthquake-prone region. Accordingly, a major earthquake could result in
material loss to the Company. At times the Company's service area has
experienced other natural disasters such as floods and droughts. The Company's
properties and substantially all of the real and personal property securing
loans in the Company's portfolio are located in California. The Company faces
the risk that many of its borrowers face uninsured property damage, interruption
of their businesses or loss of their jobs from earthquakes, floods or droughts.
As a result these borrowers may be unable to repay their loans in accordance
with their terms and the collateral for such loans may decline significantly in
value. The Company's service area is a largely agricultural region and
therefore is highly dependent on a reliable supply of water for irrigation
purposes. The area obtains nearly all of its water from the run-off of melting
snow in the mountains of the Sierra Nevada to the east. Although such sources
have usually been available in the past, water supply can be adversely affected
by light snowfall over one or more winters or by any diversion of water from
its present natural courses. Any such natural disaster could impair the ability
of many of the Company's borrowers to meet their obligations to the Company.

Parts
of California have experienced significant floods in the late 1990s. No
assurance can be given that future flooding will not have an adverse impact on
the Company and its borrowers and depositors.

Liquidity.In order to
maintain adequate liquidity, the Company must have sufficient resources
available at all times to meet its cash flow requirements. The need for
liquidity in a banking institution arises principally to provide for deposit
withdrawals, the credit needs of its customers and to take advantage of
investment opportunities as they arise. The Company may achieve desired
liquidity from both assets and liabilities. The Company considers cash and
deposits held in other banks, federal funds sold, other short term investments,
maturing loans and investments, payments of principal and interest on loans and
investments and potential loan sales as sources of asset liquidity. Deposit
growth and access to credit lines established with correspondent banks and
market sources of funds are considered by the Company as sources of liability
liquidity.  The Holding Company's
primary source of liquidity is from dividends received from the Bank.  Dividends from the Bank are subject to
certain regulatory limitations.

The
Company reviews its liquidity position on a regular basis based upon its
current position and expected trends of loans and deposits. These assets
include cash and deposits in other banks, available-for-sale securities and
federal funds sold. The Company's liquid assets totaled $242,794,000 and
$203,698,000 on March 31, 2001 and December 31, 2000, respectively, and
constituted 33% and 30% of total assets on those dates. Liquidity is also
affected by the collateral requirements of its public deposits and certain
borrowings. Total pledged securities were $119,325,000 at March 31, 2001
compared with $124,396,000 at December 31, 2000.

Although
the Company's primary sources of liquidity include liquid assets and a stable
deposit base, the Company maintains lines of credit with the Federal Reserve
Bank of San Francisco, Federal Home Loan Bank of San Francisco and Pacific
Coast Bankers' Bank aggregating $57,822,000 of which $26,000,000 was
outstanding as of March 31, 2001 and $14,600,000 was outstanding as of December
31, 2000. Funds received causing an increase in outstanding short term
borrowings during the first quarter of 2001 were used to purchase securities
within the investment portfolio. Management believes that the Company maintains
adequate amounts of liquid assets to meet its liquidity needs. The Company's
liquidity might be insufficient if deposit withdrawals were to exceed
anticipated levels. Deposit withdrawals can increase if a company experiences
financial difficulties or receives adverse publicity for other reasons, or if
its pricing, products or services are not competitive with those offered by
other institutions.

Capital
Resources.Capital serves as a source of funds and helps protect depositors against
potential losses. The primary source of capital for the Company has been
internally generated capital through retained earnings. The Company's
shareholders' equity increased by $3,582,000 or 7% from December 31, 2000 to
March 31, 2001.

The
Company is subject to various regulatory capital requirements administered by
the federal banking agencies. Failure to meet minimum capital requirements can
initiate mandatory and possibly additional discretionary actions by the
regulators that, if undertaken, could have a material adverse effect on the
Companys financial statements. Management believes, as of March 31, 2001, that
the Company and the Bank met all capital requirements to which they are
subject. The Companys leverage capital ratio at March 31, 2001 was 7.32% as
compared with 7.56% as of December 31, 2000. The Companys total risk based
capital ratio at March 31, 2001 was 10.86% as compared to 10.92% as of December
31, 2000.

The
Companys and Banks actual capital amounts and ratios met all regulatory requirements
as of March 31, 2001 and were summarized as follows:

Dollars
  in thousands
  Actual
  For Capital
  Adequacy Purposes
  To Be Well Capitalized
  Under Prompt Corrective
  Action Provisions:Consolidated
  Amount
  Ratio
  Amount
  Ratio
  Amount
  RatioAs
  of March 31, 2001Total
  capital (to risk weighted assets)
  $64,394
  11.98%
  $42,996
  8.0%
  $53,746
  10.0%Tier
  1 capital (to risk weighted assets)
  57,655
  10.73
  21,498
  4.0
  32,247
  6.0Leverage
  ratio*
  57,655
  8.41
  27,432
  4.0
  34,289
  5.0The
  Bank:As
  of March 31, 2001Total
  capital (to risk weighted assets)
  $55,211
  10.39%
  $42,510
  8.0%
  $53,137
  10.0%Tier
  1 capital (to risk weighted assets)
  48,547
  9.14
  21,254
  4.0
  31,882
  6.0Leverage
  ratio*
  48,547
  7.14
  27,195
  4.0
  33,994
  5.0* The leverage ratio consists of Tier 1
capital divided by adjusted quarterly average assets.The minimum leverage ratio
is 3 percent for banking organizations that do not anticipate significant
growth and that have well-diversified risk, excellent asset quality and in
general, are considered top-rated banks.

The
Company has no formal dividend policy, and dividends are issued solely at the
discretion of the Companys Board of Directors, subject to compliance with
regulatory requirements. In order to pay any cash dividends, the Company must
receive payments of dividends or management fees from the Bank. There are
certain regulatory limitations on the payment of cash dividends by banks.

Deposits.Deposits are the Company's
primary source of funds. At March 31, 2001, the Company had a deposit mix of
30% in savings deposits, 41% in time deposits, 13% in interest-bearing checking
accounts and 16% in noninterest-bearing demand accounts. Noninterest-bearing
demand deposits enhance the Company's net interest income by lowering its costs
of funds.

The
Company obtains deposits primarily from the communities it serves.No material
portion of its deposits has been obtained from or is dependent on any one
person or industry. The Company's business is not seasonal in nature. The
Company accepts deposits in excess of $100,000 from customers. These deposits
are priced to remain competitive. At March 31, 2001, the Company had brokered
deposits of $6,953,000.

Maturities
of time certificates of deposits of $100,000 or more outstanding at March 31,
2001 and December 31, 2000 are summarized as follows:

March 31,
  2001
  December 31, 2000(Dollars in thousands)Three
  months or less
  $28,384
  $45,233Over
  three to six months
  17,998
  20,643Over
  six to twelve months
  45,282
  16,526Over
  twelve months
  14,151
  10,252Total
  $105,815
  $93,654Borrowed Funds

The
increase in other borrowings during the first quarter of 2001 was primarily due
to the use of a leveraged investment strategy that uses additional FHLB
borrowings to fund purchases of investment securities within the Banks
investment portfolio.

Return
on Equity and Assets

Three months ended
  March 31
  Three months ended
  March 31
  Year ended
  December 312001
  2000
  2000Annualized
  return on average assets
  1.11%
  1.08%
  1.09%Annualized
  return on average equity
  13.93%
  13.73%
  14.33%Average
  equity to average assets
  7.96%
  7.85%
  7.64%Impact
of Inflation

The
primary impact of inflation on the Company is its effect on interest rates. The
Companys primary source of income is net interest income which is affected by
changes in interest rates. The Company attempts to limit inflations impact on
its net interest margin through management of rate sensitive assets and
liabilities and the analysis of interest rate sensitivity. The effect of
inflation on premises and equipment, as well as on interest expenses, has not
been significant for the periods covered in this report.



Item 3.     Quantitative and Qualitative Disclosures about Market Risk

In
the normal course of business, the Company is exposed to market risk which
includes both price and liquidity risk. Price risk is created from fluctuations
in interest rates and the mismatch in repricing characteristics of assets,
liabilities, and off balance sheet instruments at a specified point in time.
Mismatches in interest rate repricing among assets and liabilities arise
primarily through the interaction of the various types of loans versus the
types of deposits that are maintained as well as from management's
discretionary investment and funds gathering activities. Liquidity risk arises
from the possibility that the Company may not be able to satisfy current and
future financial commitments or that the Company may not be able to liquidate
financial instruments at market prices. Risk management policies and procedures
have been established and are utilized to manage the Company's exposure to
market risk.

On
March 31, 2001, the interest rate position of the Company was relatively
neutral as the impact of a gradual parallel 100 basis-point rise or fall in
interest rates over the next 12 months was estimated to be approximately 1-2%
of net interest income when compared to stable rates. See "BUSINESS -
Selected Statistical Information - Interest Rate Sensitivity" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Interest Rate Risk Management."

PART II
- Other Information

Item
1.     Legal Proceedings

The Company is a party to routine
litigation in the ordinary course of its business.In the opinion of management,
pending and threatened litigation is not likely to have a material adverse
effect on the financial condition or results of operations of the Company. Also
see Managements Discussion and Analysis of Financial Condition and Results of
Operations  Memorandum of Understanding. contained herein.

Item 2.     Changes in
Securities and Use of Proceeds.

None.

Item 3.    
Defaults Upon Senior Securities.

None.

Item 4.     Submission
of Matters to a Vote of Securities Holders.

None.

Item
5.     Other Information.

In the opinion of management, there is no
additional information relating to these periods being reported which warrants
inclusion in the report.

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

(a)         Exhibits.

Exhibits
  Description
  of Exhibits3.1
  Articles
  of Incorporation, incorporated by reference from (filed as Exhibit 3.1 of the
  Companys March 31, 1996 Form 10Q filed with the SEC on or about November 14,
  1996).
  *3.2
  Bylaws
  (filed as Exhibit 3.2 of the Companys March 31, 1996 Form 10Q filed with the
  SEC on or about November 14, 1996.)
  *10
  Employment
  agreement between Thomas T. Hawker and Capital Corp. (Filed as Exhibit 10 of
  the Companys 2000 form 10K filed with the SEC on or about March 30, 2001)
  *10.1
  Administration
  Construction Agreement (filed as Exhibit 10.4 of the Companys 1995 Form 10K
  filed with the SEC on or about March 31, 1996).
  *10.2
  Stock
  Option Plan (filed as Exhibit 10.6 of the Companys 1995 Form 10K filed with
  the SEC on or about March 31, 1996).
  *10.3
  401
  (k) Plan (filed as Exhibit 10.7 of the Companys 1995 Form 10K filed with the
  SEC on or about March 31, 1996).
  *10.4
  Employee
  Stock Ownership Plan (filed as Exhibit 10.8 of the Companys 1995 Form 10K
  filed with the SEC on or about March 31, 1996).
  *10.5
  Purchase
  Agreement for three branches from Bank of America is incorporated herein by
  reference from Exhibit 2.1 Registration Statement on Form S-2 filed July 14,
  1997, File No. 333-31193.
  *10.6
  Change-in-Control
  Agreement between R. Dale McKinney and Capital Corp of the West (filed as
  Exhibit 10.6 of the Companys 1999 Form 10K with the SEC on or about March
  17, 2000).
  *10.7
  Deferred
  Compensation Agreement between members of the board of directors and Capital
  Corp of the West (filed as Exhibit 10.7 of the Companys 1999 Form 10K with
  the SEC on or about March 17, 2000).
  *10.8
  Executive
  Salary Continuation Agreement between certain members of executive management
  and Capital Corp of the West (filed as Exhibit 10.8 of the Companys 1999
  Form 10K with the SEC on or about March 17, 2000).
  *(b)         Reports
on Form 8-K

None





*
Denotes documents which have been incorporated by reference.

SIGNATURES

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

CAPITAL
  CORP OF THE WEST(Registrant)By/s/  Thomas T. HawkerThomas
  T. HawkerPresident
  andChief
  Executive OfficerBy/s/  R. Dale McKinneyR.
  Dale McKinneyChief
  Financial Officer