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

                                   FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
                                     OF 1934
                               (FEE  REQUIRED)

           FOR  THE  FISCAL  YEAR  ENDED               DECEMBER  31,  1999
                                                       -------------------

                                   OR

     [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                                (NO FEE REQUIRED)

                     COMMISSION FILE NUMBER          0-12510
                                                     -------

                                MARATHON BANCORP
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

            CALIFORNIA                                            95-3770539
----------------------------------------------                    ----------
(STATE OR OTHER JURISDICTION OF
 INCORPORATION OR ORIGINATION)          (I.R.S. EMPLOYER  IDENTIFICATION  NO.)

11150  WEST  OLYMPIC  BOULEVARD,  LOS  ANGELES,  CALIFORNIA        90064
----------------------------------------------------------------   -----
(ADDRESS  OF  PRINCIPAL  EXECUTIVE  OFFICES)                      (ZIP  CODE)

                   ISSUER'S TELEPHONE NUMBER:  (310) 996-9100
                                               --------------

 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE EXCHANGE ACT:      NONE
                                                                        -------

      SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT:

                           COMMON STOCK, NO PAR VALUE
                           --------------------------
                                (TITLE OF CLASS)
     CHECK  WHETHER THE ISSUER (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY
SECTION  13  OR 15(D) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR SUCH
SHORTER  PERIOD  THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2)
HAS  BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X  NO
                                                                        --   --

     CHECK  IF  THERE  IS NO DISCLOSURE OF DELINQUENT FILERS IN RESPONSE TO ITEM
405 OF REGULATION S-B IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST  OF  REGISTRANT'S  KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED  BY  REFERENCE  IN PART III OF THIS FORM 10-KSB OR ANY AMENDMENT TO
THIS  FORM  10-KSB.  [  ]

     STATE  ISSUER'S  REVENUES  FOR  ITS  MOST  RECENT  FISCAL  YEAR $5,763,000.

     STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES
COMPUTED  BY  REFERENCE TO THE PRICE AT WHICH THE STOCK WAS SOLD, OR THE AVERAGE
BID  AND  ASKED  PRICES  OF  SUCH  STOCK,  AS  OF  MARCH  17,  2000.  THE AMOUNT
IS $7,846,858.  SOLELY  FOR  THE  PURPOSE  OF THIS CALCULATION, ALL DIRECTORS
AND OFFICERS  ARE  REGARDED  AS  AFFILIATES.

     AS  OF  MARCH  17, 2000, THERE WERE 3,837,019 SHARES OF NO PAR COMMON STOCK
ISSUED  AND  OUTSTANDING.

<PAGE>
                                     PART I
                                     ------
ITEM  1.  BUSINESS
------------------

GENERAL
-------

     Marathon  Bancorp  (the  Company)  is a California corporation organized on
October 12, 1982, and, as a bank holding company, is subject to the Bank Holding
Company  Act  of 1956, as amended (the BHC Act).  The Company commenced business
on  August  29, 1983 when the Company acquired all of the issued and outstanding
shares of Marathon National Bank (the Bank), which is the sole active subsidiary
of  the  Company  and  its  principal asset.  The Company has not engaged in any
other  activities  to  the  date  of  this filing.  All references herein to the
Company  include  the  Bank,  unless  the  context  requires  otherwise.

THE  BANK
---------

     The  Bank  was  organized  on  November  8,  1982  as  a  national  banking
association.  The  application  to  organize the Bank was accepted for filing by
the  Office  of  the  Comptroller of the Currency (the Comptroller) on March 11,
1982,  and preliminary approval was granted on September 8, 1982.  On August 29,
1983,  the  Bank  received  from  the  Comptroller a Certificate of Authority to
Commence  the  Business of Banking.  The Bank is a member of the Federal Reserve
System,  and its deposits are insured under the Federal Deposit Insurance Act to
the  extent  of  applicable  limits.

     The  Bank  is  located  at  11150  West  Olympic  Boulevard,  Los  Angeles,
California.  The  Bank's  primary  marketing  area  rests principally within the
counties  of Los Angeles (including the San Fernando Valley and South Bay areas)
and  Orange.   The  Bank markets its services mainly to commercial and wholesale
businesses,  professionals  and  discerning individuals living or working in the
west  Los  Angeles  area.

BANK  SERVICES
--------------

     The Bank offers a wide range of commercial banking services to individuals,
businesses  and professional firms located in its primary marketing area.  These
services  include personal and business checking, interest-bearing money market,
savings  accounts  (including  interest-bearing  negotiable  order of withdrawal
accounts)  and  time  certificates  of  deposit.  The  Bank  also  offers  cash
management  services,  ACH origination, night depository  bank by mail services,
as  well  as  traveler's  checks (issued by an independent entity) and cashier's
checks.  The  Bank  acts  as  an  authorized depository for deposits of the U.S.
Bankruptcy Court for the Southern, Central and Northern districts of California.
The  Bank  also  acts  as a merchant depository for cardholder drafts under both
VISA  and  MasterCard.  In  addition,  the  Bank  provides  note  and collection
services  and  direct  deposit  of  social security and other government checks.

     The  Bank  engages  in  a  full complement of lending activities, including
revolving  lines  of  credit, working capital and accounts receivable financing,
short  term  real  estate  construction  financing,  mortgage loans and consumer
installment  loans,  with  particular  emphasis  on  short  and  medium  term
obligations.  Additionally,  the  Bank  has  become  an  active  Small  business
Administration  (SBA)  lender.  The  Bank's  commercial  lending  activities are
directed principally toward small to medium sized businesses, wholesalers, light
manufacturing  concerns  and  professional  firms.  The  Bank's consumer lending
activities  include  loans  for  automobiles,  recreational  vehicles,  home
improvements  and other personal needs.  The Bank also issues VISA credit cards.

COMPETITION
-----------
     The  banking  business  in  California  generally, and in the Bank's market
areas  specifically, is highly competitive with respect to both making loans and
attracting  deposits.  The  Bank  competes  for  loans  and  deposits with other
commercial  banks,  savings  and  loan  associations, industrial loan companies,
finance  companies,  money  market  funds,  credit  unions  and  other financial
institutions,  including  a number of institutions that are much larger than the
Bank.  There  has  been increased competition for loan and deposit business over
the  past  several  years  as  a  result  of  changes  in the financial services
industry.  Recent  years  have  seen  an  unprecedented  consolidation  in  the
financial  institutions  industry  as  large  numbers  of  banks have merged and
combined,  resulting  in  greater concentration of assets and lending ability, a
trend  which  is  expected  to  continue.

<PAGE>
     In  addition, the enactment of interstate banking legislation in California
makes  it  easier  for  bank  holding  companies  with  headquarters  outside of
California  to  enter  the California market, presenting an additional source of
competition  for  the Bank.  Many of the major commercial banks operating in the
Bank's  market  areas  offer  certain  services  that  the  Bank  does not offer
directly.  In  addition,  banks  with greater capitalization have larger lending
limits  and  are  thereby able to serve larger borrowing customers.  The Company
competes  for  loan  and deposit business by providing innovative and responsive
service  to  its  customers.

YIELDS  EARNED  AND  RATES  PAID
--------------------------------

     Banking  is  a business that depends to a large part on rate differentials.
The  difference  between  the  interest rate received by the Bank on its earning
assets  and  the  interest  rate  it  pays  on its deposits and other borrowings
comprises the most significant component of the Bank's earnings.  These interest
rates are sensitive to many factors beyond the Bank's control.  Accordingly, the
earnings  and  growth  of  the  Company  are  affected  by  economic conditions,
including  inflation,  recession  and  unemployment.

RECENT  LEGISLATION  AND  OTHER  CHANGES
----------------------------------------

     From  time  to  time,  legislation  is  enacted  which  has  the  effect of
increasing  the  cost  of  doing  business,  limiting  or  expanding permissible
activities  or  affecting  the  competitive  balance  between  banks  and  other
financial  institutions.  Proposals to change the laws and regulations governing
the  operations  and  taxation  of  banks  and  other financial institutions are
frequently  made  in  Congress, in the California legislature and before various
bank  regulatory  agencies.  The  likelihood of any major changes and the impact
such  changes  might  have  on  the  Bancorp and Bank are impossible to predict.

     It  is  likely  that  other  bills  affecting  the business of banks may be
introduced  in  the  future  by  the  United  States  Congress  or  California
legislature.

COMMUNITY  REINVESTMENT  ACT
----------------------------

     The  Community  Reinvestment  Act  of 1977 ("CRA") was enacted to encourage
every  financial  institution  to  help  meet  the  credit  needs  of its entire
community, including low- and moderate-income neighborhoods, consistent with its
safe  and  sound operation.  Under the CRA, the state and federal regulators are
required,  in examining financial institutions and when considering applications
for approval of certain merger, acquisition and other transactions, to take into
account  the  institution's  record  in  helping to meet the credit needs of its
entire  community,  including  low-  and  moderate-income  neighborhoods.  In
reviewing  an  institution's  CRA  record  for  this  purpose, state and federal
regulators  will  consider  reports of regulatory examination, comments received
from interested members of the public, and the publicly available CRA statement.
The  Bank  has  received  a  rating  of  satisfactory  on  its  last  regulatory
examination  June  22,  1998.

INTERSTATE  BANKING  AND  BRANCHING

     Subject to reciprocal legislation and Superintendent approval, out-of-state
bank  holding  companies  (since  1987) and banks (since 1991) have been able to
purchase  or  merge  with  California  banks  and  bank  holding companies.  The
Riegle-Neal  Interstate  Banking and Branching Efficiency Act of 1994 amends the
Bank  Holding  Company  Act  to  authorize the Federal Reserve Board to approve,
subject to the financial condition of the acquiring bank holding company, a bank
holding company's acquisition of wither control, or the substantial assets, of a
bank  located  outside the home state of the bank holding company, regardless of
whether the acquisition would be prohibited by the law of the state in which the
target  is  located.  Beginning  June  1, 1997, responsible agencies may approve
mergers  between  insured banks with different home states regardless of whether
the  transaction  is  whose  home  state has enacted a law expressly prohibiting
merger  transactions with out-of-state banks.  Additionally, banks may establish
and  operate  a  de  novo branch in any state that specifically opts to allow de
novo  branching.  As  a  result  of  the  foregoing,  the  Bank  faces increased
competition  from  larger  institutions  based  outside  of  California.


ACCOUNTING  CHANGES
-------------------

     In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
133,  "Accounting  for  Derivative  Instruments  and  Hedging Activities".  This
Statement  establishes  accounting  and  reporting  standards  for  derivative
instruments and for hedging activities.  This new standard is effective for 2000
and  is  not  expected  to  have  a  material  impact  on  the Bank' s financial
statements.


SUPERVISION  AND  REGULATION
----------------------------

     The  Company  and  the  Bank  are  subject  to  various  regulatory capital
requirements  administered  by  the  federal  banking agencies.  Failure to meet
minimum  capital  requirements  can  initiate  certain  mandatory  and  possible
additional discretionary actions by regulators that, if undertaken, could have a
direct  material  effect  on  the Company's financial statements.  Under capital
adequacy  guidelines  and the regulatory framework for prompt corrective action,
the  Company  and  Bank  must  meet  specific  capital  guidelines  that involve
quantitative  measures of the assets, liabilities, and certain off-balance-sheet
items  as calculated under regulatory accounting practices.  The capital amounts
and  classification  are also subject to qualitative judgments by the regulators
about  components,  risk  weightings  and  other  factors.

     Quantitative  measures established by regulation to ensure capital adequacy
require the Company and Bank to maintain minimum amounts and ratios of total and
Tier  1  capital  (as  defined  in  the regulations) to risk-weighted assets (as
defined),  and  of  Tier  1 capital (as defined) to average assets (as defined).
Management  believes,  as  of December 31, 1999, that the Bank meets all capital
adequacy  requirements  to  which it is subject. See Part II, Item 7, Note L for
the  Bank's  capital  ratio  requirements  and  current  ratios.

     MARATHON BANCORP: Marathon Bancorp is a registered bank holding company and
is  subject  to  regulation  under the BHC Act.  The Company files quarterly and
annual  reports  with  the  FRB,  as well as other information which the FRB may
require  under the BHC Act.  The FRB is empowered to conduct examinations of the
Company  and  its  subsidiaries.

     The  FRB  has the power to require the Company to terminate activities, and
to  terminate  control  of  or  liquidate  or  divest  certain  subsidiaries  or
affiliates  when  it  believes  that  the  activity  or  subsidiary or affiliate
constitutes  a  risk  to  the  financial  safety,  soundness or stability of the
Company's  banking  subsidiaries.  The  FRB  also  has the authority to regulate
provisions  of  certain  holding  company  debt, such as the authority to impose
interest  rate ceilings and reserve requirements on such debt.  The Company may,
under  certain circumstances, be required to file written notice with and obtain
approval  from  the  FRB prior to purchasing or redeeming its equity securities.

     Under  the  BHC  Act  and  regulations  adopted  by  the  FRB, bank holding
companies  and  their  non-banking  subsidiaries  are  prohibited from requiring
certain tie-in arrangements in connection with any extension of credit, lease or
sale of property or furnishing of services.  Further, the Company is required by
the  FRB  to  maintain  certain  levels  of  capital.

     The  Company must obtain approval from the FRB prior to acquiring more than
5%  of the outstanding shares of any class of voting securities or substantially
all  of  the  assets of any bank or bank holding company.  The Company must also
obtain  FRB  approval  prior  to any merger or consolidation of the Company with
another  bank  holding  Company.

     The BHC Act prohibits the Company, except in particular circumstances, from
acquiring  direct  or indirect control of more than 5% of the outstanding voting
shares of any company that is not a bank or a bank holding company.  The BHC Act
also  generally  prohibits  the  Company  from  engaging,  either  directly  or
indirectly,  in  activities other than those of banking, managing or controlling
banks  or  furnishing  related  services.  The  Company may, however, subject to
obtaining prior approval from the FRB, engage in activities or acquire interests
in  companies which engage in activities which are deemed by the Federal Reserve
Board  to  be  so  closely  related  to  banking.

     In  addition  to  regulation  and  supervision  by  the FRB, the Company is
subject  to the periodic reporting requirements with the Securities and Exchange
Commission  under  the Exchange Act, including but not limited to filing annual,
quarterly and other current reports with the Commission, and related substantive
and  procedural  requirements.

     THE  BANK:  The  Bank,  as  a national banking association chartered by the
Comptroller,  is  subject  to primary supervision, examination and regulation by
the  Comptroller.  It  is  also  a  member of the Federal Reserve System and, as
such,  is  subject  to  applicable  provisions  of  the  Federal Reserve Act and
regulation  by  the  FRB.  The  Bank is also subject to applicable provisions of
California  law,  insofar  as  they do not conflict with or are not preempted by
Federal  banking  law.

     Deposits  in  the  Bank  are  insured  by the FDIC, which currently insures
deposits  of  each member bank to a maximum of $100,000 per depositor.  For this
protection,  the Bank and all other insured banks pays statutory assessments and
is  subject  to  the  rules  and  regulations  of  the  FDIC.

     Various  requirements  and  restrictions affect the operations of the Bank,
including  reserves against deposits, interest rates payable on deposits, loans,
investments,  mergers  and  acquisitions, borrowings, dividends and locations of
branch offices.  In addition, the Bank is required to maintain certain levels of
capital.  Management  seeks to maintain adequate capital to support its size and
credit risks, and to ensure that the Company and the Bank are within established
regulatory  and  industry  standards.

          As of December 31, 1999, the most recent notification from the Federal
Deposit Insurance Corporation categorized the Bank as well-capitalized under the
regulatory  framework  for  prompt corrective action (there are no conditions or
events  since that notification that management believes have changed the Bank's
category).

     Banking  regulations  require that all banks maintain a percentage of their
deposits  as  reserves  in cash or on deposit with the Federal Reserve Bank.  At
December  31,  1999,  required  reserves  were  approximately  $466,000.


EMPLOYEES
---------

     At  December  31,  1999,  the  Company  employed  35  personnel.

STATISTICAL  DISCLOSURE
-----------------------

     The  following  tables  and  data  set  forth,  for  the  respective  years
indicated,  selected  statistical  information  relating  to  the  Company.

     The Company's operating results depend primarily on the level of the Bank's
net interest income, which is the difference between interest income on interest
earning assets and interest expense on interest bearing liabilities.  The Bank's
net  interest income is determined by the average outstanding balances of loans,
investments,  deposits  and  borrowings,  and  the  respective average yields on
interest-earning  assets  and the average costs on interest bearing liabilities,
and  the  relative  amount  of  loans  and  investments compared to deposits and
borrowings.  The  Bank's  volumes  and  rates  on  interest  earning  assets and
interest bearing liabilities are affected by market interest rates, competition,
the  demand  for  bank financing, the availability of funds, and by management's
responses  to  these  factors.

     The  following  tables  set  forth the Company's daily average balances for
each  principal  category  of asset and liability and shareholders' equity.  The
tables also present the amounts and average rates of interest earned and paid on
each  category  of  interest earning asset and interest bearing liability, along
with  the  net  interest  income and net yield on earning assets for the periods
indicated.

     In addition, the tables set forth changes in the components of net interest
income for the periods indicated.  The total change is segmented into the change
attributable  to  variations in volume and the change attributable to variations
in  interest  rates.  The  changes  in interest due to both rate and volume have
been  allocated  to  the  changes  due  to  volume and rate in proportion to the
relationship  of  the  absolute  dollar amounts of the change in both.  Interest
foregone  on loans in nonaccrual status is not included in the tables, while the
average  balance  of  loans  in  nonaccrual  status  is  included.


<PAGE>
<TABLE>
<CAPTION>

CHANGES  IN  NET  INTEREST  INCOME
Year  ended  December  31,  1999
(in  thousands)

<S>                                  <C>        <C>        <C>       <C>                       <C>     <C>
                                     YTD        Interest   Average           Change From Prior Year
                                     Average    Income/    Yield/               Due to Change in
                                                                     -------------------------------------
Net Interest Income Analysis         Balance    Expense    Rate      Volume                 Rate    Total
                                     ---------  ---------  --------  --------------------  ------  -------

Loans                                $ 46,006   $   3,882      8.4%  $                96   $  57   $  153
Other earning assets:
   Interest bearing deposits with
      financial institutions                0           0      0.0%                    0       0        0
   Investment Securities               19,324       1,104      5.7%                  272      (7)     265
   Fed funds sold & Securities
      purchased under resale
      agreements                        5,574         280      5.0%                 (153)    (21)    (174)
                                     ---------  ---------  --------  --------------------  ------  -------
Total  interest earning assets       $ 70,904   $   5,266      7.4%  $               215   $  29   $  244
Non earning assets:
                                        4,623
   Cash & due from banks
   Other assets                         3,462
   Allowance for loan loss               (672)
                                     ---------
                                     $ 78,317

Interest-bearing liabilities:
   Deposits:

   Demand                            $  3,521   $      33      0.9%  $                (7)  $   0   $   (7)
   Money  market and savings           25,639         852      3.3%                  106      72      178
   Time certificate of deposit         12,292         590      4.8%                  (58)    (44)    (102)
   Federal funds purchased                  -           -        -                     0       1        1
Other interest bearing liabilities:
   Mortgage indebtedness                   20           1      5.0%                    -      (1)      (1)
                                     ---------  ---------  --------  --------------------  ------  -------
Total interest-bearing liabilities   $ 41,472   $   1,476      3.6%  $                41   $  28   $   69
Noninterest-bearing liabilities
   And shareholders equity
Noninterest-bearing demand             27,623
Other liabilities                         343
Shareholders' equity                    8,879
                                     ---------
                                     $ 78,317

Net interest income                             $   3,790

Net interest spread                                            3.8%

Net yield on earning assets                                    4.7%

</TABLE>

<TABLE>
<CAPTION>

CHANGES  IN  NET  INTEREST  INCOME

Year  ended  December  31,  1998

<S>                                   <C>        <C>        <C>       <C>                       <C>     <C>
( in thousands)                       YTD        Interest   Average   Change From Prior Year
                                      Average    Income/    Yield/    Due To Change In
                                                                      ------------------------
Net Interest Income Analysis          Balance    Expense    Rate      Volume                    Rate    Total
                                      ---------  ---------  --------  ------------------------  ------  -------

Loans                                 $ 44,849   $   3,729      8.3%  $                  (139)  $ 154   $   15
Other earning assets:
   Interest bearing deposits with
      financial institutions                 0           0      0.0%                      (27)      0      (27)
   Investment Securities                14,587         839      5.8%                      337     (62)     275
   Fed funds sold & Securities
      purchased under resale
      agreements                         8,394         454      5.4%                       31      (2)      29
                                      ---------  ---------  --------  ------------------------  ------  -------
Total  interest earning assets        $ 67,830   $   5,022      7.4%  $                   202   $  90   $  292
Non earning assets:
                                         4,118
   Cash & due from banks
   Other assets                          3,161
   Allowance for loan loss                (733)
                                      ---------
                                      $ 74,376

Interest-bearing liabilities:
   Deposits:

   Demand                             $  4,209   $      40      1.0%  $                   (17)  $   1   $  (16)
   Money  market and savings            22,163         674      3.0%                      (21)     74       53
   Time certificate of deposit          13,419         692      5.2%                      226      (1)     225
   Federal funds purchased                   -           -        -                         -       -        -
Other interest bearing liabilities:
   Mortgage indebtedness                   175           1      0.6%                        -       1        1
                                      ---------  ---------  --------  ------------------------  ------  -------
Total interest-bearing liabilities    $ 39,791   $   1,407      3.5%  $                    88   $  75   $  263
Noninterest-bearing liabilities
   And shareholders equity
Noninterest-bearing demand              25,629
Other liabilities                          618
Shareholders' equity                     8,338
                                      ---------
                                      $ 74,376

Net interest income                              $   3,615

Net interest spread                                             3.9%

Net yield on earning assets                                     5.3%


</TABLE>



<TABLE>
<CAPTION>

INVESTMENT  SECURITIES
----------------------

     The  following table shows the carrying amount of the portfolio of investment securities
at  the  end  of  each  of  the  past  two  years:

<S>                                          <C>         <C>                <C>       <C>
                                             Total       Estimated
                                             Amortized   Gross Unrealized   Market
      YEAR END 1999                          Cost        Gains              Losses    Value
-------------------------------------------
( in thousands)
Securities available for sale:
     U.S. Government and Agency Securities   $    4,000  $               -  $  (159)  $ 3,841
     Other                                        4,789                  -      (40)    4,749
                                             ----------  -----------------  --------  -------
          Total                              $    8,789  $               -  $  (199)  $ 8,590

Securities held to maturity:
     U.S. Treasury Securities                $      503  $               -  $    (4)  $   499
     U.S. Government and Agency Securities        5,500                  -      (10)    4,488
     Municipal Securities                         4,965                  -     (167)    4,798
     Mortgage-Backed Securities                   1,910                  -      (43)    1,867
                                             ----------  -----------------  --------  -------
          Total                              $   12,878  $               -  $  (339)  $12,539


YEAR END 1998
Securities available for sale:
     U.S. Treasury Securities                $    1,000  $               2  $     -   $ 1,002
     U.S. Government and Agency Securities        4,497                  1      (10)    4,488
     Other                                          264                  -       (1)      263
                                             ----------  -----------------  --------  -------
          Total                              $    5,761  $               3  $   (11)  $ 5,763

Securities held to maturity:
     U.S. Government and Agency Securities   $    8,800  $              14  $    (8)  $ 8,806
     Municipal Securities                         3,982                 35      (21)    3,996
     Mortgage-Backed Securities                   1,509                  1       (6)    1,504
                                             ----------  -----------------  --------  -------
          Total                              $   14,291  $              50  $   (35)  $14,306
</TABLE>

<TABLE>
<CAPTION>



<PAGE>
INVESTMENT  SECURITIES  -  CONTINUED
------------------------------------


The following table shows the maturities of investment securities at December 31, 1999 and the weighted
average  yields  of  those  securities.

<S>                               <C>       <C>       <C>            <C>        <C>            <C>

                                            OVER 1
                                            YEAR      OVER 5 YEARS
                                    1 YEAR  THROUGH   THROUGH        OVER                      AVERAGE
(in thousands)                    OR LESS    5 YEARS       10 YEARS   10 YEARS  TOTAL          YIELD
                                  --------  --------  -------------  ---------  -------------  --------
Securities available for sale:
     U.S. Government Agency
        Securities                $      -  $  3,841  $           -          -  $       3,841      4.9%
     Other                           3,995       754              -          -          4,749      6.1%
                                  --------  --------  -------------  ---------  -------------  --------
          Total                   $  3,995  $  1,284  $       3,551  $       -  $       8,590      5.6%

Securities held to maturity:
     U.S. Treasury Securities     $    503  $      -  $           -  $       -  $         503      4.9%
     U.S. Government Agency
        Securities                       -     5,500              -          -   5,500      -      5.8%
     Mortgage-Backed Securities          -       532          1,114        264          1,910      6.6%
     Municipal Securities              653     4,312              -          -          4,965      5.6%
                                  --------  --------  -------------  ---------  -------------  --------
          Total                   $  1,105  $ 10,344  $       1,114  $     264  $      12,878      5.8%
</TABLE>


<TABLE>
<CAPTION>


LOAN  PORTFOLIO
---------------

     The  following  table sets forth the amount of loans outstanding at the end
of  the  past  two  years:

<S>                                   <C>       <C>     <C>       <C>
                                                 % OF              % OF
 (in Thousands)                          1999   TOTAL      1998   TOTAL
                                      --------  ------  --------  ------

Commercial Loans                      $18,922      38%  $16,640      34%
Real Estate Loans:
     Construction                       6,395      13%    1,215       -
     Real Estate Mortgage              24,132      48%   24,246      64%
                                      --------          --------
          Total real estate loans      30,527            25,461
Installment loans                         591       1%      677       2%
                                      --------  ------  --------  ------
                                       50,040     100%   42,778     100%
Deferred net loan origination costs        62               214
Allowance for Loan Losses                (853)             (733)
                                      --------          --------
          Net Loans                   $49,249           $42,259
</TABLE>

     The  following  table  shows  the  amounts  of  commercial  and real estate
construction loans outstanding  at the end of the year which, based on remaining
scheduled  repayments  of  principal, are due in one year or less, more than one
year  but  less  than  five  years,  and  more than five years.  The amounts are
classified  according  to  the  sensitivity  to  changes  in  interest  rates.

<TABLE>
<CAPTION>

COMMERCIAL  AND  CONSTRUCTION  LOANS
DECEMBER  31,

<S>                                                      <C>
 ( in thousands)                                            1999
                                                         -------

COMMERCIAL LOANS
Aggregate maturities of loan balances due:
     In one year or less:
          Interest rates are floating or adjustable      $ 8,975
          Interest rates are fixed or predetermined          931
     After one year but within five years:
          Interest rates are floating or adjustable        5,060
          Interest rates are fixed or predetermined        2,074
     After five years:
          Interest rates are floating or adjustable        1,572
          Interest rates are fixed or predetermined          310
                                                         -------
               Total commercial loans                    $18,922

REAL ESTATE CONSTRUCTION LOANS
Aggregate maturities of loan balances due
     In one year or less:
           Interest rates are floating or adjustable     $ 5,036
           Interest rates are fixed or predetermined         380
     After one year but within five years:
           Interest rates are floating or adjustable         979
                                                         -------
               Total commercial and construction loans   $25,317

</TABLE>

RISK  ELEMENTS  -  NONACCRUAL,  PAST  DUE  AND  RESTRUCTURED  LOANS
-------------------------------------------------------------------

     Nonaccrual  loans  are those for which the Bank has discontinued accrual of
interest  because  there  exists  reasonable  doubt  as  to  the full and timely
collection  of  either  principal  or  interest  or  such  loans  have  become
contractually past due ninety days with respect to principal or interest.  Under
certain  circumstances, interest accruals are continued on loans past due ninety
days  which,  in  management's  judgment,  are considered to be well secured and
fully  collectible  as to both principal and interest.  When a loan is placed in
nonaccrual  status,  all interest previously accrued but uncollected is reversed
against  current period income.  Income on such loans is then recognized only to
the extent that cash is received and where the future collection of principal is
probable.  Accrual  of  interest is resumed only when principal and interest are
brought  fully  current  and  when,  in  management's  judgment,  such loans are
estimated  to  be  collectible  as  to  both  principal  and  interest.

     Restructured commercial loans are those for which the Bank has, for reasons
related  to  borrowers' financial difficulties, granted concessions to borrowers
(including  reductions  of  either  interest  or  principal)  that  it would not
otherwise  consider,  whether  or  not  such  loans are secured or guaranteed by
others.  Loan  restructurings  involving  only  a  modification  of  terms  are
accounted  for  prospectively  from  the time of restructuring.  Accordingly, no
gain  or loss is recorded at the time of such restructurings unless the recorded
investment in such loans exceeds the total future cash receipts specified by the
new  loan  terms.

     At  December  31,  1999,  loans on nonaccrual totaled $3,000, compared with
$258,000  at  year-end  1998.  The  reduction in interest income associated with
nonaccrual  loans was approximately $3,000 during 1999, and $15,000 during 1998.
At  December  31, 1999 no loans were past due 90 days or more and still accruing
interest  compared  to  $1,000  at year-end 1998. At December 31, 1998, the Bank
had  recorded  as  specific  reserves  for  its  impaired  loans $84,000, in the
allowance  for  loan  losses and had no specific reserves in 1999.  In addition,
the  Bank  classified  $2,318,000  and  $1,990,000,  respectively,  of its loans
without  a  specific  reserve. The average recorded investment of impaired loans
during  the  year ended December 31, 1999 and 1998 was approximately $39,000 and
$242,000  respectively.  Interest  income  of $12,000 was recognized on impaired
loans  during  the  year  ended  December  31,  1998  and no interest income was
recognized  on  impaired  loans  in  1999.  There  were no restructured loans at
December  31,  1998  or 1999. There were no loans at December 31, 1999 where the
known credit problems of a borrower caused the Bank to have serious doubts as to
the  ability  of  such  borrower  to comply with the then present loan repayment
terms,  and which would result in such loan being included as a nonaccrual, past
due  or  restructured  loan at some future date.  The Bank has not made loans to
borrowers  outside  the United States.  At December 31, 1999, the Company had no
loan  concentrations  exceeding  ten  percent  of total gross loans outstanding.

SUMMARY  OF  LOAN  LOSS  EXPERIENCE
-----------------------------------

     The allowance for loan losses is established by a provision for loan losses
charged against current period income.  Losses are charged against the allowance
when,  in  management's  judgment,  the  collectability of a loan's principal is
doubtful.  The  accompanying financial  statements require the use of management
estimates  to  calculate  the  allowance  for  loan losses.  These estimates are
inherently  uncertain  and depend on the outcome of future events.  Management's
estimates  are  based  upon  previous  loan  loss  experience,  current economic
conditions,  volume, growth, and composition of the loan portfolio, the value of
collateral  and  other  relative factors.  The Bank's lending is concentrated in
Los  Angeles  County  and  surrounding  areas,  which  have recently experienced
adverse  economic  conditions,  including  declining real estate  values.  These
factors  have  adversely  affected  borrowers' ability to repay loans.  Although
management  believes  the  level  of  the  allowance  as of December 31, 1999 is
adequate  to absorb losses inherent in the loan portfolio, additional decline in
the  local  economy  and  increases  in interest rates may result in losses that
cannot  reasonably  be  predicted  at  this  date.  Such  losses  may also cause
unanticipated  erosion  of  the  Bank's  capital.




<PAGE>
     The following table summarizes the changes in the allowance for loan losses
arising  from  loan  losses,  recoveries  on  loans  previously  charged off and
provisions  for  loan  losses  charged  to  operating  expense.
<TABLE>
<CAPTION>

<S>                                                         <C>       <C>
 LOAN CHARGE-OFFS AND RECOVERIES
(in thousands)                                                 1999      1998
                                                            --------  --------
Balance of allowance for loan losses at beginning of year   $   733   $   747
Loans charged off:
     Commercial                                                (169)     (113)
     Real estate                                                  -     (  54)
     Installment                                              (  20)    (  27)
                                                            --------  --------
        Total loans charged off                                (189)     (194)

Recoveries of loans previously charged off:
     Commercial                                                 307       115
     Real estate                                                  -         -
     Installment                                                  2         9
                                                            --------  --------
        Total loan recoveries                                   309       124
                                                            --------  --------
Net loans charged off                                           120     (  70)
Provision charged to operating expense                            -        56
                                                            --------  --------
Balance of allowance for loan losses at end of year         $   853   $   733

                                                               1999      1998
                                                            --------  --------
Amount of loans outstanding at end of the year               $50,102   $42,992
Average amount of loans outstanding                          $46,006   $44,849
Ratio of net charge-offs to average loans outstanding         -0.26%     0.16%
Ratio of allowance for loan losses at the end of the
     year to average loans outstanding                         1.85%     1.63%
Ratio of allowance for loan losses at the end of the
     year to loans outstanding at the end of the year          1.70%     1.70%
</TABLE>


     The  following  table  sets forth the Company's allocation of the allowance
for  loan  losses  to specific loan categories at the end of the past two years.
The  allocations  are based upon the same factors as considered by management in
determining the amount of additional provisions to the allowance for loan losses
and  the  aggregate  level  of  the  allowance.


<TABLE>
<CAPTION>


<S>                                    <C>             <C>                <C>               <C>
ALLOWANCE FOR LOAN LOSSES                                        December 31,
                                       --------------------------------------------------------------------
                                                 1999                                  1998
                                       --------------------------------  ----------------------------------
                                                       PERCENT OF LOANS                    PERCENT OF LOANS
                                       ALLOWANCE FOR   IN EACH CATEGORY   ALLOWANCE FOR    IN EACH CATEGORY
 ( in thousands)                         LOAN LOSSES     TO TOTAL LOANS     LOAN LOSSES      TO TOTAL LOANS
                                       --------------  -----------------  --------------   -----------------
Commercial loans                       $          349                38%  $          552                39%
Real  estate loans:
     Construction                                  99                13%               -                 3%
     Mortgage                                     369                48%             127                57%
Installment/Consumer loans                         36                 1%              54                 1%
                                       --------------  -----------------  --------------  -----------------
     Total allowance for loan losses   $          853               100%  $          733               100%
</TABLE>

     The  allowance  for  loan losses should not be interpreted as an indication
that  future charge-offs will occur in these amounts or proportions, or that the
allocation  indicates  future  charge-off  trends.  Furthermore,  the  portion
allocated  to  each  loan  category is not the total amount available for future
losses  that  might  occur within such categories, since even on the above basis
there  is  an  unallocated portion of the allowance and the total allowance is a
general  reserve  applicable  to  the  entire  portfolio.

<PAGE>
     Although  management believes the level of the allowance for loan losses as
of  December  31,  1999,  is  adequate  to  absorb  losses  inherent in the loan
portfolio,  currently  unanticipated  conditions  and events, such as additional
declines  in  the  local  economy and increases in interest rates, may result in
losses  that  cannot  reasonably  be  predicted  at  this  date.

SOURCES  OF  FUNDS
------------------

     Deposits traditionally have been the primary source of the Bank's funds for
use  in  lending  and  other  investments.  The Bank also derives funds from net
earnings,  receipt  of  interest  and  principal  on outstanding loans and other
sources,  including the sale of  investment securities.  The Bank is a member of
the  Federal  Reserve  System  and  may borrow through that system under certain
conditions

DEPOSITS
--------

     The  Bank's  deposit  products include noninterest-bearing demand deposits,
interest-bearing  demand  deposits,  money market and savings accounts, and time
certificates  of deposit.  The majority of the Bank's deposits are obtained from
its  primary  marketing  area.

     The  distribution of average deposits and the average rates paid thereon is
summarized  for  the  periods  indicated  below:

<TABLE>
<CAPTION>

<S>                            <C>               <C>       <C>               <C>
                                          1999                         1998
                               --------------------------  -------------------------
DEPOSITS                                AVERAGE   AVERAGE           AVERAGE   AVERAGE
(in thousands)                          BALANCE      RATE           BALANCE      RATE
                               ----------------  --------  ----------------  --------
Demand, non-interest-bearing   $         27,623            $         25,629
Demand, interest bearing                  3,521      0.9%             4,209      1.0%
Money market and savings                 25,639      3.3%            22,163      3.0%
Time certificates of deposit             12,292      4.8%            13,419      5.2%
                               ----------------            ----------------
         Total Deposits        $         69,075            $         65,420

</TABLE>

     The  following  is  a  maturity schedule of time certificates of deposit of
$100,000  or  more  at  the  end  of  the  past  two  years:
<TABLE>
<CAPTION>


TIME  CERTIFICATES  OF  DEPOSIT
                                         December  31,
<S>                                     <C>      <C>
(in thousands)                             1999    1998
                                        -------  ------

Three months or less                    $ 7,046  $5,464
Over three months through six months      1,904     813
Over six months through twelve months     1,124   1,116
Over twelve months                          509     990
                                        -------  ------
        Total                           $10,583  $8,383
</TABLE>


The  Bank  had  no  brokered  deposits  at  December  31,  1999  and  1998.


<PAGE>
SELECTED  FINANCIAL  RATIOS
---------------------------

The  following  table sets forth the ratios of net loss to average assets and to
average  shareholders'  equity, and the ratio of average shareholders' equity to
average  assets.
<TABLE>
<CAPTION>


<S>                                               <C>    <C>
                                                  1999   1998
Return on average assets                          0.82%  0.60%
Return on average shareholders' equity             7.3%   5.3%
Average shareholders' equity to average assets    11.3%  11.2%
Shareholders' equity to total assets at year end  10.7%  11.6%
</TABLE>



ITEM  2.  PROPERTIES
--------------------

     The Bank leases 14,900 square feet of office space and 5,600 square feet of
retail  banking  space  at 11150 West Olympic Boulevard, Los Angeles, California
under  a  noncancelable  operating lease, which expires on August 31, 2002.  The
lease  provides for annual rental payments of approximately $610,000 during 2000
- 2001 and $396,000 in 2002.  In addition, the Bank pays its proportionate share
of  increases  in  common  operating  expenses.

ITEM  3.  LEGAL  PROCEEDINGS
----------------------------

     The Company and the Bank are subject to pending or threatened legal actions
which  arise  in  the  normal course of business.  Based on current information,
management  is  of the opinion that the disposition of all suits will not have a
material  effect  on  the  Company's  consolidated  financial  statements.

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

     No  matters  were  submitted  to  shareholders during the fourth quarter of
1999.


                         PART II
                         -------

ITEM  5.  MARKET  FOR  THE  REGISTRANT'S  COMMON  SHARES AND RELATED SHAREHOLDER
--------------------------------------------------------------------------------
MATTERS
-------


     The  Bancorp's common shares are traded over-the-counter.  The high and low
market  prices for each quarterly period ended December 31, 1999 and 1998 ranged
as  follows:
<TABLE>
<CAPTION>

<S>         <C>     <C>    <C>    <C>           <C>    <C>    <C>        <C>
By Quarter  1st     2nd    3rd    4th-1999      1st    2nd     3rd       4th-1998
----------  ---     -----  -----  --------      -----  ------  -----     --------
Price
   High      3      3       3      3 1/8        4 7/8   4 7/64  3 55/64  3 7/64
   Low       2 5/8  2 7/8   2 5/8  2 7/8        3 5/8   3 1/2   2 43/64  2 1/2
</TABLE>


Principal  market  makers  at  December  31,  1999:

Hoefer  &  Arnett,  Inc.                    Sutro  &  Co.,  Inc
Ryan,  Beck  &  Co.                         Torrey  Pines  Securities

The  Transfer  Agent and Registrar is U.S. Stock Transfer Corporation, Glendale,
California

At  December  31,  1999  there  were  approximately 283 holders of record of the
Company's  common  shares.

<PAGE>
ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION
---------------------------------------------------------------------------
AND  RESULTS  OF  OPERATIONS
----------------------------

     Forward-looking  statements  (defined  in the Private Securities Litigation
Reform  Act  of  1995)  are  contained  in  the  discussion that follows.  These
forward-looking  statements  may  involve  significant  risks  and
uncertainties.  Although  management believes that the expectations reflected in
such  forward-looking  statements  are  reasonable,  actual  results  may differ
materially  from  the  results  discussed  in  these forward-looking statements.

     The  following  financial  discussion  should be read with the accompanying
consolidated  financial  statements  and  notes  thereto.

FINANCIAL  HIGHLIGHTS  OVERVIEW

     The  Company  continued to grow and improve performance throughout 1999. We
ended  the  year with net income of $645,000 up 45% from 1998 with the per share
earnings improving to $0.17 versus $0.12 in 1998.  Deposits increased $6,337,000
or  10% from yearend 1998 while loans increased $7,110,000 or 17%.  Total assets
continued  to  grow  to  $83,119,000  a  12%  increase.

     As we continue to focus on our goals we are maintaining our quality in both
the  loan and investment portfolios.  At year end, the Company had no other real
estate  owned,  one loan of $3,000 on nonaccrual and loans past-due over 30 days
of  only $225,000. Our regulatory capital ratios remain excellent and the rating
agencies  Veribanc  and  Bauer  Financial  have  given  us their highest quality
ratings.

RESULTS  OF  OPERATIONS

NET  INTEREST  INCOME
     Net  interest  income  has  been  and continues to be the main component of
total  earnings.  Interest  rates  after  declining  throughout 1998 and hitting
their  lows  in January of 1999 started to rise slowly in the first half of 1999
and continued to increase at a faster pace in the second half of the year.  This
rise  in rates was dictated by the Federal Reserve Board, which moved the target
rate for fed funds up .75%.  Our interest rate margin for the year averaged 5.3%
equal  to  the  5.3% recorded in 1998.  The majority of our investment portfolio
was  purchased  during  the fourth quarter of 1998 and the first quarter of 1999
when  loan  growth  was  weak,  and this accounted for the investment yields not
increasing  while  the  overall  bond  market  yields  increased.   Loan  volume
increased  during  the  later  part  of  1999.  This was funded by a decrease in
short-term  assets  and an increase in deposits, which improved our margin.  Net
interest  income  for  the  first  quarter of 1999 was $850,000 and increased to
$1,106,000  for the fourth quarter of the year while in 1998 net interest income
was  approximately  $885,000  per  quarter.

     Rates  have continued to increase in the beginning of 2000 and it currently
is  the  market  consensus  that  the  Federal Reserve Board will increase rates
further  in  the second quarter to slow the economy.  This Federal Reserve Board
action  should  help  us increase the net interest income if we are able to keep
our  noninterest bearing deposits growing. This strategy has been difficult with
the  disintermediation  of deposits into the non-deposit mutual fund market.  If
we  are  not  able  to continue the growth of noninterest bearing deposits, then
higher  funding  costs  will  occur  effecting  the  margin.

NONINTEREST  INCOME
     Noninterest  income  increased  by  13%,  or  $56,000  during  1999 after a
decrease  in 1998.  An increase in service charges on deposit accounts accounted
for  most  of  the  gain.  Business  account  service  charges  were  up
17%,  overdraft  charges  8%  and  cash management fees increased 40%.  With the
focus  as  a  wholesale commercial bank we do not generate the fee income that a
consumer  based  institution  does  but we continue to look for ways to increase
noninterest  income.

     Other  noninterest  income  was  generated  from  noninterest  related loan
charges,  service  charges  for  legal  research, merchant bankcard discount and
other  miscellaneous  charges  and income. Noninterest related loan charges come
from  bankcard interchange fees, construction loan funds control fees and letter
of  credit  fees.

NONINTEREST  EXPENSE
     Noninterest related expenses increased in 1999 after two years of declines.
Now  that  the  Company  is  growing  again  additional staff expenses and other
expenses  have  been generated to support our plan to increase assets.  Employee
related  expenses  grew  from  the  addition  of  a loan production office and a
construction  loan department.  Also, the bank reassessed and lowered the salary
costs associated to loan production, per FASB 91 (Financial Accounting Standards
Board)  accounting rules, which reduced the credits applied to employee costs by
$93,000  in  1999.

     Insurance  and  regulatory  assessments  were  reduced  by  $133,000  a 51%
decrease  from  1998  and a 67% decrease from the fees paid in 1997.  Legal fees
declined  $88,000  or  44%  from 1998 and $200,000 or 64% from 1997.  Losses and
costs  from  the  expenses  associated  with  holding and maintaining other real
estate  were  eliminated  during 1999 with the bank holding none on its books at
any  time during the year.  There were approximately $20,000 in directly related
Y2K  expenses  incurred  in  1999  and  additional costs in depreciation for the
additional  computer  upgrades  caused  by  Y2K.

     There  were  no  problems  found  during  century date change and we do not
anticipate  any  expenses  relating  to  Y2K  in  2000.

CREDIT  RISK  MANAGEMENT
     Credit  risk  is an intrinsic part of commercial banking and losses will be
experienced  and that the amount of such losses will vary from time to time, and
will  be  affected by economic conditions and the financial management abilities
of  borrowers.  The  Company has credit policies designed to manage and regulate
credit  risk  and  to  minimize  the  level  of  losses  incurred.

     These  credit  policies require extensive evaluation of new credit requests
and  continuing  review  of  existing  credits in order to identify, monitor and
quantify  evidence  of  deterioration  of  quality or potential loss in a timely
manner.  Management  reviews  current  economic  conditions,  previous loan loss
experience,  composition  of  the  portfolio  and many other relative factors in
determining  the  allowance  for  credit  losses.

     Nonperforming  loans,  which  consist  of  loans past due over 90 days plus
loans  on  nonaccrual,  totaled  $3,000  at December 31, 1999 versus $259,000 at
year-end  1998.  Loans  classified  by  the  Bank  as doubtful or substandard at
year-end  1999  equaled  $2,318,000  versus  $1,990,000  at  year-end  1998.

     The  allowance for credit losses, which buffers the risk of losses inherent
in  the  lending  process, is increased by the provision for loan losses charged
against  income  and  by  recoveries.  It  is  decreased  by the amount of loans
charged  off.  There  is  no precise method of predicting specific losses, which
ultimately  may  be  charged  off,  and  the  conclusion  that a loan may become
uncollectable,  in  whole  or in part, is a matter of judgement.  Similarly, the
adequacy  of  the  allowance  and  accompanying provision for loan losses can be
determined only on a judgmental basis after full review, including consideration
of  economic  conditions  and  their  effects  on specific borrowers, borrowers'
financial  data,  and  evaluation  of underlying collateral for secured lending.
For 1999 the Company also took into consideration the effect of the year 2000 on
our  borrowers.

     Based  on  our assessment of the quality of the loan portfolio, taking into
consideration  the  other  factors  previously  discussed  and the fact that the
reserve  for  credit losses had increased from recoveries there was no provision
to  the  loan  loss  reserve.  This  compares to a $56,000 provision in 1998 and
$301,000  provided  during 1997. Loans totaling $189,000 were charged off during
the year, and $309,000 was recovered increasing the reserve for credit losses to
$853,000.  The  reserve at December 31, 1999 was 1.7% of gross loans compared to
1.6%  of  gross  loans  outstanding  at  December  31,  1998.

ASSETS  AND  LIABILITIES
     This  was  a  year  of  asset  and  deposit growth for our Company.  Assets
increased to $83,119,000 12% higher than yearend 1998.  The largest component of
this  increase  was  the  increase  in total loans that grew 17% to $50,102,000.
Loan  demand  improved in the second half of the year with the opening of a real
estate  construction  lending  department  in  May  and  the opening of our loan
production  office  in Woodland Hills, California in October.  Cash and due from
banks  was  high on the last day of the year because we kept additional funds at
our  correspondents  for  any  Y2K  needs.  Cash  and  due  from  banks averaged
$4,623,000  for  the  year.  We joined the Federal Home Loan Bank during 1999 in
order  to  give ourselves an additional source of liquidity both ongoing and for
Y2K  purposes.  The investment portfolio was increased early in the year but few
investments  were  made  during  the  second  half  of the year when loan demand
increased.

     The  increase in assets was funded through deposit growth and an advance at
yearend  from  the  Federal Home Loan Bank.  The advance was used for short-term
liquidity  and  was  paid  back  in mid January 2000.   Total deposits increased
$6,337,000 or 10% over December 31, 1998.  The deposit increase was split fairly
evenly  between  noninterest  bearing  and  interest  bearing  deposits.

     Our goal in 2000 is to keep trying to generate noninterest-bearing deposits
but  with  the  equity  markets  and  bond markets strong it is hard to increase
demand  deposits.  We  will  probably  have  to  increase our dependence on time
certificates  of  deposit  that  could  increase  our  overall  cost  of  funds.

LIQUIDITY  AND  CAPITAL

ASSET/LIABILITY  MANAGEMENT
     The  Company's  Asset/Liability  Committee  is responsible for managing the
risks associated with changing interest rates and their impact on earnings.  Gap
analysis measures interest rate risk in terms of the mismatch between the stated
repricing  and maturities of the Company's earning assets and liabilities within
defined  time  frames.

     In  order  to  appropriately reflect the repricing structure of the Company
balance sheet, management has made certain adjustments to the balances reflected
in  the following table to account for the behavioral characteristics of certain
core  deposits that do not have specified contractual maturities (i.e., checking
with  interest,  savings, money markets).  In addition, the investment portfolio
is  shown  as  repricing at specified call date, if applicable, and not maturity
date. At year-end the cumulative gap position showed an asset sensitivity of $23
million  or  31%  of  earning  assets  as  shown  in the following interest rate
sensitivity  table.  This  means that the Company is asset sensitive and that an
increase  in interest rates would likely cause earnings to increase, as a larger
portion  of  assets  than  liabilities  would reprice in 2000, and a decrease in
rates  would  decrease  earnings.

     Immediately  adjustable  loans  are  defined  as loans that are tied to the
prime  rate  or  other  indexes,  which  can  change  at  any time.  Immediately
adjustable  deposits are those deposits on which the Company can adjust the rate
without  notice.  The  Company  uses  adjustable deposits and demand deposits to
fund  adjustable  rate  loans.  The  remaining  assets  and  liabilities  are
categorized  by  either  the next time the asset or liability may be repriced or
the  maturity  date,  whichever is sooner.  The Company does not use off-balance
sheet  interest  rate  instruments  to hedge interest rate risk, but does employ
interest  rate  floors on adjustable rate loans. The floors help to mitigate the
loss  of  net  interest  income  in  a  declining  rate  environment.
<TABLE>
<CAPTION>


INTEREST  RATE  SENSITIVITY

                             Immediately     >0-3    >3-6    >6-12     >1-5      >5
(in  thousands)               Adjustable   Months  Months   Months    Years   Years
---------------               ----------   ------  ------   ------    -----   -----

<S>                           <C>         <C>      <C>      <C>      <C>      <C>
Assets:
  Securities                     $     -  $ 7,075  $   180  $ 1,816  $12,349  $   346
  Fed funds sold                   1,000        -        -        -        -        -
  Cash value life insurance            -    1,559        -        -        -        -
  Loans                           21,162    7,575    3,851   10,781    7,112      624
-------------------------        -------  -------  -------  -------  -------  -------
TOTAL EARNING ASSETS             $22,162  $16,209  $ 4,031  $12,597  $19,461  $   970


Sources:
  Savings                              -      265        -        -      529      265
  Checking with interest               -      625        -        -    2,500        -
  Money market                         -   16,895        -        -    5,263    2,732
  Time CD's                            -    8,589    3,236    2,410      712        -
  Demand deposits                      -        -        -        -        -   27,529
-------------------------        -------  -------  -------  -------  -------  -------
TOTAL SOURCES                    $     -  $26,374  $ 3,236  $ 2,410  $ 9,004  $30,526


Cumulative Gap                   $22,162  $11,997  $12,792  $22,979  $33,436  $ 3,880
Gap as a percent of total
      earning assets                29.4     15.9     16.7     30.5     44.3      5.1
</TABLE>

LIQUIDITY  MANAGEMENT
     Liquidity  refers to the Company's ability to maintain cash flow sufficient
to  meet  the needs of depositors and borrowers and to fund its operations.  The
Company continues to have a stable base of core deposits that provide a low-cost
source  of  stable  funds.  These  deposits fluctuate but management maintains a
weekly report of the balances of its largest volume customers to correctly gauge
balance  fluctuations.

     The statement of cash flows shows the Company generated cash from operating
activities  of  $848,000 and $8,236,000 was from financing activities.  The cash
generated  was  used  mainly  to  fund  the increased loan portfolio and the net
change in cash and cash equivalents was ($358,000) for the year. Liquidity
remains adequate for the Company's  needs  and  gives  the  Company  the ability
to deal with any deposit
fluctuations  as well as providing funds for increasing the loan portfolio.  The
Bank  has available lines of credit to purchase fed funds with two correspondent
banks,  the  ability to borrow at both the Federal Reserve Bank and Federal Home
Loan  Bank  and  a reverse repurchase agreement with a major investment bank has
been  arranged  to  supplement  liquidity  if  needed.


CAPITAL
     The  federal  banking  agencies require a minimum ratio of qualifying total
capital  to  risk-adjusted  assets  of 8% and minimum ratio of Tier I capital to
risk-adjusted  assets  of 4%.  In addition to the risk based guidelines, federal
banking regulators require banking organizations to maintain a minimum amount of
Tier  I capital to total assets, referred to as the leverage ratio.  The Company
and  bank  meet  all  regulatory  guidelines  and  the  bank is considered "well
capitalized"  under  the  regulations.

     The  Company  increased capital to $9,136,000 at yearend 1999.  The capital
was  increased  from the retained earnings generated and no dividends were paid.
The bank 's total capital risk-based capital to asset ratio at yearend was 15.3%
and  the  Tier  I  leverage  ratio was 10.9%.  A further analysis of the capital
position  is  covered  in  Note  L.

YEAR  2000
     The  Bank  finished  the renovation, validation, implementation and testing
phases  of  its  Y2K plan prior to year-end 1999.  Testing was also done for the
significant  dates  both  before  and  after  January  1, 2000, not just for the
millennium  date  change.  The  Company spent approximately $115,000 towards the
Y2K  project and we had no Y2K related problems at the turn of the century.   We
have  also  checked  with  our  major  customers  and  have not been told of any
significant  problems  that  would put the Company at risk.  We will continue to
monitor  the critical dates in 2000 to insure that there are systems are working
correctly.

ITEM  7.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA
---------------------------------------------------------
<TABLE>
<CAPTION>

CONSOLIDATED  BALANCE  SHEETS
                                                                      December  31,
<S>                                                               <C>
ASSETS                                                                         1999
                                                                  ------------------

Cash and Due From Banks                                           $       7,891,000
Federal Funds Sold                                                        1,000,000
                                                                  ------------------
        TOTAL CASH AND CASH EQUIVALENTS                                   8,991,000

Interest-Bearing Deposits With Financial Institutions                       100,000

Investment Securities:
   Securities Available for Sale                                          8,590,000
   Securities Held to Maturity                                           12,878,000
                                                                  ------------------
        TOTAL INVESTMENT SECURITIES                                      21,468,000

Federal Home Loan and Federal Reserve Bank stock, at cost                   482,000

Loans                                                                    50,102,000
   Less Allowance for Credit Losses                                (        853,000)
                                                                  ------------------
       NET LOANS                                                         49,249,000

Premises and Equipment                                                      325,000
Cash Surrender Value of Life Insurance                                    1,559,000
Accrued Interest and Other Assets                                         1,045,000
                                                                  ------------------
       TOTAL ASSETS                                               $      83,119,000
                                                                  ==================

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
   Noninterest-Bearing Demand                                     $      27,529,000
   Interest-Bearing Demand                                                3,130,000
   Money Market and Savings                                              25,848,000
   Time Deposits Under $100,000                                           4,465,000
   Time Deposits $100,000 and Over                                       10,583,000
                                                                  ------------------
       TOTAL DEPOSITS                                                    71,555,000

Accrued Interest and Other Liabilities                                      553,000
Federal Home Loan Bank Advance                                            1,875,000
                                                                  ------------------
       TOTAL LIABILITIES                                                 73,983,000
Commitments and Contingencies - Note I

Shareholders' Equity
   Preferred Shares - No Par Value, 1,000,000 Shares Authorized,
      No Shares Issued and Outstanding
   Common Shares - No Par Value, 9,000,000 Shares Authorized,
      3,830,019 Shares Issued and Outstanding at December 1999           13,654,000
   Accumulated Deficit                                              (     4,319,000)
   Accumulated Other Comprehensive Income - Net Unrealized
      Gains (Losses) on Available-for-Sale Securities               (       199,000)
                                                                  ------------------
       TOTAL SHAREHOLDERS' EQUITY                                         9,136,000
                                                                  ------------------
       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                 $      83,119,000
                                                                  ==================
</TABLE>
See  accompanying  notes  to  consolidated  financial  statements.


CONSOLIDATED  STATEMENTS  OF  OPERATIONS
<TABLE>
<CAPTION>
                                                             Year  Ended  December  31,
<S>                                                       <C>             <C>
                                                                   1999            1998
                                                          --------------  --------------
INTEREST INCOME
    Interest and Fees on Loans                            $   3,882,000   $   3,729,000
    Interest on Investment Securities - Taxable               1,104,000         839,000
    Other Interest Income                                       280,000         454,000
                                                          --------------  --------------
       TOTAL INTEREST INCOME                                  5,266,000       5,022,000
INTEREST EXPENSE
    Interest on Demand Deposits                                  33,000          40,000
    Interest on Money Market and Savings                        852,000         674,000
    Interest on Time Deposits                                   590,000         692,000
    Other Interest Expense                                        1,000           1,000
                                                          --------------  --------------
       TOTAL INTEREST EXPENSE                                 1,476,000       1,407,000
                                                          --------------  --------------

NET INTEREST INCOME                                           3,790,000       3,615,000
Provision for Credit Losses                                           -          56,000
                                                          --------------  --------------
       NET INTEREST INCOME AFTER
          PROVISION FOR CREDIT LOSSES                         3,790,000       3,559,000
                                                          --------------  --------------
NONINTEREST INCOME
    Service Charges and Fees on Deposits                        278,000         236,000
    Gain on Sale of Other Real Estate Owned                           -               -
    Dividends on Cash Surrender Value of Life Insurance          75,000          67,000
    Other Noninterest Income                                    144,000         138,000
                                                          --------------  --------------
       TOTAL NONINTEREST INCOME                                 497,000         441,000
                                                          --------------  --------------
NONINTEREST EXPENSE
    Salaries and Employee Benefits                            1,810,000       1,556,000
    Occupancy Expenses                                          539,000         537,000
    Furniture and Equipment                                     114,000         120,000
    Professional Services                                       139,000         105,000
    Business Promotion                                           66,000          70,000
    Stationery and Supplies                                      57,000          65,000
    Data Processing Services                                    477,000         435,000
    Messenger and Courier Services                               72,000          86,000
    Insurance and Assessments                                   126,000         259,000
    Legal Fees and Costs                                        112,000         200,000
    Provision for OREO Losses                                         -               -
    Loss on Sale of Other Real Estate Owned                           -          30,000
    Net Operating Cost of Other Real Estate Owned                     -          22,000
    Other Expenses                                              291,000         267,000
                                                          --------------  --------------
       TOTAL NONINTEREST EXPENSE                              3,803,000       3,752,000
                                                          --------------  --------------
INCOME (LOSS) BEFORE INCOME TAXES                               484,000         248,000
Income Taxes (Benefit)                                     (    161,000)   (    197,000)
                                                          --------------  --------------
       NET INCOME (LOSS)                                  $     645,000   $     445,000
                                                          ==============  ==============
Per Share Data:
       Net Income (Loss) - Basic                          $        0.17   $        0.12
       Net Income (Loss) - Diluted                        $        0.17   $        0.12
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


<TABLE>
<CAPTION>


CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS

                                                                             Year  Ended  December  31,
                                                                              -------------------------
<S>                                                                      <C>             <C>
                                                                                  1999             1998
                                                                         --------------  ---------------
OPERATING ACTIVITIES
   Net Income (Loss)                                                     $     645,000   $      445,000
   Adjustments to Reconcile Net Loss to Net Cash Provided
      (Used) by Operating Activities:
         Depreciation and Amortization                                         136,000          144,000
         Provision for Credit Losses                                                 -           56,000
         Provision for OREO Losses                                                   -                -
         Loss (Gain) on Sale of Other Real Estate Owned                              -           30,000
         Net Amortization of Premiums and Discounts
            on Investment Securities                                            12,000     (     24,000)
         Net Change in Deferred Loan Origination Fees                          152,000     (      3,000)
         Net Increase in Cash Surrender Value of Life Insurance            (    64,000)    (     58,000)
         Net Change in Accrued Interest, Other Assets
             and Other Liabilities                                         (    33,000)          84,000
                                                                         --------------  ---------------
         NET CASH PROVIDED BY OPERATING ACTIVITIES                             848,000          674,000
INVESTING ACTIVITIES
   Net Change in Interest-Bearing Deposits with Financial Institutions     (   100,000)               -
   Purchases of  Available-for-Sale Securities                             ( 8,464,000)     ( 9,217,000)
   Purchases of Held-to-Maturity Securities                                ( 3,801,000)     (15,135,000)
   Proceeds from Maturities of Available-for-Sale Securities                 4,500,000        8,508,000
   Proceeds from Maturities of Held-to-Maturity Securities                   5,138,000        9,961,000
   Proceeds from Sale of Available-for-Sale Securities                         991,000                -
   Purchase of Federal Home Loan & Federal Reserve Bank Stock              (   234,000)               -
   Net Change in Loans                                                     ( 7,142,000)       4,172,000
   Proceeds from Sale of Other Real Estate Owned                                     -          762,000
   Purchase of Life Insurance                                              (   215,000)     ( 1,222,000)
   Purchases of Premises and Equipment                                     (   115,000)     (    74,000)
                                                                         --------------  ---------------
         NET CASH USED BY INVESTING ACTIVITIES                              (9,442,000)     ( 2,245,000)
FINANCING ACTIVITIES
   Net Change in Demand Deposits, Money Market and Savings                   4,617,000      ( 7,854,000)
   Net Change in Time Deposits                                               1,720,000        2,624,000
   Federal Home Loan Bank Advance                                            1,875,000                -
   Proceeds from Exercise of Stock Options                                      24,000           23,000
   Proceeds from Issuance of Common shares                                           -                -
                                                                         --------------  ---------------
         NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES                    8,236,000      ( 5,207,000)
                                                                         --------------  ---------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                           (   358,000)     ( 6,778,000)
Cash and Cash Equivalents at Beginning of Year                               9,249,000       16,027,000
                                                                         --------------  ---------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                 $   8,891,000   $    9,249,000
                                                                         ==============  ===============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Interest Paid                                                         $   1,483,000   $    1,386,000
   Income Taxes Paid                                                     $       2,000   $        3,000
</TABLE>


See  accompanying  notes  to  consolidated  financial  statements.




<TABLE>
<CAPTION>

CONSOLIDATED  STATEMENT  OF  CHANGES  IN  SHAREHOLDER'S  EQUITY

<S>                            <C>            <C>          <C>               <C>             <C>              <C>
                                                                                             Accumulated
                                                                                             Other
                                   Common Shares           Comprehensive     Accumulated     Comprehensive
                               Shares         Amount       Income            Deficit         Income           Total
                               -------------  -----------  ----------------  --------------  ---------------  -------------
BALANCE, JANUARY 1, 1998           3,811,819  $13,607,000                    $(  5,409,000)  $        3,000   $  8,201,000

Exercise of Stock Options              9,000       23,000                                                           23,000

COMPREHENSIVE INCOME:
  Net Income                                               $       445,000         445,000                         445,000
  Net Change in Unrealized
    Gain (Loss) on Available-
    for-Sale Securities                                     (       11,000)                     (    11,000)   (    11,000)
                                                           ----------------
TOTAL COMPREHENSIVE INCOME                                 $       434,000
                                                           ================

BALANCE, DECEMBER 31, 1998         3,820,819   13,630,000                     (  4,964,000)     (     8,000)     8,658,000

Exercise of Stock Options              9,200       24,000                                                           24,000

COMPREHENSIVE INCOME:
  Net Income                                               $       645,000         645,000                         645,000
  Net Change in Unrealized
    Gain (Loss) on Available-
    for-Sale Securities                                     (      191,000)                      (  191,000)    (  191,000)
                                                           ----------------
TOTAL COMPREHENSIVE INCOME                                 $       454,000
                                                           ================

BALANCE, DECEMBER 31, 1999         3,830,019  $13,654,000                    $(  4,319,000)  $   (  199,000)  $  9,136,000
                               =============  ===========                    ==============  ===============  =============

</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

NOTE  A  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Basis  of  Presentation
-----------------------

The  accounting and reporting policies of Marathon Bancorp (the Company) and its
wholly  owned  subsidiary,  Marathon National Bank (the Bank), are in accordance
with  generally  accepted  accounting principles and conform to practices within
the  banking  industry.

Principles  of  Consolidation
-----------------------------

The  consolidated  financial  statements include the accounts of the Company and
the  Bank,  after  elimination  of  all  material  intercompany transactions and
balances.

Nature  of  Operations
----------------------

The  Bank has been organized as a single reporting segment and operates a branch
office  and  corporate  headquarters located in the west side of the City of Los
Angeles.  The  Bank offers a wide range of commercial banking services primarily
to  professionals  and  small  to  medium  size companies located throughout the
greater  Los  Angeles  area.

Use  of  Estimates  in  the  Preparation  of  Financial  Statements
-------------------------------------------------------------------

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  and  disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
the  reported  amounts  of  revenues  and  expenses during the reporting period.
Actual  results  could  differ  from  those  estimates.

Cash  and  Cash  Equivalents
----------------------------

For  purposes  of  reporting cash flows, cash and cash equivalents include cash,
due  from  banks  and federal funds sold.  Generally, federal funds are sold for
one  day  periods.

Cash  and  Due  From  Banks
---------------------------

Banking  regulations  require  that  all  banks  maintain  a percentage of their
deposits  as  reserves in cash or on deposit with the Federal Reserve Bank.  The
Bank  complied  with  the  reserve  requirements  as  of  December  31,  1999.

The Bank maintains amounts due from banks which exceed federally insured limits.
The  Company  has  not  experienced  any  losses  in  such  accounts.

Investment  Securities
----------------------

Bonds,  notes,  and  debentures  for  which the Bank has the positive intent and
ability  to  hold  to  maturity  are reported at cost, adjusted for premiums and
discounts  that are recognized in interest income using the interest method over
the  period  to  maturity.

<PAGE>

NOTE  A  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  CONTINUED

Investment  Securities  -  Continued
------------------------------------

Investments  not  classified  as  trading  securities  nor  as  held to maturity
securities  are classified as available-for-sale securities and recorded at fair
value.  Unrealized gains or losses on available-for-sale securities are excluded
from  net  income and reported as an amount net of taxes as a separate component
of  other  comprehensive  income  included in shareholders' equity.  Premiums or
discounts on held-to-maturity and available-for-sale securities are amortized or
accreted  into  income  using  the interest method.  Realized gains or losses on
sales  of  held-to-maturity  or available-for-sale securities are recorded using
the  specific  identification  method.

Loans
-----

Loans  receivable  that  management  has  the intent and ability to hold for the
foreseeable future or until maturity or payoff are reported at their outstanding
unpaid  principal  balances  reduced  by  any  charge-offs or specific valuation
accounts  and  net  of  any  deferred  fees  or  costs  on  originated loans, or
unamortized  premiums  or  discounts  on  purchased  loans.

Loan  origination  fees and certain direct origination costs are capitalized and
recognized  as  an  adjustment  of  the  yield  of  the  related  loan.

The  accrual of interest on impaired loans is discontinued when, in management's
opinion,  the  borrower may be unable to meet payments as they become due.  When
interest  accrual  is  discontinued,  all  unpaid  accrued interest is reversed.
Interest  income is subsequently recognized only to the extent cash payments are
received.

For  impairment  recognized  in  accordance  with Financial Accounting Standards
Board  (FASB)  Statement  of  Financial  Accounting  Standards  (SFAS)  No. 114,
"Accounting  by Creditors for Impairment of a Loan", as amended by SFAS No. 118,
the  entire  change  in  the present value of expected cash flows is reported as
either  provision  for  loan  losses  in  the  same  manner  in which impairment
initially  was recognized, or as a reduction in the amount of provision for loan
losses  that  otherwise  would  be  reported.

Allowance  for  Credit  Losses
------------------------------

The  allowance for credit losses is increased by charges to income and decreased
by charge-offs (net of recoveries).  Quarterly detailed reviews are performed to
identify  the risks inherent in their loan portfolio, assess the overall quality
of  their  loan  portfolio  and to determine the adequacy of their allowance for
loan  losses and the related provision for loan losses to be charged to expense.
Loans identified as less than "acceptable" are reviewed individually to estimate
the  amount of probable losses that need to be included in the allowance.  These
reviews  include  analysis  of  financial  information  as well as evaluation of
collateral  securing  the credit.  Additionally, the Bank considers the inherent
risk  present  in  the  "acceptable" portion of their loan portfolio taking into
consideration  historical losses on pools of similar loans, adjusted for trends,
conditions  and other relevant factors that may affect repayment of the loans in
these  pools.


<PAGE>
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS


NOTE  A  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  CONTINUED

Premises  and  Equipment
------------------------

Premises  and  equipment  are  carried at cost less accumulated depreciation and
amortization.  Depreciation  is computed using the straight-line method over the
estimated  useful  lives,  which range from three to ten years for furniture and
fixtures.  Leasehold  improvements  are amortized using the straight-line method
over the estimated useful lives of the improvements or the remaining lease term,
whichever  is  shorter.  Expenditures  for  betterment  or  major  repairs  are
capitalized  and  those  for  ordinary  repairs  and  maintenance are charged to
operations  as  incurred.

Other  Real  Estate  Owned
--------------------------

Other  real  estate  owned (OREO), which represents real estate acquired through
foreclosure  in  satisfaction of commercial and real estate loans, is carried at
the  lower of cost or estimated fair value less selling costs.  Any loan balance
in  excess  of  the  fair  value  of  the  real  estate  acquired at the date of
foreclosure  is  charged  to  the  allowance  for  loan  losses.  Any subsequent
valuation  adjustments  are  charged  to  provision  for  other real estate loan
losses.  Operating income or expenses and gains or losses on disposition of such
properties are recorded in current operations under net operating costs of other
real  estate  owned.

Income  Taxes
-------------

Deferred  income  taxes are computed using the asset and liability method, which
recognizes  a  liability or asset representing the tax effects, based on current
tax  law,  of  future  deductible or taxable amounts attributable to events that
have  been  recognized  in  the  consolidated financial statements.  A valuation
allowance  is established to reduce the deferred tax asset to the level at which
it  is  "more  likely than not" that the tax asset or benefits will be realized.
Realization  of  tax  benefits of deductible temporary differences and operating
loss carryforwards depends on having sufficient taxable income of an appropriate
character  within  the  carryforward  periods.

Disclosure  About  Fair  Value  of  Financial  Instruments
----------------------------------------------------------

SFAS  No.  107 specifies the disclosure of the estimated fair value of financial
instruments.  The  Bank's  estimated  fair value amounts have been determined by
the  Bank  using  available  market  information  and  appropriate  valuation
methodologies.

However,  considerable  judgment  is  required  to develop the estimates of fair
value.  Accordingly, the estimates are not necessarily indicative of the amounts
the  Company  could  have  realized  in  a  current market exchange.  The use of
different market assumptions and/or estimation methodologies may have a material
effect  on  the  estimated  fair  value  amounts.

Although  management is not aware of any factors that would significantly affect
the  estimated  fair  value  amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since the balance sheet date
and,  therefore,  current  estimates of fair value may differ significantly from
the  amounts  presented  in  the  accompanying  notes.

<PAGE>
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS


NOTE  A  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  CONTINUED

Earnings  Per  Shares  (EPS)
----------------------------

Basic  EPS  excludes  dilution  and  is computed by dividing income available to
common  stockholders by the weighted-average number of common shares outstanding
for the period.  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 that then shared
in  the  earnings  of  the  entity.

Stock-Based  Compensation
-------------------------

SFAS  No.  123,  "Accounting for Stock-Based Compensation," encourages, but does
not  require,  companies  to  record  compensation cost for stock-based employee
compensation plans at fair value.  The Company has chosen to continue to account
for  stock-based  compensation  using  the  intrinsic value method prescribed in
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to  Employees", and related interpretations.  Accordingly, compensation cost for
stock  options  is measured as the excess, if any, of the quoted market price of
the  Company's  stock  at the date of the grant over the amount an employee must
pay  to  acquire  the stock.  The pro forma effects of adoption are disclosed in
Note  J.

Comprehensive  Income
---------------------

Beginning  in  1998,  the  Bank  adopted  SFAS No. 130, "Reporting Comprehensive
Income",  which  requires  the  disclosure  of  comprehensive  income  and  its
components.  Changes  in  unrealized  gains  (losses)  on  available-for-sale
securities  net  of  income  taxes  is  the  only component of accumulated other
comprehensive  income  for  the  Bank.

Current  Accounting  Pronouncements
-----------------------------------

In  June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for Derivative
Instruments  and Hedging Activities".  This Statement establishes accounting and
reporting standards for derivative instruments and for hedging activities.  This
new  standard  was originally effective for 2000.  In June 1999, the FASB issued
SFAS  No.  137,  "Accounting for Derivative Instruments and Hedging Activities -
Deferral  of  the  Effective  Date  of  FASB Statement No. 133".  This statement
establishes  the  effective date of SFAS No. 133 for 2001 and is not expected to
have  a  material  impact  on  the  Bank'  s  financial  statements.

Reclassifications
-----------------

Certain  reclassifications were made to prior years' presentations to conform to
the  current  year.  These  reclassifications  are of a normal recurring nature.


<PAGE>

NOTE  B  -  INVESTMENT  SECURITIES
<TABLE>
<CAPTION>


The  following  is a summary of data for the major categories of securities as of December 31, 1999:

<S>                                          <C>          <C>          <C>               <C>
                                                          Gross        Gross             Estimated
                                             Amortized    Unrealized   Unrealized        Fair
                                             Cost         Gains        Losses            Value
                                             -----------  -----------  ----------------  -----------
AVAILABLE-FOR-SALE SECURITIES:
   DECEMBER 31, 1999:
      U.S. Government and Agency Securities  $ 4,000,000  $         -  $  (    159,000)  $ 3,841,000
      Other                                    4,789,000            -    (      40,000)    4,749,000
                                             -----------  -----------  ----------------  -----------

                                             $ 8,789,000  $         -  $  (    199,000)  $ 8,590,000
                                             ===========  ===========  ================  ===========

HELD-TO-MATURITY SECURITIES:
   DECEMBER 31, 1999:
      U. S. Treasury Securities              $   503,000  $         -  $(        4,000)  $   499,000
      U.S. Government and Agency Securities    5,500,000            -     (    125,000)    5,375,000
      Municipal Securities                     4,965,000            -     (    167,000)    4,798,000
      Mortgage-Backed Securities               1,910,000            -    (      43,000)    1,867,000
                                             -----------  -----------  ----------------  -----------

                                             $12,878,000  $         -  $  (    339,000)  $12,539,000
                                             ===========  ===========  ================  ===========

</TABLE>

NOTE  B  -  INVESTMENT  SECURITIES  -  CONTINUED

Investment  securities  carried at approximately $2,900,000 at December 31, 1999
were  pledged  to  secure public deposits and other purposes as required by law.

The  actual  maturity  of mortgage-backed securities may differ from contractual
maturities  because  borrowers  may  have  the  right to prepay such obligations
without  penalty.

Gross  realized  loss on sale of available-for-sale securities was $9,000 during
1999.  There  were  no  sales  of  securities  in  1998.

<TABLE>
<CAPTION>


The  scheduled  maturities of securities held to maturity and securities available
for  sale  at  December  31,  1999,  were  as  follows:

                          Available-for-Sale Securities:  Held-to-Maturity Securities:
                          ------------------------------  ----------------------------
<S>                              <C>         <C>          <C>          <C>
                                 Amortized                Amortized
                                 Cost        Fair Value   Cost         Fair Value
                                 ----------  -----------  -----------  -----------

Due in One Year or Less          $3,995,000  $ 3,995,000  $ 1,156,000  $ 1,149,000
Due From One Year to Five Years   4,794,000    4,595,000    9,812,000    9,523,000
Mortgage-Backed Securities                -            -    1,910,000    1,867,000
                                 ----------  -----------  -----------  -----------

                                 $8,789,000  $ 8,590,000  $12,878,000  $12,539,000
                                 ==========  ===========  ===========  ===========
</TABLE>


NOTE  C  -  LOANS

The  Bank's  loan  portfolio consists primarily of loans to borrowers within the
Los  Angeles  Area  of  Southern  California.  Although  the Bank seeks to avoid
concentrations  of  loans  to  a single industry or based upon a single class of
collateral,  real  estate  and  real  estate associated businesses are among the
principal industries in the Bank's market area and, as a result, the Bank's loan
and  collateral  portfolios are to some degree concentrated in those industries.

<PAGE>

NOTE  C  -  LOANS  -  CONTINUED
<TABLE>
<CAPTION>

The  following  is  a  summary  of the components of loans at December 31, 1999:

<S>                         <C>
                                   1999
                            -----------

Commercial Loans            $18,922,000
Real Estate - Construction    6,395,000
Real Estate - Other          24,132,000
Consumer                        591,000
                            -----------
                             50,040,000
Net Deferred Loan Costs          62,000
                            -----------

                            $50,102,000
                            ===========
</TABLE>


<TABLE>
<CAPTION>


The  following  is  a  summary  of the investment in impaired loans, the related
allowance  for  credit  losses, and income recognized thereon as of December 31:

<S>                                            <C>       <C>
                                                   1998     1999
                                               --------  -------

Recorded Investment in Impaired Loans          $258,000  $     -
                                               ========  =======

Related Allowance for Credit Losses            $ 84,000  $     -
                                               ========  =======

Average Recorded Investment in Impaired Loans  $242,000  $39,000
                                               ========  =======

Interest Income Recognized from Cash Payments  $ 12,000  $     -
                                               ========  =======
</TABLE>


Loans  having  carrying value of  $977,000 were transferred to other real estate
owned  in  1998.  During 1998 loans totaling  $1,434,000 were made to facilitate
the  sale  of other real estate owned. During 1999, no loans were transferred to
other  real  estate  owned.

<TABLE>
<CAPTION>

A  summary  of  changes  in  the  allowance  for  credit  losses  follows:

<S>                        <C>         <C>
                                1999        1998
                           ----------  ----------

Balance, January 1         $ 733,000   $ 747,000
Provision for Loan Losses          -      56,000
Loans Charged Off           (189,000)   (194,000)
Recoveries                   309,000     124,000
                           ----------  ----------
Balance, December 31       $ 853,000   $ 733,000
                           ==========  ==========
</TABLE>

NOTE  D  -  PREMISES  AND  EQUIPMENT
<TABLE>
<CAPTION>


The  following is a summary of the major components of premises and equipment at
December  31,  1999:

<S>                                             <C>
                                                        1999
                                                -------------

Furniture, Fixtures and Equipment               $  1,435,000
Leasehold Improvements                               480,000
                                                -------------
                                                   1,915,000
Less Accumulated Depreciation and Amortization   ( 1,590,000)
                                                -------------

                                                $    325,000
                                                =============
</TABLE>



The  Bank  has  an  operating  lease  commitment  covering its banking premises.
Minimum  rental  commitments under this and all other operating leases that have
initial  or  remaining noncancellable terms in excess of one year as of December
31,  1999  are  as  follows:
<TABLE>
<CAPTION>


          <S>   <C>
          2000  $  613,000
          2001     608,000
          2002     396,000
                ----------

                $1,617,000
                ==========
</TABLE>

Rent  expense  was  $528,000 and $523,000, for the years ended December 31, 1999
and 1998, respectively.  Sublease rental income was $99,000 and  $92,000 in 1999
and  1998,  respectively.


NOTE  E  -  DEPOSITS
<TABLE>
<CAPTION>

At December 31, 1999, the scheduled maturities of certificates of deposit are as
follows:

<S>                <C>
2000               $14,336,000
2001 through 2002      712,000
                   -----------

                   $15,048,000
                   ===========
</TABLE>


NOTE  F  -  FEDERAL  HOME  LOAN  BANK  ADVANCE

At  December  31,  1999, the Bank had a $1,875,000 advance from the Federal Home
Loan  Bank  with  no  stated maturity and a current interest rate of 4.96%.  The
advance  is  secured  by  investment  securities.


NOTE  G  -  INCOME  TAXES

The  income  tax  provision  (benefit) for the years ended December 31, 1999 and
1998  is  comprised  of  the  following:
<TABLE>
<CAPTION>

<S>                                <C>          <C>
                                         1999         1998
                                   -----------  -----------
Current Taxes:
   Federal                         $    9,000   $        -
   State                                3,000        3,000
                                   -----------  -----------
                                       12,000        3,000
Deferred                              175,000      239,000
Net Change in Valuation Allowance    (348,000)    (439,000)
                                   -----------  -----------

                                   $( 161,000)  $( 197,000)
                                   ===========  ===========
</TABLE>


For  federal  income  tax  purposes,  the  Company  has  net  operating  loss
carryforwards  of  approximately  $3,672,000  which  expire in 2008 - 2018.  For
state  income  tax  purposes,  the  Company  has  incurred  net  operating  loss
carryforwards  of  approximately  $1,508,000,  which  expire  in 2000 - 2003, to
offset  future  taxes  payable,  adjusted  for  the  fifty percent reduction, as
required  by  state  tax  law.  During  1999  and 1998, state net operating loss
carryforwards  of  approximately  $109,000 and $1,967,000 expired, respectively.
<TABLE>
<CAPTION>


At December 31, 1999, the components of the net deferred tax asset are comprised
of  the  following:

<S>                                                        <C>
                                                                      1999
                                                           ----------------
Deferred Tax Assets:
    Allowance for Credit Losses Due to Tax Limitations     $       343,000
    Net Operating Loss and Tax Credit Carryforwards              1,503,000
    Premises and Equipment Due to Depreciation Difference           90,000
    Other Assets/Liabilities                                        60,000
                                                           ----------------
                                                                 1,996,000

Valuation Allowance                                           (  1,598,000)

Deferred Tax Liabilities:
    Other Assets/Liabilities                                  (     25,000)
                                                           ----------------
                                                              (     25,000)
                                                           ----------------

Net Deferred Assets                                        $       373,000
                                                           ================
</TABLE>


<PAGE>

NOTE  G  -  INCOME  TAXES  -  CONTINUED

The  principal  reasons  for the difference between the federal statutory income
tax rate of 34% in 1999 and 1998  and income tax expense (benefit) for the years
ended  December  31,  1999  and  1998  are  as  follows:
<TABLE>
<CAPTION>

<S>                                              <C>             <C>
                                                          1999            1998
                                                 --------------  --------------

Tax Expense (Benefit) at Statutory Rate          $     164,000   $      84,000
State Franchise Tax Net of Federal Tax Benefit          31,000          14,000
Reduction of Valuation Allowance                   (   348,000)    (   439,000)
Expired State Net Operating Losses                       4,000         141,000
Other, Net                                         (    12,000)          3,000
                                                 --------------  --------------

Tax Expense (Benefit)                            $ (   161,000)  $(    197,000)
                                                 ==============  ==============
</TABLE>

NOTE  H  -  EARNINGS  PER  SHARE  (EPS)

The following is a reconciliation of net income (loss) and shares outstanding to
the  income  (loss)  and  number  of  share  used  to  compute  EPS:
<TABLE>
<CAPTION>


                                              1999                 1998
                                ------------------   ------------------
<S>                             <C>       <C>        <C>       <C>
                                Income    Shares     Income    Shares
                                --------  ---------  --------  ---------

Net Income (Loss) as Reported   $645,000             $445,000
Weighted Average Shares
   Outstanding During the Year            3,826,668            3,817,498
                                          ---------            ---------
      USED IN BASIC EPS          645,000  3,826,668   445,000  3,817,498
Dilutive Effect of Outstanding
   Stock Options                       -          -         -          -
                                --------  ---------  --------  ---------
      USED IN DILUTIVE EPS      $645,000  3,826,668  $445,000  3,817,498
                                ========  =========  ========  =========
</TABLE>

The  impact  of  stock options has been excluded from the computation of diluted
EPS  since  their  effect  would  be  anti-dilutive.


<PAGE>

NOTE  I  -  COMMITMENTS  AND  CONTINGENCIES

The Company and the Bank are subject to pending or threatened legal actions that
arise  in  the  normal  course  of  business.  Based  on  current  information,
management  is  of  the  opinion that the disposition of all litigation will not
have  a  material  effect  on  the  Company's consolidated financial statements.

In  the  normal course of business, the Bank is a party to financial instruments
with  off  balance sheet risk, which are intended to meet the financing needs of
its customers.  These financial instruments include commitments to extend credit
and  letters  of  credit,  which are not reflected in the consolidated financial
statements.  These  instruments  involve, to varying degrees, elements of credit
and  interest  rate risk in excess of the amounts recognized in the consolidated
financial  statements.  The Bank's exposure to credit loss commitments to extend
credit  and  letters  of  credit  is  represented by the contractual or notional
amount  of  those  instruments.

The  following  is  a  summary  of  contractual or notional amounts of financial
instruments  with  off  balance  sheet  risk  as  of  December  31,  1999.
<TABLE>
<CAPTION>

<S>                           <C>
                                     1999
                              -----------

Commitments to Extend Credit  $17,161,000
Letters of Credit                 451,000
                              -----------

                              $17,612,000
                              ===========

</TABLE>

Commitments  to extend credit are agreements to lend a customer as long as there
is  no  violation  of  any  condition  established in the contract.  Commitments
generally  have  fixed  expiration  dates  or  other termination clauses and may
require  payment of a fee.  Since many of the commitments are expected to expire
without  being  drawn  upon,  the  total  commitment  amounts do not necessarily
represent  future  cash  requirements.

The  Bank  uses the same credit policies in making off balance sheet commitments
and  conditional obligations as it does for balance sheet instruments.  The Bank
evaluated  each customer's creditworthiness on a case by case basis.  The amount
of  collateral  obtained,  if  deemed  necessary  by  the Bank upon extension of
credit, is based on management's credit evaluation.  The collateral held varies,
but  may  include accounts receivable, inventory, property, plant and equipment,
and  income  producing  commercial  and  residential  properties.


<PAGE>

NOTE  J  -  STOCK  OPTION  PLAN

The Company has stock option plans which authorize the issuance of up to 700,000
shares  of the Company's unissued common shares to officers, directors and other
key  personnel.  Option  prices  shall  be equal to the fair market value at the
date of grant.  Options granted under the stock option plan expire not more than
ten  years  after  the date of grant and must be fully paid when exercised.  Set
forth below is the status of options granted, giving retroactive effect to stock
dividends  declared,  if  any:

<TABLE>
<CAPTION>

<S>                               <C>          <C>
                                      Number of Shares
                                     -----------------
                                        1999               1998
                                  -----------  -----------------

Options Outstanding, January 1       408,956            128,030
Granted at Option Prices of:
   $3.75 in 1999                      83,500                  -
   $3.75 in 1998                           -            325,610
   $3.09 in 1997                           -                  -
Exercised                         (    9,200)        (    9,000)
Canceled                          (    6,360)         (  35,684)
                                  -----------  -----------------
Options Outstanding, December 31     476,896            408,956
                                  ===========  =================
</TABLE>

At December 31, 1999 the weighted average exercise price was $3.63, the weighted
average  remaining  contractual  life  was  8.3  years, and 108,235 options were
exercisable  at  a  weighted  average  price  of  $4.05.

The fair value of each option grant was estimated on the date of grant using the
Black-Scholes  option  pricing  model  with  the  following  weighted-average
assumptions used:  no dividend yield; risk-free rates of 5.00% for 1999 and 4.5%
for  1998;  volatility  of 31% for 1999 and  37% for 1998; and expected lives of
ten  years.  The  estimated  fair  value of options granted during 1999 and 1998
were  $1.78  and  $2.12  per  share,  respectively.

<PAGE>

NOTE  J  -  STOCK  OPTION  PLAN  -  CONTINUED

The  Company  applies  Accounting  Principles  Board  Opinion No. 25 and related
interpretations  in  accounting  for  its  stock  options.  Accordingly,  no
compensation  cost  has  been  recognized  for  its  stock  option  plan.  Had
compensation  cost  for the Company's stock option plan been determined based on
the  fair value at the grant dates for awards under the plan consistent with the
method  of  SFAS  No. 123, the Company's net income (loss) and income (loss) per
share  for  the year ended December 31, 1999 and 1998 would have been changed to
the  pro  forma  amounts  indicated  below:

<TABLE>
<CAPTION>

<S>                                        <C>       <C>
                                               1999      1998
                                           --------  --------
Net Income (Loss) to Common Shareholders:
   As Reported                             $645,000  $445,000
   Pro Forma                               $499,000  $322,000

Per Share Data:
   Net Income (Loss) - Basic
      As Reported                          $   0.17  $   0.12
      Pro Forma                            $   0.13  $   0.08

   Net Income (Loss) - Diluted
      As Reported                          $   0.17  $   0.12
      Pro Forma                            $   0.13  $   0.08
</TABLE>

NOTE  K  -  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

The  fair  value  of  a financial instrument is the amount at which the asset or
obligation  could be exchanged in a current transaction between willing parties,
other  than in a forced or liquidation sale.  Fair value estimates are made at a
specific  point  in  time  based  on relevant market information and information
about  the  financial instrument.  These estimates do not reflect any premium or
discount  that  could  result  from  offering  for  sale  at one time the entire
holdings  of  a particular financial instrument.  Because no market value exists
for a significant portion of the financial instruments, fair value estimates are
based  on  judgments regarding future expected loss experience, current economic
conditions,  risk  characteristics  of  various financial instruments, and other
factors.  These  estimates  are  subjective in nature, involve uncertainties and
matters  of  judgment  and,  therefore,  cannot  be  determined  with precision.
Changes  in  assumptions  could  significantly  affect  the  estimates.

Fair  value  estimates  are  based  on financial instruments both on and off the
balance  sheet  without  attempting  to estimate the value of anticipated future
business  and  the  value  of  assets  and  liabilities  that are not considered
financial  instruments.  Additionally,  tax  consequences  related  to  the
realization  of  the  unrealized gains and losses can have a potential effect on
fair  value  estimates  and  have  not been considered in many of the estimates.


<PAGE>

NOTE  K  -  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  -  CONTINUED

The  following  methods  and assumptions were used to estimate the fair value of
significant  financial  instruments:

Financial  Assets
-----------------

The  carrying  amounts  of  cash,  short term investments, due from customers on
acceptances, and bank acceptances outstanding are considered to approximate fair
value.  Short  term investments include federal funds sold, securities purchased
under  agreements to resell, and interest bearing deposits with banks.  The fair
values  of  investment  securities,  including available for sale, are generally
based  on  quoted  market prices.  The fair value of loans are estimated using a
combination of techniques, including discounting estimated future cash flows and
quoted  market  prices  of  similar  instruments  where  available.

Financial  Liabilities
----------------------

The carrying amounts of deposit liabilities payable on demand, commercial paper,
and  other  borrowed  funds are considered to approximate fair value.  For fixed
maturity  deposits, fair value is estimated by discounting estimated future cash
flows  using  currently  offered  rates  for  deposits  of  similar  remaining
maturities.  The  fair  value  of  long  term  debt  is based on rates currently
available  to  the  Bank  for  debt with similar terms and remaining maturities.

Off  Balance  Sheet  Financial  Instruments
-------------------------------------------

The  fair value of commitments to extend credit and standby letters of credit is
estimated  using  the  fees  currently charged to enter into similar agreements.
The  fair  value  of  these  financial  instruments  is  not  material.

The  estimated  fair value of financial instruments at December 31 is summarized
as  follows  (dollar  amounts  in  thousands):
<TABLE>
<CAPTION>


<S>                                <C>           <C>
                                           1999
                                   -------------------------
                                   Carry Value   Fair Value
                                   ------------  -----------
Financial Assets:
   Cash and Due From Banks         $      7,991  $     7,991
   Federal Funds Sold              $      1,000  $     1,000
   Investment Securities           $     21,468  $    21,129
   Federal Home Loan and Federal
      Reserve Bank Stock           $        482  $       482
   Loans, Net                      $     49,249  $    49,096
   Cash Value of Life Insurance    $      1,559  $     1,559

Financial Liabilities:
   Deposits                        $     71,555  $    71,518
   Federal Home Loan Bank Advance  $      1,875  $     1,875
</TABLE>

<PAGE>

NOTE  L  -  REGULATORY  MATTERS

The  Company  and  Bank  are  subject to various regulatory capital requirements
administered  by  the federal banking agencies.  Failure to meet minimum capital
requirements  can  initiate  certain  mandatory  and  possible  additional
discretionary  actions  by  regulators  that, if undertaken, could have a direct
material  effect  on the Company's financial statements.  Under capital adequacy
guidelines  and  the  regulatory  framework  for  prompt  corrective action, the
Company and Bank must meet specific capital guidelines that involve quantitative
measures  of  the  assets,  liabilities,  and certain off-balance-sheet items as
calculated  under  regulatory  accounting  practices.  The  capital  amounts and
classification are also subject to qualitative judgments by the regulators about
components,  risk  weightings  and  other  factors.

Quantitative  measures  established  by  regulation  to  ensure capital adequacy
require  the  Company and Bank to maintain minimum amounts and ratios (set forth
in  the table below) of total and Tier 1 capital (as defined in the regulations)
to  risk-weighted  assets  (as  defined),  and of Tier 1 capital (as defined) to
average assets (as defined).  Management believes, as of December 31, 1999, that
the  Company  and  Bank meet all capital adequacy requirements to which they are
subject.

As  of  December 31, 1999, the most recent notification from the Federal Deposit
Insurance  Corporation  categorized  the  Bank  as  well-capitalized  under  the
regulatory  framework  for  prompt corrective action (there are no conditions or
events  since that notification that management believes have changed the Bank's
category).  To  be  categorized  as  well-capitalized,  the  Bank  must maintain
minimum  ratios  as set forth in the table below.  The following table also sets
forth  the  Bank's  actual  capital  amounts  and  ratios  (dollar  amounts  in
thousands):


<TABLE>
<CAPTION>

<S>                      <C>      <C>          <C>         <C>          <C>                <C>
                                                        Amount of Capital Required
                                               ------------------------------------------------
                                               To Be Categorized as      To Be
                         Actual                Adequately Capitalized    Well-Capitalized
                         -------               ----------------------    ----------------------
                         Amount   Percentage   Amount      Percentage    Amount     Percentage
                         -------  -----------  ----------  -----------   ---------  -----------
AS OF DECEMBER 31, 1999
   Total Risk-Based      $10,157        15.3%  $    5,312         8.0%   $  6,639        10.0%
   Tier 1 Risk-Based     $ 9,327        14.1%  $    2,656         4.0%   $  3,984         6.0%
   Tier 1 Leverage       $ 9,327        10.9%  $    3,434         4.0%   $  4,293         5.0%

</TABLE>


The  Company  is  subject  to  similar  requirements administered by its primary
regulator,  the  Federal  Reserve  Board.  For  capital  adequacy  purposes, the
Company  must  maintain total capital to risk-weighted assets, Tier 1 capital to
risk-weighted  assets  and  Tier  1  capital to average assets of 8.0%, 4.0% and
4.0%,  respectively.  Its  total capital to risk-weighted assets, Tier 1 capital
to  risk-weighted  assets and Tier 1 capital to average assets was 15.3%, 14.1%,
and  10.9%,  respectively,  at  December  31,  1999.

<PAGE>


The  Company  is  subject  to  similar  requirements administered by its primary
regulator,  the  Federal  Reserve  Board.  For  capital  adequacy  purposes, the
Company  must  maintain total capital to risk-weighted assets, Tier 1 capital to
risk-weighted  assets  and  Tier  1  capital to average assets of 8.0%, 4.0% and
4.0%,  respectively.  Its  total capital to risk-weighted assets, Tier 1 capital
to  risk-weighted  assets and Tier 1 capital to average assets was 15.3%, 14.1%,
and  10.9%,  respectively,  at  December  31,  1999.

<PAGE>

NOTE  M  -  CONDENSED  FINANCIAL  INFORMATION  OF  PARENT  COMPANY  ONLY

Marathon  Bancorp  operates  Marathon  National  Bank.  The  earnings  of  the
subsidiary  are  recognized  on  the  equity  method  of  accounting.  Condensed
financial  statements  of  the  parent  company  only  are  presented  below:
<TABLE>
<CAPTION>

                                                December, 31
<S>                                            <C>
CONDENSED BALANCE SHEETS                               1999
                                               -------------
ASSETS
Cash in Marathon National Bank                 $     17,000
Investment in Marathon National Bank              9,128,000
Other Assets                                          2,000
                                               -------------
   TOTAL ASSETS                                $  9,147,000
                                               =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued Expenses                               $     11,000
Shareholders' Equity
   Common Shares                                 13,654,000
   Accumulated Deficit                          ( 4,319,000)
   Accumulated Other Comprehensive Income       (   199,000)
                                               -------------
   TOTAL SHAREHOLDERS' EQUITY                     9,136,000
                                               -------------
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $  9,147,000
                                               =============

</TABLE>


<TABLE>
<CAPTION>

<S>                                                                 <C>            <C>
                                                                          Year Ended December 31,
CONDENSED STATEMENTS OF OPERATIONS                                          1999            1998
                                                                    -------------  --------------
Dividend from Marathon National Bank                                $     20,000   $           -
Operating Expenses                                                   (    21,000)   (     21,000)
Equity in Undistributed Net Income (Loss) of Marathon National Bk        646,000         466,000
                                                                    -------------  --------------
   NET INCOME (LOSS)                                                $    645,000   $     445,000
                                                                    =============  ==============

                                                                          Year ended December 31,
CONDENSED STATEMENTS OF CASH FLOWS                                          1999            1998
                                                                    -------------  --------------
OPERATING ACTIVITIES
Net Income (Loss)                                                   $    645,000   $     445,000
Adjustments to Reconcile Net Income (Loss) to Net Cash Used by
   Operating Activities - Equity in Net Income (Loss)
   of Marathon National Bank                                         (  666,000)    (    466,000)
Net Change in Other Assets and Other Liabilities                     (    10,000)   (     18,000)
                                                                    -------------  --------------
   NET CASH USED BY OPERATING ACTIVITIES                             (    31,000)   (     39,000)
INVESTING ACTIVITIES
Dividend from Marathon National Bank                                      20,000               -
Investment in Marathon National Bank                                           -
                                                                    -------------  -------------
   NET CASH USED BY INVESTING ACTIVITIES                                  20,000               -
FINANCING ACTIVITIES
Proceeds from Exercise of Stock Options                                   24,000          23,000
Proceeds from Issuance of Common Shares                                        -               -
                                                                    -------------  --------------
   NET CASH PROVIDED BY FINANCING ACTIVITIES                              24,000          23,000
                                                                    -------------  --------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                          13,000    (     16,000)
Cash and Cash Equivalents at Beginning of Year                             4,000          20,000
                                                                    -------------  --------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                            $     17,000   $       4,000
                                                                    =============  ==============
</TABLE>
<PAGE>

INDEPENDENT  AUDITORS'  REPORT


The  Board  of  Directors  and  Shareholders
Marathon  Bancorp

We  have audited the accompanying consolidated balance sheet of Marathon Bancorp
and  Subsidiary  as of December 31, 1999 and the related consolidated statements
of  operations, changes in shareholder's equity and cash flows for the two years
ended  December  31,  1999.  These  consolidated  financial  statements  are the
responsibility  of  the Marathon Bancorp's management.  Our responsibility is to
express  an  opinion  on  these  consolidated  financial statements based on our
audits.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance  about  whether  the consolidated financial statements are
free  of  material  misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit  also  includes  assessing  the accounting principles used and significant
estimates  made  by  management,  as  well  as  evaluating the overall financial
statement  presentation.  We  believe that our audits provide a reasonable basis
for  our  opinion.

In our opinion, such consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Marathon Bancorp and
Subsidiary  as  of  December 31, 1999, and the results of its operations and its
cash  flows  for each of the two years in the period ended December 31, 1999, in
conformity  with  generally  accepted  accounting  principles.


/s/  VAVRINEK, TRINE, DAY & CO. LLP

Laguna  Hills,  California
January  18,  2000

<PAGE>
ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
--------------------------------------------------------------------------------
FINANCIAL  DISCLOSURE
---------------------

     No  information  is  required  in  response  to  this  item.

                                PART III
                                -------


ITEM  9.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT
------------------------------------------------------------------
<TABLE>
<CAPTION>

     DIRECTORS:
<S>                             <C>                                                            <C>
                                                                                               DIRECTOR
NAME                            POSITION WITH COMPANY                                          SINCE
------------------------------  -------------------------------------------------------------  --------
Nikolas Patsaouras (1) (2) (3)  Chairman of the Board of the Company and Bank                      1982
Robert Abernethy (2)            Director                                                           1983
Craig D. Collette(3)            President and Chief Executive Officer of the Company and Bank      1997
Frank W. Jobe, M.D.             Director                                                           1985
C. Thomas Mallos (1) (2) (3)    Director                                                           1982
Robert l. Oltman  (1) (2) (3)   Director                                                           1982
Ann Pappas (1) (2) (3)          Director                                                           1982
<FN>


(1)     Member  of  the  Audit  Committee
(2)     Member  of  the  Executive  and  Compensation  Committee.
(3)     Member  of  the  Loan  Committee.
</TABLE>


<TABLE>
<CAPTION>
     EXECUTIVE  OFFICERS  OF  THE  COMPANY  AND  THE  BANK  WERE:

<S>                <C>                                                                        <C>
NAME               POSITION                                                                   AGE
-----------------  -------------------------------------------------------------------------  ---
Craig D. Collette  President and Chief Executive Officer of the Company and Bank               57
Timothy J. Herles  Executive Vice President and Senior Credit Officer of the Bank              58
Howard J. Stanke   Executive Vice President, Chief Financial Officer of the Company and Bank   51
Adrienne Caldwell  Executive Vice President, Operations Administration of the Bank             57
</TABLE>

     CRAIG D. COLLETTE has been the President and Chief Executive Officer of the
Company  and  Bank  since  January  1997.  Mr. Collette has been a banker for 29
years  in the Southern California banking community.  Prior to joining the Bank,
Mr.  Collette  was President, COO and Director of TransWorld Bank, Sherman Oaks,
CA  and, for approximately 18 years, was President, CEO and Director of Landmark
Bank,  La  Habra,  CA

     TIMOTHY J. HERLES has been Executive Vice President of the Bank since April
1983,  and  has  served  in  various  positions  including  Cashier,  Chief
Administrative  Officer,  Compliance  Officer  and  Senior Credit Officer, which
position  he  currently  holds.

     HOWARD J. STANKE has been Executive Vice President /Chief Financial Officer
of the Company and Bank since June 9, 1997.  Mr. Stanke was previously Executive
Vice President/Chief Financial Officer of TransWorld Bancorp and TransWorld Bank
for  approximately  19  years.

     ADRIENNE  CALDWELL  has  been  Executive  Vice  President-Operations
Administration  of  the  Bank  since  March  1986.

<PAGE>

ITEM  10.  EXECUTIVE  COMPENSATION
----------------------------------

     The following table sets forth a comprehensive overview of the compensation
of the Bank's executive officers with salary and bonus exceeding $100,000 during
the  fiscal year ended December 31, 1999.  Comparative data is also provided for
the  previous  three  fiscal  years.
<TABLE>
<CAPTION>

<S>                                <C>   <C>       <C>     <C>     <C>      <C>       <C>       <C>

(a)                                (b)   (c)       (d)     (e)     (f)      (g)       (h)       (I)
                                                           Other
                                                           Annual  Restricted                   All Other
             Name and                                      Compen-   Stock              LTIP      Compen
            Principal                     Salary   Bonus   sation   Award(s) Options/  Payouts    sation
            Position               Year     ($)     ($)    ($)(1)     ($)     SARs       ($)       ($)
---------------------------------  ----  --------  ------  ------  ---------  ------   -------  ---------

Craig D. Collette (3)              1999  $173,102  $    0  $8,400       0     11,000       0    $  72,069(2)
President and                      1998  $171,602  $    0  $8,400       0      5,000       0    $   5,199
Chief Executive Officer            1997  $160,714  $    0  $7,700       0     30,000       0    $   1,238
Of the Company and the Bank

Timothy J. Herles                  1999  $104,304  $4,000  $8,400       0      8,000       0    $   4,539
Executive Vice President and       1998  $101,089  $    0  $8,400       0     34,184       0    $   4,177
Chief Credit Officer of the Bank   1997  $ 96,372  $    0  $8,400       0     15,000       0    $   2,525

Howard J. Stanke (4)               1999  $ 94,682  $4,000  $7,200       0      8,000       0    $   3,168
Executive Vice President and       1998  $ 88,409  $    0  $7,200       0          0       0    $   2,852
Chief Financial Officer of the     1997  $ 49,803  $    0  $4,200       0     15,000       0    $     304
Company and Bank

<FN>
(1)     These  amounts  represent  the  automobile  allowance
(2)     This  amount  includes $66,870 of vested benefits in Mr. Collette's salary continuation plan.
(3)     Mr.  Collette  commenced  employment  on  January  22,  1997.
(4)     Mr.  Stanke  commenced  employment  on  June  1,  1997.

</TABLE>


<PAGE>
ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT
--------------------------------------------------------------------------------

     Management  of  the Company knows of no person who owns, beneficially or of
record,  either  individually  or together with associates, 5 percent or more of
the outstanding shares of the Company's common stock, except as set forth in the
table  below.  The  following  table sets forth, as of March 6, 2000, the number
and  percentage of shares of the Company's outstanding common stock beneficially
owned,  directly  or  indirectly,  by  each of the Company's directors and named
officers  and  by  the  directors  and named officers of the Company as a group.
Unless  otherwise  indicated,  the  persons  listed  below  have sole voting and
investment  powers.  Management is not aware of any arrangements which may, at a
subsequent  date,  result  in  a  change  of  control  of  the  Company.
<TABLE>
<CAPTION>

            Common  Stock  Beneficially  Owned  as  of
            March  6,  2000
<S>                                       <C>              <C>
                                          Number of        Percent Of
Name of Beneficial Owner                  Shares           Class
----------------------------------------  ---------        ----------

Directors and Named Executive Officers:
----------------------------------------
Nikolas Patsaouras                           50,693   (1)         1.3
Robert J. Abernethy                         115,234   (2)         2.9
Craig D. Collette                            73,723   (3)         1.9
Frank W. Jobe, M.D.                          80,188   (4)         2.0
C. Thomas Mallos                             57,813   (5)         1.5
Robert L. Oltman                            200,857   (6)         5.1
Ann Pappas                                   69,946   (7)         1.8
Timothy J. Herles                            19,533   (8)         0.5
Howard J. Stanke                             18,500   (9)         0.5
Adrienne Caldwell                            11,789  (10)         0.3

Total for all directors, named
executive officers and all
executive officers (numbering 10)           698,276  (11)        17.8

Principal Shareholder:
----------------------------------------
Oppenheimer-Spence Financial
Services Partnership L.P.                   224,897  (12)         5.9

<FN>
(1)     Mr.  Patsaouras  has shared voting and investment powers as to 37,500 of
these  shares.  The amount includes 12, 783 shares acquirable by the exercise of
stock  options.
(2)     The  amount  includes  7,935  shares  acquirable  by  exercise  of stock
options.
(3)     Mr.  Collette  has  shared  voting  and  investment  powers as to 72,723
shares.  The  amount  includes  1,000  shares  acquirable  by  exercise of stock
options.
(4)     The  amount  includes  5,998  shares  acquirable  by  exercise  of stock
options.
(5)     Mr. Mallos has shared voting and investment powers as of 45,108 of these
shares.  The  amount  includes  9,935  shares  acquirable  by  exercise of stock
options.
(6)     Mr.  Oltman  has  shared  voting  and investment powers as to 179,424 of
these  shares.  The amount includes 9,935 shares acquirable by exercise of stock
options.  His address is c/o Marathon Bancorp, 11150 West Olympic Boulevard, Los
Angeles,  California  90064.
(7)     Ms. Pappas has shared voting and investment powers as to 59,896 of these
shares.  The  amount  includes  9,935  shares  acquirable  by  exercise of stock
options.
(8)     Mr.  Herles has shared voting and investment powers as to 1,184 of these
shares.  The  amount  includes  18,349  shares  acquirable  by exercise of stock
options.
(9)     Mr.  Stanke has shared voting and investment powers as to 18,500 shares.
(10)    These  shares  are  acquirable  by  exercise  of  stock  options.
(11)    This  amount  includes  93,659  shares  acquirable by exercise of stock
options  within  60  days  of  March  6,  2000.
(12)    The  Schedule  13D filing by the partnership indicates that it has sole
voting  power  and  sole dispositive power of all of these shares.  The business
address  of  the  partnership is 119 West 57th Street, New York, New York 10019.
</TABLE>


ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
-------------------------------------------------------------

     It  is  against  Bank  policy  to  make  loans  to  directors,  officers or
employees.


ITEM  13.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND  REPORTS  ON FORM 8-K
--------------------------------------------------------------------------------

     (A)  FINANCIAL  STATEMENTS  AND  SCHEDULES
          -------------------------------------

     All  schedules are omitted because they are not applicable, not material or
because  the  information  is  included in the financial statements or the notes
thereto.


     (B)  REPORTS  ON  FORM  8-K
          ----------------------

          N/A

     (C)  EXHIBITS
          --------

         See  Exhibit  Index  at  Page  48  this  Form  10-KSB.



<PAGE>


                                 SIGNATURES
                                 ----------

     Pursuant  to  the  requirements  of  Section  13 or 15(d) 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, on the 20th day of
March  2000.

                                        MARATHON  BANCORP  (Registrant)

                                        Howard  J.  Stanke
                                        ------------------
                                        Howard  J.  Stanke
                                        Chief  Financial  Officer

     `Pursuant  to the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
registrant  and  in  the  capacities  and  on  the  dates  indicated.
<TABLE>
<CAPTION>

<S>                  <C>                     <C>
SIGNATURE            TITLE                    DATE
-------------------  ---------------------   -----


Nikolas Patsaouras   Chairman of the Board   March 20, 2000
-------------------
Nikolas Patsaouras


Craig D. Collette    Director and President  March 20, 2000
-------------------  and CEO
Craig D. Collette


C. Thomas Mallos     Director                March 20, 2000
-------------------
C. Thomas Mallos


Robert J. Abernethy  Director                March 20, 2000
-------------------
Robert J. Abernethy

                     Director                March 20, 2000
-------------------
Frank W. Jobe, M.D.


Robert L. Oltman     Director and Secretary  March 20, 2000
-------------------
Robert L. Oltman


Ann Pappas           Director                March 20, 2000
-------------------
Ann Pappas


</TABLE>
<PAGE>
                             EXHIBIT INDEX
                             --------------
<TABLE>
<CAPTION>
<S>                <C>                                           <C>
EXHIBIT NO.        DESCRIPTION                                    PAGE
---------------    -------------------------------------------    --------

10.                Salary Continuation Plan                       46

21.                Subsidiaries of Company                        56

23.                Consent of Vavrinek, Trine, Day & Co LLP       57

27.                Financial Data Schedule

</TABLE>

<PAGE>

                             MARATHON NATIONAL BANK
                     INCENTIVE SALARY CONTINUATION AGREEMENT


THIS  AGREEMENT  is  made  this __ day of _____________, by and between MARATHON
NATIONAL BANK, a national banking association located in Los Angeles, California
(the  "Company")  and  _________________(the  "Executive").

                                  INTRODUCTION

     To  encourage  the  Executive  to  remain  an  employee of the Company, the
Company  is  willing  to  provide salary continuation benefits with an incentive
deferral  opportunity  to the Executive.  The Company will pay the benefits from
its  general  assets.

                                    AGREEMENT

     The  Executive  and  the  Company  agree  as  follows:

                                    ARTICLE 1
                                   DEFINITIONS

     Whenever used in this Agreement, the following words and phrases shall have
the  meanings  specified:

     1.1  "Change  of  Control"  means  the  transfer of shares of the Company's
voting common stock such that one entity or one person (or persons considered to
be one person or one entity under Section 318 of the Code) acquires more than 50
percent  of  the  Company's  outstanding  voting  common  stock; or, if there is
replacement,  at  any one time, of fifty percent (50%) or more of the members of
the  Company's  Board  of  Directors.

1.2  "Code"  means  the  Internal  Revenue  Code  of  1986,  as  amended.

     1.3  "Company"  means  Marathon National Bank, its holding company Marathon
Bancorp,  and  any  direct  or  indirect  subsidiary  of  either  of  them.

     1.4    "Disability"  means,  if  the  Executive  is  covered  by  a Company
sponsored  disability policy, total disability as defined in such policy without
regard to any waiting period.  If the Executive is not covered by such a policy,
Disability  means  the Executive suffering a sickness, accident or injury which,
in  the  judgement  of  a  physician  satisfactory  to the Company, prevents the
Executive from performing substantially all of the Executive's normal duties for
the Company.  As a condition to receive any Disability benefits, the Company may
require the Executive to submit to such physical or mental evaluations and tests
as  the  Company's  Board  of  Directors  deems  appropriate.

     1.5  "Early Termination"  means the Termination of Employment before Normal
Retirement  Age  for reasons other than death, Disability, Termination for Cause
or  following  a  Change  of  Control.

     1.6"Vesting"    means annual benefit accrual per year contingent in meeting
ROA  and  ROE  goals.

    1.7 "Early  Termination  Date"  means the month, day and year in which Early
Termination  occurs.

     1.8 "Effective  Date"  means  _______________.

     1.9     "Extraordinary  Items"  means  those  items  of income and expenses
that  are  recognized  by  Generally  Accepted  Accounting  Principles  as
extraordinary.  Examples of such items are income and expense items arising from
stock redemptions, mergers, acquisitions, stock splits and other similar events.
The  Company's  Board  of Directors, in its sole discretion, may designate other
items  of  income  or  expense  as  extraordinary.

1.10     "Normal  Retirement  Age"  means  the  Executive's  65th  birthday.

1.11     "Normal  Retirement Date"  means the later of the Normal Retirement Age
or  Termination  of  Employment.

1.12     "Plan  Year"  means a twelve-month period commencing on January 1st and
ending  on  December 31st of each year.  The initial Plan Year shall commence on
the  effective  date  of  this  Agreement.

1.13     "Return  On Assets"  means the Company's after tax income at the end of
the  most  recent  fiscal year, adjusted for Extraordinary Items, divided by the
Company's  average  assets  for  the fiscal year, as determined by the Company's
independent  auditor based upon certified financial statements for the pertinent
year.

1.14     "Return on Equity"  means the Company's after-tax net income at the end
of the most recent fiscal year, adjusted for Extraordinary Items, divided by the
prior  year-end  capital  or  equity  position.

1.15    "Termination  for  Cause"  See  Section  6.1.

     1.16     "Termination of Employment"  means that the Executive ceases to be
employed  by the Company for any reason whatsoever.   The Executive shall not be
considered  to  have  a  Termination of Employment during the term of a leave of
absence  approved by the Company.  For purposes of this Agreement, if there is a
dispute  over  the  employment  status  of  the  Executive  or  the  date of the
Executive's  Termination  of  Employment, the Company's Board of Directors shall
have  the  sole  and  absolute  right  to  resolve  the  dispute.

                                    ARTICLE 2
                                    INCENTIVE

The Return On Assets (the "ROA") and the Return On Equity (the "ROE") determined
as  of  December  31  of  each  Plan Year shall determine whether  the Executive
receives  an  Annual  Vested  Benefit  for  the  Plan Year, which determines the
increase,  if  any,  for  the  Plan Year to the Executive's Total Vested Benefit
(defined  as  the  total  of  the Annual Vested Benefit for all Plan Years).  In
order  for  the Executive to vest in the Annual Accrued Benefit Amount set forth
on  Schedule  A attached hereto, the Company must achieve at least a one percent
(1%)  ROA and at least a ten percent (10%) ROE in that Plan Year.  Therefore, if
in  a  Plan  Year,  the Company's ROA is 1% and if the Company's ROE is 10%, the
Executive  will  vest  in  the  Annual Accrued Benefit Amount for the Plan Year,
which  amount  becomes  the Annual Vested Benefit and increases the Total Vested
Benefit.  If  in a Plan Year, the Company's ROA is less that 1% or the Company's
ROE  is  less  than  10%,  there will be neither an Annual Vested Benefit nor an
increase  in  the  Total  Vested  Benefit:  however,  the Annual Accrued Benefit
Amount  becomes  the  Annual  Unvested  Benefit  for  the  Plan  Year.

                                    ARTICLE 3
                                LIFETIME BENEFIT

     3.1  Normal Retirement Benefit.  Upon Termination of Employment on or after
Normal Retirement Age for reasons other than death, the Company shall pay to the
Executive the benefit described in this Section 3.1 in lieu of any other benefit
under  this  Agreement.

3.1.1     Amount  of  Benefit.  The  benefit  under  this  Section  3.1  is  the
Executive's Total Vested Benefit at the Executive's Normal Retirement Date.  The
     lump-sum  amount  of  such  Total  Vested  Benefit shall be converted to an
annual  benefit  amount  (up to $_______per year) in the form of a 10-year fixed
annuity, crediting interest on the unpaid balance of the Total Vested Benefit at
an  annual  rate  of  __  percent,  compounded  monthly.

3.1.2     Payment  of Benefit.   The Company shall pay the annual benefit amount
to Executive each year for a period of 10 years in 12 equal monthly installments
     on  the  first  day  of  each month commencing with the month following the
Executive's  Normal  Retirement  Date.

3.1.3     Benefit  Increases.  On  the  first  anniversary  of the first benefit
payment,  and  on  each  subsequent  anniversary thereof, the Company's Board of
Directors, in its sole discretion, may increase the amount (but not the term) of
     future  benefit  payments.

     3.2  Early  Termination Benefit.  Upon Early Termination, the Company shall
pay  to  the  Executive the benefit described in this Section 3.2 in lieu of any
other  benefit  under  this  Agreement.

3.2.1     Amount  of  Benefit.   The  benefit  under  this  Section  3.2  is the
Executive's Total Vested Benefit at the Executive's Early Termination Date.  The
     lump-sum  amount  of  such  Total  Vested  Benefit shall be converted to an
annual  benefit  amount  (less  than  $_______per year) in the form of a 10-year
fixed  annuity  commencing  at  the Executive's Normal Retirement Age, crediting
interest  on the unpaid balance of the Total Vested Benefit at an annual rate of
__  percent,  compounded  monthly.

     3.2.2  Payment  of  Benefits.  The  Company shall pay the Early Termination
annual  benefit to the Executive in 12 equal monthly installments payable on the
first  day  of  each  month  commencing with the month following the Executive's
Normal Retirement Age.  The annual benefit shall be paid to the Executive for 10
years.

     3.2.3   Benefit  Increases.  Benefit  payments may be increased as provided
in  Section  3.1.3.

     3.3  Disability  Benefit.  If  the  Executive  terminates employment due to
Disability  prior  to  Normal  Retirement  Age,  the  Company  shall  pay to the
Executive the benefit described in this Section 3.3 in lieu of any other benefit
under  this  Agreement.

3.3.1       Amount  of  Benefit.  The  benefit  under  this  Section  3.3 is the
Executive's  Total  Vested Benefit at the time of Termination of Employment plus
the  total  of  the  Annual  Unvested  Benefit,  if  any, from prior years.  The
lump-sum  amount  of  such Total Vested Benefit plus Annual Unvested Benefit, if
any, shall be converted to an annual benefit amount (less than $______ per year)
     in  the  form  of an immediate 10-year fixed annuity, crediting interest on
the  unpaid balance of the Total Vested Benefit at an annual rate of __ percent,
compounded  monthly.

3.3.2        Payment  of  Benefit.   The Company shall pay the Disability annual
benefit  to  the Executive in 12 equal monthly installments payable on the first
day of each month commencing with the month following Termination of Employment.
     The  annual  benefit  shall  be  paid  to  the  Executive  for  10  years.


3.3.3       Benefit  Increases.   Benefit  payments may be increased as provided
in  Section  3.1.3.

     3.4 Change of Control Benefit.  Upon a Change of Control, the Company shall
pay  to  the  Executive the benefit described in this Section 3.4 in lieu of any
other  benefit  under  this  Agreement.

3.4.1     Amount  of  Benefit.  The benefit under this Section 3.4 is the annual
amount  of  ______________Dollars  ($______)  payable  for  10  years.

3.4.2       Payment  of  Benefits.   The Company shall pay the Change of Control
annual  benefit to the Executive in 12 equal monthly installments payable on the
first  day  of  each  month  commencing  with the month following Termination of
Employment.  The  annual  benefit  shall  be paid to the Executive for 10 years.

3.4.3          Benefit Increases.  Benefit payments may be increased as provided
     in  Section  3.1.3.

     3.5  Excess  Parachute  Payment.  Notwithstanding  anything  herein  to the
contrary,  the  Executive  can  opt  to  have  the Company not make some benefit
payments  hereunder  to  the  extent  such  benefit payments would constitute an
excess  parachute  payment  under  the  provisions  of Section 280G of the Code.

                                    ARTICLE 4
                                 DEATH BENEFITS

     4.1 Death During Active Service.  If the Executive dies while in the active
service of the Company, the Company shall pay to the Executive's beneficiary the
benefit  described  in  this Section 4.1.  This benefit shall be paid in lieu of
the  benefits  under  Article  3.

4.1.1     Amount  of Benefit.   The annual benefit under this Section 4.1 is the
annual  amount  of  _______________Dollars  ($______)  payable  for  10  years.

4.1.2     Payment  of Benefits.  The Company shall pay the annual benefit to the
Executive's  beneficiary  in  12 equal monthly installments payable on the first
day of each month commencing with the month following Termination of Employment.
     The  annual  benefit  shall  be  paid  for  10  years.

4.1.3     Benefit  Increase.  Benefit  payments  may be increased as provided in
Section  3.1.3.

     4.2  Death  During  Benefit Period. If the Executive dies after the benefit
payments  have  commenced under Article 3 of this Agreement but before receiving
all  such  payments,  the  Company  shall  pay  the  remaining  benefits  to the
Executive's beneficiary at the same time and in the same amounts they would have
been  paid  to  the  Executive  had  the  Executive  survived.

     4.3  Death  After  Termination  of  Employment  But Before Benefit Payments
Commence.  If  the  Executive  is  entitled  to  benefits  payments  under  this
Agreement,  but  dies  after  Termination  of  Employment  and  prior  to  the
commencement  of  said  benefit  payments,  the  Company  shall  pay the benefit
payments to the Executive's beneficiary that the Executive was entitled to prior
to  death,  except  that the benefit payments shall commence on the first day of
the  month  following  the  date  of  the  Executive's  death.

                                    ARTICLE 5
                                  BENEFICIARIES

     5.1  Beneficiary Designations.  The Executive shall designate a beneficiary
by  filing  a written designation with the Company.  The Executive may revoke or
modify  the  designation  at  any  time  by  filing a new designation.  However,
designations  will  only be effective if signed by the Executive and accepted by
the  Company during the Executive's lifetime. If the Executive is married at the
time  any  benefit accrues under this Agreement, the designation of anyone other
than  the  Executive's  spouse as beneficiary with respect to such benefit shall
not  be  effective  without  the  spouse's  written  consent.  The  Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the  marriage is subsequently dissolved prior to the commencement of benefits to
the  beneficiary. If the Executive dies without a valid beneficiary designation,
all  payments  shall  be  made  to  the  Executive's  estate.

     5.2  Facility of Payment.   If a benefit is payable to a minor, to a person
declared  incapacitated, or to a person incapable of handling the disposition of
his  or  her  property,  the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incapacitated
person  or  incapable  person.  The  Company  may  require  proof of incapacity,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit.  Such  distribution  shall  completely  discharge  the Company from all
liability  with  respect  to  such  benefit.

                                    ARTICLE 6
                               GENERAL LIMITATIONS


     6.1  Termination  for  Cause.    Notwithstanding  any  provision  of  this
Agreement  to  the  contrary,  the  Company shall not pay any benefit under this
Agreement  if  the  Company  terminates  the  Executive's  employment  for:

(a)     Gross  negligence  or  gross  neglect  of  duties;

(b)     Commission  of  a  felony  or  of  a  gross  misdemeanor involving moral
turpitude;  or

(c)     Fraud,  disloyalty,  dishonesty  or  willful  violation  of  any  law or
significant  Company  policy  committed  in  connection  with  the  Executive's
employment  and  resulting  in  an  adverse  effect  on  the  Company.

     6.2  Suicide  or  Misstatement.     The  Company  shall not pay any benefit
under this Agreement if the Executive commits suicide within two years after the
date  of  this Agreement, or if the Executive has made any material misstatement
of fact on any application for life insurance on the life of Executive purchased
by  the  Company  that  results  in  the  policy  proceeds not being paid to the
Company.

                                    ARTICLE 7
                          CLAIMS AND REVIEW PROCEDURES

     7.1  Claims  Procedure.  The Company shall notify any person or entity that
makes  a  claim under this Agreement (the "Claimant") in writing, within 90 days
of  Claimant's  written  application  for benefits, of his or her eligibility or
noneligibility for benefits under the Agreement.  If the Company determines that
the Claimant is not eligible for benefits or full benefits, the notice shall set
forth  (1) the specific reasons for such denial, (2) a specific reference to the
provisions  of  the Agreement on which the denial is based, (3) a description of
any additional information or material necessary for the Claimant to perfect his
or  her  claim, and a description of why it is needed, and (4) an explanation of
this  Agreement's claim review procedure and other appropriate information as to
the steps to be taken if the Claimant wishes to have the claim reviewed.  If the
Company  determines  that  there  are special circumstances requiring additional
time  to  make  a decision, the Company shall notify the Claimant of the special
circumstances  and  the date by which a decision is expected to be made, and may
extend  the  time  for  up  to  an  additional  90  days.

     7.2  Review  Procedure. If the Claimant is determined by the Company not to
be eligible for benefits, or if the Claimant believes that he or she is entitled
to  greater  or  different  benefits, the Claimant shall have the opportunity to
have such claim reviewed by the Company by filing a petition for review with the
Company  within 60 days after receipt of the notice issued by the Company.  Said
petition  shall  state  the specific reasons which the Claimant believes entitle
him  or  her  to  benefits  or to greater or different benefits.  Within 60 days
after  receipt  by  the  Company  of  the petition, the Company shall afford the
Claimant  (and counsel, if any) an opportunity to present his or her position to
the Company verbally or in writing, and the Claimant (or counsel) shall have the
right  to review the pertinent documents.  The Company shall notify the Claimant
of  its  decision  in writing within the 60-day period, stating specifically the
basis  of  its  decision, written in a manner calculated to be understood by the
Claimant  and  the specific provisions of the Agreement on which the decision is
based.  If,  because  of  the  need  for  a  hearing,  the  60-day period is not
sufficient,  the  decision  may  be  deferred  for  up to another 60 days at the
election  of  the  Company,  but  notice  of this deferral shall be given to the
Claimant.  The Company shall have sole authority to decide all such matters, and
the Company's final decision on any and all such matters shall be binding on all
persons.

                                    ARTICLE 8
AMENDMENTS  AND  TERMINATION

     This  Agreement  may  be  amended or terminated only by a written agreement
signed  by  the  Company  and  the  Executive.

Notwithstanding  the previous paragraph in this Article 8, the Company may amend
or terminate this Agreement at any time if, pursuant to legislative, judicial or
regulatory  action, continuation of the Agreement would (i) cause benefits to be
taxable  to the Executive prior to actual receipt, or (ii) result in significant
financial  penalties  or  other  significantly  detrimental ramifications to the
Company  (other than the financial impact of paying the benefits), to the extent
necessary  to  prevent  such  consequences.

                                    ARTICLE 9
                                  MISCELLANEOUS

     9.1     Binding  Effect.       This  Agreement shall bind the Executive and
the  Company,  and  their  beneficiaries,  survivors,  executors,  successors,
administrators  and  transferees.

     9.2     No  Guarantee  of Employment.   This Agreement is not an employment
policy  or  contract.  It  does  not  give  the Executive the right to remain an
employee  of  the  Company,  nor  does  it interfere with the Company's right to
discharge  the  Executive.  It  also does not require the Executive to remain an
employee nor interfere with the Executive's right to terminate employment at any
time.

     9.3     Non-Transferability.     Benefits  under  this  Agreement cannot be
sold,  transferred,  assigned,  pledged,  attached  or encumbered in any manner.

     9.4     Reorganization.  The Company shall not merge or consolidate into or
with another company, or reorganize , or sell substantially all of its assets to
another  company,  firm, or person unless such succeeding or continuing company,
firm,  or  person  agrees to assume and discharge the obligations of the Company
under  this Agreement.  Upon the occurrence of such event, the term "Company" as
used  in  this  Agreement  shall be deemed to refer to the successor or survivor
company.

9.5 Tax Withholding.   The Company shall withhold any taxes that are required to
be  withheld  from  the  benefits  provided  under  this  Agreement.

9.6 Applicable Law.  The Agreement and all rights hereunder shall be governed by
the  laws of the State of California, except to the extent preempted by the laws
of  the  United  States  of  America.

9.7     Unfunded  Arrangement.  The  Executive  and  beneficiary  are  general
unsecured  creditors  of  the  Company  for  the  payment of benefits under this
Agreement.  The  benefits  represent the mere promise by the Company to pay such
benefits.  The rights to benefits are not subject in any manner to anticipation,
     alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment  by  creditors.  Any  insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured  claim.

9.8  Entire  Agreement.  This Agreement constitutes the entire agreement between
the  Company  and  the Executive as to the subject matter hereof.  No rights are
granted  to  the  Executive  by  virtue  of  this  Agreement  other  than  those
specifically  set  forth  herein.

9.9  Administration.  The Company shall have the exclusive right to exercise all
powers that are necessary or appropriate to administer this Agreement, including
but  not  limited  to:

(a)     Interpreting  the  provisions  of  the  Agreement;

(b)     Establishing  and  revising  the method of accounting for the Agreement;

(c)     Maintaining  a  record  of  benefit  payments;  and

(d)     Establishing  rules  and prescribing any forms necessary or desirable to
     administer  the  Agreement.

9.10     Named  Fiduciary.  The  Company  shall  be the named fiduciary and plan
administrator  under  this Agreement.  It may delegate to others certain aspects
of  the  management and operational responsibilities including the employment of
advisors  and  the  delegation  of  ministerial duties to qualified individuals.

     IN  WITNESS  WHEREOF,  the  Executive  and  the  Company  have  signed this
Agreement.




EXECUTIVE:                                    COMPANY:

                                              MARATHON  NATIONAL  BANK

___________________________________          By_____________________________

                                          Title ____________________________


                             BENEFICIARY DESIGNATION

                             MARATHON NATIONAL BANK
                     INCENTIVE SALARY CONTRIBUTION AGREEMENT

I  designate  the  following  as  beneficiary  of  any death benefits under this
Agreement:

Primary:________________________________________________________________________
________________________________________________________________________________

Contingent:_____________________________________________________________________
________________________________________________________________________________

NOTE:  TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE(S)
AND  THE  EXACT  NAME  AND  DATE  OF  THE  TRUST  AGREEMENT.
          -----

I  understand  that  I may change these beneficiary designations by filing a new
written  designation  with  the  Company.  I  further  understand  that  the
designations  will  be  automatically revoked if the beneficiary predeceases me,
or,  if  I  have named my spouse as beneficiary and our marriage is subsequently
dissolved.

I  certify  that  I  presently  am  married/not  married  [STRIKE  ONE].


Signature  __________________________________________

Date  _______________________________________________


Consent  of  Spouse:

I  consent  to  the  payment  of  death  benefits  in  accordance with the above
beneficiary   designation.



Spouse's  Signature  __________________________________

Date  ________________________________________________



Accepted  by  the  Company this _____________ day of  ___________________, 2000.


By  ________________________________________

Title  ______________________________________


Acknowledgement  of  Spouse's  Signature


STATE  OF  CALIFORNIA                    )

                                         )       SS.

COUNTY  OF  __________________           )


            On ___________________, 2000 before me, _____________________ Notary
Public,  personally  appeared  ___________________________________,  personally
known  to  me  (or proved to me on the basis of satisfactory evidence) to be the
person  whose name is subscribed to the within instrument and acknowledged to me
that  she/he  executed  the  same  in  her/his  authorized capacity, and that by
her/his  signature  on  the  instrument the person, or the entity upon behalf of
which  the  person  acted,  executed  the  instrument.

     Witness  my  hand  and  official  seal.



_______________________________________________
Notary  Public


<PAGE>

                                   SCHEDULE A


                             MARATHON NATIONAL BANK
                     INCENTIVE SALARY CONTRIBUTION AGREEMENT
<TABLE>
<CAPTION>

<S>    <C>         <C>      <C>     <C>      <C>      <C>
       CUMULATIVE  ANNUAL
       ----------  -------
       ACCRUED     ACCRUED          ANNUAL   TOTAL    ANNUAL
       ----------  -------          -------  -------  --------
PLAN   BENEFIT     BENEFIT          VESTED   VESTED   UNVESTED
       ----------  -------          -------  -------  --------
YEAR   AMOUNT      AMOUNT   ROA     BENEFIT  BENEFIT  BENEFIT
-----  ----------  -------  ------  -------  -------  --------
1               0        0
       ----------  -------
2               0        0
       ----------  -------
3               0        0
       ----------  -------
4               0        0
       ----------  -------
5               0        0
       ----------  -------
6               0        0
       ----------  -------
7               0        0
       ----------  -------
8               0        0
       ----------  -------
9               0        0
       ----------  -------
10              0        0
       ----------  -------

TOTAL  ----------  -------  ------   -------- -------  --------

<FN>

The  Total Vested Benefit is a cumulative total of the Annual Vested Benefit and
     the  Annual  Deferred  Bonus
The  blanks  in  this schedule are for the Company's use in tracking the benefit
     for  each  Plan  Year
</TABLE>


<PAGE>
                                  EXHIBIT 21.

                        SUBSIDIARIES OF MARATHON BANCORP
                        --------------------------------



MARATHON  NATIONAL  BANK,  incorporated  under  the  laws  of the United States.



<PAGE>


                                   EXHIBIT 23.



INDEPENDENT  AUDITORS'  CONSENT


Board  of  Directors  and  Shareholders
Marathon  Bancorp
Los  Angeles,  California

We  consent  to  the incorporation by reference in the Registration Statement of
Marathon  Bancorp on Form S-8 of our report dated January 18, 2000, on our audit
of  the  consolidated balance sheet of Marathon Bancorp as of December 31, 1999,
and  the related consolidated statements of operations, changes in stockholder''
equity and cash flows for each of the two years in the period ended December 31,
1999,  which  report  is  incorporated by reference in the 1999 Annual Report on
Form  10-KSB.



/s/ Vavrinek,  Trine,  Day  &  Co.,  LLP

March  22,  2000
Laguna  Hills,  California