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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

|  |                                                                                        
|- | ---------------------------------------------------------------------------------------
|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the Quarterly Period Ended March 31, 2002

OR

|  |                                                                                         
|- | ----------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Transition Period from __________________ to __________________

Commission File Number 0-26960

ITLA CAPITAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 95-4596322                       
|                                                               |  |                                  
|(State or Other Jurisdiction of Incorporation
or Organization) |  | (IRS Employer Identification No.)
|                                                              
|888 Prospect St., Suite 110, La Jolla, California              |  | 92037                            
|                                                               |  |                                  
|(Address of Principal Executive Offices)                       |  | (Zip Code)                       

(858) 551-0511

---

(Registrants Telephone Number, Including Area Code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes x No o


Number of shares of common stock of the registrant: 5,804,292 outstanding
as of May 8, 2002.

THIS FILING INCLUDES UNAUDITED FINANCIAL STATEMENTS
THAT HAVE NOT BEEN REVIEWED IN ACCORDANCE WITH RULE 10-01 (d) OF
REGULATION S-X PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION,
BECAUSE THE REGISTRANT ELECTED NOT TO OBTAIN SUCH A REVIEW FROM ITS
CURRENT INDEPENDENT AUDITOR, ARTHUR ANDERSEN, LLP, IN ACCORDANCE WITH
STATEMENT OF AUDITING STANDARDS NUMBER 71. SEE
INFORMATION WITH RESPECT TO FINANCIAL STATEMENTS IN THIS
FILING FOR MORE INFORMATION.





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TABLE OF CONTENTS



|                            |                                                                                               |                                                          |  |  |  |  |  | 
|--------------------------- | --------------------------------------------------------------------------------------------- | -------------------------------------------------------- |  |  |  |  |  | 
|                            |                                                                                               | CONSOLIDATED BALANCE SHEETS                             
|                            |                                                                                               | CONSOLIDATED STATEMENTS OF INCOME                       
|                            |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS                   
|                            |                                                                                               | NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|                            | ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                            | ITEM 3: MARKET RISK                                                                          
|Part II  OTHER INFORMATION
|                            | Item 1 Legal Proceedings                                                                     
|                            | Item 2 Changes in Securities                                                                 
|                            | Item 3 Defaults Upon Senior Securities                                                       
|                            | Item 4 Submission of Matters to a Vote of Security Holders                                   
|                            | Item 5 Other Information                                                                     
|                            | Item 6 Exhibits and Reports on Form 8-K                                                      
|SIGNATURES                 



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ITLA CAPITAL CORPORATION
FORM 10-Q
FOR THE THREE MONTHS ENDED MARCH 31, 2002
TABLE OF CONTENTS

|                                                 |  |                                                                                       |   |            |                                                                                    |  |      |   | 
|------------------------------------------------ |  | ------------------------------------------------------------------------------------- | - | ---------- | ---------------------------------------------------------------------------------- |  | ---- | - | 
|                                                 |  |                                                                                       |   |            |                                                                                    |  | Page
|                                                 |  |                                                                                       |   |            |                                                                                    |  |     
|PART I  FINANCIAL INFORMATION                   |  |                                                                                       | 2 |           
|                                                
|                                                
|                                                
|                                                
|Information
with respect to Financial Statements |  |                                                                                       |   |           
|Item 1.                                          |  | Financial Statements                                                                  |   |            |                                                                                    | 
|                                                 |  |                                                                                       |   |            | Consolidated Balance Sheets  March 31, 2002 and December 31, 2001                 |  |      | 3 | 
|                                                 |  |                                                                                       |   |            | Consolidated
Statements of Income  Three months
Ended March 31, 2002 and 2001     |  |      | 4 | 
|                                                 |  |                                                                                       |   |            | Consolidated Statements of Cash Flows 
Three Months Ended March 31, 2002 and 2001 |  |      | 5 | 
|                                                 |  |                                                                                       |   |            | Notes to Unaudited Consolidated Financial Statements                               |  |      | 6 | 
|Item 2.                                          |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations |   |            | 8                                                                                  | 
|                                                
|                                                
|                                                
|                                                
|Item 3.                                          |  | Market Risk                                                                           |   |            | 16                                                                                 | 
|                                                
|PART II  OTHER INFORMATION                      |  |                                                                                       |   |           
|                                                
|                                                
|                                                
|                                                
|Item 1.                                          |  | Legal Proceedings                                                                     |   |            | 17                                                                                 | 
|                                                
|                                                
|                                                
|                                                
|Item 2.                                          |  | Changes in Securities                                                                 |   |            | 17                                                                                 | 
|                                                
|                                                
|                                                
|                                                
|Item 3.                                          |  | Defaults Upon Senior Securities                                                       |   |            | 17                                                                                 | 
|                                                
|                                                
|                                                
|                                                
|Item 4.                                          |  | Submission of Matters to a Vote of Security Holders                                   |   |            | 17                                                                                 | 
|                                                
|                                                
|                                                
|                                                
|Item 5.                                          |  | Other Information                                                                     |   |            | 17                                                                                 | 
|                                                
|                                                
|                                                
|                                                
|Item 6.                                          |  | Exhibits and Reports on Form 8-K                                                      |   |            | 17                                                                                 | 
|                                                 |  |                                                                                       |   | Signatures |                                                                                    |  | 18   |  

Forward Looking Statements

Safe Harbor statement under the Private Securities Litigation Reform Act
of 1995: This Form 10-Q contains forward-looking statements that are subject
to risks and uncertainties, including, but not limited to; the economic impact
of the terrorist attacks on September 11, 2001, and the U.S. response to these
attacks, changes in economic conditions in our market areas, changes in
policies by regulatory agencies, the impact of competitive loan products, loan
demand risks, the quality or composition of the loan or investment portfolios,
including levels of nonperforming assets, fluctuations in interest rates, and
changes in the relative differences between short and long term interest rates,
and operating results and other risks detailed from time to time in our filings
with the Securities and Exchange Commission. We caution readers not to place
undue reliance on forward-looking statements. We do not undertake and
specifically disclaim any obligation to revise any forward-looking statements
to reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements. These risks could cause our
actual results for 2002 and beyond to differ materially from those expressed in
any forward-looking statements by, or on behalf of, us.

As used throughout this report, the terms we, our or Company refer
to ITLA Capital Corporation and its consolidated subsidiaries.

PART I  FINANCIAL
INFORMATION

Information
with Respect to Financial Statements

This filing includes unaudited financial
statements that have not been reviewed in accordance with
Rule 10-01(d) of Regulation S -X promulgated by the Securities
and Exchange Commission, because the Company elected not to obtain such a review from its current
independent auditor, Arthur Andersen, LLP, in accordance with
Statement of Auditing Standards Number 71. The Company plans to have
these financial statements reviewed in accordance with Rule 10-01(d)
by another independent auditor to be selected by the Company's Board
of Directors, and will seek to have this review completed as soon as
practicable following the selection of such other independent
auditor. No independent auditor has opined that the financial
statements set forth below present fairly, in all material aspects,
the financial position, results of operations, cash flows and changes
in shareholders' equity of the Company for the periods presented in
accordance with generally accepted accounting principles.

2



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ITLA CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                     |           |              |   |         |           | 
|--------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------------------------- | ------------------------------------------ | - | ----------------------------------- | --------- | ------------ | - | ------- | --------- | 
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   | March 31,                           |           | December 31,
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   | 2002                                |           | 2001        
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   | (unaudited)                         |           |             
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   | (in thousands except share amounts)
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                    
|                                                                                                                |                                                                                                                                                               |   |                            | Assets                                     |   |                                     |           |              |   |         |           | 
|Cash and cash equivalents                                                                                       |                                                                                                                                                               | $ | 116,862                    |                                            |   | $                                   | 134,241   |             
|Investment
securities available for sale, at fair value                                                         |                                                                                                                                                               |   | 36,612                     |                                            |   |                                     | 29,411    |             
|Stock in Federal Home Loan Bank                                                                                 |                                                                                                                                                               |   | 13,621                     |                                            |   |                                     | 13,464    |             
|Real estate loans, net (net of allowance for loan
losses of $26,701 and $24,722 in 2002 and 2001, respectively) |                                                                                                                                                               |   | 1,040,435                  |                                            |   |                                     | 1,122,370 |             
|Real estate loans held in trust (net of allowance
for loan losses of $1,928 in 2002 and 2001, respectively)     |                                                                                                                                                               |   | 151,788                    |                                            |   |                                     | 162,158   |             
|Interest receivable                                                                                             |                                                                                                                                                               |   | 9,332                      |                                            |   |                                     | 11,144    |             
|Other real estate owned, net                                                                                    |                                                                                                                                                               |   | 12,110                     |                                            |   |                                     | 13,741    |             
|Premises and equipment, net                                                                                     |                                                                                                                                                               |   | 2,418                      |                                            |   |                                     | 2,177     |             
|Deferred income taxes                                                                                           |                                                                                                                                                               |   | 11,798                     |                                            |   |                                     | 11,869    |             
|Other assets                                                                                                    |                                                                                                                                                               |   | 9,897                      |                                            |   |                                     | 7,733     |             
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|                                                                                                                |                                                                                                                                                               |   |                            | Total assets                               |   | $                                   | 1,404,873 |              |   | $       | 1,508,308 | 
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|                                                                                                                |                                                                                                                                                               |   |                            | Liabilities and Shareholders Equity       |   |                                     |           |              |   |         |           | 
|Liabilities:                                                                                                    |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|                                                                                                                | Deposit accounts                                                                                                                                              |   | $                          | 901,168                                    |   |                                     | $         | 953,654      |  
|                                                                                                                | Federal Home Loan Bank advances                                                                                                                               |   |                            | 228,185                                    |   |                                     |           | 269,285      |  
|                                                                                                                | Collateralized mortgage obligations                                                                                                                           |   |                            | 98,841                                     |   |                                     |           | 109,648      |  
|                                                                                                                | Accounts payable and other liabilities                                                                                                                        |   |                            | 7,052                                      |   |                                     |           | 9,674        |  
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|                                                                                                                |                                                                                                                                                               |   |                            | Total liabilities                          |   |                                     | 1,235,246 |              |   |         | 1,342,261 | 
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|Commitments and contingencies                                                                                   |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|                                                                                                                | Guaranteed preferred beneficial interests in the
Companys junior subordinated deferrable interest debentures, net                                            |   |                            | 28,142                                     |   |                                     |           | 28,118       |  
|Shareholders equity:                                                                                           |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|                                                                                                                | Preferred
stock, 5,000,000 shares authorized, none issued                                                                                                     |   |                            |                                           |   |                                     |           |             |  
|                                                                                                                | Contributed capital-common stock, $.01 par value;
20,000,000 shares authorized, 8,220,748 and
8,212,749 issued and outstanding in 2002 and 2001, respectively |   |                            | 58,288                                     |   |                                     |           | 58,183       |  
|                                                                                                                | Retained earnings                                                                                                                                             |   |                            | 120,487                                    |   |                                     |           | 115,768      |  
|                                                                                                                | Accumulated other comprehensive income (loss)                                                                                                                 |   |                            | 124                                        |   |                                     |           | (7           | )
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|                                                                                                                |                                                                                                                                                               |   | 178,899                    |                                            |   |                                     | 173,944   |             
|                                                                                                                | Less treasury stock, at cost 2,415,456 and
2,354,056 shares in 2002 and 2001, respectively                                                                    |   |                            | (37,414                                    | ) |                                     |           | (36,015      | )
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|                                                                                                                |                                                                                                                                                               |   | Total shareholders equity |                                            |   | 141,485                             |           |              |   | 137,929 |          
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             
|                                                                                                                |                                                                                                                                                               |   |                            | Total liabilities and shareholders equity |   | $                                   | 1,404,873 |              |   | $       | 1,508,308 | 
|                                                                                                                |                                                                                                                                                               |   |                            |                                            |   |                                     |           |             

See accompanying notes to the unaudited consolidated financial statements

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ITLA CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |        |        |        | 
|-------------------------------------------------------------------------------------- | --------------------------------------------------- | ------------------------------------ | ---------------------------------------------------- | ------ | --------------------------------------- | ------ | ----- | ------ | ------ | ------ | 
|                                                                                       |                                                     |                                      |                                                      |        | For the Three Months Ended             
|                                                                                       |                                                     |                                      |                                                      |        | March 31,                              
|                                                                                       |                                                     |                                      |                                                      |        |                                        
|                                                                                       |                                                     |                                      |                                                      |        | (in thousands except per share amounts)
|                                                                                       |                                                     |                                      |                                                      |        | 2002                                    |        | 2001 
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |      
|Interest income:                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       | Real estate loans, including fees                   |                                      | $                                                    | 23,516 |                                         |        | $     | 26,783 |       
|                                                                                       | Real estate loans held in trust                     |                                      |                                                      | 2,840  |                                         |        |       | 4,322  |       
|                                                                                       | Cash and investment securities                      |                                      |                                                      | 679    |                                         |        |       | 1,161  |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       |                                                     | Total interest income                |                                                      |        | 27,035                                  |        |       |        | 32,266 |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|Interest expense:                                                                      |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       | Deposit accounts                                    |                                      |                                                      | 8,293  |                                         |        |       | 15,814 |       
|                                                                                       | Federal Home Loan Bank advances                     |                                      |                                                      | 1,538  |                                         |        |       | 531    |       
|                                                                                       | Collateralized mortgage obligations                 |                                      |                                                      | 658    |                                         |        |       | 2,293  |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       |                                                     | Total interest expense               |                                                      |        | 10,489                                  |        |       |        | 18,638 |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       |                                                     |                                      | Net interest income before provision
for loan losses |        |                                         | 16,546 |       |        |        | 13,628 | 
|Provision for loan losses                                                              |                                                     |                                      | 1,325                                                |        |                                         |        | 450   |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       |                                                     |                                      | Net interest income after provision
for loan losses  |        |                                         | 15,221 |       |        |        | 13,178 | 
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|Non-interest income:                                                                   |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       | Late and collection fees                            |                                      |                                                      | 72     |                                         |        |       | 102    |       
|                                                                                       | Gain on sale of loans, net                          |                                      |                                                      | 32     |                                         |        |       |       |       
|                                                                                       | Fee income from mortgage banking activities         |                                      |                                                      |       |                                         |        |       | 60     |       
|                                                                                       | Other                                               |                                      |                                                      | 21     |                                         |        |       | 152    |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       |                                                     | Total non-interest income            |                                                      |        | 125                                     |        |       |        | 314    |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|Non-interest expense:                                                                  |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       | Compensation and benefits                           |                                      |                                                      | 3,319  |                                         |        |       | 2,756  |       
|                                                                                       | Occupancy and equipment                             |                                      |                                                      | 717    |                                         |        |       | 693    |       
|                                                                                       | FDIC assessment                                     |                                      |                                                      | 42     |                                         |        |       | 45     |       
|                                                                                       | Other                                               |                                      |                                                      | 2,240  |                                         |        |       | 1,637  |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       |                                                     | Total general and administrative     |                                                      |        | 6,318                                   |        |       |        | 5,131  |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       | Real estate owned expense, net                      |                                      |                                                      | 86     |                                         |        |       | 15     |       
|                                                                                       | Provision for losses on other real estate
owned     |                                      |                                                      | 513    |                                         |        |       | 122    |       
|                                                                                       | (Gain) loss on sale of other real estate
owned, net |                                      |                                                      | (132   | )                                       |        |       | 32     |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       |                                                     | Total real estate owned expense, net |                                                      |        | 467                                     |        |       |        | 169    |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       |                                                     |                                      | Total non-interest expense                           |        |                                         | 6,785  |       |        |        | 5,300  | 
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|Income before provision for income taxes and
minority interest in income of subsidiary |                                                     |                                      | 8,561                                                |        |                                         |        | 8,192 |       
|Minority interest in income of subsidiary                                              |                                                     |                                      | 799                                                  |        |                                         |        | 574   |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|Income before provision for income taxes                                               |                                                     |                                      | 7,762                                                |        |                                         |        | 7,618 |       
|Provision for income taxes                                                             |                                                     |                                      | 3,043                                                |        |                                         |        | 2,905 |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       | NET INCOME                                          |                                      | $                                                    | 4,719  |                                         |        | $     | 4,713  |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       | BASIC EARNINGS PER SHARE                            |                                      |                                                      | 0.79   |                                         |        | $     | 0.70   |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       
|                                                                                       | DILUTED EARNINGS PER SHARE                          |                                      | $                                                    | 0.74   |                                         |        | $     | 0.67   |       
|                                                                                       |                                                     |                                      |                                                      |        |                                         |        |       |       

See accompanying notes to the unaudited consolidated financial statements.

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ITLA CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |       |         |         |        | 
|------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------------------------------ | ------- | -------------------------- | ------- | ----- | ------- | ------- | ------ | 
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         | For the Three Months Ended
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         | March 31,                 
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                           
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         | 2002                       |         | 2001 
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         | (in thousands)            
|Cash Flows From Operating Activities: |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      | Net Income                                                                        |                                                                                        | $                                         | 4,719                                            |         |                            | $       | 4,713 |        
|                                      | Adjustments to reconcile net income to net cash provided by
operating activities: |                                                                                        |                                           |                                                  |         |                            |         |       |        
|                                      |                                                                                   | Depreciation and amortization of premises and equipment                                |                                           |                                                  | 220     |                            |         |       | 199     |        
|                                      |                                                                                   | Amortization of premium on purchased loans                                             |                                           |                                                  | 53      |                            |         |       | 805     |        
|                                      |                                                                                   | Amortization of original issue discount and deferred debt issuance cost on CMOs       |                                           |                                                  | 52      |                            |         |       | 88      |        
|                                      |                                                                                   | Accretion of deferred loan origination fees, net of costs                              |                                           |                                                  | (283    | )                          |         |       | (413    | )      
|                                      |                                                                                   | Provision for loan losses                                                              |                                           |                                                  | 1,325   |                            |         |       | 450     |        
|                                      |                                                                                   | Provision for losses on other real estate owned                                        |                                           |                                                  | 513     |                            |         |       | 122     |        
|                                      |                                                                                   | Gain on sale of real estate loans, net                                                 |                                           |                                                  | (32     | )                          |         |       |        |        
|                                      |                                                                                   | (Gain) loss on sales of other real estate owned                                        |                                           |                                                  | (132    | )                          |         |       | 32      |        
|                                      |                                                                                   | Decrease in interest receivable                                                        |                                           |                                                  | 1,812   |                            |         |       | 596     |        
|                                      |                                                                                   | (Increase) decrease in other assets                                                    |                                           |                                                  | 1,233   |                            |         |       | 1,832   |        
|                                      |                                                                                   | Decrease in accounts payable and other liabilities                                     |                                           |                                                  | (2,598  | )                          |         |       | (432    | )      
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      |                                                                                   |                                                                                        | Net cash provided by operating activities |                                                  |         | 6,882                      |         |       |         | 7,992   |       
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|Cash Flows From Investing Activities: |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      |                                                                                   | Proceeds from securitization and sale of real estate loans                             |                                           |                                                  | 98,155  |                            |         |       | 210     |        
|                                      |                                                                                   | Decrease in real estate loans, net                                                     |                                           |                                                  | 27,635  |                            |         |       | 18,874  |        
|                                      |                                                                                   | Net cash paid to acquire Asahi Bank of California                                      |                                           |                                                  | (14,758 | )                          |         |       |        |        
|                                      |                                                                                   | Repayment of real estate loans held in trust                                           |                                           |                                                  | 10,017  |                            |         |       | 14,349  |        
|                                      |                                                                                   | Purchase of real estate loans                                                          |                                           |                                                  | (9,791  | )                          |         |       | (75,414 | )      
|                                      |                                                                                   | Purchases of investment securities available for sale                                  |                                           |                                                  | (14,092 | )                          |         |       | (6,619  | )      
|                                      |                                                                                   | Proceeds
from the maturity of investment securities available for sale                 |                                           |                                                  | 7,000   |                            |         |       | 33,260  |        
|                                      |                                                                                   | Decrease in stock in Federal Home Loan Bank                                            |                                           |                                                  |        |                            |         |       | (2,121  | )      
|                                      |                                                                                   | Proceeds from the sale of other real estate owned                                      |                                           |                                                  | 738     |                            |         |       | 156     |        
|                                      |                                                                                   | Other, net                                                                             |                                           |                                                  | (784    | )                          |         |       | (36     | )      
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      |                                                                                   |                                                                                        | Net cash used in investing activities     |                                                  |         | 104,120                    |         |       |         | (17,341 | )     
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|Cash Flows From Financing Activities: |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      |                                                                                   | Decrease in deposit accounts                                                           |                                           |                                                  | (60,404 | )                          |         |       | (16,672 | )      
|                                      |                                                                                   | Net proceeds from (repayment of borrowings) borrowings from
the Federal Home Loan Bank |                                           |                                                  | (41,100 | )                          |         |       | 42,425  |        
|                                      |                                                                                   | Repayment
of Asahi repurchase agreement, net                                           |                                           |                                                  | (14,724 | )                          |         |       |        |        
|                                      |                                                                                   | Principal payments on collateralized mortgage obligations                              |                                           |                                                  | (10,859 | )                          |         |       | (14,424 | )      
|                                      |                                                                                   | Cash paid to acquire treasury stock                                                    |                                           |                                                  | (1,399  | )                          |         |       | (1,777  | )      
|                                      |                                                                                   | Proceeds from exercise of employee stock options                                       |                                           |                                                  | 105     |                            |         |       | 5       |        
|                                      |                                                                                   | Proceeds from issuance of trust preferred securities                                   |                                           |                                                  |        |                            |         |       | 14,549  |        
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      |                                                                                   |                                                                                        | Net cash provided by financing activities |                                                  |         | (128,381                   | )       |       |         | 24,106  |       
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      |                                                                                   |                                                                                        |                                           | Net decrease in cash and cash equivalents        |         |                            | (17,379 | )     |         |         | 14,757 | 
|                                      |                                                                                   |                                                                                        |                                           | Cash and cash equivalents at beginning of period |         |                            | 134,241 |       |         |         | 70,950 | 
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      |                                                                                   |                                                                                        |                                           | Cash and cash equivalents at ending of period    |         | $                          | 116,862 |       |         | $       | 85,707 | 
|                                      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|Supplemental Cash Flow Information:   |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      |                                                                                   | Cash paid during the period for interest                                               |                                           | $                                                | 10,866  |                            |         | $     | 18,843  |        
|                                      |                                                                                   | Cash paid during the period for income taxes                                           |                                           | $                                                | 1,700   |                            |         | $     |        |        
|Non-cash Investing Transactions:      |                                                                                   |                                                                                        |                                           |                                                  |         |                            |         |      
|                                      |                                                                                   | Loans transferred to other real estate owned                                           |                                           | $                                                | 548     |                            |         | $     | 1,619   |        

See accompanying notes to the unaudited consolidated financial statements.

5



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##### Table of Contents






ITLA CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The unaudited consolidated financial statements of ITLA Capital
Corporation (the Company) included herein reflect all normal recurring
adjustments which are, in the opinion of management, necessary to present
fairly the results of operations and financial position of the Company, as of
and for the interim period indicated. The unaudited consolidated financial
statements include the accounts of ITLA Capital and its wholly-owned subsidiaries, Imperial
Capital Bank (the Bank) and Imperial Capital Real Estate Investment Trust
(Imperial Capital REIT), ITLA Capital Statutory Trust I (Trust I) and ITLA
Capital Statutory Trust II (Trust II). All intercompany transactions and
balances have been eliminated. Certain information and disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to the rules and regulations of the U.S. Securities and
Exchange Commission. The results of operations for the three months ended
March 31, 2002 are not necessarily indicative of the results of operations for
the remainder of the year.

These unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in our annual report on Form 10-K for the year ended December 31,
2001.

NOTE 2 - EARNINGS PER SHARE

Basic Earnings Per Share (Basic EPS) is computed by dividing income
available to common shareholders by the weighted-average number of common
shares outstanding for the period. Diluted Earnings Per Share (Diluted EPS)
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock
or resulted in the issuance of common stock which shared in the Companys
earnings.

The following is a reconciliation of the calculation of Basic EPS and
Diluted EPS.

|                                 |  |                                       |       |             |  |           |       |     |  |   |       |  
|-------------------------------- |  | ------------------------------------- | ----- | ----------- |  | --------- | ----- | --- |  | - | ----- | -
|                                 |  | For the Three Months Ended March 31, 
|                                 |  |                                      
|                                 |  |                                       |       |             |  | Weighted- |       |     |  |  
|                                 |  |                                       |       |             |  | Average   |       | Per
|                                 |  | Net                                   |       | Shares      |  | Share    
|                                 |  | Income                                |       | Outstanding |  | Amount   
|                                 |  |                                       |       |             |  |          
|                                 |  | (in thousands, except per share data)
|2002                             |  |                                       |       |             |  |           |       |     |  |   |       |  
|Basic EPS                        |  | $                                     | 4,719 |             |  |           | 6,007 |     |  | $ | 0.79  |  
|Effect of dilutive
stock options |  |                                       |      |             |  |           | 331   |     |  |   | (0.05 | )
|                                 |  |                                       |       |             |  |           |       |     |  |   |       |  
|Diluted EPS                      |  | $                                     | 4,719 |             |  |           | 6,338 |     |  | $ | 0.74  |  
|                                 |  |                                       |       |             |  |           |       |     |  |   |       |  
|2001                             |  |                                       |       |             |  |           |       |     |  |   |       |  
|Basic EPS                        |  | $                                     | 4,713 |             |  |           | 6,720 |     |  | $ | 0.70  |  
|Effect of dilutive stock
options |  |                                       |      |             |  |           | 273   |     |  |   | (0.03 | )
|                                 |  |                                       |       |             |  |           |       |     |  |   |       |  
|Diluted EPS                      |  | $                                     | 4,713 |             |  |           | 6,993 |     |  | $ | 0.67  |  
|                                 |  |                                       |       |             |  |           |       |     |  |   |       |  

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##### Table of Contents



NOTE 3 - COMPREHENSIVE INCOME

Comprehensive income, which encompasses net income and the net change in
unrealized gains (losses) on investment securities available for sale, is
presented below:

|                                 |                                                                                                                                                                                    |   |                    |     |      |   |       |     |  
|-------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------ | --- | ---- | - | ----- | --- | -
|                                 |                                                                                                                                                                                    |   | Three Months Ended
|                                 |                                                                                                                                                                                    |   | March 31,         
|                                 |                                                                                                                                                                                    |   |                   
|                                 |                                                                                                                                                                                    |   | 2002               |     | 2001
|                                 |                                                                                                                                                                                    |   |                    |     |     
|                                 |                                                                                                                                                                                    |   | (in thousands)    
|Net income                       |                                                                                                                                                                                    | $ | 4,719              |     |      | $ | 4,713 |    
|Other
comprehensive gain (loss): |                                                                                                                                                                                    |   |                    |     |      |   |       |    
|                                 | Unrealized gain (loss) on investment
securities available for sale, net of tax
expense (benefit) of $87 and $(27) for the three
months ended March 31, 2002 and
2001, respectively |   |                    | 131 |      |   |       | (40 | )
|                                 |                                                                                                                                                                                    |   |                    |     |      |   |       |    
|Comprehensive income             |                                                                                                                                                                                    | $ | 4,850              |     |      | $ | 4,673 |    
|                                 |                                                                                                                                                                                    |   |                    |     |      |   |       |    

NOTE 4 - IMPAIRED LOANS RECEIVABLE

As of March 31, 2002 and December 31, 2001, the recorded investment in
impaired real estate loans and impaired real estate loans held in trust was
$6.3 million and $16.7 million, respectively. The average recorded investment
in impaired loans was $15.0 million for the three months ended March 31, 2002
and $24.0 million for the same period last year. Interest income recognized on
impaired loans totaled $44,000 for the three months ended March 31, 2002 as
compared to $127,000 for the same periods last year.

|         |                                                                                                          
|-------- | ---------------------------------------------------------------------------------------------------------
|NOTE 5 - | GUARANTEED PREFERRED BENEFICIAL INTERESTS IN COMPANYS JUNIOR
SUBORDINATED DEFERRABLE INTEREST DEBENTURES

The Company has two wholly-owned trust subsidiaries, Trust I and Trust II,
which issued $14.0 million of 10.60% cumulative trust preferred securities and
$15.0 million of 10.20% cumulative trust preferred securities, respectively,
(referred to collectively as the Trust Preferred securities.) ITLA Capital
has fully and unconditionally guaranteed the Trust Preferred securities along
with all obligations of each trust under their respective trust agreements.
Each trust was formed for the exclusive purpose of issuing their respective
Trust Preferred securities and common securities and using the proceeds to
acquire ITLA Capitals junior subordinated deferrable interest debentures.
Trust I acquired an aggregate principal amount of $14.4 million of ITLA
Capitals 10.60% junior subordinated deferrable interest debentures due
September 7, 2030 and Trust II acquired an aggregate principal amount of $15.5
million of ITLA Capitals 10.20% junior subordinated deferrable interest
debentures due February 22, 2031. The sole assets of each trust are the
debentures it holds. Each of the debentures is redeemable, in whole or in
part, at ITLA Capitals option on or after ten years after issuance, at
declining premiums to maturity. The Company used the proceeds from the
debentures for general corporate purposes, including an aggregate of $28.0
million in capital contributions to the Bank to support future growth.

The costs associated with the Trust Preferred securities issuance have
been capitalized and are being amortized using a method that approximates the
interest method over a period of ten years. The distributions payable on the
Trust Preferred securities are reflected as Minority interest in income of
subsidiary in the Consolidated Statements of Income. The Trust preferred
securities are reflected on the Consolidated Statement of Financial Condition
as Guaranteed Preferred Beneficial Interests in the Companys Junior
Subordinated Deferrable Interest Debentures.

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##### Table of Contents



NOTE 6  RESIDUAL INTEREST IN SECURITIZATION

During the quarter ended March 31, 2002, the Company formed a limited
liability company to issue $86.3 million of asset-backed notes in a
securitization of substantially all of its residential loan portfolio. The
Company recognized a gain of $3.7 million on the securitization of these loans,
although cash (representing the excess spread and servicing fees) is received
over the lives of the loans. Concurrent with recognizing such gain on sale, the
Company recorded the excess spread as a residual interest in the amount of $5.6
million which is recorded on the consolidated balance sheet in Investment
securities available for sale, at fair value. The value of the residual
interest is subject to substantial credit, prepayment, and interest rate risk
on the sold residential loans. In accordance with the provisions of Statement
of Financial Accounting Standards, or SFAS 115, Accounting for Certain
Investments in Debt and Equity Securities, the residual interest is classified
as available-for-sale asset and, as such, recorded at fair value with the
resultant changes in fair value recorded as unrealized gain or loss in a
separate component of shareholders equity entitled accumulated other
comprehensive income or loss, until realized. Fair value is determined on a
monthly basis based on a discounted cash flow analysis. These cash flows are
projected over the lives of the receivables using prepayment, default, and
interest rate assumptions that the Company believes market participants would
use for similar financial instruments.

At March 31, 2002, key economic assumptions and the sensitivity of the current
fair value of the residual interest based on projected cash flows to immediate
adverse changes in those assumptions is as follows:

|                                         |  |                |        |  
|---------------------------------------- |  | -------------- | ------ | -
|                                         |  | March 31, 2002
|                                         |  |               
|Dollars in thousands, except percentages |  |                |        |  
|Fair value of retained interest          |  | $              | 5,619  |  
|                                        
|                                        
|                                        
|                                        
|Weighted average life (in years)         |  |                | 1.75   |  
|                                        
|                                        
|                                        
|                                        
|Weighted average annual prepayment speed |  |                | 35.0   | %
|                                        
|                                        
|                                        
|                                        
|Impact of 10% adverse change             |  | $              | (521   | )
|                                        
|                                        
|                                        
|                                        
|Impact of 25% adverse change             |  | $              | (1,007 | )
|                                        
|                                        
|                                        
|                                        
|Weighted average annual discount rate    |  |                | 15.0   | %
|                                        
|                                        
|                                        
|                                        
|Impact of 10% adverse change             |  | $              | (319   | )
|                                        
|                                        
|                                        
|                                        
|Impact of 25% adverse change             |  | $              | (756   | )
|                                        
|                                        
|                                        
|                                        
|Weighted average lifetime credit losses  |  |                | 3.3    | %
|                                        
|                                        
|                                        
|                                        
|Impact of 10% adverse change             |  | $              | (301   | )
|                                        
|                                        
|                                        
|                                        
|Impact of 25% adverse change             |  | $              | (597   | )

These sensitivities are hypothetical and should be used with caution. As the
figures indicate, changes in the fair value of the residual is based on a
variation in assumptions and generally cannot be extrapolated because the
relationship of the change in assumption to the change in fair value may not be
linear. Also, in the above table, the effect of a variation in a particular
assumption on the fair value of the residual interest is calculated without
changing any other assumption; in reality, changes in one factor may result in
changes in another (for example, increases in market interest rates may result
in lower prepayments but increased credit losses), which might magnify or
counteract the sensitivities, and depending on the severity of such changes,
the results of operations may be materially effected.




|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|ITEM 2: | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion and analysis is intended to identify the major
factors that influenced the financial condition and results of operations for
the three months ended March 31, 2002.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2002 Compared to Three Months Ended March 31,
2001

General

Consolidated net
income was unchanged at $4.7 million for the three
months ended March 31, 2002 and for the same period last year. Diluted EPS was
$0.74 for the three months ended March 31, 2002 compared to $0.67 for the same
period last year, an increase of 10.4%.

The return on average assets was 1.37% for the three months ended March
31, 2002 compared to 1.40% for the same period last year. The return on
average shareholders equity was 13.63% for the three months ended March 31,
2002, compared to 14.05% for the same period last year.

Total loan production was $102.7 million for the three months ended March
31, 2002, consisting of the origination and/or purchase of $102.7 million of
commercial real estate loans including $36.8 million of loans
from our acquisition of Asahi Bank of California completed on
January 31, 2002. Loan production during the same
period last year totaled $129.3 million, consisting of the origination and/or
purchase of $100.6 million of commercial real estate loans, $15.4 million of
residential real estate loans and $13.3 million of franchise loans.

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##### Table of Contents



Net Interest Income and Margin

The following table presents, for the three months ended March 31, 2002
and 2001, our condensed average balance sheet information, together with
interest income and yields earned on average interest-earning assets and
interest expense and rates paid on average interest-bearing liabilities.
Average balances are computed using daily average balances. Nonaccrual loans
are included in loans receivable.

|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |       |      |   |  | 
|---------------------------------------------------- | ---------------------------------- | ------------------------------------------ | --------- | --------- | --------- | ------------------------------------ | ------ | ------- | ----- | ------ | ---- | ------- | ---- | ------- | --------- | --------- | --------- | - | ------ | ------ | ------ |  | ---- | ----- | ---- | - |  | 
|                                                     |                                    |                                            |           |           |           | For the Three Months Ended March 31,
|                                                     |                                    |                                            |           |           |           |                                     
|                                                     |                                    |                                            |           |           |           | 2002                                 |        | 2001   
|                                                     |                                    |                                            |           |           |           |                                      |        |        
|                                                     |                                    |                                            |           |           |           | Average                              |        | Income/ |       | Yield/ |      | Average |      | Income/ |           | Yield/   
|                                                     |                                    |                                            |           |           |           | Balance                              |        | Expense |       | Rate   |      | Balance |      | Expense |           | Rate     
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |          
|                                                     |                                    |                                            |           |           |           | (dollars in thousands)              
|                                                     |                                    |                                            |           | Assets    |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |       |      |   |  | 
|Cash and investments                                 |                                    | $                                          | 75,066    |           |           | $                                    | 679    |         |       |        | 3.67 | %       |      | $       | 78,649    |           |           | $ | 1,161  |        |        |  | 5.99 | %    
|Loans receivable:                                    |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|                                                     | Real estate loans                  |                                            |           | 1,116,848 |           |                                      |        | 23,516  |       |        |      | 8.54    | %    |         |           | 1,073,465 |           |   |        | 26,783 |        |  |      | 10.12 | %   
|                                                     | Real estate loans
held in trust    |                                            |           | 158,073   |           |                                      |        | 2,840   |       |        |      | 7.29    | %    |         |           | 209,456   |           |   |        | 4,322  |        |  |      | 8.37  | %   
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|Total loans receivable                               |                                    |                                            | 1,274,921 |           |           |                                      | 26,356 |         |       |        | 8.38 | %       |      |         | 1,282,921 |           |           |   | 31,105 |        |        |  | 9.83 | %    
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|Total interest-earning assets                        |                                    |                                            | 1,349,987 |           |           | $                                    | 27,035 |         |       |        | 8.12 | %       |      |         | 1,361,570 |           |           | $ | 32,266 |        |        |  | 9.61 | %    
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|Non-interest-earning assets                          |                                    |                                            | 78,129    |           |           |                                      |        |         |       |        |      |         |      |         | 33,500    |           |           |   |        |        |        |  |      |      
|Allowance for loan losses                            |                                    |                                            | (28,558   | )         |           |                                      |        |         |       |        |      |         |      |         | (27,502   | )         |           |   |        |        |        |  |      |      
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|                                                     |                                    | Total assets                               |           | $         | 1,399,558 |                                      |        |         |       |        |      |         |      |         |           | $         | 1,367,568 |   |        |        |        |  |      |       |      |  
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|Liabilities and
Shareholders Equity                 |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|Deposit accounts:                                    |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|                                                     | Money market and
passbook accounts |                                            | $         | 166,544   |           |                                      | $      | 946     |       |        |      | 2.30    | %    |         | $         | 105,014   |           |   | $      | 1,349  |        |  |      | 5.21  | %   
|                                                     | Time certificates                  |                                            |           | 776,633   |           |                                      |        | 7,347   |       |        |      | 3.84    | %    |         |           | 904,829   |           |   |        | 14,465 |        |  |      | 6.48  | %   
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|                                                     |                                    | Total deposit accounts                     |           |           | 943,177   |                                      |        |         | 8,293 |        |      |         | 3.57 | %       |           |           | 1,009,843 |   |        |        | 15,814 |  |      |       | 6.35 | %
|FHLB advances                                        |                                    |                                            | 178,773   |           |           |                                      | 1,538  |         |       |        | 3.49 | %       |      |         | 35,137    |           |           |   | 531    |        |        |  | 6.13 | %    
|Collateralized mortgage
obligations                  |                                    |                                            | 103,078   |           |           |                                      | 658    |         |       |        | 2.59 | %       |      |         | 154,943   |           |           |   | 2,293  |        |        |  | 6.00 | %    
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|Total interest-bearing
liabilities                   |                                    |                                            | 1,225,028 |           |           | $                                    | 10,489 |         |       |        | 3.47 | %       |      |         | 1,199,923 |           |           | $ | 18,638 |        |        |  | 6.30 | %    
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|Non-interest-bearing
liabilities                     |                                    |                                            | 6,036     |           |           |                                      |        |         |       |        |      |         |      |         | 11,918    |           |           |   |        |        |        |  |      |      
|Trust preferred securities                           |                                    |                                            | 28,130    |           |           |                                      |        |         |       |        |      |         |      |         | 19,664    |           |           |   |        |        |        |  |      |      
|Shareholders equity                                 |                                    |                                            | 140,364   |           |           |                                      |        |         |       |        |      |         |      |         | 136,063   |           |           |   |        |        |        |  |      |      
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|                                                     |                                    | Total liabilities
and shareholders equity |           | $         | 1,399,558 |                                      |        |         |       |        |      |         |      |         |           | $         | 1,367,568 |   |        |        |        |  |      |       |      |  
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|Net interest spread                                  |                                    |                                            |           |           |           |                                      |        |         |       |        | 4.65 | %       |      |         |           |           |           |   |        |        |        |  | 3.31 | %    
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|Net interest income
before provision for
loan losses |                                    |                                            |           |           |           | $                                    | 16,546 |         |       |        |      |         |      |         |           |           |           | $ | 13,628 |        |        |  |      |      
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      
|Net interest margin                                  |                                    |                                            |           |           |           |                                      |        |         |       |        | 4.97 | %       |      |         |           |           |           |   |        |        |        |  | 4.06 | %    
|                                                     |                                    |                                            |           |           |           |                                      |        |         |       |        |      |         |      |         |           |           |           |   |        |        |        |  |      |      

9



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The following table sets forth a summary of the changes in interest income
and interest expense resulting from changes in average interest-earning asset
and interest-bearing liability balances and changes in average interest rates.
The change in interest due to both volume and rate has been allocated to change
due to volume and rate in proportion to the relationship of absolute dollar
amounts of each.

|                                           |                                     |                                               |      |                             |     |      |       |        |        |   |       |        |        |  
|------------------------------------------ | ----------------------------------- | --------------------------------------------- | ---- | --------------------------- | --- | ---- | ----- | ------ | ------ | - | ----- | ------ | ------ | -
|                                           |                                     |                                               |      | For the Three Months Ended 
|                                           |                                     |                                               |      | March 31, 2002 and 2001    
|                                           |                                     |                                               |      | Increase (Decrease) Due To:
|                                           |                                     |                                               |      |                            
|                                           |                                     |                                               |      | Volume                      |     | Rate |       | Total 
|                                           |                                     |                                               |      |                             |     |      |       |       
|                                           |                                     |                                               |      | (In thousands)             
|Interest and fees earned from:             |                                     |                                               |      |                             |     |      |       |        |        |   |       |       
|                                           | Real estate loans                   |                                               | $    | 914                         |     |      | $     | (4,181 | )      |   | $     | (3,267 | )     
|                                           | Real estate loans held in trust     |                                               |      | (924                        | )   |      |       | (558   | )      |   |       | (1,482 | )     
|                                           | Cash and investment securities      |                                               |      | (32                         | )   |      |       | (450   | )      |   |       | (482   | )     
|                                           |                                     |                                               |      |                             |     |      |       |        |        |   |       |       
|                                           |                                     | Total decrease in interest income             |      |                             | (42 | )    |       |        | (5,189 | ) |       |        | (5,231 | )
|                                           |                                     |                                               |      |                             |     |      |       |        |        |   |       |       
|Interest paid on:                          |                                     |                                               |      |                             |     |      |       |        |        |   |       |       
|                                           | Deposit accounts                    |                                               |      | (588                        | )   |      |       | (6,933 | )      |   |       | (7,521 | )     
|                                           | FHLB advances                       |                                               |      | 1,236                       |     |      |       | (229   | )      |   |       | 1,007  |       
|                                           | Collateralized mortgage obligations |                                               |      | (331                        | )   |      |       | (1,304 | )      |   |       | (1,635 | )     
|                                           |                                     |                                               |      |                             |     |      |       |        |        |   |       |       
|                                           |                                     | Total increase (decrease) in interest expense |      |                             | 317 |      |       |        | (8,466 | ) |       |        | (8,149 | )
|                                           |                                     |                                               |      |                             |     |      |       |        |        |   |       |       
|(Decrease) increase in net interest income |                                     | $                                             | (359 | )                           |     | $    | 3,277 |        |        | $ | 2,918 |       
|                                           |                                     |                                               |      |                             |     |      |       |        |        |   |       |       

Total interest income decreased $5.2 million to $27.0 million in the first
quarter of 2002 compared to $32.3 million for the same period last year. The
net decrease in interest income was due primarily to lower yields on interest
earning assets.

The average balance
of real estate loans held by the Bank was essentially the same at $1.1
billion for the three months ended March 31, 2002 as compared to the same
period last year. Loans secured by income producing properties and
construction loans had an average balance of $1.1 billion during the quarter
ended March 31, 2002 compared to $939.5 million during the same period last
year. The average balance of purchased single family residential mortgages was
$63.9 million during the quarter ended March 31, 2002, compared to $134.0
million in the same period in the prior year as a result of the sale
and securitization of substantially all of our single family loan
portfolio during the first quarter of 2002.

The average balance of real estate loans held in trust was $158.1 million
for the three months ended March 31, 2002 as compared to $209.5 million for the
same period last year. This decrease was due to loan prepayments and principal
amortization.

The average yield earned on real estate loans decreased 158 basis points
to 8.54% in the quarter ended March 31, 2002 as compared to 10.12% in the same
period last year. The decrease in the yield on real estate loans was primarily
due to the repricing of variable rate loans at lower interest rates resulting
from the general decline in market interest rates. Our commercial real estate
loan portfolio is primarily comprised of adjustable rate mortgages indexed to
the six month LIBOR.

Approximately 90.4% of our real estate loan portfolio (including real
estate loans held in trust) are adjustable rate mortgages at March 31, 2002.
These adjustable rate mortgages generally reprice on a quarterly basis and
approximately $1.0 billion or 94.5% of our real estate loan portfolio contain
interest rate floors, below which the loans contractual interest rate may not
adjust. At March 31, 2002, the weighted average floor interest rate of these
loans was 8.5%. At that date,

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approximately $976.2 million or 94.1% of those loans were at the floor
interest rate, approximately $15.3 million or 1.5% were within 50 basis points
of their floor interest rate, and approximately $17.8 million or 1.7% were
greater than 50 but less than 100 basis points from their floor interest rate.
If market interest rates decline, because most of our portfolio has
reached the floor interest rate, our loans may be more susceptible to prepayment.

Total interest expense decreased by $8.1 million to $10.5 million in the
first quarter of 2002, compared to $18.6 million for the same period last year.
This decrease was primarily attributable to lower interest rates paid on all
interest bearing liabilities and lower average balances on our deposit accounts
and Collateralized Mortgage Obligations (CMOs) partially offset by higher
average balances on Federal Home Loan Bank (FHLB) advances.

Our cost of funds decreased to 3.47% during the three month period ended
March 31, 2002, compared to 6.30% for the same period last year. This decrease
in funding costs was due primarily to lower rates being paid on the CMOs and
deposit accounts as compared to the same period last year due to the general
decline in market interest rates. The average rate paid on the CMOs was 2.59%
during the three months ended March 31, 2002 compared to 6.00% for the same
period last year. The average balance of deposit accounts decreased $66.6
million to $943.2 million for the three months ended March 31, 2002, compared
to $1.0 billion for the same period last year. The average
balance of our CMOs was $103.1 million during the first quarter of 2002, compared to $154.9 million
for the same period last year. FHLB advances averaged $178.8 million in the
current quarter, compared to $35.1 million for the same period last year.

Net interest margin increased to 4.97% for the three months ended March
31, 2002 as compared to 4.06% for the same period last year primarily due to
the 283 basis point decrease in cost of funds partially offset by the 149 basis
point decrease in the yield on total average interest-earning assets.

Provision for Loan Losses

Management periodically assesses the adequacy of the allowance for loan
losses by reference to many factors which may be weighted differently at
various times depending on prevailing conditions. These factors include, among
other elements;



| |  | general portfolio trends relative to asset and portfolio size;            
|- |  | --------------------------------------------------------------------------
| 
| |  | asset categories;                                                         
| 
| |  | credit and geographic concentrations;                                     
| 
| |  | delinquency trends and nonaccrual loan levels;                            
| 
| |  | historical loss experience; and                                           
| 
| |  | risks associated with changes in economic, social and business conditions.

Accordingly, the calculation of the adequacy of the allowance for loan
losses is not based solely on the level of nonperforming assets. Management
believes that the allowance for loan losses as of March 31, 2002 was adequate
to absorb the known and inherent risks of loss in the loan portfolio at that
date. While management believes the estimates and assumptions used in its
determination of the adequacy of the allowance are reasonable, there can be no
assurance that such estimates and assumptions will not be proven incorrect in
the future, or that the actual amount of future provisions will not exceed the
amount of past provisions or that any increased provisions that may be required
will not adversely impact our financial condition and results of operations.
In addition, the

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determination of the amount of the Banks allowance for loan losses is
subject to review by the Banks regulators, as part of the routine examination
process, which may result in the establishment of additional reserves based
upon their judgment of information available to them at the time of their
examination.

The consolidated provision for loan losses totaled $1.3 million for the
first quarter of 2002, compared to $450,000 for the same period last year. The
current period provision for loan losses was recorded to provide for reserves
based on an analysis of the factors referred to above and the
valuation of certain nonperforming loans and other loans of
concern, including our retained residential loans. The allowance
for loan losses was 2.35% of total real estate loans and real estate loans held
in trust at March 31, 2002 as compared to 2.03% at December 31, 2001. During
the quarter ended March 31, 2002, the Company had net loan charge-offs of $1.0
million compared to a recovery of $3,000 for the same period last year. See also  Financial Condition  Credit
Risk.

Non-interest Income

Non-interest income decreased to $125,000 for the three ended March 31,
2002, compared to $314,000 for the same period last year. The decrease was
primarily related to the lower fees on mortgage banking activities and
late/collection fees on mortgage loans, partially offset by the net gain on
sale and securitization of single family mortgage loans. During the quarter
ended March 31, 2002 we securitized $86.3 million
and sold $17.6 million of our residential loan portfolio for a net gain of $32,000.

Non-interest Expense

Non-interest expense totaled $6.8 million for the three months ended March
31, 2002, compared to $5.3 million for the same period last year. Compensation
and benefits expense totaled $3.3 million during the three months ended March
31, 2002, compared to $2.8 million for the same period last year. The increase
in compensation and benefits expense was primarily due to additions made to
retail and wholesale loan origination sales and operations staff.

For the three months ended March 31, 2002, our ratio of consolidated
general and administrative expense to average assets, on an annualized basis,
increased to 1.81% compared to 1.50% for the same period last year. Our
efficiency ratio, (excluding real estate owned expense), which is defined as
general and administrative expenses as a percentage of net interest income and
non-interest income was 37.9% for the quarter ended March 31, 2002, compared to
36.8% for the same period last year.

Minority Interest in Income of Subsidiary

Minority interest in income of subsidiary, consisting of accrued
distributions payable on our Trust Preferred securities, was $799,000 during
the three month period ended March 31, 2002 as compared to $574,000 for the
same period last year. On a period to period comparison, the increase was
primarily due to the issuance of the Trust II in February 2001 of the prior
year. See Note 5 to the unaudited Consolidated Financial Statements for
further information.

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FINANCIAL CONDITION

Total assets decreased $103.4 million to $1.4 billion at March 31, 2002 as
compared to $1.5 billion at December 31, 2001. At March 31, 2002, real estate
loans, net totaled $1.0 billion, including approximately $58.5 million of
franchise loans. During the three months ended March 31, 2002, the Banks loan
portfolio decreased $81.9 million due to the sale and
securitization of substantially all of our residential loan
portfolio. Real estate loans held in trust decreased by
$10.4 million during the current three month period.
These decreases were partially offset by a
$7.2 million increase in investment securities available for
sale and a $2.2
million increase in other assets. The increase in investment
securities available for sale is due primarily to the $5.6 million
residual interest relating to our residential loan
securitization. The increase in other assets was primarily
due to the addition of $2.2 million of goodwill related to the acquisition of
Asahi Bank of California. Total deposit
accounts, which are concentrated in time certificates, decreased to $901.2
million at March 31, 2002 as compared to $953.7 million at December 31, 2001.
FHLB advances deceased $41.1 million to $228.2 million at March 31, 2002,
compared to $269.3 million at December 31, 2001. Management believes that a
significant portion of deposits will remain with us upon maturity based on our
historical experience regarding retention of deposits. CMOs decreased $10.8
million to $98.8 million at March 31, 2002 compared to $109.6 million at
December 31, 2001.

Residual Interest

In the first quarter of 2002, the Company formed a limited liability
company to issue the $86.3 million of asset-backed notes in a securitization of
substantially all of its residential loan portfolio. These notes were rated
AAA by Standard & Poors, Aaa by Moodys, and are insured by Financial Security
Assurance. In the securitization, residential loans were sold to the limited
liability company for a cash purchase price and an interest in the loans
securitized in the form of the excess spread. The cash purchase price was
raised through an offering of the asset-backed notes issued by the limited
liability company. Noteholders are entitled to receive the principal collected
on the loans and the stated interest rate on the notes. We are entitled to
receive the excess spread. The excess spread generally represents, over the
estimated life of the loans, the excess of the weighted average coupon on the
loans sold over the sum of the note interest rate less other expenses including a trustee fee and an insurance fee. Valuation of the
excess spread includes an estimate of annual future credit losses related to
the loans securitized. These reported cash flows are discounted when computing
the value of the residual interest.

We recognized a gain on the sale of these loans, although cash
(representing the excess spread and servicing fees) is received by us over the
lives of the loans. Concurrent with recognizing such gain on sale, we recorded
the excess spread as a residual interest of $5.6 million which is indicated on
our consolidated balance sheet as Investment securities available for sale,
at fair value section. The value of the residual interest is
subject to substantial credit, prepayment and interest rate risk on
the sold residential loans.

In accordance with the provisions of Statement of Financial Accounting
Standards, or SFAS 115, Accounting for Certain Investments in Debt and Equity
Securities, we classified our residual interest as available-for-sale asset
and, as such, they are recorded at fair value with the resultant changes in
fair value recorded as accumulated unrealized gain or loss in a separate
component of shareholders equity entitled accumulated other comprehensive
income or loss, until realized. We determine fair value on a monthly basis
based on a discounted cash flow analysis. These cash flows are projected over
the lives of the receivables using prepayment, default, and interest rate
assumptions that we believe market participants would use for similar financial
instruments.

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At March 31,
2002, key economic assumptions and the sensitivity of the current
fair value of the residual interest based on projected cash flows to
immediate adverse changes in those assumptions is as follows:

|                                         |                                            |   |        |   | 
|---------------------------------------- | ------------------------------------------ | - | ------ | - | 
|                                         | March
31, 2002                            
|                                         |                                           
|                                         | (Dollars in thousands, except percentages)
|Fair
value of retained interest          |                                            | $ | 5,619  |  
|Weighted
average life (in years)         |                                            |   | 1.75   |  
|Weighted
average annual prepayment speed |                                            |   | 35.0   | %
|Impact
of 10% adverse change             |                                            | $ | (521   | )
|Impact
of 25% adverse change             |                                            | $ | (1,007 | )
|Weighted
average annual discount rate    |                                            |   | 15.0   | %
|Impact
of 10% adverse change             |                                            | $ | (319   | )
|Impact
of 25% adverse change             |                                            | $ | (756   | )
|Weighted
average lifetime credit losses  |                                            |   | 3.3    | %
|Impact
of 10% adverse change             |                                            | $ | (301   | )
|Impact
of 25% adverse change             |                                            | $ | (597   | )

These sensitivities are hypothetical and should be used with caution. As
the figures indicate, changes in the fair value of our residual based on a
variation in assumptions generally cannot be extrapolated because the
relationship of the change in assumption to the change in fair value may not be
linear. Also, in the above table, the effect of a variation in a particular
assumption on the fair value of the residual interest is calculated without
changing any other assumption; in reality, changes in one factor may result in
changes in another (for example, increases in market interest rates may result
in lower prepayments but increased credit losses), which might magnify or
counteract the sensitivities, and depending on the severity of such
charges, the results of operations may be materially effected.

CREDIT RISK

Nonperforming Assets, Other Loans of Concern and Allowance for Loan Losses

The following table sets forth our nonperforming assets by category,
accruing loans past due 90 days or more and troubled debt restructurings as of
the dates indicated.

|                                                                                |                   |                        |                                         |   |                        |        |                   |   |        |        | 
|------------------------------------------------------------------------------- | ----------------- | ---------------------- | --------------------------------------- | - | ---------------------- | ------ | ----------------- | - | ------ | ------ | 
|                                                                                |                   |                        |                                         |   | March 31, 2002         |        | December 31, 2001
|                                                                                |                   |                        |                                         |   |                        |        |                  
|                                                                                |                   |                        |                                         |   | (dollars in thousands)
|                                                                                | Nonaccrual loans: |                        |                                         |   |                        |        |                   |   |       
|                                                                                |                   | Real estate            |                                         | $ | 3,347                  |        |                   | $ | 13,690 |       
|                                                                                |                   | Construction           |                                         |   | 1,550                  |        |                   |   | 1,600  |       
|                                                                                |                   |                        |                                         |   |                        |        |                   |  
|                                                                                |                   | Total nonaccrual loans |                                         |   | 4,897                  |        |                   |   | 15,290 |       
|Other real estate owned, net                                                    |                   |                        | 12,110                                  |   |                        |        | 13,741            |  
|                                                                                |                   |                        |                                         |   |                        |        |                   |  
|                                                                                |                   |                        | Total nonperforming assets              |   |                        | 17,007 |                   |   |        | 29,031 | 
|                                                                                |                   |                        | Performing troubled debt restructurings |   |                        | 3,932  |                   |   |        | 3,752  | 
|                                                                                |                   |                        |                                         |   |                        |        |                   |  
|                                                                                |                   | $                      | 20,939                                  |   |                        | $      | 32,783            |  
|                                                                                |                   |                        |                                         |   |                        |        |                   |  
|Nonaccrual loans to total real estate loans
and real estate loans held in trust |                   |                        | 0.40                                    | % |                        |        | 1.17              | %
|Allowance for loan losses to nonaccrual loans                                   |                   |                        | 584.62                                  | % |                        |        | 174.30            | %
|Nonperforming assets to total assets                                            |                   |                        | 1.21                                    | % |                        |        | 1.92              | %

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At March 31, 2002, other real estate owned consisted of four income
producing properties totaling $12.0 million and one single family residential
property valued at $65,000.

As of March 31, 2002 and December 31, 2001, other loans of concern totaled
$17.2 million and $21.5 million, respectively. Other loans of concern consist
of loans with respect to which known information concerning possible credit
problems with the borrowers or the cash flows of the properties securing the
respective loans has caused management to be concerned about the ability of the
borrowers to comply with present loan repayment terms, which may result in the
future inclusion of such loans in the nonaccrual category. The decrease in
other loans of concern for the three months ended March 31, 2002 was primarily
due to $4.2 million of loans being sold or paid-off, $1.4 million of loans
being upgraded due to improving conditions and $1.7 million of loans migrating
to nonaccrual status, partially offset by $3.0 million of new other loans of
concern.

The following table provides certain information with respect to our
allowance for loan losses, including charge-offs, recoveries and selected
ratios for the periods indicated.

|                                                                                            |                    |                   |                          |      |                        |        |              |        |        |        | 
|------------------------------------------------------------------------------------------- | ------------------ | ----------------- | ------------------------ | ---- | ---------------------- | ------ | ------------ | ------ | ------ | ------ | 
|                                                                                            |                    |                   |                          |      | For Three              |        | For the     
|                                                                                            |                    |                   |                          |      | Months Ended           |        | Year Ended  
|                                                                                            |                    |                   |                          |      | March 31,              |        | December 31,
|                                                                                            |                    |                   |                          |      | 2002                   |        | 2001        
|                                                                                            |                    |                   |                          |      |                        |        |             
|                                                                                            |                    |                   |                          |      | (dollars in thousands)
|Balance at beginning of period                                                              |                    | $                 | 26,650                   |      |                        | $      | 27,186       |       
|Provision for loan losses                                                                   |                    |                   | 1,325                    |      |                        |        | 4,575        |       
|Acquired from Asahi Bank of California                                                      |                    |                   | 1,639                    |      |                        |        |             |       
|Charge-offs:                                                                                |                    |                   |                          |      |                        |        |              |       
|                                                                                            | Real estate loans  |                   |                          | (988 | )                      |        |              | (2,845 | )     
|                                                                                            | Construction loans |                   |                          |     |                        |        |              | (2,419 | )     
|                                                                                            |                    |                   |                          |      |                        |        |              |       
|                                                                                            |                    | Total charge-offs |                          |      | (988                   | )      |              |        | (5,264 | )     
|                                                                                            |                    |                   |                          |      |                        |        |              |       
|Recoveries:                                                                                 |                    |                   |                          |      |                        |        |              |       
|                                                                                            | Real estate loans  |                   |                          | 3    |                        |        |              | 153    |       
|                                                                                            |                    |                   |                          |      |                        |        |              |       
|                                                                                            |                    | Total recoveries  |                          |      | 3                      |        |              |        | 153    |       
|                                                                                            |                    |                   |                          |      |                        |        |              |       
|Net charge-offs                                                                             |                    |                   | (985                     | )    |                        |        | (5,111       | )     
|                                                                                            |                    |                   |                          |      |                        |        |              |       
|                                                                                            |                    |                   | Balance at end of period |      | $                      | 28,629 |              |        | $      | 26,650 | 
|                                                                                            |                    |                   |                          |      |                        |        |              |       
|Allowance for loan losses as a percentage
of real estate loans and loans held in
trust, net |                    |                   | 2.35                     | %    |                        |        | 2.03         | %     

Liquidity

Liquidity refers to our ability to maintain cash flow adequate to fund
operations and meet obligations and other commitments on a timely basis,
including the payment of maturing deposits and the origination or purchase of
new real estate loans. We maintain a cash and investment securities portfolio
designed to satisfy operating liquidity requirements while preserving capital
and maximizing yield. As of March 31, 2002, we held approximately $116.9
million of cash and cash equivalents (consisting primarily of short-term
investments with original maturities of 90 days or less) and $36.6 million of
investment securities classified as available for sale.

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Short-term fixed income investments classified as cash equivalents
consisted of interest-bearing deposits at financial institutions, government
money market funds and short-term government agency securities, while
investment securities available for sale consisted primarily of fixed income
instruments which were rated AAA or equivalent by nationally recognized
rating agencies. As of March 31, 2002 and December 31, 2001, the Banks
liquidity ratios were 16.5% and 17.0%, respectively. In addition, our
liquidity position is supported by a credit facility with the Federal Home Loan
Bank of San Francisco. As of March 31, 2002, we had remaining available
borrowing capacity under this credit facility of $61.3 million, net of the $3.2
million of additional Federal Home Loan Bank Stock that we would be required to
purchase to support those additional borrowings, and $30.0 million of unused
federal funds credit facilities under established lines of credit with two
banks.

Capital Resources

As of March 31, 2002, the Banks Leverage (Core), Tier I and Total
Risk-Based capital ratios were 9.5%, 10.6% and 11.9%, respectively. These
ratios were 10.1%, 10.7% and 12.0%, respectively, as of December 31, 2001. The
decrease in capital ratios from December 31, 2001 to March 31, 2002 was due
primarily to the Banks $7.0 million dividend payment to
its Parent,
partially offset by the Banks net income of $4.4 million. The minimum
regulatory requirement for Leverage (Core), Tier I and Total Risk-Based capital
are 4.0%, 4.0% and 8.0%, respectively. As of March 31, 2002, the Banks
capital position was designated as well capitalized for regulatory purposes.

At March 31, 2002, shareholders equity totaled $141.5 million or 10.1
percent of total assets. The Company continued to repurchase shares of its
common stock in the open market during the first quarter of 2002. During the
first quarter of 2002, the Company repurchased 61,400 shares of common stock at
an average price of $22.79 per share. Since beginning share repurchases in
April of 1997, the Company has repurchased a total of 2,134,619 shares or
approximately 26.0% of the outstanding shares of common stock, returning
approximately $34.9 million of capital to its shareholders at an average price
of $16.33 per share. Through our stock repurchase program, 100 percent of the
Companys secondary public offering, which raised $22.6 million in April of
1996 has been retired along with returning to our shareholders approximately
$12.3 million of proceeds from the Companys initial public offering completed
in October 1995. The Companys book value per share of common stock was $24.34
as of March 31, 2002, as compared to $23.54 as of December 31, 2001, and $20.76
as of March 31, 2001.




ITEM 3: MARKET RISK

Our estimated sensitivity to interest rate risk, as measured by the
estimated interest earnings sensitivity profile and the interest sensitivity
gap analysis, has not materially changed from the information disclosed in our
annual report on Form 10-K for the year ended December 31, 2001.

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Part II  OTHER INFORMATION




Item 1 Legal Proceedings

We are party to certain legal proceedings incidental to our
business. Management believes that the outcome of such
proceedings, in the aggregate, will not have a material effect on
our financial condition or results of operations.




Item 2 Changes in Securities

Not applicable.




Item 3 Defaults Upon Senior Securities

Not applicable.




Item 4 Submission of Matters to a Vote of Security Holders

None.




Item 5 Other Information

None.




Item 6 Exhibits and Reports on Form 8-K

None.

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SIGNATURES

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

|                   |  |                                                                                  
|------------------ |  | ---------------------------------------------------------------------------------
|                   |  | ITLA CAPITAL CORPORATION                                                         
|Date: May 15, 2002 |  | /s/ George W. Haligowski                                                         
|                   |  |                                                                                  
|                   |  | George W. Haligowski
Chairman of the Board, President and
Chief Executive Officer
|                  
|Date: May 15, 2002 |  | /s/ Timothy M. Doyle                                                             
|                   |  |                                                                                  
|                   |  | Timothy M. Doyle
Managing Director and Chief
Financial Officer                   

18