<PAGE>



                      U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.  20549
                                    FORM 10-QSB


        X           Quarterly report under Section 13 or 15(d) of the Securities
      -----         Exchange Act of 1934 for the quarterly period ended March
                    31, 1998

      -----         Transition report under Section 13 or 15(d) of the 
                    Securities Exchange Act of 1934 (No fee required) for the
                    period from         to        
                                --------  --------

                           Commission File Number 0-27666

                         NORTHERN CALIFORNIA BANCORP, INC.
                         ---------------------------------
                   (Name of Small Business Issuer in its Charter)
                      Incorporated in the State of California

                   IRS Employer Identification Number 77-0421107

                  Address:  601 Munras Avenue, Monterey, CA  93940

                             Telephone: (408) 649-4600




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

     As of May 2, 1998, the Corporation had 858,526 shares of common stock 
outstanding.


<PAGE>

                         NORTHERN CALIFORNIA BANCORP, INC.
                                   AND SUBSIDIARY
                             CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                         MARCH 31         DECEMBER 31
                                                           1998               1997
                                                       ------------      ------------
<S>                                                     <C>                <C>
ASSETS:

Cash and Cash Equivalents                                8,220,300         11,060,600
Due From Bank - Time Deposits                              100,000            100,000
Investment Securities, available for sale (Note 1)         582,000            480,200
Investment Securities, held to maturity (Note 1)         7,767,200          5,495,300
Loans Held for Sale                                        874,100            543,400
Gross Loans (Note 2)                                    25,378,900         25,370,800
Allowance for Possible Loan Losses (Note 3)               (280,900)          (269,100)
Deferred Origination Fees                                  (37,600)           (39,600)
                                                       ------------      -------------
  Net Loans                                             25,060,400         25,062,100
Bank Premises and Equipment, Net                         1,887,000          1,898,900
Interest Receivable and Other Assets                     1,651,900          1,472,100
                                                       ------------      -------------
    Total Assets                                        46,142,900         46,112,600
                                                       ------------      -------------
                                                       ------------      -------------

LIABILITIES AND SHAREHOLDERS' EQUITY:


Total Deposits (Note 4)                                 38,598,100         39,205,600
Borrowed Funds                                           4,000,000          3,000,000
Interest Payable and Other Liabilities                     437,800            876,800
                                                       ------------      -------------
    Total Liabilities                                   43,035,900         43,082,400
                                                       ------------      -------------

Shareholders' Equity:

  Common Stock - No Par Value
    Authorized: 2,500,000 in 1998 and 1997
    Outstanding: 858,526 in 1998 and 1997                2,716,800          2,716,800
  Retained Earnings                                        317,800            240,800
  Unrealized Gain (Loss) Available
      for Sale Securities                                   72,400             72,600
                                                       ------------      -------------
    Total Shareholders' Equity                           3,107,000          3,030,200
                                                       ------------      -------------
    Total Liabilities & Shareholders' Equity            46,142,900         46,112,600
                                                       ------------      -------------
                                                       ------------      -------------

</TABLE>

                                                                               2

<PAGE>

                          NORTHERN CALIFORNIA BANCORP, INC.
                                   AND SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                             MARCH 31
                                                       1998           1997
                                                    ---------     ---------
<S>                                                 <C>           <C>
INTEREST INCOME:
  Interest and Fees on Loans                          696,500       663,000
  Interest on Time Deposits with
    Financial Institutions                              1,500             0
  Interest on Investment Securities                   143,200        60,100
  Interest on Federal Funds                            62,900        72,100
                                                    ---------     ---------
    Total Interest Income                             904,100       795,200
                                                    ---------     ---------

INTEREST EXPENSE:
  Interest on Interest-Bearing
    Transaction Accounts                               27,200        28,300
  Interest on Savings Accounts                         12,000        13,000
  Interest on Time Deposits                           303,500       280,000
  Interest on Other Borrowed Funds                     59,600        12,000
                                                    ---------     ---------
    Total Interest Expense                            402,300       333,300
                                                    ---------     ---------

    Net Interest Income                               501,800       461,900
PROVISION FOR LOAN LOSSES                              10,000        30,000
                                                    ---------     ---------
    Net Interest Income After
      Provision for Possible Loan Losses              491,800       431,900
                                                    ---------     ---------

NONINTEREST INCOME:
  Service Charges on Deposit Accounts                  78,600        92,000
  SBA Loan Sales & Servicing Income                    61,500        52,500
  Other Operating Income                              270,200       260,500
                                                    ---------     ---------
    Total Non-interest Income                         410,300       405,000
                                                    ---------     ---------

NONINTEREST EXPENSE:
  Salaries and Employee Benefits                      331,900       303,500
  Occupancy and Equipment Expense                      67,600        52,400
  Professional Fees                                    25,200        30,800
  Data Processing                                      49,500        42,900
  FDIC & State Assessments                              3,700         4,700
  Other Operating Expenses                            321,900       321,300
   Income Tax Expense                                  25,700        26,500
                                                    ---------     ---------
    Total Non-interest Expense                        825,500       782,100
                                                    ---------     ---------
    NET INCOME (LOSS)                                  76,600        54,800
                                                    ---------     ---------
                                                    ---------     ---------

Earnings per common share
   Primary                                               0.09          0.06
   Diluted                                               0.08          0.05

</TABLE>

                                                                               3

<PAGE>

                          NORTHERN CALIFORNIA BANCORP, INC.
                                   AND SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                     THREE MONTHS ENDED MARCH 31, 1998 AND 1997

<TABLE>
<CAPTION>
                                                             1998            1997
                                                        -------------    ------------
<S>                                                     <C>              <C>
NET INCOME                                                    76,600          54,800
Adjustments to net income:
  Depreciation and amortization expense                       33,100          24,200
  Amortization/Accretion on investments                       (4,500)           (100)
  Provision for possible loan losses                          10,000          30,000
  Increase in deferred servicing premium                           0          (2,900)
  Amortization of deferred servicing premium                   4,600           4,700
  Increase in deferred income                                      0               0
  Amortization of deferred income                             (1,100)         (1,100)
  Increase (decrease) in accrued expenses                   (338,000)       (190,800)
  (Increase) decrease in prepaid expenses                   (153,300)        146,600
  Increase (decrease) in interest payable                    (91,300)       (139,900)
  (Increase) decrease in interest receivable                 (38,600)         34,900
  (Increase) decrease in loans held for sale                (434,500)         77,400
                                                        -------------    ------------
  Total adjustments to net income                         (1,013,600)        (17,000)
                                                        -------------    ------------
                                                        -------------    ------------
Net cash provided (used) by operations                      (937,000)         37,800

CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from maturity of investments                    2,495,000       1,500,000
  Proceeds from sale of investments                                0               0
  Principal payments on investments                                0               0
  Purchase of securities                                  (4,864,200)     (3,647,200)
  Unrealized gain (loss) available for sale securities          (200)         55,500
  Net (increase) decrease in loans                            95,500         508,200
  Proceeds from sale of equipment                              1,400               0
  Capital expenditures                                       (24,800)        104,900
                                                        -------------    ------------

Net cash provided (used) in investing activities          (2,297,300)     (1,478,600)
                                                        -------------    ------------
                                                        -------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase (decrease) in deposit accounts               (606,000)       (964,900)
  Net increase (decrease) in borrowed funds                1,000,000               0

Net cash provided (used) by financing activities             394,000        (964,900)
                                                        -------------    ------------
                                                        -------------    ------------

Net increase (decrease) in cash & cash equivalents        (2,840,300)     (2,615,900)
Cash & cash equivalents - beginning of period             11,160,600       9,820,100
                                                        -------------    ------------
                                                        -------------    ------------

Cash & cash equivalents - end of period                    8,320,300       7,204,200

</TABLE>
                      See Note 5 for supplemental disclosures

                                                                              4
<PAGE>

NOTES TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                       MARCH 31      DECEMBER 31
                                                         1998            1997
                                                     -------------  -------------
<S>                                                  <C>            <C>
(NOTE 1) INVESTMENT SECURITIES:

Available for sale:
  Other Securities                                        582,000        480,200
                                                     -------------  -------------
                                                     -------------  -------------

Held to maturity:
  US Treasury Securities                                  500,100        499,900
  US Government Securities                              2,500,100      4,995,400
  State and Loacal Agency Securities                    4,767,000      4,680,400
                                                     -------------  -------------
                                                        7,767,200      5,495,300
                                                     -------------  -------------
                                                     -------------  -------------

(NOTE 2) GROSS LOANS:

  Commercial and Industrial                            10,818,800     10,299,500
  Construction                                                  0        346,500
  Real Estate - Mortgage                               13,814,500     13,920,900
  Installment                                             466,400        519,900
  Government Guaranteed Loans Purchased                   279,200        284,000
                                                     -------------  -------------
  Gross Loans                                          25,378,900     25,370,800

(NOTE 3) ALLOWANCE FOR POSSIBLE LOAN LOSSES:

  Balance at Beginning of Period                          269,100        253,500
  Recoveries                                                2,800          1,800
  Provision for Possible Loan Losses                       10,000       (106,200)
  Loans Charged Off                                        (1,000)       120,000
                                                     -------------  -------------
  Balance at End of Period                                280,900        269,100

(NOTE 4) DEPOSITS:

  Demand                                                8,850,400       8,734,200
  Interest-Bearing Transaction                          7,535,000       7,483,900
  Savings                                               2,430,000       2,145,300
  Time Under $100,000                                  12,101,100      12,742,700
  Time Equal to or Greater than $100,000                7,681,600       8,099,500
                                                     -------------  -------------
                                                       38,598,100      39,205,600

</TABLE>

(NOTE 5) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

<TABLE>
<CAPTION>
                                                       3/31/98           3/31/97
  Payments during the period ending:                 ------------   -------------
  <S>                                                <C>            <C>
    Interest                                             342,700          333,300
    Income Taxes                                          25,700           26,500
</TABLE>


                                                                              5

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

OVERVIEW

     The following discussion reviews and analyzes the operating results and 
financial condition of the Corporation, focusing on the Bank.  It should be 
read in conjunction with the financial statements and the other financial 
data presented elsewhere herein.  The Corporation had no activities other 
than its organization.

     For the three months ended March 31, 1998 net income was $76,600, an 
increase of $21,800 when compared to the same period in 1997.  The increase 
in earnings during this period was the result of a $59,900 increase in net 
interest income after provision for loan losses and a $5,300 increase in 
non-interest income; partially offset by an increase of $43,400 in 
non-interest expense.




                                                                             6

<PAGE>

     The following table sets forth certain selected financial ratios of the 
Corporation at and for the three months ended, March 31, 1998 and 1997.

<TABLE>
<CAPTION>
                                     The three months       The three months
                                   Ended March 31, 1998   Ended March 31, 1997
                                  ---------------------   --------------------
                                   (Dollars in thousands except per share data)
<S>                               <C>                    <C>
Summary of Operating Results:


Total interest income                      904                   795
Total interest expense                     402                   333
                                  ------------           -----------
Net interest income                        502                   462

Provision for possible
   loan losses                              10                    30
                                  ------------           -----------
Net interest income after
   provision for loan loss                 492                   432


Total other income                         411                   405
Total other expense                        800                   756
                                  ------------           -----------

Income (loss) before taxes                 102                    81
Provision for income tax                    26                    26
                                  ------------           -----------

Net income (loss)                           77                    55


Per Common Share Data:


Net income - Primary (1)                  0.09                  0.06
Net income - Diluted (2)                  0.08                  0.05
Book value, end of period                 3.62                  3.42
Avg. shares outstanding                858,526               879,465


Balance Sheet Data:


Total loans, net of
   unearned income (3)                  26,215                24,690
Total assets                            46,143                39,582
Total deposits                          38,589                35,178
Stockholders' equity                     3,107                 3,008

</TABLE>

                                                                              7


<PAGE>

<TABLE>
<CAPTION>

                                     The three months      The three months 
                                   Ended March 31, 1998  Ended March 31, 1997
                                   --------------------  --------------------
<S>                                <C>                   <C>
Selected Financial Ratios (4):

Return on average assets (5)              0.67%                 0.60%
Return on average
  stockholders' equity (5)                9.98%                 7.52%
Net interest spread                       4.39%                 4.65%

Net interest margin                       5.01%                 5.37%

Avg. shareholders' equity
  to average assets                       6.67%                 7.31%

Risked-Based capital ratios
    Tier 1                               10.66%                11.39%
    Total                                 9.74%                12.37%
Total loans to total deposits
  at end of period                       67.93%                70.19%

Allowance to total loans
  at end of period                        1.07%                 1.01%

Non-performing loans to total
  loans at end of period                  0.70%                 1.05%

Net charge-offs to 
  average loans                           0.00%                 0.14%

</TABLE>

(1)  Primary earnings per share amounts were computed on the basis of the 
     weighted average number of shares of common stock outstanding during the 
     year.  The weighted average number of common shares used for this 
     computation was 858,526 and 879,465 for March 31, 1998 and 1997, 
     respectively.

(2)  Diluted earnings (loss) per share amounts were computed on the basis of 
     the weighted average number of shares of common stock and common stock 
     equivalents outstanding during the year.  Common stock equivalents 
     include director/employee stock options. The weighted average number of 
     shares used for this computation was 1,009,082 and 1,021,965 for March 
     31, 1998 and 1997, respectively.

(3)  Includes loans being held for sale.

(4)  Averages are of daily balances.

(5)  March 31, 1998 calculated on an annualized basis.

                                                                              8
<PAGE>


NET INTEREST INCOME

     Net interest income, the difference between (a) interest and fees earned 
on interest-earning assets and (b) interest paid on interest-bearing 
liabilities, is the most significant component of the Bank's earnings.  
Changes in net interest income from period to period result from increases or 
decreases in the average balances of interest-earning assets portfolio, the 
availability of particular sources of funds and changes in prevailing 
interest rates.

     Net interest income for the three months ended March 31, 1998 was 
$501,800 compared to $461,900 for the same period in 1997.  The increase of 
$39,900 resulted from total interest income increasing $108,900, while total 
interest expense increased $69,000.  Average interest earning assets 
increased $5,231,000 (15.20%), while the average rate earned decreased 16 
basis points.   Average interest bearing liabilities increased $5,313,000 
(18.13%), while the average rate paid increased 10 basis points, reflecting 
decreases in certificate of deposit rates.                                    

     The following table shows the components of the Bank's net interest 
income, setting forth, for each the three months ended March 31, 1998 and 
1997, (i) average assets, liabilities and investments, (ii) interest income 
earned on interest-earning assets and interest expense paid on 
interest-bearing liabilities, (iii) average yields earned on interest-earning 
assets and average rates paid on interest-bearing liabilities, (iv) the net 
interest spread (i.e., the average yield earned on interest-earning assets 
less the average rate paid on interest-bearing liabilities) and (v)the net 
interest yield on average interest-earning assets (i.e., net interest income 
divided by average interest-earning assets).  Yields are not computed on a 
tax-equivalent basis.  Non-accrual loans and overdrafts are included in 
average loan balances.  Average loans are presented net of unearned income.

                                                                              9
<PAGE>

INTEREST SPREAD ANALYSIS:

<TABLE>
<CAPTION>

                                                   Three Months                                Twelve Months
                                                  Ended March 31,                            Ended December 31,
                                        1998                          1997                         1997
                             -------------------------     -------------------------     -------------------------
                                        Int       Avg                 Int       Avg                 Int       Avg
                              Avg       Earn       %        Avg       Earn       %        Avg       Earn       %
                              Bal       Paid      Rate      Bal       Paid      Rate      Bal       Paid      Rate
                             -------------------------     -------------------------     -------------------------
                                                            (Dollars in thousands)
<S>                          <C>        <C>       <C>      <C>        <C>       <C>      <C>        <C>       <C>
Interest Earning Assets: 

Int-bearing deposits
  at other banks                100        2      6.06          0        0      0.00         71        5      7.67
Invest securities             8,922      143      6.42      3,522       60      6.83      1,519       90      5.91
Federal funds sold            4,605       63      5.46      5,785       72      4.99      6,460      341      5.27
                             -------------------------     -------------------------     -------------------------

Total investments            13,627      208      6.09      9,307      132      5.68      8,050      436      5.42

Loans
  Real estate                13,918      360     10.36     13,977      351     10.03     13,138    1,368     10.41
  Installment                   462       13     11.25        516       14     11.16        686       80     11.70
  Commercial                 11,597      318     10.95     10,611      298     11.23     10,823    1,256     11.61
                             -------------------------     -------------------------     -------------------------

Total loans                  25,976      691     10.64     25,104      663     10.56     24,647    2,704     10.97

Total Interest
  earning assets             39,603      898      9.08     34,411      795      9.24     32,697    3,140      9.60
                             -------------------------     -------------------------     -------------------------
                             -------------------------     -------------------------     -------------------------

Interest Bearing Liabilities:


Int-bearing demand            5,720       17      1.15      5,201       16      1.27      4,534       64      1.40
Money market savings          1,827       11      2.34      1,953       12      2.43      1,911       45      2.34
Savings deposits              2,192       12      2.19      2,267       13      2.29      2,541       70      2.76
Time deposits > $100M         8,266      120      5.79      6,660       98      5.86      5,698      338      5.92
Time deposits < $100M        12,374      184      5.95     11,931      182      6.12     11,774      735      6.24
Other Borrowing               3,944       60      6.05      1,000       12      4.81      1,790       83      4.62
                             -------------------------     -------------------------     -------------------------

Total interest
  bearing liabilities        34,324      402      4.69     29,012      333      4.59     28,249    1,334      4.72
                             -------------------------     -------------------------     -------------------------
                             -------------------------     -------------------------     -------------------------

Net interest income                      496                           462                         1,806
Net interest spread                               4.39                          4.65                          4.88
Net yield on interest
  earning assets                                  5.01                          5.37                          5.52

</TABLE>

                                                                             10
<PAGE>

INTEREST SPREAD ANALYSIS (CONTINUED):

<TABLE>
<CAPTION>

                                              Three Months                     Twelve Months
                                             Ended March 31,                 Ended December 31,
                                              1998 vs 1997                      1997 vs 1996
                                        ---------------------------     ---------------------------
                                            Increase (Decrease)             Increase (Decrease)
                                              Due to changes                  Due to Changes
                                        ---------------------------     ---------------------------
                                          Avg       Avg                   Avg       Avg
                                        Volume      Rate      Total     Volume      Rate      Total
                                        ---------------------------     ---------------------------
                                                          (Dollars in thousands)
<S>                                     <C>         <C>       <C>       <C>         <C>       <C>  
Interest Earning Assets:

Int-bearing deposits
  at other banks                            2         0          2        (17)       (2)       (19)
Invest securities                          92        (9)        83         21        (7)        14 
Federal funds sold                        (15)        5         (9)        75       (13)        62 
                                        ---------------------------     ---------------------------

Total investments                          61        14         75         89       (32)        57 

Loans
  Real estate                              (1)       11         10         52       (55)        (3)
  Installment                              (2)        0         (1)       (35)        3        (32)
  Commercial                               28        (8)        20         89        78        166 
                                        ---------------------------     ---------------------------
  Total loans                              23         5         28        107        24        131 

Total Interest Earning Assets             120       (16)       103        246       (59)       187 
                                        ---------------------------     ---------------------------
                                        ---------------------------     ---------------------------

Interest Bearing Deposits:

Int-bearing demand                          2        (2)        0          1          2          3 
Money market savings                       (1)       (0)       (1)        (8)        (3)       (11)
Savings deposits                           (0)       (1)       (1)        41         (5)        36 
Time deposits > $100M                      24        (1)       22        121          9        130 
Time deposits < $100M                       7        (5)        2        (10)         0         (9)
Other Borrowing                            35        12        48          0          0          0 
                                        ---------------------------     ---------------------------

Total interest bearing deposits            61         8        69        100         51        151 
                                        ---------------------------     ---------------------------
                                        ---------------------------     ---------------------------

Net change in net interest                 59       (24)       34        146       (110)        36 

</TABLE>

                                                                            11
<PAGE>

PROVISION AND ALLOWANCE FOR LOAN LOSSES

     The provision for loan losses is an expense charged against operating 
income and added to the allowance for loan losses.  The allowance for loan 
losses represents amounts set aside for the specific purpose of absorbing 
losses which may occur in the Bank's loan portfolio.

     The allowance for loan losses reflects management's ongoing evaluation 
of the risks inherent in the loan portfolio, both generally and with respect 
to specific loans, the state of the economy, and the level of net loan losses 
experienced in the past.  Management and the Board of Directors review the 
results of the State Banking Department and FDIC examinations, independent 
accountants' observations, and the Bank's internal review as additional 
indicators to determine if the amount in the allowance for loan losses is 
adequate to protect against estimated future losses.  It is the Bank 's 
current practice, which could change in accordance with the factors mentioned 
above, to maintain an allowance which is at least equal to the sum of the 
following percentage of loan balances by loan category.

<TABLE>
<CAPTION>

          Loan Category                                    Reserve %
          <S>                                              <C>
          Classified Loans:
          Loans classified loss                             100.00%
          Loans classified doubtful                          50.00%
          Loans classified substandard
            Real Estate Secured                               5.00%
            Non Real Estate Secured                          20.00%

          Unclassified Loans:
          Real Estate - Loan to value 80% or less             0.10%
          Real Estate - Loan to value over 80%                0.50%
          Loans to Individuals                                3.00%
          Commercial                                          3.00%
          SBA Loans - Unguaranteed portion                    2.00%
          Unfunded Loan Commitments                            .25%
          SBA Loans - Guaranteed portion                      0.00%
          Cash Secured Loans                                  0.00%

</TABLE>

     Although no assurance can be given that actual losses will not exceed 
the amount provided for in the allowance, Management believes that the 
allowance is adequate to provide for all estimated credit losses in light of 
all known relevant factors. At March 31, 1998 and 1997 the Bank's allowance 
stood at 1.07 percent and 1.01 percent of gross loans, respectively.  A 
provision of $10,000 was made to the allowance during the three months ended 
March 31, 1998, compared to a provision of $30,000 during the same period in 
1997.  Loans charged off during the three months ended March 31, 1998, 
totaled 

                                                                            12
<PAGE>

$1,000, compared to $34,500 in the same period of 1997.  Recoveries for the 
same periods were $2,800 and $600, respectively.

     The Bank's non-performing (delinquent 90 days or more and non-accrual) 
loans as a percentage of total loans was .70% at March 31, 1998 compared with 
 .81 percent and 1.11 percent as of the end of 1997 and 1996, respectively.   
The ratio at December 31, 1996 was significantly impacted by one 
non-performing loan that represented 69.40% of the total non-performing 
loans. 

     Based upon statistics released by Federal and state banking authorities 
regarding banks of similar size or otherwise located in California, 
Management believes that the Bank 's ratios of delinquent and non performing 
loans to total loans are far better than average.  Prudent collection 
efforts, and tighter lending controls, are responsible for the Bank's strong 
performance on these measures of credit quality.  However, no assurance can 
be given that the Bank's loan portfolio will continue to measure well against 
its peers on these ratios and quality measures, or that losses will not 
otherwise occur in the future.

NON-INTEREST INCOME

     Total non-interest income for the three months ended March 31, 1998 was 
$410,300, compared with $405,000 for the same period in 1997.  The increase 
of $5,300 was the result of service charges on deposit accounts decreasing 
$13,400 and income from other service charges, commissions and fees 
increasing $9,700, while income from SBA loan sales and servicing increased 
$9,000.

     The sale, of Small Business Administration (SBA) guaranteed loans, is a 
significant contributor to the Bank's income.  SBA guaranteed loans yield up 
to 3 3/4% over the New York prime rate, and the guaranteed portions can be 
sold at premiums, which vary with market conditions.  SBA loans are 
guaranteed by the full faith of the United States Government from 75 to 80 
percent of the principal amount.  The guaranteed portion has risks comparable 
for an investor to a U. S. Government security and can usually be sold in the 
secondary financial market, either at a premium or at a yield which allows 
the Bank to maintain a significant spread for itself.

     There can be no assurance that the gains on sale will continue at, or 
above, the levels realized in the past three years.  In addition, increasing 
competition among lenders for qualified SBA borrowers makes it difficult for 
the Bank to continually expand its program in this area, and may limit the 
level of premium that can be earned with regard thereto.  Furthermore, the 
SBA recently began requiring lenders to share a portion of premiums in excess 
of 10% earned on the sale of the guaranteed portions, and to pay 50 basis 
points on the outstanding guaranteed balance.  Management cannot predict the 
impact these changes will not have a significant impact on SBA income.

                                                                            13
<PAGE>

NON-INTEREST EXPENSE

     Salary and benefits expense for the three months ended March 31, 1998 
increased $28,400 compared with the same period in 1997. These increases were 
primarily due to employee merit pay increases.

     Total occupancy and equipment expense for the three months ended March 
31, 1998 was $67,600 compared to $52,400 for the same period in 1997.  The 
increase was due to the opening of the Pacific Grove branch office in April 
1997.  

     For the three months ended March 31, 1998 professional fees decreased 
$5,600 compared to the same period in 1997.

     Data processing expenses for the three months ended March 31, 1998 
increased $6,600 compared to the same period in 1997.  The increase was due 
to a 2.7% cost of living increase, effective April 1997, and increased 
numbers of accounts and transactions.

     Other expenses for the three months ended March 31, 1998 totaled 
$347,600 compared with $347,800 for the same period in 1997.  Significant 
changes occurred in the following categories with increases in advertising 
($6,800), director fees ($3,300), merchant expense ($13,900), collection 
expense ($10,500), and decreases in SBA loan expense ($6,900), automobile 
expense ($3,700), donations ($3,800), telephone expense ($4,400), business 
development ($7,200), insurance expense ($7,100). 

LOANS

     Loans represented 65.62% of average earning assets, and 56.49% of 
average total assets for the three months ended March 31, 1998, compared with 
72.95% and 62.98%, respectively during 1997.  For the three months ended 
March 31, 1998, average loans increased 3.63% from $25,104,000 for the same 
period in 1997 to $26,014,000.  Average real estate loans increased $110,000 
(0.79%), installment loans decreased $35,000 (6.77%); while average 
commercial loans increased $835,000 (7.87%).

     The Bank's commercial and industrial loans are generally made for the 
purpose of providing working capital, financing the purchase of equipment or 
inventory, and other business purposes. Such loans generally have maturities 
ranging from one year to several years.  Short-term business loans are 
generally intended to finance current transactions and typically provide for 
monthly interest payments with principal being payable at maturity or at 
90-day intervals. Term loans (usually for a term of two to five years) 
normally provide for monthly installments of principal and interest.  The 
Bank from time to time utilizes accounts receivable and inventory as security 
for loans.

                                                                            14
<PAGE>

     The Bank is a recognized leader for Small Business Administration 
lending in Monterey County, and holds SBA's coveted Preferred Lender Status.  
Generally, SBA loans are guaranteed, by the SBA, for 75 to 80 percent of 
their principal amount, which can be retained in portfolio or sold to 
investors.  Such loans are made at floating interest rates, but generally for 
longer terms (up to 25 years) than are available on a conventional basis to 
small businesses.  The unguaranteed portion of the loans, although generally 
supported by collateral, is considered to be more risky than conventional 
commercial loans because they may be based upon credit standards the Bank 
would not otherwise apply, such as lower cash flow coverage, or longer 
repayment terms.

     The Bank's real estate loan portfolio consists both of real estate 
construction loans and real estate mortgage loans.  The Bank has initiated a 
program to generate more commercial and industrial real estate loans, which 
generally yield higher returns than normal commercial loans.  The Bank has 
also developed a broker program for generating residential real estate loans. 
The Bank does not make real estate development loans.  Real estate 
construction loans are made for a much shorter term, and often at higher 
interest rates, than conventional single-family residential real estate 
loans.  The cost of administering such loans is often higher than for other 
real estate loans, as principal is drawn on periodically as construction 
progresses.

     The Bank also makes real estate loans secured by a first deed of trust 
on single family residential properties and commercial and industrial real 
estate. California commercial banks are permitted, depending on the type and 
maturity of the loan, to lend up to 90 percent of the fair market value of 
real property (or more if the loan is insured either by private mortgage 
insurers or governmental agencies).  In certain instances, the appraised 
value may exceed the actual amount that could be realized on foreclosure, or 
declines in market value subsequent to making the loan can impair the Bank's 
security.

     Consumer loans are made for the purpose of financing the purchase of 
various types of consumer goods, home improvement loans, auto loans and other 
personal loans.  Consumer installment loans generally provide for monthly 
payments of principal and interest, at a fixed rate.  Most of the Bank's 
consumer installment loans are generally secured by the personal property 
being purchased.  The Bank generally makes consumer loans to those customers 
with a prior banking relationship with the Bank.

NON-PERFORMING AND NON-ACCRUAL LOANS

     The Bank's present policy is to cease accruing interest on loans which 
are past due as to principal or interest 90 days or more, except for loans 
which are well secured or when collection of interest and principal is deemed 
likely. When a loan is placed on non-accrual, previously accrued and unpaid 
interest is generally reversed out of income unless adequate collateral from 
which to collect the principal of, and interest on, the loan appears to be 
available.

                                                                            15
<PAGE>

     The following table presents information with respect to loans which, as 
of the dates indicated, were past due 90 days or more or were placed on 
non-accrual status (referred to collectively as "non-performing loans"):

<TABLE>
<CAPTION>
                                          Three Months Ended
                                               March 31,
                                          1998         1997
                                        ---------   ----------
                                        (Dollars in thousands)
<S>                                     <C>         <C>
ACCRUING, PAST DUE 90 DAYS OR MORE:

Real Estate                                 71             0
Commercial                                   0           204
Installment                                  0             0
Other                                        0             0
                                        ---------   ----------
    Total accruing                          71           204

NONACCRUAL LOANS:

Commercial                                  96            35
Installment                                 16            21
Other                                        0             0
                                        ---------   ----------
    Total non-accrual                      112            56

    Total non-performing                   183           260

Total loans end of period               26,215        24,726

Ratio of non-performing loans
  to total loans at end of period         0.70%         1.05%

</TABLE>

     The ratio of non-performing loans at March 31, 1997 was significantly 
impacted by one loan that represented 75.00% of the total non-performing 
loans. These ratios have been maintained as a result of a strengthening of 
underwriting criteria, frequent review of new and delinquent loans and a firm 
collection policy (with the assistance of outside legal counsel).  The Bank 
does not have any foreign loans or loans for highly leveraged transactions.

SUMMARY OF LOAN LOSS EXPERIENCE

                                                                            16
<PAGE>

<TABLE>
<CAPTION>
                                        Three Months Ended   Three Months Ended
                                             March 31,            March 31,
                                               1998                 1997
                                        ------------------   ------------------
                                                (Dollars in thousands)
<S>                                     <C>                  <C>
Average loans outstanding                      26,014               25,104

Allowance, beginning of period                    269                  254 

Loans charged off during period:
    Commercial                                      0                   35 
    Installment                                     1                    0 
    Real Estate                                     0                    0 
    Other                                           0                    0 
                                        ------------------   ------------------
    Total charge offs                               1                   35 

Recoveries during period:
    Commercial                                      3                    0 
    Installment                                     0                    1 
    Other                                           0                    0 
                                        ------------------   ------------------
    Total recoveries                                3                    1 

Net Loans charged off
  during the period                                (2)                  34 

Additions to allowance for
  possible loan losses                             10                   30 

Allowance, end of period                          281                  250 

Ratio of net loans charged off to
  average Loans outstanding
  during the period                             (0.01)%               0.14%

Ratio of allowance to total
  loans at end of period                         1.07%                1.01%

</TABLE>

FUNDING SOURCES

                                                                            17
<PAGE>

     Average deposits for the three months ended March 31, 1998 were 
$38,555,000 an increase of 8.32% compared with the same period in 1997.  
Average certificates of deposit represented 53.81% of average deposits for 
the three months ended March 31, 1998.  Average interest bearing checking, 
money market and savings accounts as a group were 25.39% of average deposits. 
Average demand deposits represented 20.79% of average deposits.  The trend of 
deposits shifting to certificates of deposit has continued, resulting in a 
increased cost of funds.

     The Bank has a line of credit from the Federal Home Loan Bank of San 
Francisco with a maximum borrowing limit on March 31, 1998 of $4,520,000.  
The line of credit is secured by certain of the Bank's real estate secured 
loans. At March 31, 1998 the Bank had four $1,000,000 advances which bear 
interest at 4.88%, 6.53%, 6.81% and 6.36%, respectively.  The advances mature 
in October 1998, June 2000, June 2004 and January 2008, respectively.  
Management believes that these advances provide funds of medium duration at a 
lower cost than comparable deposits.  The Bank did not utilize any short-term 
borrowings in 1998, 1997 or 1996.

CAPITAL RESOURCES

     The Company maintains capital to comply with legal requirements, to 
provide a margin of safety for its depositors and stockholders, and to 
provide for future growth and the ability to pay dividends.  At March 31, 
1998, stockholders' equity was $3,107,000 versus $3,030,200 at December 31, 
1997.  The Company paid cash dividends of $0.12 and $0.11 per share in 1997 
and 1996, respectively.  The Bank paid cash dividends totaling $170,000 and 
$150,000 to the Corporation in 1997 and 1996.

     The FDIC and Federal Reserve Board have adopted capital adequacy 
guidelines for use in their examination and regulation of banks and bank 
holding companies. If the capital of a bank or bank holding company falls 
below the minimum levels established by these guidelines, it may be denied 
approval to acquire or establish additional banks or non-bank businesses, or 
the FDIC or Federal Reserve Board may take other administrative actions.  The 
guidelines employ two measures of capital:  (1) risk-based capital and (2) 
leverage capital.

     Under current rules, all banks are required to maintain Tier 1 capital 
of at least 4 percent and total capital of 8.0% of risk-adjusted assets. The 
Bank had a Tier 1 risk-based capital ratio of 9.74% and a total risk-based 
capital ratio of 10.66% at March 31, 1998, well above the minimum regulatory 
requirements.

     The leverage capital ratio guidelines require a minimum leverage capital 
ratio of 3% of Tier 1 capital to total assets less goodwill.  The Bank had a 
leverage capital ratio of 6.43% March 31, 1998.

                                                                            18
<PAGE>

LIQUIDITY

     Liquidity represents a bank's ability to provide sufficient cash flows 
or cash resources in a manner that enables it to meet obligations in a timely 
fashion and adequately provides for anticipated future cash needs.  For the 
Bank, liquidity considerations involve the capacity to meet expected and 
potential requirements of depositors seeking access to balances and to 
provide for the credit demands of borrowing customers.  In the ordinary 
course of the Bank's business, funds are generated from the repayment of 
loans, maturities within the investment securities portfolio and the 
acquisition of deposit balances and short-term borrowings.  In addition, the 
Bank has a line of credit from the Federal Home Loan Bank of San Francisco of 
approximately $4,520,000 and a $1,000,000 Federal Funds Purchased line of 
credit with Pacific Coast Bankers' Bank, to meet temporary liquidity 
requirements.

     As a matter of policy, the Bank seeks to maintain a level of liquid 
assets, including marketable investment securities, equal to a least 15 
percent of total assets ("primary liquidity"), while maintaining sources of 
secondary liquidity (borrowing lines from other institutions) equal to at 
least an additional 10 percent of assets.  In addition, it seeks to generally 
limit loans to not more than 90 percent of deposits.  Within these ratios, 
the Bank generally has excess funds available to sell as federal funds on a 
daily basis, and is able to fund its own liquidity needs without the need of 
short-term borrowing.  The Bank's primary liquidity at March 31, 1998 was 
35.57, while its average loan to deposit ratio for the three months ended 
March 31, 1998 was 67.93 percent.  The high level of liquidity has an adverse 
impact on interest income.

INTEREST RATE RISK

     Interest rate risk is the exposure the Bank's earnings have to changes 
in interest rates.  The goal is to manage the miss-match between 
rate-sensitive assets and rate-sensitive liabilities, to reduce interest rate 
risk to an acceptable level.  Rate sensitive is defined as anything maturing 
or repricing within the next twelve months.  Twelve months is considered an 
appropriate time frame for several reasons.  Forecasting is required in order 
to ascertain the volume and mix of rate-sensitive assets and liabilities for 
the twelve month period.  Forecasting involves making assumptions about 
multiple variables in the future; interest rates, loan demand, deposit mix, 
bank growth, regulatory changes, etc.  As most of these variables are outside 
of the control of bank management, forecasting beyond twelve months would 
sacrifice accuracy and reliability and will therefore not be done.  
Additionally, we feel that an analysis of twelve months gives us adequate 
time to recognize and adjust to any relevant trends.

                                                                            19
<PAGE>

      The primary tool of management for quantifying our interest rate 
exposure is or Earnings Change Ratio (ECR) analysis.  The ECR analysis 
provides a display of the balance sheet gap, weighted by the appropriate rate 
sensitivity factor, to define the impact on the income statement from a 100 
basis-point change in National Prime.  The analysis assumes an immediate and 
parallel change in all rates, and calculates the effect of the change for the 
next twelve-month period. 

      The Bank's maximum exposure to interest rate risk, defined as the 
difference in one-year rate-sensitive assets and one-year rate-sensitive 
liabilities as a percentage of total assets is 25% when asset sensitive 
(positive gap) and 15% when liability sensitive (negative gap).  The 
following table sets forth the Bank's interest rate risk analysis as of March 
31, 1998.

<TABLE>
<CAPTION>

                                                                Falling Rates            Rising Rates
                                                             --------------------    --------------------
                                                  One Year   One Year   One Year
                                                  Balance    Earnings    Income      Earnings    Income 
                                                    Sheet     Change    Statement     Change    Statement
                                                     Gap      Ratio*       Gap        Ratio*       Gap
<S>                                               <C>        <C>        <C>          <C>        <C>
RATE SENSITIVE ASSETS

  DUE FROM BANKS- TIME                               100        61%         61          61%         61

  LOANS:
Fixed rate < 1 year                                2,766        84%      2,311          84%      2,311
Floating rate < 1 year                            11,759        90%     10,602          90%     10,602 

  SECURITIES:
Fed Funds Sold & Repos                             5,670       100%      5,670         100%      5,670 
Fixed Rate Securities - Maturities < 1 year          500        81%        404          81%        404 
Fixed Rate Securities - Callable < 1 year          1,000        58%        581           0%          0 
                                                  ------                ------                  ------
Total Rate Sensitive Assets                       21,794                19,629                  19,048 

RATE SENSITIVE LIABILITIES

Savings                                            2,431        31%        745          31%        745 
Money Market Checking                              5,579        16%        885          16%        892 
Money Market Savings                               1,956        28%        542          28%        542 
CDs > $100,000                                     5,542        79%      4,367          79%      4,367 
CDs < $100,000                                     7,686        80%      6,113          80%      6,113 
FFP, Repos & Other Borrowing                       1,000        56%        562          56%        562 
                                                  ------                ------                  ------
Total Rate Sensitive Liabilities                  24,194                13,213                  13,220 

Rate Sensitivity Gap (Assets-Liabilities)         (2,399)                6,416                   5,828 

Total Assets                                      46,139                46,139                  46,139 

Gap as a percentage of Total Assets                (5.20)%               13.91%                  12.63%

Estimated change in net interest margin 
  if prime rate falls 1%:                                               (64.16)

Estimated change in net interest margin 
  if prime rate rises 1%:                                                                        58.28 

</TABLE>

                                                                            20
<PAGE>

     Except as noted, the table above indicates the time periods in which 
interest-earning assets and interest-bearing liabilities will theoretically 
mature or are otherwise subject to repricing in accordance with their 
contractual terms.  However, this table does not necessarily indicate the 
impact of general interest rate movements on the Bank's net interest yield 
because the repricing of various categories or assets and liabilities is 
discretionary and is subject to competitive and other pressures.  As a 
result, various assets and liabilities indicated as repricing within the same 
period may, in fact, reprice at different times and at different interest 
rate levels.

     The Corporation has limited cash on hand and no sources of revenues or 
liquidity other than dividends, tax equalization payments or management fees 
from the Bank.  The ability of the Bank to pay such items to the Corporation 
is subject to limitations under state and Federal law.

INVESTMENT SECURITIES

     The following table sets forth the book and market value of the Bank's 
investment securities at March 31, 1998:

<TABLE>
<CAPTION>

                                                 INVESTMENT PORTFOLIO MIX
                                                      March 31, 1998
                                                    Book         Market
                                                    value        value
                                                 -----------  ------------
                                                   (Dollars in thousands)
<S>                                              <C>          <C>
Available for sale:
  Other Securities                                  582,000       480,200
                                                 -----------  ------------
                                                 -----------  ------------
Held to maturity:
  US Treasury Securities                            500,100       499,900 
  US Government Securities                        2,500,100     4,995,400 
  State and Local Agency Securities               4,767,000
                                                 -----------  ------------
                                                  7,767,200     5,495,300 
                                                 -----------  ------------
                                                 -----------  ------------
</TABLE>

     The following table summarizes the maturity of the Bank's investment 
securities at March 31, 1998:

<TABLE>
<CAPTION>

                                              INVESTMENT PORTFOLIO MATURITIES
                                                  (Dollars in thousands)
                                                       over 1         over 5
                                        1 year         through        through       over 10
                                        or less        5 years        10 years       years
                                        -------        -------        --------      -------
<S>                                     <C>            <C>            <C>           <C>
U.S. Treasury Securities                   500            ---             ---          ---
U.S. Government Agency Securities          ---            ---             500        2,000
State and Local Agency Securities          ---            ---             ---        4,767
Other Securities                           582            ---             ---          ---
                                        -------        -------        --------      -------
     Total                               1,082            ---             500        6,767

</TABLE>
                                                                            21
<PAGE>

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

                                    NORTHERN CALIFORNIA BANCORP, INC.

Date:  May 6, 1998                     By: /s/ Charles T. Chrietzberg, Jr.
                                           --------------------------------
                                       Charles T. Chrietzberg, Jr.
                                       Chief Executive Officer
                                       and President

Date:  May 6, 1998                     By: /s/ Bruce N. Warner
                                           --------------------------------
                                       Bruce N. Warner
                                       Chief Financial Officer and
                                       Principal Accounting Officer


                                                                            22