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                                                                    EXHIBIT 10.5

                 EXECUTIVE SUPPLEMENTAL COMPENSATION AGREEMENT

         This Agreement is made and entered into effective as of October 17,
2001, by and between Southwest Community Bank, with its principal offices
located in the City of Carlsbad, California ("the Bank"), and Frank J.
Mercardante, an individual residing in the State of California ("the
Executive").

                                 R E C I T A L S

         WHEREAS, the Executive is an employee of the Bank, serving since
March 1, 1998;

         WHEREAS, the Bank desires to establish a compensation benefit program
as a fringe benefit for executive officers of the Bank in order to attract and
retain individuals with extensive and valuable experience in the banking
industry;

         WHEREAS, the Executive's experience and knowledge of the affairs of the
Bank and the banking industry are extensive and valuable;

         WHEREAS, it is deemed to be in the best interests of the Bank to
provide the Executive with certain fringe benefits, on the terms and conditions
set forth herein, in order to reasonably induce the Executive to remain in the
Bank's employment; and

         WHEREAS, the Executive and the Bank wish to specify in writing the
terms and conditions upon which this additional compensatory incentive will be
provided to the Executive;

         NOW, THEREFORE, in consideration of the services to be performed by the
Executive in the future, as well as the mutual promises and covenants contained
herein, the Executive and the Bank agree as follows:

                                A G R E E M E N T

1.       TERMS AND DEFINITIONS.

         1.1.     ADMINISTRATOR. The Bank shall be the "Administrator" and,
solely for the purposes of ERISA as defined in subparagraph 1.8 below, the
"fiduciary" of this Agreement where a fiduciary is required by ERISA.

         1.2.     APPLICABLE PERCENTAGE. The term "Applicable Percentage" shall
mean that percentage listed on Schedule "A" attached hereto which is adjacent to
the number of calendar years which shall have elapsed from the date of this
Agreement and ending on the date payments are to first begin under the terms of
this Agreement. Notwithstanding the foregoing or the percentages set forth on
Schedule "A", but subject to all other terms and conditions set forth herein,
the "Applicable Percentage" shall be: One hundred percent (100%) pursuant to

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subparagraph 5.4 upon the occurrence of a "Change in Control" as defined in
subparagraph 13 below, or the Executive's Death. In the event Executive becomes
Disabled pursuant to subparagraph 1.6 below, the Applicable Percentage shall be
calculated as of the end of three years following the year in which the
Executive is Disabled.

         1.3.     CHANGE IN CONTROL. The term "Change in Control" shall mean the
occurrence of any of the following events with respect to the Bank (with the
term "Bank" being defined for purposes of determining whether a "Change in
Control" has occurred to include a Holding Company if one is formed in the
future: (i) a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
in response to any other form or report to the regulatory agencies or
governmental authorities having jurisdiction over the Bank or any stock exchange
on which the Bank's shares are listed which requires the reporting of a change
in control; (ii) any merger, consolidation or reorganization of the Bank in
which the Bank does not survive; (iii) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one transaction or a series of
transactions) of any assets of the Bank having an aggregate fair market value of
fifty percent (50%) of the total value of the assets of the Bank, reflected in
the most recent balance sheet of the Bank; (iv) a transaction whereby any
"person" (as such term is used in the Exchange Act) or any individual,
corporation, partnership, trust or any other entity becomes the beneficial
owner, directly or indirectly, of securities of the Bank representing
twenty-five percent (25%) or more of the combined voting power of the Bank's
then outstanding securities; or (v) a situation where, in any one-year period,
individuals who at the beginning of such period constitute the Board of
Directors of the Bank cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the Bank's
shareholders, of each new Director is approved by a vote of at least
three-quarters (3/4) of the Directors then still in office who were Directors at
the beginning of the period. Notwithstanding the foregoing or anything else
contained herein to the contrary, there shall not be a "Change of Control" for
the purposes of this Agreement if the event which would otherwise come within
the meaning of the term "Change of Control" involves an Employee Stock Ownership
Plan sponsored by the Bank which is the party that acquires "control" or is the
principal participant in the transaction constituting a "Change in Control," as
described above.

         1.4.     THE CODE. The "Code" shall mean the Internal Revenue Code of
1986, as amended (the "Code").

         1.5.     CONSTRUCTIVE TERMINATION OF EMPLOYMENT. The term "Constructive
Termination of Employment" shall mean termination of Employment by Executive
because the working conditions are so intolerable or aggravated that a
reasonable person in the Executive's position would be compelled to resign,
provided that the Executive advised the Bank of the conditions and the Bank
failed to take timely reasonable actions to remedy the conditions.

         1.6      DISABILITY/DISABLED. The term "Disability" or "Disabled" shall
have the same meaning given such terms in any policy of disability insurance
maintained by the Bank for the benefit of the Executive. In the absence of such
a policy which extends coverage to the Executive in the event of disability, the
terms shall mean bodily injury or disease (mental or physical) which wholly and
continuously prevents the performance of duty for at least six months.

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         1.7.     EFFECTIVE DATE. The term "Effective Date" shall mean the date
first written above.

         1.8.     ERISA. The term "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.

         1.9.     EXECUTIVE BENEFIT. The term "Executive Benefit" or "Retirement
Benefit Payments" shall mean the benefits determined pursuant to subparagraphs
3.1 or 3.2 and in accordance with Schedule "B", and reduced or adjusted to the
extent: (i) required under the other provisions of this Agreement, including,
but not limited to, Paragraphs 5,6, and 7 hereof; (ii) required by reason of the
lawful order of any regulatory agency or body having jurisdiction over the Bank;
or (iii) required in order for the Bank to properly comply with any and all
applicable state and federal laws, including, but not limited to, income,
employment and disability income tax laws (e.g., FICA, FUTA, SDI).

         1.10.    NORMAL RETIREMENT DATE. The term "Normal Retirement Date"
shall mean the Retirement, as defined below, of the Executive upon attainment of
age sixty-two (62).

         1.11.    EARLY RETIREMENT DATE. The term "Early Retirement Date" shall
mean Retirement, as defined below, of the Executive after the attainment of age
fifty-five (55), provided the Applicable Percentage equals one-hundred percent
(100%).

         1.12.    PLAN YEAR. The term "Plan Year" shall mean the Bank's fiscal
year.

         1.13.    RETIREMENT. The term "Retirement" or "Retires" shall refer to
the date which the Executive acknowledges in writing to Bank to be the last day
the Executive will provide any significant personal services, whether as an
employee or independent consultant or contractor, to the Bank. For purposes of
this Agreement, the phrase "significant personal services" shall mean more than
ten (10) hours of personal services rendered to one or more individuals or
entities in any thirty (30) day period.

         1.14.    TERMINATION FOR CAUSE. The term "Termination for Cause" shall
mean termination of the employment of the Executive by reason of any of the
following, and only by reason of any of the following:

                  (a)      The Executive's deliberate violation of (i) any state
or federal banking or securities laws, or of the Bylaws, rules, policies or
resolutions of the Bank, or (ii) of the rules or regulations of the California
Department of Financial Institutions, the Federal Deposit Insurance Corporation,
the Federal Reserve Board of Governors, the Office of the Comptroller of the
Currency or any other regulatory agency or governmental authority having
jurisdiction over the Bank, which has a material financial adverse effect upon
the Bank; or

                  (b)      The Executive's conviction of (i) any felony or (ii)
a crime involving moral turpitude or a fraudulent or dishonest act which, in
each case, has a material financial adverse effect on the Bank.

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         1.15.    YEAR OF SERVICE. The term "Year of Service" shall mean any
calendar year in which the Executive is employed by the Bank for at least six
months.

2.       SCOPE, PURPOSE AND EFFECT.

         2.1.     CONTRACT OF EMPLOYMENT. Although this Agreement is intended to
provide the Executive with an additional incentive to remain in the employ of
the Bank, this Agreement shall not be deemed to constitute a contract of
employment between the Executive and the Bank nor shall any provision of this
Agreement restrict or expand the right of the Bank to terminate the Executive's
employment. This Agreement shall have no impact or effect upon any separate
written Employment Agreement which the Executive may have with the Bank, it
being the parties' intention and agreement that unless this Agreement is
specifically referenced in said Employment Agreement (or any modification
thereto), this Agreement (and the Bank's obligations hereunder) shall stand
separate and apart and shall have no effect on or be affected by, the terms and
provisions of said Employment Agreement.

         2.2.     FRINGE BENEFIT. The benefits provided by this Agreement are
granted by the Bank as a fringe benefit to the Executive and are not a part of
any salary reduction plan or any arrangement deferring a bonus or a salary
increase. The Executive has no option to take any current payments or bonus in
lieu of the benefits provided by this Agreement.

         2.3.     PROHIBITED PAYMENTS. Notwithstanding anything in this
Agreement to the contrary (and in particular in section 1.8 or section 3
hereof), if any payment made under this Agreement is a "golden parachute
payment" as defined in Section 28(k) of the Federal Deposit Insurance Act (12
U.S.C. section 1828(k) and Part 359 of the Rules and Regulations of the Federal
Deposit Insurance Corporation (collectively, the "FDIC Rules") or is otherwise
prohibited, restricted or subject to the prior approval of a Bank Regulator (as
defined in section 1.14 (d) herein), no payment shall be made hereunder without
complying with said FDIC Rules.

3.       EXECUTIVE BENEFITS PAYMENTS.

         3.1.     PAYMENTS COMMENCE UPON EARLY RETIREMENT DATE. In the event the
Executive elects to Retire on a date which constitutes an Early Retirement Date,
as defined in subparagraph 1.11 above, the Executive shall be entitled to be
paid the Applicable Percentage of the Executive Benefits as described in
Schedule B, in substantially equal monthly installments on the first day of each
month, beginning with the month following the month in which the Early
Retirement Date occurs or upon such later date as may be mutually agreed upon by
the Executive and the Bank in advance of said Early Retirement Date, payable
until the Executive's death.

         3.2.     PAYMENTS COMMENCE UPON NORMAL RETIREMENT DATE. If the
Executive shall remain in the continuous employment of the Bank until attaining
sixty-two (62) years of age, the Executive shall be entitled to be paid the
Applicable Percentage of the Executive Benefits, as defined in Schedule B, in
substantially equal monthly installments on the first day of each month,
beginning with the month following the month in which the Executive Retires or
upon

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such later date as may be mutually agreed upon by the Executive and the Bank in
advance of said Retirement date, payable until the Executive's death.

         3.3.     PAYMENTS IN THE EVENT OF THE EXECUTIVE'S DEATH. In the event
of the Executive's death, any payments under this, paragraph 3 shall be prorated
to the date of death.

         4.       PAYMENTS IN THE EVENT DISABILITY OCCURS PRIOR TO RETIREMENT.
In the event the Executive becomes Disabled while actively employed by the Bank
at any time after the Effective Date of this Agreement but prior to Retirement,
the Executive shall be entitled to be paid the Applicable Percentage of the
Executive Benefits, as defined above, in substantially equal monthly
installments on the first day of each month, beginning with the month following
the month in which the Executive becomes Disabled, payable until the Executive's
death.

         5.       PAYMENTS IN THE EVENT EXECUTIVE IS TERMINATED PRIOR TO
RETIREMENT. As indicated in subparagraph 2.1 above, the Bank reserves the right
to terminate the Executive's employment, with or without Cause but subject to
any written employment agreement which may then exist, at any time prior to the
Executive's Retirement. In the event that the employment of the Executive shall
be terminated, other than by reason of Disability or Retirement, then this
Agreement shall terminate upon the date of such termination of employment;
provided, however, that the Executive shall be entitled to the following
benefits as may be applicable depending upon the circumstances surrounding the
Executive's termination:

         5.1.     TERMINATION WITHOUT CAUSE. If the Executive's employment is
terminated by the Bank without cause, and such termination is not subject to the
provisions of subparagraph 5.4 below, the Executive shall be entitled to be paid
the Applicable Percentage of the Executive Benefits as defined above calculated
as of the end of the year following the year the Executive was terminated, as if
the employment had continued to such date, in substantially equal monthly
installments on the first day of each month, beginning with the month following
the month in which the Executive attains sixty two (62) years of age, or any
month thereafter, as requested in writing by the Executive and delivered to the
Bank or its successor thirty (30) days prior to the commencement of installment
payments.

         5.2      VOLUNTARY TERMINATION BY THE EXECUTIVE.

                  (a)      If the Applicable Percentage is one hundred percent
(100%), the Executive shall be entitled to be paid the Applicable Percentage of
the Executive Benefits, as defined in Schedule B, in substantially equal monthly
installments on the first day of each month, beginning with the month following
the month in which the Executive attains sixty two (62) years of age, or any
month thereafter, as requested in writing by the Executive and delivered to the
Bank or its successor thirty (30) days prior to the commencement of installment
payments

                  (b)      If the Executive's employment is terminated by
voluntary resignation prior to the date specified in Schedule A which
corresponds to an Applicable Percentage equal to one hundred percent (100%) and
such resignation is not subject to the provisions of subparagraph 5.4 below, the
Executive shall forfeit any and all rights and benefits he may have under the
terms of

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this Agreement and shall have no right to be paid any of the amounts which would
otherwise be due or paid to the Executive by the Bank pursuant to the terms of
this Agreement.

                  (c)      Termination of Employment of Executive that is a
"Constructive Termination of Employment" shall not be considered as a voluntary
Termination by Executive but rather as a Termination of Employment by Bank
without cause.

         5.3.     TERMINATION FOR CAUSE. The Executive agrees that if his
employment with the Bank is terminated "for cause," as defined in subparagraph
1.13 of this Agreement, he shall forfeit any and all rights and benefits he may
have under the terms of this Agreement and shall have no right to be paid any of
the amounts which would otherwise be due or paid to the Executive by the Bank
pursuant to the terms of this Agreement; provided however, if the Executive is
terminated for disability, he shall be entitled to benefits under Section 4.

         5.4.     TERMINATION ON ACCOUNT OF OR AFTER A CHANGE IN CONTROL. In the
event: (i) the Executive's employment with the Employer is terminated by the
Employer in conjunction with, or by reason of, a "Change in Control" (as defined
in subparagraph 1.3 above); or (ii) by reason of the Employer's actions any
adverse and material change occurs in the scope of the Executive's position,
responsibilities, duties, salary, benefits, or location of employment after a
Change in Control occurs; or (iii) the Employer causes an event to occur which
reasonably constitutes or results in a demotion, a significant diminution of
responsibilities or authority, or a constructive termination (by forcing a
resignation or otherwise) of the Executive's employment after a Change in
Control occurs, then the Executive shall be entitled to be paid the Applicable
Percentage of the Executive Benefits, as defined above, in substantially equal
monthly installments on the first day of each month, beginning with the month
following the month in which the Change in Control has occurred, as requested in
writing by the Executive and delivered to the Bank or its successor thirty (30)
days prior to the commencement of installment payments; provided, however, that
in the event the Executive does not request a commencement date as specified,
such installments shall be paid on the first day or each month, beginning with
the month following the month in which the Executive attains sixty-two (62)
years of age. The installments shall be payable until the Executive's death.

6.       IRS SECTION 280G ISSUES. If all or any portion of the amounts payable
to the Executive under this Agreement, either alone or together with other
payments which the Executive has the right to receive from the Bank, constitute
"excess parachute payments" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), that are subject to the excise
tax imposed by Section 4999 of the Code (or similar tax and/or assessment),
Executive shall be responsible for the payment of such excise tax and Bank (and
its successor) shall be responsible for any loss of deductibility related
thereto; provided, however, that Bank and Executive shall cooperate with each
other and use all reasonable efforts to minimize to the fullest extent possible
the amount of excise tax imposed by Section 4999 of the Code. If, at a later
date, it is determined (pursuant to final regulations or published rulings of
the Internal Revenue Service, final judgment of a court of competent
jurisdiction, or otherwise) that the amount of excise taxes payable by the
Executive is greater than the amount initially so determined, then the Executive
shall pay an amount equal to the sum of such additional excise taxes and any
interest, fines and penalties resulting from such underpayment. The
determination of the amount of any

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such excise taxes shall be made by the independent accounting firm employed by
the Bank immediately prior to the change in control or such other independent
accounting firm or advisor as may be mutually agreeable to Bank and Executive in
the exercise of their reasonable good faith judgment.

7.       RIGHT TO DETERMINE FUNDING METHODS. The Bank reserves the right to
determine, in its sole and absolute discretion, whether, to what extent and by
what method, if any, to provide for the payment of the amounts which may be
payable to the Executive, under the terms of this Agreement. In the event that
the Bank elects to fund this Agreement, in whole or in part, through the use of
life insurance or annuities, or both, the Bank shall determine the ownership and
beneficial interests of any such policy of life insurance or annuity. The Bank
further reserves the right, in its sole and absolute discretion, to terminate
any such policy, and any other devise used to fund its obligations under this
Agreement, at any time, in whole or in part. Consistent with Paragraph 8 below,
the Executive shall have no right, title or interest in or to any funding source
or amount utilized by the Bank pursuant to this Agreement, and any such funding
source or amount shall not constitute security for the performance of the Bank's
obligations pursuant to this Agreement. In connection with the foregoing, the
Executive agrees to execute such documents and undergo such medical examinations
or tests which the Bank may request and which may be reasonably necessary to
facilitate any funding for this Agreement including, without limitation, the
Bank's acquisition of any policy of insurance or annuity.

8.       CLAIMS PROCEDURE. The Bank shall, but only to the extent necessary to
comply with ERISA, be designated as the named fiduciary under this Agreement and
shall have authority to control and manage the operation and administration of
this Agreement. Consistent therewith, the Bank shall make all determinations as
to the rights to benefits under this Agreement. Any decision by the Bank denying
a claim by the Executive for benefits under this Agreement shall be stated in
writing and delivered or mailed, via registered or certified mail, to the
Executive, the Executive's spouse or the Executive's beneficiaries, as the case
may be. Such decision shall set forth the specific reasons for the denial of a
claim. In addition, the Bank shall provide the Executive, or as applicable, the
Executive's spouse or beneficiaries, with a reasonable opportunity for a full
and fair review of the decision denying such claim.

9.       STATUS AS AN UNSECURED GENERAL CREDITOR. Notwithstanding anything
contained herein to the contrary: (i) the Executive shall have no legal or
equitable rights, interests or claims in or to any specific property or assets
of the Bank as a result of this Agreement; (ii) none of the Bank's assets shall
be held in or under any trust for the benefit of the Executive or held in any
way as security for the fulfillment of the obligations of the Bank under this
Agreement; (iii) all of the Bank's assets shall be and remain the general
unpledged and unrestricted assets of the Bank; (iv) the Bank's obligation under
this Agreement shall be that of an unfunded and unsecured promise by the Bank to
pay money in the future; and (v) the Executive shall be an unsecured general
creditor with respect to any benefits which may be payable under the terms of
this Agreement.

Notwithstanding subparagraphs (i) through (v) above, the Bank and the Executive
acknowledge and agree that, in the event of a Change in Control, upon request of
the Executive, or in the Bank's discretion if the Executive does not so request
and the Bank nonetheless deems it

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appropriate, the Bank shall establish, not later than the effective date of the
Change in Control, a Rabbi Trust or multiple Rabbi Trusts (the "Trust" or
"Trusts") upon such terms and conditions as the Bank, in its sole discretion,
deems appropriate and in compliance with applicable provisions of the Code, in
order to permit the Bank to make contributions and/or transfer assets to the
Trust or Trusts to discharge its obligations pursuant to this Agreement. The
principal of the Trust or Trusts and any earnings thereon shall be held separate
and apart from other funds of the Bank to be used exclusively for discharge of
the Bank's obligations pursuant to this Agreement and shall continue to be
subject to the claims of the Bank's general creditors until paid to the
Executive in such manner and at such times as specified in this Agreement.

10.      DISCRETION OF BOARD TO ACCELERATE PAYOUT. Notwithstanding any of the
other provisions of this Agreement, the Board of Directors of the Bank or the
Holding Company may, if determined in its sole and absolute discretion to be
appropriate, accelerate the payment of the amounts due under the terms of this
Agreement, provided that the Executive: (i) consents to the revised payout terms
determined appropriate by the Board of Directors; and (ii) does not negotiate or
in any way influence the terms of proposed altered/accelerated payout (said
decision to be made solely by the Board of Directors and offered to the
Executive on a "take it or leave it basis").

11.      MISCELLANEOUS.

         11.1.    OPPORTUNITY TO CONSULT WITH INDEPENDENT ADVISORS. The
Executive acknowledges that he has been afforded the opportunity to consult with
independent advisors of his choosing including, without limitation, accountants
or tax advisors and counsel regarding both the benefits granted to him under the
terms of this Agreement and the (i) terms and conditions which may affect the
Executive's right to these benefits and (ii) personal tax effects of such
benefits including, without limitation, the effects of any federal or state
taxes, Section 280G of the Code, and any other taxes, costs, expenses or
liabilities whatsoever related to such benefits, which in any of the foregoing
instances the Executive acknowledges and agrees shall be the sole responsibility
of the Executive notwithstanding any other term or provision of this Agreement.
The Executive further acknowledges and agrees that the Bank shall have no
liability whatsoever related to any such personal tax effects or other personal
costs, expenses, or liabilities applicable to the Executive and further
specifically waives any right for himself or herself, and his or her heirs,
beneficiaries, legal representatives, agents, successor and assign to claim or
assert liability on the part of the Bank related to the matters described above
in this subparagraph 11.1. The Executive further acknowledges that he has read,
understands and consents to all of the terms and conditions of this Agreement,
and that he enters into this Agreement with a full understanding of its terms
and conditions.

         11.2.    ARBITRATION OF DISPUTES. All claims, disputes and other
matters in question arising out of or relating to this Agreement or the breach
or interpretation thereof, other than those matters which are to be determined
by the Bank in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
located in San Diego, California. In the event JAMS is unable or unwilling to
conduct the arbitration provided for under the terms of this Paragraph, or has
discontinued its business, the

<PAGE>

parties agree that a representative member, selected by the mutual agreement of
the parties of the American Arbitration Association ("AAA") located in San
Diego, California, shall conduct the binding arbitration referred to in this
Paragraph. Notice of the demand for arbitration shall be filed in writing with
the other party to this Agreement and with JAMS (or AAA, if necessary). In no
event shall the demand for arbitration be made after the date when institution
of legal or equitable proceedings based on such claim, dispute or other matter
in question would be barred by the applicable statute of limitations. The
arbitration shall be subject to such rules of procedure used or established by
JAMS, or if there are none, the rules of procedure used or established by AAA.
Any award rendered by JAMS or AAA shall be final and binding upon the parties,
and as applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns, and may be entered in any court having
jurisdiction thereof. The obligation of the parties to arbitrate pursuant to
this clause shall be specifically enforceable in accordance with, and shall be
conducted consistently with, the provisions of Title 9 of Part 3 of the
California Code of Civil Procedure. Any arbitration hereunder shall be conducted
in San Diego, California, unless otherwise agreed to by the parties.

         11.3.    ATTORNEYS' FEES. In the event of any arbitration or litigation
concerning any controversy, claim or dispute between the parties hereto, arising
out of or relating to this Agreement or the breach hereof, or the interpretation
hereof, the prevailing party shall be entitled to recover from the losing party
reasonable expenses, attorneys' fees and costs incurred in connection therewith
or in the enforcement or collection of any judgment or award rendered therein.
The "prevailing party" means the party determined by the arbitrator(s) or court,
as the case may be, to have most nearly prevailed, even if such party did not
prevail in all matters, not necessarily the one in whose favor a judgment is
rendered.

         11.4.    NOTICE. Any notice required or permitted of either the
Executive or the Bank under this Agreement shall be deemed to have been duly
given, if by personal delivery, upon the date received by the party or its
authorized representative; if by facsimile, upon transmission to a telephone
number previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

                           If to the Bank:         Southwest Community Bank
                                                   5810 El Camino Real
                                                   Suite D
                                                   Carlsbad, CA 92013
                                                   Attention: President

                           If to the Executive:    Frank J. Mercardante

                                                   ______________________
                                                   ______________________

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                           and a copy to:
                                                   Lawrence S. Branton, Esq.
                                                   Branton & Wilson, APC
                                                   701 B St., Suite 1255
                                                   San Diego, CA 92101-8187

         11.5.    ASSIGNMENT. The Executive shall have no power or right to
transfer, assign, anticipate, hypothecate, modify or otherwise encumber any part
or all of the amounts payable hereunder, nor, prior to payment in accordance
with the terms of this Agreement, shall any portion of such amounts be: (i)
subject to seizure by any creditor of the Executive, by a proceeding at law or
in equity, for the payment of any debts, judgments, alimony or separate
maintenance obligations which may be owed by the Executive; or (ii) transferable
by operation of law in the event bankruptcy, insolvency or otherwise. Any such
attempted assignment or transfer shall be void.

         11.6.    BINDING EFFECT/MERGER OR REORGANIZATION. This Agreement shall
be binding upon and inure to the benefit of the Executive and the Bank.
Accordingly, the Bank shall not merge or consolidate into or with another
corporation, or reorganize or sell substantially all of its assets to another
corporation, firm or person, unless and until such succeeding or continuing
corporation, firm or person agrees to assume and discharge the obligations of
the Bank under this Agreement. In the alternative, the Holding Company may agree
to assume and discharge the obligation of the Bank under this Agreement. Upon
the occurrence of such event, the term "Bank" as used in this Agreement shall be
deemed to refer to such surviving or successor firm, person, entity or
corporation, or the Holding Company, as the case may be.

         11.7.    NONWAIVER. The failure of either party to enforce at any time
or for any period of time any one or more of the terms or conditions of this
Agreement shall not be a waiver of such term(s) or condition(s) or of that
party's right thereafter to enforce each and every term and condition of this
Agreement.

         11.8.    PARTIAL INVALIDITY. If any terms, provision, covenant, or
condition of this Agreement is determined by an arbitrator or a court, as the
case may be, to be invalid, void, or unenforceable, such determination shall not
render any other term, provision, covenant or condition invalid, void or
unenforceable, and the Agreement shall remain in full force and effect
notwithstanding such partial invalidity.

         11.9.    ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
subject matter of this Agreement and contains all of the covenants and
agreements between the parties with respect thereto. Each party to this
Agreement acknowledges that no other representations, inducements, promises, or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not set forth herein, and that no other
agreement, statement, or promise not contained in this Agreement shall be valid
or binding on either party.

         11.10.   MODIFICATIONS. Any modification of this Agreement shall be
effective only if it is in writing and signed by each party or such party's
authorized representative.

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         11.11.   PARAGRAPH HEADINGS. The paragraph headings used in this
Agreement are included solely for the convenience of the parties and shall not
affect or be used in connection with the interpretation of this Agreement.

         11.12.   NO STRICT CONSTRUCTION. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
person.

         11.13.   GOVERNING LAW. The laws of the State of California, other than
those laws denominated choice of law rules, and where applicable, the rules and
regulations of the Board of Governors of the Federal Reserve System, Federal
Deposit Insurance Corporation, Office of the Comptroller of the Currency, or any
other regulatory agency or governmental authority having jurisdiction over the
Bank or the Holding Company, shall govern the validity, interpretation,
construction and effect of this Agreement.

         IN WITNESS WHEREOF, the Bank and the Executive have executed this
Agreement on the date first above-written in the City of Carlsbad, California.

BANK                                               EXECUTIVE

Southwest Community Bank

By:  /s/ Howard B. Levenson                        /s/ Frank J. Mercardante
     -------------------------------               -----------------------------
     Howard B. Levenson                            Frank J. Mercardante
     Chairman

<PAGE>

                                   SCHEDULE A

<TABLE>
<CAPTION>
         CALENDAR YEAR                            APPLICABLE PERCENTAGE
--------------------------------                  ---------------------
<S>                                               <C>
Inception of service to 12/31/01                            30%

01/01/02 to 12/31/02:                                    38.75%

01/01/03 to 12/31/03:                                    47.50%

01/01/04 to 12/31/04:                                    56.25%

01/01/05 to 12/31/05:                                       65%

01/01/06 to 12/31/06:                                    73.75%

01/01/07 to 12/31/07:                                    82.50%

01/01/08 to 12/31/08:                                    91.25%

01/01/09 and beyond:                                       100%
</TABLE>

Beginning in the year 2002, the Executive shall be entitled to the
Applicable Percentage increase for each calendar year, during which he
is employed by the Bank for at least six months.

<PAGE>

                                   SCHEDULE B

                               EXECUTIVE BENEFITS

The Bank shall pay to the Executive pursuant to the Agreement during the
Executive's lifetime One Hundred Forty Thousand Dollars ($140,000) per year,
payable in twelve equal monthly installments. The amount of Executive Benefits
payable under the Agreement shall be adjusted each year from the date of
commencement of payments of the Executive Benefits until the death of the
Executive as follows:

         a.       The Executive Benefits shall be increased at the rate of three
percent (3%) each year, subject to further adjustment for an Early Retirement.

         b.       If the Executive elects Early Retirement, the Executive
Benefits shall be decreased by a percentage calculated by subtracting the
Executive's age at Early Retirement from the Normal Retirement Age of 62 and
multiplying the result by a factor of seven. For example, assuming the
Applicable Percentage equals 100%, a 35% reduction of the Executive Benefits
would occur if the Executive's Early Retirement Age is 57, based on the
following calculation: 62-57=5x7=35%.

Exhibit 10.5