---

---

U.S. SECURITIES AND EXCHANGE COMMISSIONWASHINGTON 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, 2001

|/ / | 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 000-29105

---

CENTENNIAL FIRST FINANCIAL SERVICES(Name of Small Business Issuer in its Charter)

Incorporated in the State of California

IRS Employer Identification Number 91-1995265

Address: 218 East State Street, Redlands, CA 92373

---

Securities registered under Section 12(b) of the Exchange Act:None

Securities registered under Section 12(g) of the Exchange Act:Common Stock

---

Check whether the issuer: (1) filed all reports required to be filed by Telephone: (909) 798-3611 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 / /

State
the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common stock, 719,401 shares (March 31, 2001)

Transitional
Small Business Disclosure Format: Yes / /  No /x/

---

---

---



FORM 10-QSB CROSS REFERENCE INDEX

|        |  |                                                                                       |  | Page 
|------- |  | ------------------------------------------------------------------------------------- |  | -----
|PART I  |  |                                                                                       |  |      
|ITEM 1  |  | Financial Statements                                                                  |  | 3-7  
|ITEM 2  |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 8-19 
|PART II |  |                                                                                       |  |      
|ITEM 1  |  | Legal Proceedings                                                                     |  | 20   
|ITEM 2  |  | Changes in Securities and Use of Proceeds                                             |  | 20   
|ITEM 3  |  | Defaults Upon Senior Securities                                                       |  | 20   
|ITEM 4  |  | Submission of Matters to a Vote of Security Holders                                   |  | 20   
|ITEM 5  |  | Other Information                                                                     |  | 20   
|ITEM 6  |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                      |  | 20-21
|        |  | Signatures                                                                            |  | 22   

2

---



CENTENNIAL FIRST FINANCIAL SERVICES AND SUBSIDIARY        CONDENSED CONSOLIDATED STATEMENTS OF CONDITION        March 31, 2001 and December 31, 2000

Dollar amounts in thousands

|                     |                                                                                                                                                                      | 2001                              |                                            | 2000   |       
|-------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------------------------------------------ | ------ | ------
|
|ASSETS               |                                                                                                                                                                      |                                   |                                            |        |       
|                     | Cash and due from banks                                                                                                                                              |                                   | $                                          | 9,666  |       
|                     | Federal funds sold                                                                                                                                                   |                                   |                                            | 12,080 |       
|                     |                                                                                                                                                                      |                                   |                                            |        |       
|                     |                                                                                                                                                                      |                                   | Total cash and cash equivalents            |        |       
|                     | Interest-bearing deposits in financial institutions                                                                                                                  |                                   |                                            | 4,820  |       
|                     | Investment securities, available for sale                                                                                                                            |                                   |                                            | 9,168  |       
|                     | Federal Home Loan Bank stock, at cost                                                                                                                                |                                   |                                            | 52     |       
|                     | Loans, net                                                                                                                                                           |                                   |                                            | 61,700 |       
|                     | Accrued interest receivable                                                                                                                                          |                                   |                                            | 463    |       
|                     | Premises and equipment, net                                                                                                                                          |                                   |                                            | 2,709  |       
|                     | Other assets                                                                                                                                                         |                                   |                                            | 3,153  |       
|                     |                                                                                                                                                                      |                                   |                                            |        |       
|                     |                                                                                                                                                                      |                                   | Total assets                               |        | $     
|                     |                                                                                                                                                                      |                                   |                                            |        |       
|LIABILITIES          |                                                                                                                                                                      |                                   |                                            |        |       
|                     | Deposits:                                                                                                                                                            |                                   |                                            |        |       
|                     |                                                                                                                                                                      | Noninterest-bearing               |                                            | $      | 28,319
|                     |                                                                                                                                                                      | Interest-bearing and NOW accounts |                                            |        | 33,768
|                     |                                                                                                                                                                      | Savings                           |                                            |        | 7,805 
|                     |                                                                                                                                                                      | Time deposits $100,000 or greater |                                            |        | 16,732
|                     |                                                                                                                                                                      | Other time deposits               |                                            |        | 9,252 
|                     |                                                                                                                                                                      |                                   |                                            |        |       
|                     |                                                                                                                                                                      |                                   | Total deposits                             |        |       
|                     | Accrued interest payable                                                                                                                                             |                                   |                                            | 361    |       
|                     | Other liabilities                                                                                                                                                    |                                   |                                            | 309    |       
|                     |                                                                                                                                                                      |                                   |                                            |        |       
|                     |                                                                                                                                                                      |                                   | Total liabilities                          |        |       
|                     |                                                                                                                                                                      |                                   |                                            |        |       
|STOCKHOLDERS' EQUITY |                                                                                                                                                                      |                                   |                                            |        |       
|                     | Common stock, $4 stated value; authorized 10,000,000 shares, issued and outstanding 719,401 and 692,269 shares at March 31, 2001 and December 31, 2000, respectively |                                   |                                            | 2,878  |       
|                     | Additional paid-in capital                                                                                                                                           |                                   |                                            | 3,021  |       
|                     | Retained earnings                                                                                                                                                    |                                   |                                            | 1,331  |       
|                     | Accumulated other comprehensive income (loss)                                                                                                                        |                                   |                                            | 35     |       
|                     |                                                                                                                                                                      |                                   |                                            |        |       
|                     |                                                                                                                                                                      |                                   | Total stockholders' equity                 |        |       
|                     |                                                                                                                                                                      |                                   |                                            |        |       
|                     |                                                                                                                                                                      |                                   | Total liabilities and stockholders' equity |        | $     
|                     |                                                                                                                                                                      |                                   |                                            |        |       

3

---

CENTENNIAL FIRST FINANCIAL SERVICES AND SUBSIDIARY        CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS        Three Months Ended March 31, 2001 and 2000

Dollars in thousands except for per share amounts

|                           |                                                | 2001 |                                                     | 2000 
|-------------------------- | ---------------------------------------------- | ---- | --------------------------------------------------- | -----
|
|Interest income:           |                                                |      |                                                     |      
|                           | Interest and fees on loans                     |      | $                                                   | 1,930
|                           | Deposits in financial institutions             |      |                                                     | 73   
|                           | Federal funds sold                             |      |                                                     | 95   
|                           | Investments                                    |      |                                                     | 133  
|                           |                                                |      |                                                     |      
|                           |                                                |      | Total interest income                               |      
|                           |                                                |      |                                                     |      
|Interest expense:          |                                                |      |                                                     |      
|                           | Demand and savings deposits                    |      |                                                     | 290  
|                           | Time deposits $100,000 or greater              |      |                                                     | 213  
|                           | Other time deposits                            |      |                                                     | 133  
|                           | Interest expense on borrowed funds             |      |                                                     |     
|                           |                                                |      |                                                     |      
|                           |                                                |      | Total interest expense                              |      
|                           |                                                |      |                                                     |      
|                           |                                                |      | Net interest income                                 |      
|Provision for loan losses  |                                                |      | 20                                                  |      
|                           |                                                |      |                                                     |      
|                           |                                                |      | Net interest income after provision for loan losses |      
|                           |                                                |      |                                                     |      
|Other income:              |                                                |      |                                                     |      
|                           | Customer service fees                          |      |                                                     | 141  
|                           | Gain from sale of loans                        |      |                                                     | 59   
|                           | Gain (loss) from sale of investment securities |      |                                                     | 1    
|                           | Other income                                   |      |                                                     | 124  
|                           |                                                |      |                                                     |      
|                           |                                                |      | Total other income                                  |      
|                           |                                                |      |                                                     |      
|Other expenses:            |                                                |      |                                                     |      
|                           | Salaries and wages                             |      |                                                     | 755  
|                           | Employee benefits                              |      |                                                     | 136  
|                           | Net occupancy expense and equipment            |      |                                                     | 247  
|                           | Other operating expense                        |      |                                                     | 491  
|                           |                                                |      |                                                     |      
|                           |                                                |      | Total other expenses                                |      
|                           |                                                |      |                                                     |      
|                           |                                                |      | Income before provision for income taxes            |      
|Provision for income taxes |                                                |      | 89                                                  |      
|                           |                                                |      |                                                     |      
|                           |                                                |      | Net income                                          |      
|                           |                                                |      |                                                     |      
|Basic earnings per share   |                                                | $    | .26                                                 |      
|                           |                                                |      |                                                     |      
|Diluted earnings per share |                                                | $    | .25                                                 |      
|                           |                                                |      |                                                     |      

4

---



CENTENNIAL FIRST FINANCIAL SERVICES AND SUBSIDIARY        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY        Three Months Ended March 31, 2001 and 2000

Dollars in thousands

|                                    |                                           | Common
Stock                                                                                        |                            | Additional
Paid-In
Capital |   | Retained
Earnings |      | Accumulated
Other
Comprehensive
Income (Loss) |       | Total |    
|----------------------------------- | ----------------------------------------- | --------------------------------------------------------------------------------------------------- | -------------------------- | -------------------------- | - | ----------------- | ---- | --------------------------------------------- | ----- | ----- | ---
|BALANCE, DECEMBER 31, 1999          |                                           | $                                                                                                   | 2,708                      |                            | $ | 2,660             |      | $                                             | 1,165 |       | $  
|                                    | Comprehensive income:                     |                                                                                                     |                            |                            |   |                   |      |                                               |       |       |    
|                                    |                                           | Net income                                                                                          |                            |                            |  |                   |      |                                              |       |       | 174
|                                    |                                           | Change in net unrealized gain on investment securities available for sale, after tax effects        |                            |                            |  |                   |      |                                              |       |       |   
|                                    |                                           |                                                                                                     |                            |                            |   |                   |      |                                               |       |       |    
|                                    |                                           |                                                                                                     | Total comprehensive income |                            |   |                   |      |                                               |       |       |    
|                                    |                                           |                                                                                                     |                            |                            |   |                   |      |                                               |       |       |    
|                                    | Stock and cash dividend                   |                                                                                                     |                            | 135                        |   |                   | 412  |                                               |       | (584  | )  
|                                    | Exercise of stock options                 |                                                                                                     |                            | 24                         |   |                   | 16   |                                               |       |      |    
|                                    | Repurchase and retirement of common stock |                                                                                                     |                            | (174                       | ) |                   | (193 | )                                             |       | (270  | )  
|                                    |                                           |                                                                                                     |                            |                            |   |                   |      |                                               |       |       |    
|BALANCE, MARCH 31, 2000 (Unaudited) |                                           | $                                                                                                   | 2,693                      |                            | $ | 2,895             |      | $                                             | 485   |       | $  
|                                    |                                           |                                                                                                     |                            |                            |   |                   |      |                                               |       |       |    
|BALANCE, DECEMBER 31, 2000          |                                           | $                                                                                                   | 2,769                      |                            | $ | 2,959             |      | $                                             | 1,184 |       | $  
|                                    | Comprehensive income:                     |                                                                                                     |                            |                            |   |                   |      |                                               |       |       |    
|                                    |                                           | Net income                                                                                          |                            |                            |  |                   |      |                                              |       |       | 182
|                                    |                                           | Change in net unrealized gain (loss) on investment securities available for sale, after tax effects |                            |                            |  |                   |      |                                              |       |       |   
|                                    |                                           |                                                                                                     |                            |                            |   |                   |      |                                               |       |       |    
|                                    |                                           |                                                                                                     | Total comprehensive income |                            |   |                   |      |                                               |       |       |    
|                                    |                                           |                                                                                                     |                            |                            |   |                   |      |                                               |       |       |    
|Cash dividend                       |                                           |                                                                                                     |                            |                            |   |                   |      |                                               | (35   | )     |    
|Exercise of stock options           |                                           |                                                                                                     | 109                        |                            |   | 62                |      |                                               |      |       |    
|                                    |                                           |                                                                                                     |                            |                            |   |                   |      |                                               |       |       |    
|BALANCE, MARCH 31, 2001 (Unaudited) |                                           | $                                                                                                   | 2,878                      |                            | $ | 3,021             |      | $                                             | 1,331 |       | $  
|                                    |                                           |                                                                                                     |                            |                            |   |                   |      |                                               |       |       |    

5

---

CENTENNIAL FIRST FINANCIAL SERVICES AND SUBSIDIARY        CONSOLIDATED STATEMENTS OF CASH FLOWS        Three Months Ended March 31, 2001 and 2000

Dollars in thousands

|                                                 |                                                                                   | 2001                                                                             |                             | 2000                                                |     
|------------------------------------------------ | --------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | --------------------------- | --------------------------------------------------- | ----
|
|CASH FLOWS FROM OPERATING ACTIVITIES             |                                                                                   |                                                                                  |                             |                                                     |     
|                                                 | Net income                                                                        |                                                                                  | $                           | 182                                                 |     
|                                                 | Adjustments to reconcile net income to net cash provided by operating activities: |                                                                                  |                             |                                                     |     
|                                                 |                                                                                   | Depreciation and amortization                                                    |                             |                                                     | 102 
|                                                 |                                                                                   | Provision for loan losses                                                        |                             |                                                     | 20  
|                                                 |                                                                                   | Gain from sale of loans                                                          |                             |                                                     | (59 
|                                                 |                                                                                   | Amortization of deferred loan fees                                               |                             |                                                     | (92 
|                                                 |                                                                                   | Deferred income tax benefit                                                      |                             |                                                     | (216
|                                                 |                                                                                   | Amortization of premiums (discounts) on investment securities available for sale |                             |                                                     | (33 
|                                                 |                                                                                   | (Increase) decrease in cash surrender value of life insurance                    |                             |                                                     | 9   
|                                                 |                                                                                   | Decrease (increase) in assets:                                                   |                             |                                                     |     
|                                                 |                                                                                   |                                                                                  | Accrued interest receivable |                                                     |     
|                                                 |                                                                                   |                                                                                  | Other assets                |                                                     |     
|                                                 |                                                                                   | Increase (decrease) in liabilities:                                              |                             |                                                     |     
|                                                 |                                                                                   |                                                                                  | Accrued interest payable    |                                                     |     
|                                                 |                                                                                   |                                                                                  | Other liabilities           |                                                     |     
|                                                 |                                                                                   |                                                                                  |                             |                                                     |     
|                                                 |                                                                                   |                                                                                  |                             | Net cash provided by (used in) operating activities |     
|                                                 |                                                                                   |                                                                                  |                             |                                                     |     
|CASH FLOWS FROM INVESTING ACTIVITIES             |                                                                                   |                                                                                  |                             |                                                     |     
|                                                 | Net (increase) decrease in interest-bearing deposits in financial institutions    |                                                                                  |                             | (40                                                 | )   
|                                                 | Net sales, maturities and (purchases) of available-for-sale securities            |                                                                                  |                             | 423                                                 |     
|                                                 | Net increase in loans                                                             |                                                                                  |                             | (2,798                                              | )   
|                                                 | Proceeds from sale of repossessed assets                                          |                                                                                  |                             | 14                                                  |     
|                                                 | Additions to bank premises and equipment                                          |                                                                                  |                             | (502                                                | )   
|                                                 |                                                                                   |                                                                                  |                             |                                                     |     
|                                                 |                                                                                   |                                                                                  |                             | Net used in investing activities                    |     
|                                                 |                                                                                   |                                                                                  |                             |                                                     |     
|CASH FLOWS FROM FINANCING ACTIVITIES             |                                                                                   |                                                                                  |                             |                                                     |     
|                                                 | Net increase (decrease) in demand and savings deposits                            |                                                                                  | $                           | 7,213                                               |     
|                                                 | Net increase in time deposits                                                     |                                                                                  |                             | 2,282                                               |     
|                                                 | Proceeds from Federal Home Loan Bank borrowings                                   |                                                                                  |                             |                                                    |     
|                                                 | Cash dividends paid in lieu of fractional shares                                  |                                                                                  |                             |                                                    |     
|                                                 | Cash dividends paid                                                               |                                                                                  |                             | (35                                                 | )   
|                                                 | Payments to acquire common stock and stock options                                |                                                                                  |                             |                                                    |     
|                                                 | Proceeds from exercise of stock options                                           |                                                                                  |                             | 171                                                 |     
|                                                 |                                                                                   |                                                                                  |                             |                                                     |     
|                                                 |                                                                                   |                                                                                  |                             | Net cash provided by financing activities           |     
|                                                 |                                                                                   |                                                                                  |                             |                                                     |     
|                                                 |                                                                                   |                                                                                  |                             | Net increase in cash and cash equivalents           |     
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |                                                                                   |                                                                                  | 15,709                      |                                                     |     
|                                                 |                                                                                   |                                                                                  |                             |                                                     |     
|CASH AND CASH EQUIVALENTS AT END OF PERIOD       |                                                                                   | $                                                                                | 21,746                      |                                                     | $   
|                                                 |                                                                                   |                                                                                  |                             |                                                     |     
|SUPPLEMENTARY INFORMATION                        |                                                                                   |                                                                                  |                             |                                                     |     
|                                                 | Interest paid                                                                     |                                                                                  | $                           | 567                                                 |     
|                                                 |                                                                                   |                                                                                  |                             |                                                     |     
|                                                 | Income taxes paid                                                                 |                                                                                  | $                           | 175                                                 |     
|                                                 |                                                                                   |                                                                                  |                             |                                                     |     

6

---



CENTENNIAL FIRST FINANCIAL SERVICES        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS        March 31, 2001

Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited consolidated financial information included herein has been prepared in conformity with the accounting principles and practices in Centennial
First Financial Services Corporation's ("the Company") consolidated financial statements included in the Annual Report for the year ended December 31, 2000. The accompanying interim
consolidated financial statements contained herein are unaudited. However, in the opinion of the Company, all adjustments, consisting of normal recurring items necessary for a fair presentation of the
operating results for the periods shown, have been made. The results of operations for the three months ended March 31, 2001 may not be indicative of operating results for the year ending
December 31, 2001. Certain prior year and prior quarter amounts have been reclassified to conform to current classifications. Cash and cash equivalents consist of cash, due from banks, and
federal funds sold.

Note 2.  EARNINGS PER SHARE

Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the
period. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that
would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method.

The
weighted-average number of shares used in computing basic and diluted earnings per share are as follows:

In
thousands

Three Months Ended March 31,2001

2000Basic shares

698

705Dilutive effect of stock options

25

53Diluted shares

723

758


7

---



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

Centennial First Financial Services (the "Company") is the holding company for Redlands Centennial Bank in Redlands, California. This discussion focuses
primarily on the results of operations of the Company on a consolidated basis for the three months ended March 31, 2001 and the financial condition of the Company as of that date.

The
following discussion presents information pertaining to the financial condition and results of operations of the Company and its subsidiary and should be read in conjunction with
the financial statements and notes thereto presented in this 10-QSB. Average balances, including balances used in calculating certain financial ratios, are generally comprised of average
daily balances.

Certain
matters discussed in this report are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those
projected in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the competitive environment and its impact on the Company's net interest margin, changes in
interest rates, asset quality risks, concentrations of credit and the economic health of the San Bernardino Area and Southern California, volatility of rate sensitive deposits, asset/liability
matching risks, the dilutive impact which might occur upon the issuance of new shares of common stock and liquidity risks. Therefore, the matters set forth below should be carefully considered when
evaluating the Company's business and prospects. For additional information concerning these risks and uncertainties, please refer to the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2000.

8

---

OVERVIEW

EARNINGS
SUMMARY

The
Company reported net income of $182,000, or $0.26 per share basic and $0.25 per share diluted, for the first quarter of 2001. This compares to net income of $174,000, or $0.25 per
share basic and $0.23 per share diluted, for the same period in 2000. Growth in average loans as a percentage of earning assets continued to positively impact the net interest margin during the three
months ended March 31, 2001.

Return
on average assets and return on average equity for the first quarter of 2001 were .73% and 10.14% respectively, as compared to 0.95% and 11.87%, respectively, for the same
period of 2000.

LOANS
HELD FOR INVESTMENT

Net
loans held for investment increased by $2.9 million, or 5%, during the first three months of 2001 as demand for commercial, real estate construction and development loans
increased. The following table sets forth the amount of total loans outstanding by category as of the dates indicated (dollar amounts in thousands):

March 31, 2001

December 31, 2000Real estate loansConstruction and development

$
16,586

26.35
%
$
14,358

23.91
%Mortgage loans


15,586

24.77
%

16,272

27.11
%Commercial loans


23,305

37.03
%

21,583

35.96
%Automobile loans


2,994

4.76
%

3,036

5.06
%Indirect loans


951

1.51
%

1,063

1.77
%Equity loans


1,847

2.93
%

1,887

3.14
%Consumer and other loans


1,666

2.65
%

1,827

3.05
%62,935

100.00
%

60,026

100.00
%Unearned income


(370
)



(384
)Allowance for loan losses


(865
)



(868
)$
61,700



$
58,774


In
the normal practice of extending credit, the Company accepts real estate collateral on loans that have primary sources of repayment from commercial operations. The total amount of
loans secured by real estate equaled $39.3 million, or 62.4% of the total portfolio as of March 31, 2001. Due to the Company's limited marketing area, its real estate collateral is
primarily concentrated in the San Bernardino Area and Southern California. The Company believes that its prudent underwriting standards for real estate secured loans provide an adequate safeguard
against declining real estate prices that may affect a borrower's ability to liquidate the property and repay the loan. However, no assurance can be given that real estate values will not decline and
impair the value of the security for loans held by the Company.

The
Company focuses its portfolio lending on commercial, real estate, and construction loans. The performance of commercial loans is generally dependent upon future cash flows from
business operations including the sale of products, merchandise and services. The successful completion or operation of real estate projects is dependent upon future sales. Risks attributable to such
loans can be significantly increased, often to a greater extent than other loans, by regional economic factors and real estate prices.

9

---

NONPERFORMING ASSETS

The
Company carefully monitors the quality of its loan portfolio and the factors that affect it, including regional economic conditions, employment stability, and real estate values.
The accrual of interest on loans is discontinued when the payment of principal or interest is considered to be in doubt, or when a loan becomes contractually past due by 90 days or more with
respect to principal or interest, except for loans that are well secured and in the process of collection.

As
of March 31, 2001, the Company had non-performing assets in the amount of $387,000 of which $146,000 were loan guarantees by the Small Business Administration.
The Company had $75,000 of loans 90 days or more past due and still accruing at March 31, 2001. The following table sets forth the balance of non-performing assets as of the
dates indicated (dollar amounts in thousands):

March 31, 2001

December 31, 2000Nonaccrual loans

$
312

$
37Loans 90 days or more past due and still accruing


75


75$
387

$
112Allowance for loan losses


20

$
868Ratio of total nonperforming assets to total assets


.37
%

.27
%Ratio of total nonperforming assets to total loans


.62
%

.42
%Ratio of total nonperforming assets to total allowance for loan losses


44.74
%

12.90
%


ALLOWANCE
FOR LOAN LOSSES

The
Company maintains an allowance for loan losses ("ALL"), which is reduced by credit losses and increased by credit recoveries, and provisions to the ALL charged
against operations. Provisions to the ALL and the total of the ALL are based, among other factors, upon the Company's credit loss experience, current and projected economic conditions, the performance
of loans within the portfolio, evaluation of loan collateral value, and the prospects or worth of respective borrowers and guarantors.

In
determining the adequacy of its ALL and after carefully analyzing each loan individually, the Company segments its loan portfolio into pools of homogeneous loans that share similar
risk factors. Each pool is given a risk assessment factor that largely reflects the expected future losses from each category. These risk assessment factors change as economic conditions shift and
actual loan losses are recorded. As of March 31, 2001, the ALL of $865,000, or 1.38% of total loans was determined by management to be adequate against foreseeable future losses. No assurance
can be given that non-performing loans will not increase or that future losses will not exceed the amount of the ALL.

The
following table summarizes, for the periods indicated, loan balances at the end of each period and average balances during the period, changes in the ALL arising from credit
losses, recoveries of

10

---

credit losses previously incurred, additions to the ALL charged to operating expense, and certain ratios relating to the ALL (dollar amounts in thousands):

|                           |                                                                         | At and for the
Year Ended
Ended
March 31,
2001 |                                  | At and for the
Three Months
Ended
December 31,
2000 |  
|-------------------------- | ----------------------------------------------------------------------- | ---------------------------------------------- | -------------------------------- | --------------------------------------------------- | -
|ALLOWANCE FOR LOAN LOSSES: |                                                                         |                                                |                                  |                                                     |  
|                           | Allowance for loan losses balance, beginning of period                  |                                                | $                                | 868                                                 |  
|                           |                                                                         |                                                |                                  |                                                     |  
|                           |                                                                         | Loans charged off:                             |                                  |                                                     |  
|                           |                                                                         |                                                | Real estate                      |                                                     |  
|                           |                                                                         |                                                | Commercial                       |                                                     |  
|                           |                                                                         |                                                | Consumer                         |                                                     |  
|                           |                                                                         |                                                | Lease financing                  |                                                     |  
|                           |                                                                         |                                                | Credit card and related accounts |                                                     |  
|                           |                                                                         |                                                |                                  |                                                     |  
|                           |                                                                         |                                                |                                  | Total                                               |  
|                           |                                                                         |                                                |                                  |                                                     |  
|                           | Actual credit recoveries:                                               |                                                |                                  |                                                     |  
|                           |                                                                         | Real estate                                    |                                  |                                                     | 
|                           |                                                                         | Commercial                                     |                                  |                                                     | 
|                           |                                                                         | Consumer                                       |                                  |                                                     | 1
|                           |                                                                         | Lease financing                                |                                  |                                                     | 
|                           |                                                                         | Credit card and related accounts               |                                  |                                                     | 
|                           |                                                                         |                                                |                                  |                                                     |  
|                           |                                                                         |                                                |                                  | Total                                               |  
|                           |                                                                         |                                                |                                  |                                                     |  
|                           | Net credit losses                                                       |                                                |                                  | (23                                                 | )
|                           | Provision charged to expense                                            |                                                |                                  | 20                                                  |  
|                           |                                                                         |                                                |                                  |                                                     |  
|                           | Balance at end of period                                                |                                                | $                                | 865                                                 |  
|                           |                                                                         |                                                |                                  |                                                     |  
|RATIOS:                    |                                                                         |                                                |                                  |                                                     |  
|                           | Loans outstanding at end of period, net of unearned income              |                                                | $                                | 62,565                                              |  
|                           | Average loans outstanding for the period                                |                                                | $                                | 62,986                                              |  
|                           | Ratio of net loans charged off (recovered) to average loans outstanding |                                                |                                  | 0.04                                                | %
|                           | Ratio of allowance for loan losses to loans at end of period            |                                                |                                  | 1.38                                                | %

The
Company provided $20,000 to the allowance for loan losses during the first quarter of 2001 as compared to $110,000 made during the first quarter of 2000. For the three months
ended March 31, 2001, the allowance for loan losses was $865,000 as compared to $690,000 during the same period of 2000. The provisions during the three months ended March 31, 2001 were
recorded as a prudent measure, based upon growth in the loan portfolio, as well as, an atypical credit loss experienced by the Company involving one loan.

11

---

The following table sets forth the allocation of the ALL as of the dates indicated (dollar amounts in thousands):

|                  |  | March 31, 2001 |     | December 31, 2000 |       
|----------------- |  | -------------- | --- | ----------------- | ------
|
|Commercial loans  |  | $              | 323 |                   | 37.03 
|Real estate loans |  |                | 292 |                   | 51.12 
|Consumer loans    |  |                | 98  |                   | 9.20  
|Not allocated     |  |                | 152 |                   | 2.65  
|                  |  |                |     |                   |       
|                  |  | $              | 865 |                   | 100.00
|                  |  |                |     |                   |       

The
ALL is available to absorb losses from all loans, although allocations have been made for certain loans and loan categories. The allocation of the ALL as shown above should not be
interpreted as an indication that charge-offs in future periods will occur in these amounts or proportions, or that the allocation indicates future charge-off trends. In
addition to the most recent analysis of individual loans and pools of loans, management's methodology also places emphasis on historical loss data, delinquency and non-accrual trends by
loan classification category and expected loan maturity. This analysis, management believes, identifies potential losses within the loan portfolio and therefore results in allocation of a large
portion of the allowance to specific loan categories.

INVESTMENTS

The
following tables set forth the amortized cost and approximate market value of investment securities as of the dates indicated (dollar amounts in thousands):

March 31, 2001Amortized
Cost

Unrealized
Gains

Unrealized
Losses

Fair
ValueAvailable for sale:Mortgage-backed securities

$
4,678

$
31

$


$
4,709Obligations of states and local governments


4,031


25





4,056U.S. Treasury Obligations


401


2





403Federal Home Loan Bank stock


52








52$
9,162

$
58

$


$
9,220


December 31, 2000Amortized
Cost

Unrealized
Gains

Unrealized
Losses

Fair
ValueAvailable for sale:Mortgage-backed securities

$
5,072

$


$
28

$
5,044Obligations of states and local governments


4,027





43


3,984U.S. Treasury Obligations


402





1


401Federal Home Loan Bank stock


210








210$
9,711

$


$
345

$
9,639


12

---

DEPOSITS/OTHER
BORROWINGS

Total
consolidated deposits increased by $9.4 million or 10.9% during the three months ended March 31, 2001.

Rates
paid on deposits decreased during the three months ended March 31, 2001 contributing to the decrease in the cost of funds of interest bearing deposits to 3.84% during the
three months ended March 31, 2001 from 3.95% for the year ended December 31, 2000.

The
following table summarizes the distribution of average deposits and the average rates paid for the periods indicated (dollar amount in thousands):

Three Months Ended
March 31, 2001

Year Ended
December 31, 2000Average
Balance

Average
Rate

Average
Balance

Average
RateInterest Bearing Liabilities:Demand deposits

$
24,528



$
19,180

Interest bearing demand deposits


8,825

1.18
%

10,131

1.17
%Money market deposits


25,627

3.40
%

13,611

4.04
%Savings deposits


7,751

2.32
%

9,609

2.49
%Time deposits of $100,000 or more


14,443

6.04
%

12,859

5.65
%Time deposits under $100,000


9,595

5.38
%

11,590

5.61
%Total interest-bearing deposits


66,241

3.84
%

57,800

3.95
%$
90,769

2.80
%
$
76,980

2.97
%


The
following table sets forth the time remaining to maturity of the Company's time deposits in amounts of $100,000 or more (in thousands):

March 31, 2001

December 31, 2000Three months or less

$
4,934

$
4,596After three months to six months


3,129


4,179After six months to one year


7,408


3,288After one year


1,261


1,241Total

$
16,732

$
13,304


13

---

RESULTS OF OPERATIONS

NET
INTEREST INCOME/NET INTEREST MARGIN

Net
interest income for the quarter ended March 31, 2001 was $1,595,000, an increase of 21.8% over the net interest income of $1,309,000 during the same period of 2000. The
increase was primarily due to the growth in average loans, our expanded market area, and continued strong economic conditions in the Company's market areas.

The
following table sets forth average assets, liabilities, and shareholders' equity; the amount of interest income or interest expense; and the average yield or rate for each
category of interest-bearing assets and interest-bearing liabilities and the net interest margin (net interest income divided by average earning assets) for the periods indicated (dollar amounts in
thousands):

|                                                    |             | Quarter Ended March 31,       |       
|--------------------------------------------------- | ----------- | ----------------------------- | ------
|
|
|Interest-Earning Assets:                            |             |                               |       
|Federal funds sold                                  |             | $                             | 7,165 
|Interest-bearing deposits in financial institutions |             |                               | 4,794 
|Investment securities                               |             |                               |       
|                                                    | Taxable     |                               |       
|                                                    | Non-taxable |                               |       
|                                                    |             |                               |       
|                                                    |             | Total investments             |       
|Loans                                               |             |                               | 62,986
|                                                    |             |                               |       
|                                                    |             | Total interest earning assets |       
|                                                    |             |                               |       

|                                       |                                     | Quarter Ended March 31, |       
|-------------------------------------- | ----------------------------------- | ----------------------- | ------
|
|
|Interest Bearing Liabilities:          |                                     |                         |       
|Demand deposits                        |                                     | $                       | 24,528
|                                       |                                     |                         |       
|Interest bearing demand deposits       |                                     |                         | 8,825 
|Money market deposits                  |                                     |                         | 25,627
|Savings deposits                       |                                     |                         | 7,751 
|Time deposits of $100,000 or more      |                                     |                         | 14,443
|Time deposits under $100,000           |                                     |                         | 9,595 
|                                       |                                     |                         |       
|                                       | Total interest bearing deposits     |                         |       
|                                       |                                     |                         |       
|Other borrowings                       |                                     |                         |      
|                                       |                                     |                         |       
|                                       | Total deposits and other borrowings |                         | $     
|                                       |                                     |                         |       
|Average rate excluding demand deposits |                                     |                         |       
|                                       |                                     |                         |       
|Net interest income                    |                                     |                         |       
|                                       |                                     |                         |       
|Net interest margin                    |                                     |                         |       
|                                       |                                     |                         |       

Although
the Company's Reference interest rate decreased 200 basis points during the first three months of 2001, the net interest margin remained strong at 7.54% during the first
quarter of 2001,

14

---

which was unchanged from the same quarter of 2000. The average interest rate earned on average earning assets increased 22 basis points from March 31, 2000 to March 31, 2001. The average
interest rate paid for interest-bearing deposits increased 30 basis points for the same period. This increase in rates paid was concentrated in promotional money market accounts and promotional
certificates of deposits. Net interest income for the first quarter of 2001 was $302,000, or 23% higher than the same period last year. The increase was primarily attributable to increased volume in
average loans as a percentage of earning assets. The increase in average loans was largely due to the expanded market areas and continued strong economic conditions in the Company's market areas.

The
following table presents the dollar amount of changes in interest earned and interest paid for each major category of interest-earning assets and liabilities, and shareholders'
equity; the amount of interest income or interest expense; and the average yield or rate for each category of interest-bearing assets and interest-bearing liabilities and the net interest margin (net
interest income divided by average earning assets) for the periods indicated (dollar amounts in thousands):

|                                        |                                                     | Quarter Ended March 31, 2001 Compared
to Quarter Ended March 31, 2000 |    
|--------------------------------------- | --------------------------------------------------- | --------------------------------------------------------------------- | ---
|
|
|Increase (decrease) in interest income  |                                                     |                                                                       |    
|                                        | Federal funds sold                                  |                                                                       | $  
|                                        | Interest-bearing deposits in financial institutions |                                                                       |    
|                                        | Investment securities                               |                                                                       |    
|                                        | Loans                                               |                                                                       |    
|                                        |                                                     |                                                                       |    
|                                        |                                                     | Total                                                                 |    
|                                        |                                                     |                                                                       |    
|Increase (decrease) in interest expense |                                                     |                                                                       |    
|                                        | Interest bearing demand deposits                    |                                                                       |    
|                                        | Money market deposits                               |                                                                       |    
|                                        | Savings deposits                                    |                                                                       |    
|                                        | Time deposits of $100,000 or more                   |                                                                       |    
|                                        | Time deposits under $100,000                        |                                                                       |    
|                                        | Other borrowings                                    |                                                                       |    
|                                        |                                                     |                                                                       |    
|                                        |                                                     | Total                                                                 |    
|                                        |                                                     |                                                                       |    
|Total change in net interest income     |                                                     | $                                                                     | 993
|                                        |                                                     |                                                                       |    

15

---

NONINTEREST
INCOME

The
following table summarizes non-interest income for the periods indicated and expresses the amounts as a percentage of average assets (dollar amounts in thousands):

Three Months Ended
March 31, 2001

Three Months Ended
March 31, 2000Components of Noninterest IncomeGain on sale of loans

$
59

$
66Service fees on deposit accounts


141


132Loan Servicing fees


42


23Other


83


48$
325

$
269


Three Months Ended
March 31, 2001

Three Months Ended
March, 31 2000As a percent of average assets (annualized)Gain on sale of loans

.30
%
.34
%Service fees on deposit accounts

.72
%
.67
%Loan servicing fees

.21
%
.12
%Other

.42
%
.24
%1.65
%
1.37
%


16

---

NONINTEREST
EXPENSES

The
following table summarizes non-interest expenses and the associated ratios to average assets for the periods indicated (dollar amounts in thousands):

|                                            |                                 | Three Months Ended
March 31, 2001 |      | Three Months Ended
March 31, 2000 |  
|------------------------------------------- | ------------------------------- | --------------------------------- | ---- | --------------------------------- | -
|Components of noninterest expense           |                                 |                                   |      |                                   |  
|                                            | Salaries                        |                                   | $    | 755                               |  
|                                            | Employee benefits               |                                   |      | 136                               |  
|                                            | Occupancy expense               |                                   |      | 145                               |  
|                                            | Furniture and equipment expense |                                   |      | 102                               |  
|                                            | Professional services           |                                   |      | 112                               |  
|                                            | Stationary and supplies         |                                   |      | 47                                |  
|                                            | Promotional expenses            |                                   |      | 29                                |  
|                                            | Data processing fees            |                                   |      | 71                                |  
|                                            | Regulatory assessments          |                                   |      | 6                                 |  
|                                            | Other                           |                                   |      | 226                               |  
|                                            |                                 |                                   |      |                                   |  
|                                            | Total other expenses            |                                   | $    | 1,629                             |  
|                                            |                                 |                                   |      |                                   |  
|As a percent of average assets (annualized) |                                 |                                   |      |                                   |  
|                                            | Salaries                        |                                   |      | 3.84                              | %
|                                            | Employee benefits               |                                   |      | .69                               | %
|                                            | Occupancy expense               |                                   |      | .74                               | %
|                                            | Furniture and equipment expense |                                   |      | .52                               | %
|                                            | Professional services           |                                   |      | .57                               | %
|                                            | Stationary and supplies         |                                   |      | .24                               | %
|                                            | Promotional expenses            |                                   |      | .15                               | %
|                                            | Data processing fees            |                                   |      | .36                               | %
|                                            | Regulatory assessments          |                                   |      | .03                               | %
|                                            | Other                           |                                   |      | 1.15                              | %
|                                            |                                 |                                   |      |                                   |  
|                                            |                                 |                                   | 8.29 | %                                 |  
|                                            |                                 |                                   |      |                                   |  

Significant
increases were seen in the areas of Salaries and Occupancy Expenses from March 31, 2000 to March 31, 2001, due to the start up costs associated with the
opening of our Brea Branch and a separate facility for our Real Estate/Construction Loan Department.

LIQUIDITY

Liquidity
is the Company's ability to absorb fluctuations in deposits while simultaneously providing for the credit needs of its borrowers. The objective in liquidity management is to
balance the sources and uses of funds. Primary sources of liquidity for the Company include payments of principal and interest on loans and investments, proceeds from the sale or maturity of loans and
investments, growth in deposits, and other borrowings. The Company holds overnight federal funds as a cushion for temporary liquidity needs. During the three months ended March 31, 2001 federal
funds sold averaged $7.2 million, or 7.2% of total average assets. In addition to its federal funds, the Company maintains various lines of credit with correspondent banks, and the Federal Home
Loan Bank of San Francisco.

At
March 31, 2001, the Company had cash, time deposits with banks, federal funds sold, and un-pledged investment securities of approximately $30.2 million,
or 29% of total assets. This represented all available liquid assets.

17

---

Several methods are used to measure liquidity. One method is to measure the balance between loans and deposits (gross loans divided by total deposits). In general, the closer this
ratio is to 100%, the more reliant an institution becomes on its illiquid loan portfolio to absorb temporary fluctuations in deposit levels. At March 31, 2001, the
loan-to-deposit ratio was 65.3% as compared to 69.5% at December 31, 2000.

As
of March 31, 2001, the Company had no material commitments, which were expected to adversely impact liquidity.

ASSET/LIABILITY
MANAGEMENT

The
purpose for asset/liability management is to provide stable net interest income growth by protecting the Bank's earnings from undue interest rate risk. The Bank expects to
generate earnings from increasing loan volume, appropriate loan pricing and expense control and not from trying to accurately forecast interest rates. Another important function of asset/liability
management is managing the risk/return relationships between interest rate risk, liquidity, market risk and capital adequacy. The Bank gives priority to liquidity concerns followed by capital
adequacy, then interest rate risk and market risk in the investment portfolio. The policy of the Bank will be to control the exposure of the Bank's earnings to changing interest rates by generally
maintaining a position within a narrow range around an "earnings neutral position." An earnings neutral position is defined as the mix of assets and liabilities that generate a net interest margin
that is not affected by interest rate changes. However, Management does not believe that the Bank can maintain a totally earnings neutral position. Further, the actual timing of repricing of assets
and liabilities does not always correspond to the timing assumed by the Bank for analytical purposes. Therefore, changes in market rates of interest will generally impact on the Bank's net interest
income and net interest margin for long or short periods of time.

The
Bank monitors its interest rate risk on a monthly basis through the use of a model, which calculates the effect on earnings of changes in the prevailing market interest rate. The
model converts a prevailing market interest rate change into rate changes for each major class of asset and liability, then simulates the bank's net interest margin based on the bank's actual
repricing over a one year period, assuming that maturities are reinvested in instruments identical to those maturing during the period. At March 31, 2001, assuming the effect of a 2% increase
or decrease in prevailing market interest rates, the increase in economic value of equity was approximately $1,005,000 and $937,000, respectively. This represents a net economic value ratio of 15.76%
and 17.06%, respectively, as compared to the Bank's net economic value ratio of 17.43% at March 31, 2001. The net portfolio value ratio represents the effect of a 2% increase or decrease in
prevailing market interest rates of total stockholders equity divided by total assets. These forecasted results fall within the Bank's asset/liability policy guidelines of 7% to 20%.

The
Company has 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
Company is subject to limitations under state and Federal law.

CAPITAL
RESOURCES

The
principal source of capital for the Company is and will continue to be the retention of operating profits. The ratios of equity to average assets for the periods indicated are set
forth below.

Three Months Ended
March 31, 2001

Year Ended
December 31, 20007.25%

8.12%


Regulatory
authorities have issued guidelines to implement risk-based capital requirements. The guidelines establish a systematic analytical framework that makes
regulatory capital requirements more

18

---

sensitive to differences in risk profiles among banking organizations. Total capital is classified into two components: Tier 1 (primarily shareholder's equity) and Tier 2 (supplementary capital
including allowance for possible credit losses, certain preferred stock, eligible subordinated debt, and other qualifying instruments). The guidelines require that total capital be 8% of
risk-based assets, of which at least 4% must be Tier 1 capital. As of March 31, 2001, the Company's total capital ratio was 11.24% and its Tier 1 capital ratio was 10.04%. In
addition, the Company, under the guidelines established for adequately capitalized institutions, must also maintain a minimum leverage ratio (Tier 1 capital divided by total assets) of 4%. As of
March 31, 2001, the Company's leverage ratio was 7.25%. It is the Company's intention to maintain risk-based capital ratios at levels characterized as "well-capitalized"
for banking organizations: Tier 1 risk-based capital of 6 percent or above and total risk-based capital at 10 percent or above.

19

---



PART IIOTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5.  OTHER INFORMATION

As previously reported, on December 1, 2000, the Company signed a Definitive Agreement whereby Centennial First would purchase 100% of the shares of
Palomar Community Bank, Escondido, California, in a cash transaction totaling $10.5 million. In connection with the proposed acquisition, the Company will be offering $6 million of its
common stock to residents of the State of California. As such, on March 21, 2001, the Company filed a Form SB-2 with the Securities and Exchange Commission. On May 2,
2001, the Company filed Form SB-2 Pre-effective Amendment #1.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

|Item      |  | Description                                                                                                                                               
|--------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|2         |  | Plan of Reorganization and Agreement of Merger
Dated December 1, 1999
Filed as exhibit to Form S-4 dated October 20, 1999                                 
|3(i)      |  | Articles of Incorporation
Filed as exhibit to Form S-4 dated October 20, 1999                                                                             
|3(ii)     |  | Bylaws
Filed as exhibit to Form S-4 dated October 20, 1999                                                                                                
|10(i)     |  | Plan document for the Redlands Centennial Bank Employee Stock Ownership Plan, dated February 1, 2000
Filed as an exhibit to Form 10-QSB dated May 12, 2000
|10(ii)(A) |  | 1.  Employment Contract of Douglas C. Spencer, dated September 10, 1997
Filed as exhibit to Form S-4 dated October 20, 1999                               
|          |  | 2.  Salary Continuation Agreement of Douglas C. Spencer, dated March 17, 1998
Filed as exhibit to Form S-4 dated October 20, 1999                         
|          |  | 3.  Employment Agreement of Roy D. Lewis, dated March 20, 1998
Filed as exhibit to Form S-4 dated October 20, 1999                                        
|          |  | 4.  Employment Agreement of Anne E. Sanders, dated March 20, 1998
Filed as exhibit to Form S-4 dated October 20, 1999                                     
|          |  | 5.  Redlands Centennial Bank 1990 Stock Option Plan and Addendums
Filed as exhibit to Form S-4 dated October 20, 1999                                     
|          |  | 6.  Employment Agreement of Timothy Walbridge, dated August 31, 2000
Filed as an exhibit to Form SB-2 dated March 21, 2001                                
|          |  | 7.  Salary Continuation Agreement of Timothy Walbridge, dated August 31, 2000
Filed as an exhibit to Form SB-2 dated March 21, 2001                       

20

---

|      |  | 8.  Brea Branch Lease, dated September 20, 2000
Filed as an exhibit to Form SB-2 dated March 21, 2001                                                                      
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  | 9.  Form of Indemnification Agreement
Filed as an exhibit to Form SB-2 dated March 21, 2001                                                                                
|      |  | 10.  Stock Purchase Agreement for Palomar Community Bank
Filed as an exhibit to Form SB-2 dated March 21, 2001                                                             
|10(I) |  | Redlands Centennial Bank Employee Stock Ownership Plan, dated February 1, 2000
Filed as exhibit to Form 10-QSB dated May 12, 2000                                          
|23    |  | 1.  Consent of Hutchinson and Bloodgood LLP, dated March 20, 2001
Filed as an exhibit to Form SB-2 dated March 21, 2001                                                    
|      |  | 2.  Consent of Arthur Andersen LLP, dated March 19, 2001
Filed as an exhibit to Form SB-2 dated March 21, 2001                                                             
|      |  | 3.  Consent of Hutchinson and Bloodgood LLP, dated April 30, 2001
Filed as an exhibit to Form 10-KSB/A dated May 2, 2001                                                   
|99    |  | 1.  99.29 Management's Discussion & Analysis of Financial Condition and Results of Operations
Filed as an exhibit to Form 10-KSB/A dated May 2, 2001                       
|      |  | 2.  99.30 Financial Statements of Centennial First Financial Services for the years ended December 31, 2000 and 1999
Filed as an exhibit to Form 10-KSB/A dated May 2, 2001

The
Company filed no reports on Form 8-K during the first quarter of 2001.

21

---

SIGNATURES

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.

|                   |  | CENTENNIAL FIRST FINANCIAL SERVICES
  (REGISTRANT)                                                                                           
|------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|                   |  |                                                                                                                                              
|Date: May 11, 2001 |  | /s/BETH SANDERSBeth Sanders Chief Financial Officer
(Principal Accounting Officer and officer authorized to sign on behalf of the registrant)

22

---

QuickLinks