<PAGE>

                      U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.  20549
                                    FORM 10-Q/A
                                          
                                          
                    QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
                                          
                     For Quarterly Period Ended March 31, 1998
                                          
                           Commission file number 2-76555
                                          
                          COMMERCE SECURITY BANCORP, INC.
                          -------------------------------
               (Exact name of registrant as specified in its charter)
                                          
                    Delaware                            33-0720548
                    --------                            ----------
          (State or other jurisdiction of          (I.R.S. Employer or
          incorporation or organization)           Identification No.)


      24012 Calle de la Plata,Suite 150, Laguna Hills, California        92653
      -----------------------------------------------------------     ----------
     (Address of principal executive offices)                         (Zip Code)
                                          
                                   (949) 699-4344
                                   --------------
                            (Issuer's telephone number)
                                          
                                          
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.     Yes   [X]        No   [  ]


APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock, $.01 par value      18,347,397 shares outstanding on May 14, 1998


<PAGE>
                          COMMERCE SECURITY BANCORP, INC.
                      U.S. SECURITIES AND EXCHANGE COMMISSION
                                     FORM 10-Q
                                          
                                       INDEX


                                                                          Page

Part I - Financial Information

   Item 1. Financial Statements

        Condensed Consolidated Statements of Condition -                   3
        March 31, 1998 and December 31, 1997

        Condensed Consolidated Statements of Operations                    5
        For the three months ended March 31, 1998 and 1997

        Condensed Consolidated Statements of Cash Flows -                  6
        For the three months ended March 31, 1998 and 1997
 
        Notes to the Condensed Consolidated Financial Statements           8

   Item 2. Management's Discussion and Analysis or Plan of Operation      10

   Item 3. Qualitative and Quantitative Disclosure about Market Risk      16



                                       2

<PAGE>


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                  COMMERCE SECURITY BANCORP, INC. AND SUBSIDIARIES
                   Condensed Consolidated Statements of Condition
                        March 31, 1998 and December 31, 1997
   
<TABLE>
<CAPTION>
<S>                                              <C>                    <C>
                                                   March 31,             December 31,
                                                        1998                     1997
                                                 (Unaudited)
                                                -----------------      -----------------
ASSETS
Cash and due from banks                         $  147,539,000            $ 81,030,000
Federal funds sold                                      -                   40,000,000
                                                -----------------      -----------------

   Total cash and cash equivalents                 147,539,000             121,030,000

Available-for-sale investment securities            62,510,000              67,295,000

Mortgage loans held for sale                       183,684,000              96,230,000
Loans and leases, net of unearned income           517,992,000             519,048,000
   Less allowance for loan and lease loss           (7,893,000)             (9,395,000)
                                                -----------------      -----------------
      Loans, net                                   693,783,000             605,883,000

Loan and servicing sale receivable                   4,168,000               1,247,000
Premises and equipment, net                         11,025,000              11,232,000
Real estate acquired through foreclosure, net        1,539,000               2,740,000
Intangibles arising from acquisitions, net          65,984,000              66,769,000
Accrued interest receivable and other assets        23,269,000              26,159,000
                                                -----------------      -----------------
Total assets                                    $1,009,817,000            $902,355,000
                                                -----------------      -----------------
                                                -----------------      -----------------
</TABLE>
    
             See notes to condensed consolidated financial statements.

                                       3

<PAGE>


                  COMMERCE SECURITY BANCORP, INC. AND SUBSIDIARIES
             Condensed Consolidated Statements of Condition (Continued)
                        March 31, 1998 and December 31, 1997
<TABLE>
<CAPTION>

                                                        March 31,             December 31,
                                                             1998                     1997
                                                      (Unaudited)
                                                     -----------------      -----------------
<S>                                                    <C>                    <C>       
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
   Demand:
      Non-interest bearing                              $285,142,000          $289,344,000
      Interest bearing                                    95,645,000            97,416,000
   Savings:
      Regular                                            131,704,000            98,465,000
      Money market                                        96,141,000            98,189,000
   Time:
      Under $100,000                                     122,700,000            99,713,000
      $100,000 or more                                    92,179,000            82,076,000
                                                      -----------------      -----------------
         Total deposits                                  823,511,000           765,203,000

Federal funds purchased                                   46,836,000             2,050,000
Due to related parties                                       540,000                  -      
Accrued expenses and other liabilities                    15,014,000            12,172,000
Mandatory convertible debentures                                -                  537,000
Subordinated debentures                                   27,657,000            27,657,000
                                                      -----------------      -----------------
         Total liabilities                               913,558,000           807,619,000

Shareholders' equity:
   Preferred stock, $.01 par value, 1,500,000 shares
      authorized, 116,593 issued and outstanding at
      March 31, 1998                                      11,659,000            11,659,000
   Special common stock, $.01 par value, 9,651,600
      shares authorized, 4,825,718 issued and 
      outstanding at March 31, 1998                           48,000                48,000
   Common stock, $.01 par value, 50,000,000
      shares authorized, 13,521,679 issued and
      outstanding at a March 31, 1998                        135,000               135,000
   Additional paid-in capital                             83,855,000            83,855,000
   Retained earnings                                       1,895,000               524,000
   Unearned compensation                                  (1,383,000)           (1,509,000)
   Unrealized gain on securities available-for-sale           50,000                24,000
                                                      -----------------      -----------------
Total shareholders' equity                                96,259,000            94,736,000
                                                      -----------------      -----------------

Total liabilities and shareholders' equity            $1,009,817,000          $902,355,000
                                                      -----------------      -----------------
                                                      -----------------      -----------------
                                                                                  
</TABLE>
                See notes to condensed consolidated financial statements.


                                       4
<PAGE>

                  COMMERCE SECURITY BANCORP, INC. AND SUBSIDIARIES
                  Condensed Consolidated Statements of Operations
                     Three months ended March 31, 1998 and 1997
                                    (Unaudited)

<TABLE>
<CAPTION>
                                                   Three Months Ended March 31,
                                                   ----------------------------
                                                       1998            1997
                                                   ----------       -----------
<S>                                                   <C>          <C>
Interest Income:
   Interest and fees on loans                         $15,212,000   $6,627,000
   Income from lease financing receivables              1,153,000    1,160,000
   Interest on Federal funds sold                          85,000      206,000
   Interest on investment securities                      987,000      592,000
                                                      -----------   ----------
         Total interest income                         17,437,000    8,585,000
Interest Expense:
   Deposits                                             5,113,000    3,156,000
   Other borrowed funds                                 1,278,000       68,000
                                                      -----------   ----------
         Total interest expense                         6,391,000    3,224,000
                                                      -----------   ----------
            Net interest income                        11,046,000    5,361,000

Provision for loan and lease losses                       922,000      407,000
                                                      -----------   ----------
   Net interest income after
      provision for loan and lease losses              10,124,000    4,954,000

Non-interest income                                     4,623,000    3,167,000
Non-interest expense                                   11,283,000    6,945,000
                                                      -----------   ----------
Net income before taxes                                 3,464,000    1,176,000
Income tax                                              1,777,000      742,000
                                                      -----------   ----------
Net income                                             $1,687,000     $434,000
                                                      -----------   ----------
                                                      -----------   ----------

Preferred dividends                                   $   316,000        -
Net income available to common                         $1,371,000     $434,000

Earnings per share (basic)                               $  0.075     $  0.040
Earnings per share (dilutive)                            $  0.071     $  0.040

</TABLE>

                   See notes to consolidated financial statements.

                                       5

<PAGE>


                  COMMERCE SECURITY BANCORP, INC. AND SUBSIDIARIES
                  Condensed Consolidated Statements of Cash Flows
                 For the Three Months Ended March 31, 1998 and 1997
                                    (Unaudited)

<TABLE>
<CAPTION>
                                                                 For three months ended March 31,
                                                                 --------------------------------
                                                                    1998                 1997
                                                                 ----------           -----------
<S>                                                             <C>               <C>
OPERATING ACTIVITIES:
   Net income                                                   $  1,687,000      $     434,000
   Adjustments to reconcile net loss to net
      cash used by operating activities:
         Provision for loan losses and real estate
            acquired through foreclosure                             922,000            452,000
         Loss (gain) on sale of real estate acquired                
           through foreclosure                                       325,000            (23,000)
         Equity in loss of real estate joint venture                  -                 153,000
         Loss on sale of premises and equipment                       -                 (22,000)
         Depreciation and amortization                               462,000            270,000
         Amortization of goodwill and other intangibles              763,000            222,000
         Amortization of compensation expense                        126,000             -     
         Accretion/amortization related to securities, net          (658,000)            50,000
         Mortgage loans originated for sale                     (396,302,000)      (155,924,000)
         Proceeds from sales of loans and servicing              394,493,000        161,344,000
         Loss (gain) on the sale of loans and servicing           (2,527,000)         1,504,000
         Decrease (increase) in servicing sale receivable         (2,921,000)           547,000
         Decrease in other assets                                  1,743,000          2,682,000
         Increase (decrease) in other liabilities                  2,721,000         (1,011,000)
                                                                -------------      -------------
            Net cash provided by operating activities                834,000         10,678,000

INVESTING ACTIVITIES:
   Purchases of investment securities                            (15,481,000)       (15,000,000)
   Proceeds from sales and maturities of
      investment securities                                       20,948,000          2,118,000
   Net decrease (increase) in loans                               (1,686,000)         4,799,000
   Net increase in loans held for sale                           (84,673,000)
   Purchases of premises and equipment                              (255,000)           (67,000)
   Proceeds from the sale of premises and equipment                      -               12,000
   Proceeds from sale of real estate acquired
      through foreclosures                                         1,120,000            980,000
   Capital expenditures for other real estate owned                      -             (890,000)
                                                                -------------      -------------
            Net cash used in investing activities                (80,027,000)        (8,048,000)

</TABLE>
                   See notes to consolidated financial statements.

                                       6

<PAGE>


                  COMMERCE SECURITY BANCORP, INC. AND SUBSIDIARIES
            Condensed Consolidated Statements of Cash Flows (Continued)
                 For the Three Months Ended March 31, 1998 and 1997
                                    (Unaudited)

<TABLE>
<CAPTION>
                                                                 For three months ended March 31,
                                                                 --------------------------------
                                                                      1998              1997
                                                                 --------------     -------------
<S>                                                              <C>                 <C>
FINANCING ACTIVITIES:
   Net increase in deposits                                        58,308,000        27,348,000
   Increase in other borrowings                                    44,786,000            -     
   Issuance of notes payable to related parties                       540,000            -     
   Redemption of mandatory convertible debentures                    (537,000)           -     
   Payment of preferred dividends                                    (316,000)           -     
                                                                 --------------     -------------
            Net cash provided by financing activities             102,781,000        27,348,000
                                                                 --------------     -------------
               Net Increase in cash and cash equivalents           26,509,000        29,978,000

Cash and cash equivalents at beginning of period                  121,030,000        46,222,000
                                                                 --------------     -------------
Cash and cash equivalents at end of period                       $147,539,000       $76,200,000
                                                                 --------------     -------------
                                                                 --------------     -------------
</TABLE>

                   See notes to consolidated financial statements.

                                       7

<PAGE>

                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF PRESENTATION

     The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that effect the reported amounts of assets and liabilities and 
disclosure of contingent assets and liabilities at the date of the financial 
statements and reported amounts of revenue and expenses during the reporting 
period.  Actual results could differ from those estimates.   The accompanying 
financial information for Commerce Security Bancorp, Inc. ("CSBI" or the 
"registrant") has been prepared in accordance with the Securities and 
Exchange Commission rules and regulations for quarterly reporting and 
therefore does not necessarily include all information and footnote 
disclosures normally included in financial statements prepared in accordance 
with generally accepted accounting principles.  The interim financial data is 
unaudited; however, in the opinion of management, the interim data includes 
all adjustments, consisting only of normal recurring adjustments, necessary 
for a fair statement of the results for the interim periods.  Certain 
reclassifications have been made in the 1997 financial information to conform 
to the presentation used in 1998. Results for the period ending March 31, 
1998 are not necessarily indicative of results which may be expected for any 
other interim period or for the year as a whole. The information contained in 
this report should be read in conjunction with the Annual Report of CSBI on 
Form 10-K for the year ended December 31, 1997 and in particular the 
footnotes to the audited financial statements included therewith.

RISKS AND UNCERTAINTIES

     In the normal course of its business, the Company encounters two 
significant types of risk: economic and regulatory.  Economic risk is 
comprised of three components - interest rate risk, credit risk and market 
risk.  The Company is subject to interest rate risk to the degree that its 
interest-bearing liabilities mature and reprice at different speeds, or on a 
different basis, than its interest-bearing assets.  Credit risk is the risk 
of default on the Company's loan portfolio that results from the borrower's 
inability or unwillingness to make contractually required payments.  Market 
risk results from changes in the value of assets and liabilities which may 
impact, favorably or unfavorably, the realizability of those assets and 
liabilities.

     The Company is subject to the regulations of various governmental 
agencies.  These regulations can and do change significantly from period to 
period.  The Company is also subject to periodic examinations by the 
regulatory agencies, which may subject it to changes in asset valuations, in 
amounts of required loss allowances and in operating restrictions resulting 
from the regulators' judgments based on information available to them at the 
time of their examination.

                                       8

<PAGE>

EARNINGS PER COMMON SHARE

     The actual number of common shares outstanding at March 31, 1998 was 
18,347,397.  Basic earnings per share is computed by dividing net income less 
dividends paid to preferred shareholders by the weighted average number of 
common shares outstanding during the period.  Dilutive earnings per share is 
computed by dividing net income less dividends paid to preferred shareholders 
plus the income impact of dilutive securities by the common shares 
outstanding plus dilutive common stock equivalents by using the treasury 
stock method.

     At March 31, 1998, the Company had outstanding common stock purchase 
warrants entitling the holders to purchase a total of 4,482,433 shares of 
common stock and stock options entitling the holder to purchase a total of 
988,600 shares if common stock. Lacking an active market for its shares, the 
Company assumed a weighted average per share price of $6.00 in computing the 
dilutive impact of the outstanding warrants and options. There were no 
warrants or options outstanding at March 31, 1997.

     The weighted average number of common shares used to compute basic 
earnings per share were 18,347,397 and 9,697,430 for the three months ended 
March 31, 1998 and March 31, 1997, respectively.  The fully diluted average 
number of common shares used to compute dilutive earnings per share were 
19,349,959 and 9,697,430 for the three months ended March 31, 1998 and March 
31, 1997, respectively. Net income was not adjusted in the calculation of 
dilutive earnings per share.

   
COMPREHENSIVE INCOME
 
     Effective January 1998, the Company adopted Statement of Financial 
Accounting Standards No. 130, "Reporting Comprehensive Income". This 
statement requires that all items recognized under accounting standards 
as components of comprehensive income be reported in an annual financial 
statement that is displayed with the same prominence as other annual 
financial statements. This Statement also requires that an entity classify 
items of other comprehensive income by their nature in an annual financial 
statement. For example, other comprehensive income may include foreign 
currency translation adjustments, minimum pension liability adjustments, 
and unrealized gains and losses on marketable securities classified as 
available-for-sale.  Annual financial statements for prior periods will be 
reclassified, as required. The Company's total comprehensive income were as 
follows:

<TABLE>
<CAPTION>
                                           Three months
                                          ended March 31,
                                          ---------------
                                          1997       1996
                                          ----       ----
     <S>                                  <C>        <C>
                                           (In thousands)

     Net income                           $1,687     $434
     Other comprehensive income (loss)        26       (8)
                                          ------     -----
     Total comprehensive income           $1,713     $426
                                          ------     -----
                                          ------     -----

</TABLE>
    

                                       9

<PAGE>


Item 2.  Management's Discussion and Analysis or Plan of Operations

     This information should be read in conjunction with the consolidated 
financial statements and the notes thereto of Commerce Security Bancorp, Inc. 
("CSBI" or the "registrant") included in Item 1 of this Quarterly Report and 
the audited consolidated financial statements and notes thereto and 
Management Discussion and Analysis of Financial Condition and Results of 
Operations for the year ended December 31, 1997 contained in the 1997 Annual 
Report of CSBI on Form 10-K.  

     Except for the historical information contained herein, the following 
discussion contains forward looking statements that involve risks and 
uncertainties.  CSBI's actual results could differ materially from those 
discussed here.  Factors that could cause or contribute to such differences 
include, but are not specifically limited to, changes in regulatory climate, 
shifts in interest rate environment, change in economic conditions of various 
markets CSBI serves, as well as the other risks detailed in this section, and 
in the sections entitled Results of Operations, Capital Resources and 
Liquidity and Interest Sensitivity, and those discussed in CSBI's Form 10-K 
for the year ended December 31, 1997, including without limitation those 
sections entitled Supervision and Regulation, Capital Resources, Liquidity 
and Interest Rate Sensitivity.

SUMMARY

     The registrant owns 100% of Eldorado Bank (the "Bank") which is the 
registrant's only banking subsidiary.   CSBI acquired Eldorado Bancorp and 
its subsidiary bank Eldorado Bank (the "Eldorado Acquisition") on June 8, 
1997 and on June 30, 1997 merged its other operating banks into a single bank 
(the "Bank") known as Eldorado Bank.  The Eldorado Acquisition was accounted 
for using the purchase method of accounting for business combinations. 
Accordingly, the following discussion related to the operating results of the 
registrant during the three months ended March 31, 1997 do not include the 
results of operations of Eldorado Bank.  In most of the registrant's income 
and expense categories and net income, the increases in the amounts reported 
for the three months ended compared to the same periods last year resulted 
from the Eldorado Acquisition.   Other significant factors affecting the 
registrant's results of operations and financial condition are described in 
the applicable sections below.

FINANCIAL CONDITION

     Total assets of CSBI at March 31, 1998 were $1.0 billion compared to 
total assets of $902.4 million at December 31, 1997.   The increase in total 
assets since December 31, 1997 is substantially attributable to the increase 
in mortgage loans held for sale that increased $87.5 million to $183.7 
million at March 31, 1998. Total earning assets of CSBI at March 31, 1998 
were $767.1 million compared to total earning assets of $725.6 million at 
December 31, 1997. Again, earning assets increased primarily due to the 
increase in mortgage loans held for sale.

     Total gross loans and leases of CSBI at March 31, 1998 were $704.5 
million, including $183.7 million of mortgage loans held for sale, compared 
to $615.3 million and $96.2 million at December 31, 1997, respectively. At 
March 31, 1998 the four largest lending categories were: (i) commercial real 
estate loans; (ii) residential mortgage loans;  (iii) commercial loans and 
(iv) loans to individuals.  At March 31, 1998, these categories accounted for 
$272.0

                                       10

<PAGE>

million, $213.4 million, $109.6 million and $62.8 million, or approximately 
38.6%, 30.3%, 15.6% and 8.9% of total loans and leases, respectively. Leases 
are made to finance small equipment for businesses and accounted for $46.7 
million, or approximately 6.6% of total loans and leases, at March 31, 1998.

     The Bank is an active participant in the lending programs established 
through the Small Business Administration ("SBA").   All SBA loans in the 
Bank's loan portfolio at March 31, 1998 totaled $105.1 million compared to 
$105.7 million at December 31, 1997. Included in the Bank's SBA loan 
portfolio are loans made by the Bank and guaranteed by the United States 
Government to the extent of 75% to 90% of the principal and interest due on 
such loans ("SBA 7(a)" loans).  The Bank is active in originating this type 
of loan. Generally, it sells the government guaranteed portion of these loans 
to participants in the secondary market and retains servicing 
responsibilities and the unguaranteed portion of the loans.

     The government guaranteed portion of the SBA 7(a) loans are sold at a 
premium, a portion of which is immediately recognized as income. The 
remaining premium, representing estimated normal servicing fees or a yield 
adjustment on the portion of the SBA 7(a) loan retained by the Bank, is 
capitalized and recognized as income over the estimated life of the loan.  
The total SBA 7(a) loan portfolio serviced by the Bank at March 31, 1998  was 
approximately  $280.4 million and included in this amount was approximately  
$87.0 million representing the guaranteed and unguaranteed portions of the 
SBA 7(a) loans retained by the Bank, which compares to $286.8 million and 
$90.0 million at December 31, 1997, respectively.

     Total investments of CSBI at March 31, 1998 were $62.5 million compared 
to $117.3 million at December 31, 1997.  Investments decreased largely due to 
the funds required by the increased mortgage origination activity. At March 
31, 1998, the investment portfolio primarily consisted of U.S. treasury 
securities and mortgage backed securities. Both of these categories of 
investment securities are classified as available for sale and totaled $19.5 
million and $43.0 million, respectively, or 31.2% and 68.8% of total 
investments, respectively.

     Total deposits were $823.5 million at March 31, 1998 compared to $765.2 
million at December 31, 1997.  An increase in regular savings deposits and 
certificates of deposits, partially offset by decreases in demand deposits 
and other interest bearing accounts, contributed to the increase in total 
deposits. The increase in deposits reflects the Bank's attempt to increase 
funding sources required to fund the increase in mortgage lending activity.  
Total non-interest bearing demand deposits were $285.1 million, or 
approximately 34.6% of total deposits, at March 31, 1998 compared to $289.3 
million, or approximately 37.8% of total deposits, at December 31, 1997.  
Interest bearing deposits were $538.4 million, or approximately 65.4% of 
total deposits, at March 31, 1998 compared to $475.9 million, or 
approximately 62.2% of total deposits, at December 31, 1997.

     Borrowings of the Company increased to $75.0 million at March 31, 1998 
from $30.2 million at December 31, 1997.  This increase in borrowings was 
primarily due to an increase in Federal funds purchased which increased to 
$46.8 million at March 31, 1998 from $2.1 million at December 31, 1997.  
These additional borrowings were undertaken primarily to the meet funding 
requirement presented by increased mortgage lending volume.

                                       11

<PAGE>

RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1998

     For the three months ended March 31, 1997, CSBI had net income of $1.7 
million compared to net income of $434,000 for the same period in 1997.  
Compared to the prior year results, the improvements stem from a combination 
of increased net interest income of approximately $5.6 million and 
non-interest income of approximately $1.5 million,  partially offset by 
increased loan loss provision of $515,000, non-interest expense of 
approximately $4.3 million and provision for taxes of $1.0 million. The 
improvement in 1998 earnings is partly attributable to the earnings of 
Eldorado in 1998 that were not included in earnings for 1997 and partly 
attributable to an improvement in earnings related to the Bank's mortgage 
banking operations.

NET INTEREST INCOME AND NET INTEREST MARGIN

     Net interest income was approximately $11.0 million for the three months 
ended March 31, 1998, an increase of $5.6 million over the $5.4 million for 
the same period in 1997.  An increase in interest income to $17.4 million for 
the three months ended March 31, 1997 from $8.6 million for the same period 
in 1997, partially offset by increased interest expense of $6.4 million for 
the three months ended March 31, 1997 from $3.2 million for the same period 
in 1997 contributed to this earnings improvement. 

     Loans and leases, the largest component of earning assets, increased to 
an average balance of $648.2 million for the three months ended March 31, 
1998 from $304.1 million for the three months ended March 31, 1997,  with an 
average yield of 10.2% and 10.4%, respectively.  Investments in securities 
and Federal funds sold rose to an average of $71.8 million for the three 
months ended March 31, 1998 from an average of $52.7 million for the three 
months ended March 31, 1997, with an average yield of 6.1% in both periods. 
The yield on earning assets was 9.8% for both three month periods ended March 
31, 1998 and 1997.

     Interest-bearing liabilities increased to an average of $558.4 million 
for the three months ended March 31, 1998 from $275.3 million for the same 
period in 1997.  The cost of these funds decreased to 4.6% for the three 
months ended March 31, 1998 compared to 4.8% for the same period in 1997.  
The increase in average balances and the decrease in cost is primarily 
attributable to deposits with borrowings also contributing to the increase in 
average balances but partially offsetting the decrease in rates paid. Average 
interest-bearing deposits increased to $497.0 million for the three months 
ended March 31, 1998 from $266.5 million for the same period in 1997.  The 
average rate paid on these deposits decreased to 4.2% during the three months 
ended March 31, 1998 compared to 4.8% during the same period in 1997.   The 
decrease in the cost of deposits is attributable to a decrease in rates paid 
on certificates of deposit that decreased to 5.0% for the three months ended 
March 31, 1998 compared to 5.7% for the same period in 1997, and a decrease 
in rates paid on interest bearing transaction accounts and savings accounts 
that in the aggregate was 3.5% for the three months ended March 31, 1998 
compared to 3.7% for the same period in 1997.

     The average balance for all borrowings increased to $61.4 million for 
the three months ended March 31, 1998 from $8.8 million for the same period 
in 1997. The average cost of these borrowings was 8.4% for the three months 
ended March 31, 1998 compared to 3.1% for the same period in 1997.  The 
increase in the average balance and cost of borrowings is

                                       12

<PAGE>

attributable to Federal funds purchased and the subordinated debentures 
issued to fund the Eldorado Acquisition.  Federal funds purchased averaged 
$33.2 million with an average rate of 5.5% for the three months ended March 
31, 1998 compared to $3.7 million with an average rate of 5.7% for the same 
period in 1997.  Other debt, including the subordinated debentures, averaged 
$28.2 million at an average rate of 11.9% compared to $5.0 million at 1.2%.

     As a result of the foregoing factors, the average net yield on earning 
assets increased to 6.2% for the three months ended March 31, 1998 compared 
to 6.1% for the same period in 1997.

ALLOWANCE AND PROVISION FOR LOAN AND LEASE LOSSES

     The allowance for loan and lease losses represents the amounts which 
have been set aside for the specific purpose of absorbing losses which may 
occur in the Bank's loan and lease portfolio.  The provision for loan and 
lease losses is an expense charged against operating income and added to the 
allowance for loan and lease losses.  Management of the Bank continues to 
carefully monitor the allowance for loan and lease losses in relation to the 
size of the Bank's loan and lease portfolio and known risks or problem loans 
and leases.

   
     The following table summarizes the loans for which the accrual of 
interest has been discontinued and loans more than 90 days past due and still 
accruing interest,  including those loans that have been restructured: 


<TABLE>
<CAPTION>
                                                    March 31,                          December 31,
                                            ---------------------       --------------------------------------
                                            1998             1997       1997              1996            1995
                                            ----             ----       ----              ----            ----
<S>                                         <C>            <C>          <C>               <C>         <C> 
                                                                    (dollars in thousands) 

Non-accrual Loans, not restructured         $5,774         $6,488       $10,589          $5,483          $1,492
Accruing loans past due 90 days or more      1,031            672         4,638           1,314              46
Restructured loans                           3,183          1,919         2,779           2,200              82
                                            ------         ------       -------          ------          ------
     Total                                  $9,988         $9,079       $18,006          $8,997          $1,620
                                            ------         ------       -------          ------          ------
                                            ------         ------       -------          ------          ------

As a percent of outstanding loans              1.4%           3.5%          2.9%            2.7%            4.2%

</TABLE>
    

     The allowance for loan and lease losses at CSBI was approximately $5.3 
million at March 31, 1998 compared to approximately $9.4 million at December 
31, 1997.   During the three months ended March 31, 1998, the provision for 
loan and lease losses was $922,000, or .71% (annualized) to portfolio loans 
at March 31, 1998, loan and lease charge-offs were $2.6 million and 
recoveries were $200,000 which compares to a provision for loan and lease 
losses of $407,000, or .64% (annualized) to portfolio loans at March 31, 
1997, loan and lease charge-offs of $345,000 and recoveries of $32,000 during 
the same period in 1997.  The allowance for loan and lease losses for CSBI 
represented 1.5% of net loans, excluding those loans held for sale, at March 
31, 1998 and 1.8% at December 31, 1997.

                                       13



<PAGE>
   
     The table below summarizes average portfolio loans outstanding, gross
portfolio loans, non-performing loans and changes in the allowance for possible
loan and lease losses arising from loan and lease losses and additions to the
allowance from provisions charged to operating expense:

<TABLE>
<CAPTION>

                                                            March 31,                         December 31,
                                                    -----------------------    ---------------------------------------
                                                      1998          1997          1997            1996          1995
                                                    ---------    ----------    -----------    -----------   ----------
<S>                                                <C>            <C>             <C>            <C>          <C>
                                                                             (Dollars in Thousands)

Average portfolio loans outstanding                 $524,467       $305,904       $464,788       $146,743     $42,272
Gross portfolio loans                               $517,992       $263,527       $522,054       $263,641     $39,022
Non-performing loans                                  $9,988         $9,079        $18,006         $8,997      $1,620

Allowance for loan losses
     Balance at beginning of period                   $9,395         $5,156         $5,156       $    639    $    821
     Balance acquired                                    -             -             4,076          4,382         -  
     Loans charged off during period
       Commercial                                      2,297            262            467            430         258
       Leases                                            167           -             1,092              -           -
       Real estate                                        63             81            610            144         115
       Installment                                        98              2            334             76         329
                                                    --------       --------       --------       --------     -------
         Total                                         2,625            345          2,503            650         702
     Recoveries during period
       Commercial                                         20             25            397            103         121
       Leases                                             16           -                33              -           -
       Real estate                                       143              3            517             61           2
       Installment                                        21              4            224            106         102
                                                    --------       --------       --------       --------     -------
          Total                                          200             32          1,171            270         225
                                                    --------       --------       --------       --------     -------
Net loans charged off during period                    2,425            313          1,331            380         477
Additions charged to operations                          922            407          1,495            515         295
                                                    --------       --------       --------       --------     -------
Balance at end of period                              $7,892         $5,250        $ 9,395        $ 5,156    $    639
                                                    --------       --------       --------       --------     -------
                                                    --------       --------       --------       --------     -------

Loan loss and quality ratios:
     Net charge-offs to average portfolio loans         1.85%           .41%           .29%          0.26%       1.13%
     Provision for loan losses to average
       portfolio loans                                   .71%           .53%           .32%          0.35%       0.70%
     Allowance at end of period to gross portfolio
       loans outstanding at end of period               1.52%          1.99%          1.80%          1.88%       1.64%
     Allowance as % of non-performing loans            79.01%         57.70%         52.18%         57.31%      39.44%

</TABLE>
    

NON-INTEREST INCOME

     Non-interest income for the three months ended March 31, 1998 was $4.6 
million compared to $3.2 million for the same period in 1997.  Non-interest 
income related to operations acquired in the Eldorado Acquisition that was 
not included in income for the same period in 1997 and increased earnings 
from the Bank's mortgage operations are primarily responsible for this 
improvement in non-interest income. Income from service charges on deposit 
accounts increased to $893,000 for the three months ended March 31, 1998 
compared to $272,000 for the same period in 1997 which is primarily 
attributable to the Eldorado Acquisition. Other non-interest income increased 
to $3.7 million for the three months ended March 31, 1998 compared to $2.9 
million for the same period in 1997 which is primarily attributable to the 
Bank's mortgage operations.

                                       14

<PAGE>

NON-INTEREST EXPENSES

     Non-interest expense for the three months ended March 31, 1998 was 
approximately $11.3 million, an increase of $4.4 million from for the same 
period in 1997. Salaries and employee benefits increased to $4.8 million for 
the three months ended March 31, 1998 from $3.0 million for the same period 
in 1997, which increase is attributable to the added personnel from the 
Eldorado Acquisition and an increase in mortgage related commissions.  
Occupancy and equipment expense increased to $1.7 million for the three 
months ended March 31, 1998 from $1.1 million for the three months ended 
March 31, 1997 and represents the additional cost for facilities and 
equipment for branches and related operations attributable to the Eldorado 
Acquisition.  Other non-interest expenses increased to $4.8 million for the 
three months ended March 31, 1998 from $2.8 million for three months ended 
March 31, 1997 which is primarily attributable to the Eldorado Acquisition.  
Also included in non-interest expense for the three months ended March 31, 
1998 is amortization of goodwill of $627,000 that is attributable to the 
Eldorado Acquisition.

PROVISION FOR INCOME TAXES

     As a result of the earnings for the three months ended March 31, 1998, a 
provision for income taxes of $1.8 million was made compared to a $742,000 
provision made for the same period in 1997. 

CAPITAL RESOURCES

     CSBI and the Bank were well capitalized March 31, 1998 for federal 
regulatory purposes.  As of March 31, 1998, both the Bank and CSBI had 
leverage ratios of 6.9%, Tier 1 risk-weighted capital ratios of 8.8% and 
total risk-weighted capital ratios of 10.0%.  For further discussion 
regarding capital requirements for the registrant and its operating bank 
subsidiary, refer to sections in CSBI's Form 10-K for the year ended December 
31, 1997 entitled Regulation and Supervision, Capital Resources and the 
footnotes to the audited financial statements contained therein.

LIQUIDITY

   
    

     The asset-liability management process determines the size and composition
of the balance sheet and focuses on the management of liquidity and interest
rate risk.  The purpose of liquidity and balance sheet management is to ensure
that funds are available to meet customer needs, meet the financial commitments
of the Bank, and to reduce the Bank's exposure to changing interest rates. 

     The Bank  manages liquidity from both sides of the balance sheet through 
the coordination of the relative maturities of its assets and liabilities.  
The Bank enhances its liquidity through the ability to raise additional funds 
in money markets through Federal funds lines, repurchase agreements and 
selling of a specified portion of its securities (securities available for 
sale).  The Bank maintains a level of liquidity that is considered adequate 
to meet current needs.  Liquid assets include cash and due from banks, 
Federal funds sold, and securities available for sale.  At March 31, 1998, 
liquid assets totaled approximately $210.3 million, or 20.8% of total assets, 
which compares to $188.3 million, or 20.8% of total assets, 

                                       15

<PAGE>


at December 31, 1997.

   
    

INFLATION

     The majority of the Company's assets and liabilities are monetary items 
held by the Banks, and only a small portion of total assets is in premises 
and equipment.  The lower inflation rate of recent years did not have the 
positive impact on the Bank that was felt in many other industries.  The 
small fixed asset investment of the Company minimizes any material 
misstatement of asset values and depreciation expenses which may result from 
fluctuating market values due to inflation.  A higher inflation rate, 
however, may increase operating expenses or have other adverse effects on 
borrowers of the Bank, making collection more difficult for the Bank.  Rates 
of interest paid or charged generally rise if the marketplace believes 
inflation rates will increase.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

   
     In  Management's opinion there has not been a material  change in the 
Company's market risk profile during the three months ended March 31, 1998.  
At March 31, 1998 the Company had net repriceable assets (a "positive gap") 
as measured at one year of approximately $21.9 million or 2.2% of total 
assets that compared to $63.9 million or 7.1% of total assets at December 31, 
1997.  The Company had a positive gap as measured at a 90-day time horizon of 
approximately $76.2 million, or 7.6% of total assets that compared to $104.2 
million, or 11.6% of total assets at December 31, 1997.  The ratio of 
interest earning assets to interest bearing liabilities maturing or repricing 
within one year at March 31, 1998 was 1.04 which compares to 1.14 at December 
31, 1997 and management tries to maintain this ratio as close to zero as 
possible while remaining in a range between .80 and 1.20.  Interest income is 
likely to be affected to a greater extent than interest expense for any 
changes in interest rates within one year from March 31, 1998.   With a 
positive gap, a bank would anticipate higher net yields over the near term in 
a rising rate environment and lower net yields in a declining rate 
environment.  Conversely, with a negative gap, a bank would anticipate lower 
net yields over the near term in a rising rate environment and higher net 
yields in a declining rate environment.

     Since interest rate changes do not affect all categories of assets and 
liabilities equally or simultaneously, a cumulative gap analysis alone cannot 
be used to evaluate the Company's interest rate sensitivity position. To 
supplement traditional gap analysis, the Company performs simulation modeling 
to estimate the potential effects of changing interest rates. The process 
allows the Company to explore the complex relationships within the gap over 
time and various interest rate environments.  In performing this type of 
analysis, certain assumptions are made which include the nature and timing of 
interest rate levels including yield curve shape, prepayments on loans and 
securities, changes in deposit levels, pricing decisions on loans and 
deposits, reinvestment/replacement of asset and liability cashflows, and 
others.  While assumptions are developed based upon current economic and 
local market conditions, the Bank cannot make any assurances as to the 
predictive nature of these assumptions including how customer preferences or 
competitor influences might change.  Furthermore, the sensitivity

                                       16

<PAGE>



analysis does not reflect actions that the Bank might take in responding to 
or anticipating changes in interest rates.
    

                                       17

<PAGE>

                 COMMERCE SECURITY BANCORP, INC.  AND SUBSIDIARIES
                 U.S. SECURITIES AND EXCHANGE COMMISSION FORM 10-Q


SIGNATURES

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

                                            COMMERCE SECURITY BANCORP, INC.



DATE: July 2, 1998       Robert P. Keller /s/
                         ------------------------------------------ 
                         Robert P. Keller
                         President and Chief Executive Officer

DATE: July 2, 1998       Curt A. Christianssen /s/
                         -----------------------------------------
                         Curt A. Christianssen
                         Senior Vice President and Chief Financial Officer


                                       18