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

                            ------------------------

                                   FORM 10-K

(MARK ONE)

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   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
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                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                                       OR

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<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
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        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NO. 333-87481

                            ------------------------

                     CALIFORNIA COMMUNITY BANCSHARES, INC.

             (Exact name of registrant as specified in its charter)

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<S>                                            <C>
               DELAWARE                                     94-3339505
    (State or other jurisdiction of                      (I.R.S. Employer
    incorporation or organization)                    Identification Number)

  ONE MARITIME PLAZA, SUITE 825, SAN                          94111
         FRANCISCO, CALIFORNIA                              (Zip Code)
    (Address of principal executive
               offices)
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                 Registrant's telephone number: (415) 434-1236

                            ------------------------

     Securities registered pursuant to Section 12(b) of Exchange Act: NONE

     Securities registered pursuant to Section 12(g) of Exchange Act: NONE

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: Yes /X/  No / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K 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-K or any amendment to this
Form 10-K. /X/

    The aggregate market value of the common stock held by non-affiliates of the
registrant, computed as of March 15, 2000 was $174,615,552.

    Number of registrant's shares of Common Stock outstanding as of March 15,
2000 was 26,297,523.

                   Documents incorporated by reference: NONE

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                           10-K CROSS-REFERENCE INDEX

    This Annual Report on Form 10-K incorporates into a single document the
requirements of the accounting profession and the Securities and Exchange
Commission, including a comprehensive explanation of 1999 results.

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10-K Cross-Reference Index..................................       i
Table of Defined Terms......................................     iii

PART I......................................................       1

  ITEM 1. Business
    General.................................................       1
    Evolution of the Company................................       2
    Business of the Company.................................       6
    Statistical Disclosure..................................       8
    Supervision and Regulation..............................       8
    Available Information...................................      12

  ITEM 2. Properties........................................      12

  ITEM 3. Legal Proceedings.................................      14

  ITEM 4. Submission of Matter to a Vote of Security
    Holders.................................................      14

PART II.....................................................      14

  ITEM 5. Market for Company Common Stock and Related
    Security Holder Matters.................................      14
    Marketplace Designation and Sales Price Information.....      14
    Dividends...............................................      14
    Recent Sales of Unregistered Securities.................      15

  ITEMS 6, 7 and 7A. Selected Financial Data; Management's
    Discussion and Analysis of Financial Condition and
    Results of Operations; and Qualitative and Quantitative
    Disclosure About Market Risk............................      15

  ITEM 8. Financial Statements and Supplementary Data.......      41
    Independent Auditors' Reports...........................      42
    Consolidated Balance Sheets.............................      45
    Consolidated Statements of Operations...................      46
    Consolidated Statements of Comprehensive Income
     (Loss).................................................      47
    Consolidated Statements of Changes in Shareholders'
     Equity.................................................      48
    Consolidated Statements of Cash Flows...................      49
    Notes to Consolidated Financial Statements..............      52

  ITEM 9. Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure.....................      89

PART III....................................................      91

  ITEM 10. Directors and Executive Officers of the
    Company.................................................      91
    Directors...............................................      91
    Committees of the Board of Directors....................      92
    Executive Officers......................................      94

  ITEM 11. Executive Compensation...........................      94

  ITEM 12. Security Ownership of Certain Beneficial Owners
    and Management..........................................      99

  ITEM 13. Certain Relationships and Related Transactions...     101
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                                       i
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  ITEM 14. Exhibits and Reports on Form 8-K.................     103
    Exhibits................................................     103
    Reports on Form 8-K.....................................     104
  SIGNATURES................................................     105
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                                       ii
<PAGE>
                             TABLE OF DEFINED TERMS

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<S>                                                           <C>
Annual Report...............................................      2
Banks.......................................................      1
Belvedere...................................................      4
BHC Act.....................................................      1
Board.......................................................     15
Board of Governors..........................................      1
BOC.........................................................      1
BOC/SFB Merger..............................................      2
BOC Acquisition.............................................      3
California Fund.............................................      1
CalWest.....................................................      1
CalWest/NBB Merger..........................................      2
CCB Merger..................................................      2
CCB/SCC Merger..............................................     18
CCB Merger Exchange Ratio...................................      2
CCB Plan....................................................     97
CFB.........................................................      2
CFB Plan....................................................     97
Change in Control...........................................     96
Commission..................................................     12
Company.....................................................      1
Company Common Stock........................................      2
CRA.........................................................     10
DB Acquisition..............................................      3
DGCL........................................................     14
DFI.........................................................     10
DNB.........................................................      3
Exchange Act................................................     12
FDIC........................................................      9
FRB.........................................................     30
Named Executive Officers....................................     94
NBB.........................................................      2
NBB Common Stock............................................      3
NBB Investment..............................................      3
PIB Debentures..............................................      5
PSB.........................................................      1
PSB Acquisition.............................................      4
PCC.........................................................      1
PCC Common Stock............................................      4
PCC Exchange Ratio..........................................      4
PCC Plan....................................................     97
PCC Share Exchange..........................................      2
Placer Funding..............................................      4
SCC.........................................................     18
SCB.........................................................      1
SFAS No. 133................................................     39
SFAS No. 137................................................     40
SFB.........................................................      2
SFB Common Stock............................................      2
SFB Exchange Ratio..........................................      5
SFB Initial Investment......................................      2
SFB Option..................................................      4
Term Loan...................................................      4
</TABLE>

                                      iii
<PAGE>
                                     PART I

ITEM 1.  BUSINESS

GENERAL

    California Community Bancshares, Inc. (the "Company"), was incorporated on
September 3, 1999 as a Delaware corporation for the purpose of becoming a bank
holding company for certain of the commercial bank investments of the California
Community Financial Institutions Fund Limited Partnership (the "California
Fund"). The Company is registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended (the "BHC Act"), and is subject to the
supervision and regulation of the Board of Governors of the Federal Reserve
System (the "Board of Governors").

    At December 31, 1999, the Company had three banking subsidiaries, Placer
Sierra Bank ("PSB") through the Company's wholly-owned subsidiary Placer Capital
Co. ("PCC"), CalWest Bank ("CalWest"), and Bank of Orange County ("BOC").
See--Evolution of the Company. The Company's principal business is to provide,
through its three banking subsidiaries, financial services in its primary market
areas of Placer and the surrounding counties, Orange County and Los Angeles
County, California. Each of PSB, BOC, and CalWest (together, the "Banks") is a
California state-chartered bank and a member of the Federal Reserve System.
Unless the context otherwise requires, references to the Company refer to the
Company, PCC and the Banks on a consolidated basis. At December 31, 1999 the
Company had total assets of approximately $843.2 million. At December 31, 1999,
PSB had total assets of approximately $640.0 million, BOC had total assets of
approximately $130.0 million and CalWest had total assets of approximately
$72.8 million. As of March 1, 2000, the Company's total assets exceeded $1.0
billion as a result of the Company having acquired Sacramento Commercial Bank
("SCB") which had total assets of approximately $200 million on the date of
acquisition. See Items 6, 7 and 7A. Selected Financial Data; Management's
Discussion and Analysis of Financial Condition and Results of Operations;
Qualitative and Quantitative Disclosure About Market Risk--Acquisition History
of the Company and Note 21 to Consolidated Financial Statements contained in
Item 8. Financial Statements and Supplementary Data.

    The Company serves Placer, Sacramento, Nevada, El Dorado, Plumas, and Sierra
Counties, California through PSB and serves Orange County through BOC and parts
of southern Los Angeles County through CalWest. On March 1, 2000, the Company
became the sole shareholder of SCB, providing the Company with a broader ability
to provide banking services in the Sacramento market.

    The Banks are full-service community banks offering a broad range of banking
products and services, including accepting time and demand deposits, originating
real estate-related loans, commercial loans, and consumer loans and making other
investments. Special services and requests beyond the lending limits of the
Banks can be arranged through correspondent banks. At December 31, 1999, the
gross loans of the Banks totaled approximately $559.8 million of which
approximately 81.5% consisted of real estate-related loans and 10.7% consisted
of commercial loans. At December 31, 1999, the Company had no properties
acquired through foreclosure ("OREO") and only $431,000 of nonperforming loans.
The ratio of nonperforming loans to total loans was 0.07% and the Company's loan
loss reserve coverage ratio to total nonperforming loans was 1,497 to 1. Net
loan charge-offs during 1999 was 0.05% of average total loans.

    The Company, through the Banks, derives its income primarily from interest
received on real estate loans, commercial loans and consumer loans and, to a
lesser extent, fees from the sale of loans originated, interest on investment
securities and fees received in connection with loans and other services
offered, including loan servicing and deposit services. The Company's major
operating expenses are the interest it pays on deposits and on borrowings and
general operating expenses. The Banks rely on a foundation of locally generated
deposits. The Company's operations, like those of other financial institutions
operating in California, are significantly influenced by economic conditions in
California, including the strength of the real estate market, and the fiscal and
regulatory policies of the federal government and of the regulatory authorities
that govern financial institutions. See--Supervision and Regulation.

                                       1
<PAGE>
    The Company is committed to running the Banks as relationship-based,
community banks serving the needs of individuals and small to medium sized
businesses in the local market areas surrounding their branches. The strategy
for serving the Company's target markets is the delivery of value-added products
and services that satisfy the primary needs of the Company's customers,
emphasizing superior service and relationships rather than transaction volume.

    Certain matters discussed in this Annual Report on Form 10-K (the "Annual
Report") including, but not limited to, those described in Item 6--Management's
Discussion and Analysis of Financial Condition and Results of Operations, are
forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from those projected in the
forward-looking statements. Such risks and uncertainties include, among others,
(1) significant increases in competitive pressure in the financial services
industry; (2) changes in the interest rate environment resulting in reduced
margins; (3) general economic conditions, either nationally or regionally, are
less favorable than expected, resulting in, among other things, a deterioration
in credit quality; (4) changes in the regulatory environment; (5) fluctuations
in the real estate market; (6) changes in business conditions and inflation; and
(7) changes in securities markets. Therefore, the information set forth in such
forward-looking statements should be carefully considered when evaluating the
business prospects of the Company.

    When the Company uses or incorporates by reference in this Annual Report the
words "anticipate," "estimate," "expect," "project," "intend," "commit,"
"believe" and similar expressions, the Company intends to identify
forward-looking statements. Such statements are not guarantees of performance
and are subject to certain risks, uncertainties and assumptions, including those
described in this Annual Report. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated, expected,
projected, intended, committed or believed. The future results and shareholder
values of the Company may differ materially from those expressed in these
forward-looking statements. Many of the factors that will determine these
results and values are beyond the Company's ability to control or predict. For
those statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.

EVOLUTION OF THE COMPANY

THE COMPANY

    The Company is the successor-in-interest to California Financial Bancorp
("CFB"), which was organized on September 11, 1997 as a California corporation
for the purpose of becoming a bank holding company subsidiary of the California
Fund. CFB was merged with and into the Company on December 14, 1999, with the
Company as the surviving corporation (the "CCB Merger"). Prior to the CCB
Merger, CFB was the sole shareholder of BOC and CalWest and was the majority
shareholder of National Business Bank, a national banking association operating
in the greater South Bay area of Los Angeles County, California ("NBB") and
Security First Bank, a California state-chartered bank operating primarily in
the cities of Anaheim and Fullerton in Orange County, California ("SFB"). In
connection with the CCB Merger, the Company caused NBB to be merged with and
into CalWest (the "CalWest/NBB Merger"), and caused SFB to be merged with and
into BOC (the "BOC/SFB Merger"). On December 13, 1999 the Company issued shares
of the Company's common stock, $0.01 par value ("Company Common Stock") to the
California Fund in exchange for all of the outstanding shares of PCC Common
Stock (the "PCC Share Exchange"). At December 31, 1999, the Company had total
assets of approximately $843.2 million. In the following discussion of the
evolution of the Company, except as otherwise indicated, transactions that were
effected by CFB prior to the CCB Merger are described as having been effected by
the Company. Shares of Company Common Stock, issued to effect the transactions
have been adjusted to reflect the CCB Merger share exchange ratio of 1.8296 (the
"CCB Merger Exchange Ratio").

                                       2
<PAGE>
SECURITY FIRST BANK INITIAL INVESTMENT

    On November 14, 1997 the Company purchased 8,750,000 shares of newly-issued
common stock of SFB ("SFB Common Stock"), which constituted 51.88% of the
resulting issued and outstanding shares of SFB Common Stock (the "SFB Initial
Investment"). At that time, SFB had one banking office, located in Fullerton,
California. The Company paid $0.40 per share in cash for each of the shares of
SFB Common Stock acquired in the SFB Initial Investment, for an aggregate
purchase price of $3,500,000. In addition, SFB granted the Company an option to
purchase an additional 2,500,000 shares of SFB Common Stock, at a price of $0.40
per share. See--Exercise of SFB Option. The SFB Initial Investment was accounted
for under the purchase method of accounting.

    The Company funded the purchase price in the SFB Initial Investment from the
issuance of 842,531 shares of Company Common Stock to the California Fund in a
private placement for approximately $4,605,000. The Company paid no investment
banking fees in connection with the SFB Investment. Following consummation of
the SFB Initial Investment, SFB was operated as a majority-owned subsidiary of
the Company, servicing customers of the Company in the cities of Anaheim and
Fullerton, and other cities in Orange County, California.

NATIONAL BUSINESS BANK INVESTMENT

    On November 3, 1998 the Company purchased 371,776 shares of common stock of
NBB ("NBB Common Stock") in NBB's initial public offering, which constituted
64.91% of the shares issued by NBB in that offering (the "NBB Investment"). NBB
commenced operations on November 3, 1998 at its banking office in Torrance,
California. The Company paid $10.00 per share in cash for each of the shares of
NBB Common Stock for an aggregate purchase price of $3,718,000. The NBB
Investment was accounted for under the purchase method of accounting.

    The Company funded the purchase price in the NBB Investment with the
issuance of 680,201 shares of Company Common Stock to the California Fund in a
private placement for $3,718,000. The Company paid no investment banking fees in
connection with the NBB Investment and incurred $125,000 in acquisition costs
that were capitalized as part of goodwill. Following consummation of the NBB
Investment, NBB was operated as a majority-owned subsidiary of the Company,
servicing customers of the Company in the greater South Bay area of Los Angeles
County, California, which includes Torrance, Redondo Beach, Palos Verdes, San
Pedro and Long Beach, California.

DOWNEY BANCORP ACQUISITION

    On November 25, 1998, through a statutory merger, the Company became the
sole shareholder of Downey Bancorp, a California corporation and sole
shareholder of Downey National Bank, a national banking association prior to the
DB Acquisition ("DNB"), as defined herein, for an aggregate purchase price of
$11,356,000, net of a cash dividend of $3,000,000 paid to Downey Bancorp. Downey
Bancorp was then merged with and into the Company, with the Company as the
surviving corporation and DNB becoming a wholly-owned subsidiary of the Company
(the "DB Acquisition"). The DB Acquisition was accounted for under the purchase
method of accounting. Following the DB Acquisition, DNB's charter was converted
from that of a national banking association to that of a state-chartered
commercial bank and DNB subsequently changed its name to CalWest Bank.

    The Company funded the purchase price in the DB Acquisition with the
issuance of 2,626,574 shares of Company Common Stock to the California Fund in a
private placement for approximately $14,356,000. The Company paid no investment
banking fees in connection with the DB Acquisition and incurred $232,000 in
acquisition costs that were capitalized as part of goodwill. Following
consummation of the DB Acquisition, DNB was operated as a wholly-owned
subsidiary of the Company, servicing customers of the Company in Downey and
surrounding communities in Los Angeles County, California.

                                       3
<PAGE>
BANK OF ORANGE COUNTY ACQUISITION

    On December 31, 1998, through a statutory merger, the Company became the
sole shareholder of BOC for an aggregate purchase price of $14,522,000, net of a
cash dividend of $375,000 paid to the Company, with BOC becoming a wholly-owned
subsidiary of the Company (the "BOC Acquisition"). The BOC Acquisition was
accounted for under the purchase method of accounting.

    The Company funded the purchase price in the BOC Acquisition with the
issuance of 2,725,555 shares of Company Common Stock to the California Fund in a
private placement for approximately $14,897,000. The Company paid no investment
banking fees in connection with the BOC Acquisition and incurred $726,000 in
acquisition costs that were capitalized as part of goodwill. Following
consummation of the BOC Acquisition, BOC was operated as a wholly-owned
subsidiary of the Company, servicing customers of the Company throughout Orange
County, California.

PLACER SIERRA BANK ACQUISITION

    On August 11, 1999, PSB was acquired by PCC, a California corporation and
wholly-owned subsidiary of the California Fund, which was organized for the
purpose of facilitating the acquisition of PSB by the California Fund ("the "PSB
Acquisition"). Prior to the PSB Acquisition, PSB's charter was converted from
that of a state-chartered savings and loan association to that of a
state-chartered commercial bank and, in addition, PSB became a member of the
Federal Reserve System. The total purchase price paid for PSB by PCC was
approximately $74,931,000, net of a cash dividend of $8.0 million paid by PSB to
PCC. The PSB Acquisition was accounted for under the purchase method of
accounting.

    PCC funded a portion of the purchase price in the PSB Acquisition with the
issuance of 5,300,000 shares of common stock of PCC ("PCC Common Stock") to the
California Fund in a private placement for $53.0 million, net of approximately
$5.2 million in issuance costs incurred. PCC paid investment banking fees in the
amount of $2.1 million in connection with the PSB Acquisition, including
$660,000 paid to Belvedere Capital Partners LLC, the general partner of the
California Fund ("Belvedere"). See Item 13. Certain Relationships and Related
Transactions--Investment Banking Services, and Note 11 of Notes to Consolidated
Financial Statements contained in Item 8. Financial Statements and Supplementary
Data. Additionally, approximately $3.1 million was incurred in other
acquisition-related costs. These expenses were capitalized as part of goodwill.
The balance of the purchase price in the PSB Acquisition was funded through the
sale by PCC of $3.5 million of noncumulative preferred stock and the sale of
$18.5 million of debentures. The source of financing for the noncumulative
preferred stock and the debentures was a $22,000,000 term loan to Placer Capital
Funding LLC ("Placer Funding") from a commercial bank not affiliated with the
Company (the "Term Loan"). See Item 13. Certain Relationships and Related
Transactions--Funding of the PSB Acquisition and Notes 2 and 10 of Notes to
Consolidated Financial Statements contained in Item 8. Financial Statements and
Supplementary Data. Following consummation of the PSB Acquisition, PSB was
operated as an indirect wholly-owned subsidiary of the California Fund. PCC
subsequently became a wholly-owned subsidiary of the Company through an exchange
of 100% of the outstanding PCC Common Stock for shares of Company Common Stock,
as a result of which PSB became an indirect wholly-owned subsidiary of the
Company. See--PCC Share Exchange.

EXERCISE OF SFB OPTION

    In connection with the SFB Initial Investment, SFB granted the Company an
option (the "SFB Option") to purchase an additional 2,500,000 shares of SFB
Common Stock, at a price of $0.40 per share. The Company exercised the SFB
Option on September 13, 1999 and SFB issued 2,500,000 additional shares of SFB
Common Stock to the Company at a price of $0.40 per share for an aggregate
purchase price of $1.0 million. The Company funded the SFB Option with the
issuance of 182,960 shares of Company Common Stock to the California Fund for
$1.0 million.

                                       4
<PAGE>
PCC SHARE EXCHANGE

    On December 13, 1999, the Company issued 13,040,657 shares of Company Common
Stock to the California Fund in exchange for all of the outstanding shares of
PCC Common Stock. The California Fund received 2.4605 shares of Company Common
Stock for each share of PCC Common Stock (the "PCC Exchange Ratio"). As a result
of that exchange, PCC became the wholly-owned direct subsidiary and PSB became
the indirect wholly-owned subsidiary of the Company in a transaction accounted
for under the "as-if" pooling-of-interests method of accounting.

CFB MERGER WITH CCB

    In late 1999, the Company effected a series of mergers and share exchanges
as part of an overall reorganization of certain of the banking and bank holding
company subsidiaries of the California Fund. In connection with this
reorganization CFB was merged with and into the Company on December 14, 1999,
with the Company as the surviving corporation and a wholly-owned subsidiary of
the California Fund. In the CCB Merger, each share of CFB Common Stock
outstanding immediately prior to the CCB Merger was converted into 1.8296 shares
of Company Common Stock. The CCB Merger is a combination accounted for under the
"as-if" pooling-of-interests method of accounting. Upon completion of, and as a
result of, the CCB Merger, the Company became the sole shareholder of BOC and
CalWest and the majority shareholder of SFB and NBB.

BOC/SFB MERGER

    In order to become the sole shareholder of SFB, on December 23, 1999 the
Company effected the BOC/SFB Merger, with BOC as the surviving corporation. The
Company issued 873,286 shares of Company Common Stock in the BOC/SFB Merger to
the minority shareholders of SFB. Each holder of SFB Common Stock, other than
the Company, received 0.0938 shares of Company Common Stock for each share of
SFB Common Stock. (the "SFB Exchange Ratio") This part of the transaction was
accounted for under the purchase method of accounting. The merger of SFB with
and into BOC was accounted for under the "as-if" pooling-of-interests method of
accounting.

    Additionally, the obligation of SFB to issue shares of SFB Common Stock upon
conversion of outstanding debentures of Pacific Inland Bancorp, SFB's former
bank holding company (the "PIB Debentures"), was assumed by the Company at the
effective time of the BOC/SFB Merger. The PIB Debentures were issued in 1996 in
the principal amount of $1,050,000, bear interest at the rate of 12% annually,
expire in 2001, and were convertible on the basis of one share of SFB Common
Stock for each $0.40 in principal plus accrued, but unpaid interest.

    Upon consummation of the BOC/SFB Merger, SFB Common Stock issuable under
outstanding PIB Debentures was converted into the right to acquire Company
Common Stock upon payment of the adjusted conversion price in an amount equal to
the number of shares of Company Common Stock the PIB Debenture holder would have
received pursuant to the BOC/SFB Merger, if he or she had exercised all his or
her PIB Debentures immediately prior to the BOC/SFB Merger. The adjusted
conversion price for the PIB Debentures equals $4.26 and is calculated by
dividing the $0.40 conversion price per share of SFB Common Stock for shares
issuable under the PIB Debentures immediately prior to the BOC/SFB Merger, by
the SFB Exchange Ratio. Over 90 percent of the PIB Debentures are held by the
California Fund.

CALWEST/NBB MERGER

    In order to become the sole shareholder of NBB, on December 30, 1999 the
Company effected the CalWest/NBB Merger, with CalWest as the surviving
corporation. The Company issued 287,488 shares of Company Common Stock in the
CalWest/NBB Merger to the minority shareholders of NBB. Each holder of NBB
Common Stock, other than the Company, received 1.5053 shares of Company Common
Stock for each share of NBB Common Stock. This part of the transaction was
accounted for under the purchase

                                       5
<PAGE>
method of accounting. The merger of NBB with and into CalWest Bank was accounted
for under the "as-if" pooling-of-interests method of accounting.

    For information regarding capital activities of the Company, see Notes 1 and
2 of Notes to Consolidated Financial Statements contained in Item 8. Financial
Statements and Supplementary Data.

BUSINESS OF THE COMPANY

    The Company, through the Banks, provides banking and other financial
services to small and medium-sized businesses in its market areas and to the
owners and employees of those businesses. The Banks offer a broad range of
banking products and services, including many types of business and personal
savings and checking accounts and other consumer banking services. The Banks
originate several types of loans, including secured and unsecured commercial and
consumer loans, commercial and residential real estate mortgage loans, and
commercial and residential construction loans. The Company's loan portfolio is
characterized primarily by long-term and fixed rate products due primarily to
the composition of the portfolio acquired in the PSB Acquisition. However, on a
go forward basis, the Banks intend to concentrate on originating loans that are
primarily short-term and adjustable rate in nature. Special services or requests
beyond the lending limits of the Banks can be arranged through correspondent
banks. The Banks have a network of ATMs and offer access to ATM networks through
other major banks. The Banks issue Visa credit cards through a correspondent
bank and are also merchant depositories for cardholder drafts under Visa and
MasterCard credit cards. The Banks can provide investment and international
banking services through correspondent banks.

    The Company, through the Banks, concentrates its lending activities in the
following areas:

        (1) Real Estate Loans: Real estate loans are comprised of commercial
    real estate loans, construction loans, mortgage loans collateralized by
    first or junior trust deeds on specific properties, including single family
    homes, and equity lines of credit. The properties collateralizing real
    estate loans are principally located in the Company's primary market areas
    in California of Sacramento, Placer, Los Angeles and Orange Counties and the
    surrounding communities. The construction loans are comprised of loans on
    residential and income producing properties, generally have terms of less
    than two years and typically bear interest at a rate that adjusts with the
    prime rate or other established indices. The commercial real estate loans
    finance the purchase and/or ownership of income producing properties.
    Commercial real estate loans are generally made with an amortization
    schedule ranging from fifteen to thirty years with a lump sum balloon
    payment due in one to ten years. Equity lines of credit are revolving lines
    of credit collateralized by junior trust deeds on real properties. They bear
    interest at a rate that adjusts with the prime rate, LIBOR, or other
    established indices and have maturities of five to seven years. The Company
    also makes loans collateralized by 1-4 family residential properties and 5
    or more unit residential properties. From time to time, the Company
    purchases participation interests in loans made by other institutions. These
    loans are subject to the same underwriting criteria and approval process as
    loans made directly by the Company.

        (2) Commercial Loans: Commercial loans are made to finance operations,
    to provide working capital or for specific purposes, such as to finance the
    purchase of assets, equipment or inventory. Since a borrower's cash flow
    from operations is generally the primary source of repayment, the Company's
    policies provide specific guidelines regarding required debt coverage and
    other important financial ratios. Commercial loans include lines of credit
    and commercial term loans. Lines of credit are extended to businesses or
    individuals based on the financial strength and integrity of the borrower
    and are generally (with some exceptions) collateralized by short term assets
    such as accounts receivable and inventory, equipment or real estate and
    generally have a maturity of one year or less. Such lines of credit bear
    interest at a rate that adjusts with the prime rate, LIBOR or other
    established indices. Commercial term loans are typically made to finance the
    acquisition of fixed assets, refinance short-term debt originally used to
    purchase fixed assets or, under appropriate circumstances, to

                                       6
<PAGE>
    finance the purchase of businesses. Commercial term loans generally have
    terms from one to five years. Commercial term loans may be collateralized by
    the asset being acquired or other available assets and bear interest at a
    rate which either adjusts with the prime rate, LIBOR or other established
    indices or is fixed for the term of the loan.

        (3) Consumer Loans: Consumer loans include personal loans, auto loans,
    boat loans, home improvement loans, equipment loans, revolving lines of
    credit and other loans typically made by banks to individual borrowers.

    As part of its efforts to achieve long-term stable profitability and respond
to a changing economic environment in both Northern and Southern California, the
Company is investigating all possible options to augment its traditional focus
by broadening its customer services. The Company believes that its capital base
will permit an acceleration of efforts to achieve growth and greater
diversification of the Banks' loan portfolios and deposit bases and new sources
of fee income. Possible avenues of growth and future diversification include
expansion of banking hours through websites, Internet banking, and ATM networks,
expansion of SBA real estate secondary market affiliates, and increasing the
variety of lending products offered by the Company. In addition, the Company
plans to establish additional branches in cities and areas adjoining the
Company's current market area. The Company intends to introduce a Web-Site Cash
Management service throughout the Company and expand the Company's asset based
lending services. However, there can be no assurance that the Company will be
able to open new branches or expand or diversify its services or market area.

BUSINESS CONCENTRATIONS

    No individual or single group of related accounts is considered material in
relation to the Company's assets or the Banks' assets or deposits, or in
relation to the overall business of the Banks or the Company. However,
approximately 81.5 percent of the Company's loan portfolio held for investment
at December 31, 1999 consisted of real estate-related loans, including
construction loans, real estate mortgage loans and commercial loans secured by
real estate and 10.7 percent consisted of commercial loans. See Items 6, 7, and
7A. Selected Financial Data; Management's Discussion and Analysis of Financial
Condition and Results of Operations; and Qualitative and Quantitative Disclosure
about Market Risk--Financial Condition-Loans. Moreover, the business activities
of the Company currently are focused in Placer County, Sacramento County, Orange
County, and the southern portion of Los Angeles County, California.
Consequently, the results of operations and financial condition of the Company
are dependent upon the general trends in these California economies and, in
particular, the residential and commercial real estate markets. In addition, the
concentration of the Company's operations in these areas of California exposes
it to greater risk than other banking companies with a wider geographic base in
the event of catastrophes, such as earthquakes, fires and floods in these
regions.

COMPETITION

    The banking business in California generally, and in the Banks' primary
service areas specifically, is highly competitive with respect to both loans and
deposits as well as other banking services, and is dominated by a relatively
small number of major banks with many offices and operations over a wide
geographic area. Among the advantages such major banks have over the Banks are
their ability to finance and engage in wide-ranging advertising campaigns and to
allocate their investment assets to regions of higher yield and demand. Such
banks offer certain services which are not offered directly by the Banks (but
which usually can be offered indirectly by the Banks through correspondent
institutions). In addition, by virtue of their greater total capitalization,
such banks have substantially higher lending limits than the Banks. (Legal
lending limits to an individual customer are based upon a percentage of a bank's
total capital accounts.) Other entities, both governmental and in private
industry, seeking to raise capital through the issuance and sale of debt or
equity securities also provide competition for the Banks in the

                                       7
<PAGE>
acquisition of deposits. Banks also compete with money market funds and other
money market instruments, which are not subject to interest rate ceilings. In
recent years, increased competition has also developed from specialized finance
and non-finance companies that offer wholesale finance, credit card, and other
consumer finance services, including on-line banking services and personal
finance software. Competition for deposit and loan products remains strong, from
both banking and non-banking firms, and affects the rates of those products as
well as the terms on which they are offered to customers.

    Technological innovation continues to contribute to greater competition in
domestic and international financial services markets. Technological innovation
has, for example, made it possible for non-depository institutions to offer
customers automated transfer payment services that previously have been
traditional banking products. In addition, customers now expect a choice of
several delivery systems and channels, including telephone, mail, home computer,
ATMs, self-service branches, and in-store branches.

    Mergers between financial institutions have placed additional pressure on
banks to streamline their operations, reduce expenses, and increase revenues to
remain competitive. In addition, competition has intensified due to federal and
state interstate banking laws, which permit banking organizations to expand
geographically with fewer restrictions than in the past. Such laws allow banks
to merge with other banks across state lines, thereby enabling banks to
establish or expand banking operations in the Company's most significant
markets. The competitive environment also is significantly impacted by federal
and state legislation, which may make it easier for non-bank financial
institutions to compete with the Company.

    Economic factors, along with legislative and technological changes, will
have an ongoing impact on the competitive environment within the financial
services industry. As an active participant in financial markets, the Company
strives to anticipate and adapt to these changing competitive conditions, but
there can be no assurance as to their impact on the Company's future business or
results of operations or as to the Company's continued ability to anticipate and
adapt to such changing conditions. In order to compete with other competitors in
their primary service areas, the Banks attempt to use to the fullest extent
possible the flexibility which the Banks' independent status permits, including
an emphasis on specialized services, local promotional activity, and personal
contacts by their respective officers, directors and employees with their
customers. In particular, each of the Banks strives to offer highly personalized
banking services. The Company also believes that through the ability to provide
larger credit accommodations to customers of the Banks and through the ability
of the Banks to participate in loans with one another, the Banks can distinguish
themselves from other community banks with which the Banks compete based on the
range of services provided and banking products offered. However, there can be
no assurance the Company will be able to diversify its services and/or banking
products or successfully compete with its competitors in its service areas.

EMPLOYEES

    As of March 15, 2000, the Company had 359 full time equivalent employees,
including those employed by the Banks.

STATISTICAL DISCLOSURE

    Statistical information relating to the Company and its subsidiaries is
presented in Items 6, 7 & 7A. Selected Financial Data; Management's Discussion
and Analysis of Financial Condition and Results of Operations; and Qualitative
and Quantitative Disclosure About Market Risk and should be read in conjunction
with the Consolidated Financial Statements contained in Item 8. Financial
Statements and Supplementary Data.

                                       8
<PAGE>
SUPERVISION AND REGULATION

GENERAL

    The banking and financial services businesses in which the Company engages
are highly regulated. Such regulation is intended, among other things, to
protect depositors whose deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC") and the banking system as a whole. The monetary and fiscal
policies of the federal government and the policies of regulatory agencies,
particularly the Board of Governors, also influence the commercial banking
business. The Board of Governors implements national monetary policies (with
objectives such as curbing inflation and combating recession) by its open-market
operations in United States Government securities, by adjusting the required
level of reserves for financial intermediaries subject to its reserve
requirements and by varying the discount rates applicable to borrowings by
depository institutions. The actions of the Board of Governors in these areas
influence the growth of bank loans, investments and deposits and also affect
interest rates charged on loans and paid on deposits. Indirectly such actions
may also impact the ability of non-bank financial institutions to compete with
the Banks. See--Competition. The nature and impact of any future changes in
monetary policies cannot be predicted.

    The laws, regulations, and policies affecting financial services businesses
are continuously under review by Congress and state legislatures, and federal
and state regulatory agencies. 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 intermediaries. Proposals to change the laws and regulations
governing the operations and taxation of banks, bank holding companies and other
financial intermediaries are frequently made in Congress, in the California
legislature and before various bank regulatory and other professional agencies.
Changes in the laws, regulations or policies that impact the Company cannot
necessarily be predicted, but they may have a material effect on the business
and earnings of the Company.

BANK HOLDING COMPANY REGULATION

    The Company, as a bank holding company, is subject to regulation under the
BHC Act, and is registered with and subject to the supervision and examination
of the Board of Governors. Pursuant to the BHC Act, the Company is required to
obtain the prior approval of the Board of Governors before it may acquire all or
substantially all of the assets of any bank, or ownership or control of voting
shares of any bank if, after giving effect to such acquisition, the Company
would own or control, directly or indirectly, more than 5 percent of such bank.

    Under the BHC Act, the Company may not engage in any business other than
managing or controlling banks or furnishing services to its subsidiaries that
the Board of Governors deems to be so closely related to banking as to be a
proper incident thereto. The Company is also prohibited, with certain
exceptions, from acquiring direct or indirect ownership or control of more than
5 percent of the voting shares of any company unless the company is engaged in
banking activities or the Board of Governors determines that the activity is so
closely related to banking to be a proper incident to banking. The Board of
Governors' approval must be obtained before the shares of any such company can
be acquired and, in certain cases, before any approved company can open new
offices.

    The BHC Act and regulations of the Board of Governors also impose certain
constraints on the redemption or purchase by a bank holding company of its own
shares of stock.

    The Company's earnings and activities are affected by legislation, by
actions of its regulators, and by local legislative and administrative bodies
and decisions of courts in the jurisdictions in which the Company and the Banks
conduct business. For example, these include limitations on the ability of the
Banks to pay dividends to the Company and the ability of the Company to pay
dividends to the shareholders of the Company. It is the policy of the Board of
Governors that bank holding companies should pay cash

                                       9
<PAGE>
dividends on common stock only out of income available over the past year and
only if prospective earnings retention is consistent with the organization's
expected future needs and financial condition. The policy provides that bank
holding companies should not maintain a level of cash dividends that undermines
the bank holding company's ability to serve as a source of strength to its
banking subsidiaries. Various federal and state statutory provisions limit the
amount of dividends that subsidiary banks can pay to their holding companies
without regulatory approval. In addition to these explicit limitations, the
federal regulatory agencies are authorized to prohibit a banking subsidiary or
bank holding company from engaging in an unsafe or unsound banking practice.
Depending upon the circumstances, the agencies could take the position that
paying a dividend would constitute an unsafe or unsound banking practice.

    In addition, banking subsidiaries of bank holding companies are subject to
certain restrictions imposed by federal law in dealings with their holding
companies and other affiliates. Subject to certain exceptions set forth in the
Federal Reserve Act, a bank can make a loan or extend credit to an affiliate,
purchase or invest in the securities of an affiliate, purchase assets from an
affiliate, accept securities of an affiliate as collateral security for a loan
or extension of credit to any person or company, issue a guarantee, or accept
letters of credit on behalf of an affiliate only if the aggregate amount of the
above transactions of such subsidiary does not exceed 10 percent of such
subsidiary's capital stock and surplus on a per affiliate basis or 20 percent of
such subsidiary's capital stock and surplus on an aggregate affiliate basis.
Such transactions must be on terms and conditions that are consistent with safe
and sound banking practices. A bank and its subsidiaries generally may not
purchase a "low-quality asset," as that term is defined in the Federal Reserve
Act, from an affiliate. Such restrictions also prevent a holding company and its
other affiliates from borrowing from a banking subsidiary of the holding company
unless the loans are secured by collateral.

    A holding company and its banking subsidiaries are prohibited from engaging
in certain tie-in arrangements in connection with any extension of credit, sale
or lease of property or provision of services. For example, with certain
exceptions a bank may not condition an extension of credit on a customer
obtaining other services provided by it, a holding company or any of its other
bank affiliates, or on a promise by the customer not to obtain other services
from a competitor.

    The Board of Governors has cease and desist powers to cover parent bank
holding companies and non-banking subsidiaries where action of a parent bank
holding company or its non-financial institution subsidiaries represent an
unsafe or unsound practice or violation of law. The Board of Governors has the
authority to regulate debt obligations (other than commercial paper) issued by
bank holding companies by imposing interest ceilings and reserve requirements on
such debt obligations.

REGULATION OF THE BANKS

    Banks are extensively regulated under both federal and state law. The Banks,
as California state-chartered banks and members of the Federal Reserve System,
are subject to primary supervision, periodic examination and regulation by the
California Department of Financial Institutions (the "DFI") and the Federal
Reserve Bank of San Francisco.

    The Banks 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
Banks, as is the case with all insured banks, pay a semi-annual statutory
assessment and are subject to the rules and regulations of the FDIC.

    Various requirements and restrictions under the laws of the State of
California and the United States affect the operations of the Banks. State and
federal statutes and regulations relate to many aspects of the Banks'
operations, including standards for safety and soundness, reserves against
deposits, interest rates payable on deposits, loans, investments, mergers and
acquisitions, borrowings, dividends, locations of branch offices, fair lending
requirements, Community Reinvestment Act ("CRA") activities, and loans to
affiliates. Further, the Banks are required to maintain certain levels of
capital. The regulatory capital

                                       10
<PAGE>
guidelines as well as the actual capitalization for BOC, CalWest, PCC, PSB and
the Company on a consolidated basis as of December 31, 1999 follow:

<TABLE>
<CAPTION>
                                        REQUIREMENT                                     ACTUAL
                                ----------------------------   --------------------------------------------------------
                                ADEQUATELY          WELL                                                   CONSOLIDATED
                                CAPITALIZED      CAPITALIZED     BOC      CALWEST      PSB        PCC        COMPANY
                                -----------      -----------   --------   --------   --------   --------   ------------
                                 (GREATER THAN OR EQUAL TO)
<S>                             <C>              <C>           <C>        <C>        <C>        <C>        <C>
Total risk-based capital......     8.00%            10.00%      10.84%     14.82%     11.80%     11.36%        12.92%
Tier 1 risk-based capital
  ratio.......................     4.00%             6.00%       9.59%     13.58%     10.62%     10.21%        11.74%
Tier 1 leverage capital
  ratio.......................     4.00%             5.00%       7.06%      9.82%      6.30%      6.20%         7.52%
</TABLE>

RECENT LEGISLATION

    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 by various bank regulatory
agencies. Most recently, President Clinton signed into law the Gramm-Leach-
Bliley Act. This legislation eliminates many of the barriers that have separated
the insurance, securities and banking industries since the Great Depression. The
federal banking agencies (the Board of Governors, FDIC, Office of the
Comptroller of the Currency) among others, are currently drafting regulations to
implement the Gramm-Leach-Bliley Act. The likelihood of any major change from
these regulations, and the impact such change may have on the Company and Banks
is impossible to predict.

    The Gramm-Leach-Bliley Act, signed into law on November 12, 1999, is the
result of a decade of debate in the Congress regarding a fundamental reformation
of the nation's financial system. The law is subdivided into seven titles, by
functional area. Title I acts to facilitate affiliations among banks, insurance
companies and securities firms. Title II narrows the exemptions from the
securities laws previously enjoyed by banks, requires the Board of Governors and
the SEC to work together to draft rules governing certain securities activities
of banks and creates a new, voluntary investment bank holding company. Title III
restates the proposition that the states are the functional regulators for all
insurance activities, including the insurance activities of federally-chartered
banks. The law bars the states from prohibiting insurance activities by
depository institutions. The law encourages the states to develop uniform or
reciprocal rules for the licensing of insurance agents. Title IV prohibits the
creation of additional unitary thrift holding companies. Title V imposes
significant requirements on financial institutions related to the transfer of
nonpublic personal information. These provisions require each institution to
develop and distribute to accountholders an information disclosure policy, and
requires that the policy allow customers to, and for the institution to, honor a
customer's request to "opt-out" of the proposed transfer of specified nonpublic
information to third parties. Title VI reforms the Federal Home Loan Bank system
to allow broader access among depository institutions to the system's advance
programs, and to improve the corporate governance and capital maintenance
requirements for the system. Title VII addresses a multitude of issues including
disclosure of ATM surcharging practices, disclosure of agreements among
non-governmental entities and insured depository institutions which donate to
non-governmental entities regarding donations made in connection with the CRA,
and disclosure by the recipient non-governmental entities of how such funds are
used. Additionally, the law extends the period of time between CRA examinations
of community banks.

    The Company continues to evaluate the strategic opportunities presented by
the broad powers granted to bank holding companies that elect to be treated as
financial holding companies. In the event that the Company determines that
access to the broader powers of a financial holding company is in the best
interests of the Company, its shareholders and the Banks, the Company will file
the appropriate election with the Board of Governors.

    The Banks and the Company intend to comply with all provisions of the
Gramm-Leach-Bliley Act and all implementing regulations as they become
effective, and the Banks intend to develop appropriate policies and procedures
to meet their responsibilities in connection with the privacy provisions of
Title V of that Act.

                                       11
<PAGE>
AVAILABLE INFORMATION

    The Company is subject to certain of the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Therefore the
Company files reports and other information with the Securities and Exchange
Commission (the "Commission"). These reports and other information may be
inspected and copied at the public reference facilities of the Commission
located at 450 Fifth Street, N. W., Washington, D. C. 20549, at the Commission's
regional offices at 7 World Trade Center, New York, New York 10048, and Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661, at prescribed rates.
Information regarding the Commission can be obtained by calling 1-800-SEC-0330.
Such reports and other information may also be accessed electronically at the
Commission's home page on the Internet at http://www.sec.gov.

ITEM 2.  PROPERTIES

    The Company's principal office is located at One Maritime Plaza, Suite 825,
San Francisco, California. In total, as of March 15, 2000, the Company had 41
properties consisting of 33 branch offices. Of the 41 locations, 12 are owned
and 29 are leased and are summarized as follows.

    BOC had 6 leased properties consisting of 5 branch offices and 1
discontinued location.

                             LEASED BOC PROPERTIES

<TABLE>
<S>                                               <C>
10101 Slater Avenue, Suite 137                    12070 Telegraph Road, Suite 101
Fountain Valley, California                       Santa Fe Springs, California

170 South Main Street, Suite 100 & 101            141 West Bastanchury Road
Orange, California                                Fullerton, California

8345 East Firestone Boulevard, Suite 102
Downey, California
</TABLE>

                           DISCONTINUED BOC PROPERTY

    27230 La Paz Road, Suite A
    Mission Viejo, California

    CalWest had 2 leased properties, each a branch office.

                           LEASED CALWEST PROPERTIES

<TABLE>
<S>                                               <C>
23550 Hawthorne Boulevard                         8345 Firestone Boulevard
Torrance, California                              Downey, California
</TABLE>

    PCC had 33 properties consisting of 26 PSB branch offices, one operations
center, one SBA loan office, four off-site ATMs and one discontinued location.
Of the 33 locations, 12 are owned and 21 are leased.

                             LEASED PCC PROPERTIES

<TABLE>
<S>                                               <C>
458 Main Street                                   24996 Blue Ravine Road, Suite 1
Newcastle, California                             Folsom, California

1224 A Broadway                                   5015 Foothills Boulevard, Suite 6B
Placerville, California                           Roseville, California
</TABLE>

                                       12
<PAGE>
<TABLE>
<S>                                               <C>
8595 Auburn-Folsom Road                           6801 5 Star Boulevard, Suite B
Granite Bay, California                           Rocklin, California

17446 Penn Valley Drive                           3919 Park Drive, Suite 110
Penn Valley, California                           El Dorado Hills, California

604 Main Street                                   10966 Combie Road * ^
Loyalton, California                              Auburn, California

10132 Alta Sierra Drive                           601 Newcastle Road * ^
Grass Valley, California                          Newcastle, California

625 5(th) Street                                  5000 Rocklin Road * ^
Lincoln, California                               Rocklin, California

11317 Deerfield Drive                             130 Vernon Street * ^
Truckee, California                               Roseville, California

4804 Granite Drive, #F2                           16800 Placer Hills Road
Rocklin, California                               Meadow Vista, California

3006 E Highway 49                                 326 Main Street
Cool, California                                  Downieville, California

24025 Racetrack Street
Foresthill, California
</TABLE>

                              OWNED PCC PROPERTIES

<TABLE>
<S>                                               <C>
649 Lincoln Way *                                 110 Harding Boulevard
Auburn, California                                Roseville, California

949 Lincoln Way                                   112 Harding Boulevard *
Auburn, California                                Roseville, California

76 Crescent Street                                11757 Sutton Way
Quincy, California                                Grass Valley, California

2995 Grass Valley Highway                         24 West Sierra
Auburn, California                                Portola, California

9407 Madison Avenue                               8475 North Lake Boulevard
Orangevale, California                            Kings Beach, California

3680 Taylor Road                                  7983 Greenback Lane *
Loomis, California                                Citrus Heights, California
</TABLE>

                           DISCONTINUED PCC PROPERTY

    7983 Greenback Lane * ^
    Citrus Heights, California

------------------------

*   NON-BRANCH PROPERTY

^  ATM-ONLY LOCATION

    The Company believes that its properties are adequate for the business of
the Company and the Banks as presently conducted. For additional information
regarding properties of the Company and of the Banks, see Item 8. Financial
Statements and Supplementary Data.

                                       13
<PAGE>
ITEM 3.  LEGAL PROCEEDINGS

    From time to time, the Company and the Banks are party to claims and legal
proceedings arising in the ordinary course of business. Management of the
Company evaluates the Company's and/or the Banks' exposure to the cases
individually and in the aggregate and provides for potential losses on such
litigation if the amount of the loss is determinable and if the occurrence of
the loss is probable. In the opinion of management of the Company, the ultimate
disposition of these matters will not have a material adverse effect on the
consolidated financial condition of the Company. However, litigation is
inherently uncertain and no assurance can be given that any litigation will not
result in any loss which might be material to the Company and/or the Banks.

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

    No matters have been submitted to the shareholders of the Company, through
the solicitation of proxies or otherwise, during the fourth quarter of the year
ended December 31, 1999, except as follows: The California Fund, as the
then-sole shareholder of the Company, approved the CCB Merger by action of the
sole general partner of the California Fund at a meeting duly held on
November 22, 1999.

                                    PART II

ITEM 5.  MARKET FOR COMPANY COMMON STOCK AND RELATED SECURITY HOLDER MATTERS

MARKETPLACE DESIGNATION AND SALES PRICE INFORMATION

    There has been no trading in the Company Common Stock and, accordingly,
there is no established public trading market for the Company Common Stock. The
Company Common Stock is not listed on any exchange, nor is it listed with
NASDAQ. Management of the Company is not aware that any brokers facilitate
trades in the Company Common Stock. No assurance can be given that a trading
market for the Company Common Stock will develop in the foreseeable future.

    The number of record holders of Company Common Stock as of March 15, 2000
was approximately 416.

DIVIDENDS

    The ability of the Company to pay dividends to its shareholders is subject
to the restrictions set forth in the Delaware General Corporation Law (the
"DGCL"). The DGCL provides that a corporation may declare and pay dividends out
of surplus or, if there is no surplus, out of net profits for the fiscal year in
which the dividend is declared and/or for the preceding fiscal year as long as
the amount of capital of the corporation following the declaration and payment
of the dividend is not less than the aggregate amount of the capital represented
by the issued and outstanding stock of all classes having a preference upon the
distribution of assets. In addition, the DGCL generally provides that a
corporation may redeem or repurchase its shares only if the capital of the
corporation is not impaired and such redemption or repurchase would not impair
the capital of the corporation. The Company's ability to pay dividends is also
subject to certain other limitations. See Item 1. Business--Supervision and
Regulation.

    The primary source of income of the Company on a stand alone basis, is the
receipt of dividends from its wholly-owned subsidiaries. Various statutes and
regulations limit the availability of dividends from the Banks. California law
restricts the amount available for cash dividends by state-chartered banks to
the lesser of retained earnings or the bank's net income for its last three
fiscal years (less any distributions to shareholders made during such period).
In the event a bank is unable to pay cash dividends due to insufficient retained
earnings or net income for its last three fiscal years, cash dividends may be
paid under certain circumstances with the prior approval of the DFI. Based on
the retained earnings and net income and distributions made to shareholders for
the three fiscal years ending December 31, 1999, the Banks

                                       14
<PAGE>
must obtain prior approval from the DFI in order to pay dividends to the holding
company. In addition, the Board of Governors also has authority to prohibit any
of the Banks, as appropriate, from engaging in what, in the opinion of the Board
of Governors, might constitute an unsafe or unsound practice in conducting its
business. It is possible, depending upon the financial condition of the Bank in
question and other factors, that the Board of Governors could assert that
payment of dividends or other payments might, under some circumstances, be
considered an unsafe or unsound practice.

    In addition, the Term Loan requires that, so long as any obligations are
outstanding thereunder, PCC will not permit its consolidated net worth to be
less than the lesser of (a) the sum of $50,000,000 (excluding preferred
securities) plus fifty percent (50%) of PCC's consolidated net income for each
fiscal quarter ended on or after September 30, 1999, excluding the effect of any
loss in any such fiscal quarter; or (b) $70,000,000. See Item 1.
Business--Evolution of the Company--Placer Sierra Acquisition and Items 6, 7,
7A. Selected Financial Data; Management's Discussion and Analysis of Financial
Condition and Results of Operations; and Qualitative and Quantitative Disclosure
about Market Risk--Cash Liquidity and Note 10 of Notes to Consolidated Financial
Statements contained in Item 8. Financial Statements and Supplementary Data.

    Holders of Company Common Stock are entitled to receive dividends declared
by the Company's Board of Directors (the "Board") out of funds legally available
therefor under the laws of the State of Delaware, subject to the rights of
holders of any preferred stock of the Company that may be issued after the date
hereof. The Company has not paid dividends on the Company Common Stock to date
and has no plans to declare any such dividends for the foreseeable future. In
addition, the Company must comply with the DGCL and banking regulations with
respect to the payment of dividends.

RECENT SALES OF UNREGISTERED SECURITIES

    None.

ITEMS 6, 7 AND 7A.  SELECTED FINANCIAL DATA; MANAGEMENT'S DISCUSSION AND
  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS; AND QUALITATIVE AND
  QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

SELECTED FINANCIAL DATA

    The following tables and data set forth statistical information relating to
the Company as of December 31, 1999, 1998 and 1997, and for each of the years in
the two- year period ended December 31, 1999 and for the period from inception
(September 11, 1997) to December 31, 1997. Such tables and data reflect the
combination of the Company with PCC on December 13, 1999 and CFB on
December 14, 1999, in transactions accounted for under the "as if"
pooling-of-interests method of accounting. See Item 1. Business--Evolution of
Company. The following summary financial data was derived from the audited
Consolidated Financial Statements of the Company, which reflect the effect of
the CCB Merger. This data should be read in conjunction with the audited
Consolidated Financial Statements as of December 31, 1999, 1998 and 1997, and
for each of the years in the two-year period ended December 31, 1999 and for the
period from inception to December 31, 1997 and related notes included elsewhere
herein. See Item 8. Financial Statements and Supplementary Data.

                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                              AS OF AND FOR   AS OF AND FOR   AS OF AND FOR
                                                                THE YEAR        THE YEAR       THE PERIOD
                                                                  ENDED           ENDED           ENDED
                                                              DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                                  1999            1998            1997
                                                              -------------   -------------   -------------
                                                                (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                                           <C>             <C>             <C>
SUMMARY OF CONSOLIDATED INCOME
Net interest income before provision for loan losses........   $    21,445     $    2,510       $    282
Provision for loan losses...................................           819            340             --
                                                               -----------     ----------       --------
Net interest income after provision for loan losses.........        20,626          2,170            282
Noninterest income..........................................         2,875            736             56
Noninterest expense.........................................        24,353          5,643            535
                                                               -----------     ----------       --------
Loss before income taxes and minority interests.............          (852)        (2,737)          (197)
Income tax (benefit) expense................................          (176)            15              2
Provision for minority interests in loss of subsidiaries and
  cost of minority interest.................................          (260)          (103)            10
                                                               -----------     ----------       --------
Net loss....................................................          (416)        (2,649)          (209)
                                                               ===========     ==========       ========
Income (loss), excluding goodwill and other intangible
  assets amortization, net of related taxes.................   $     1,607     $   (2,524)      $   (199)
                                                               ===========     ==========       ========
PER SHARE DATA
Weighted average shares outstanding
  Basic.....................................................     7,667,368      1,375,713        108,768
  Diluted...................................................     7,667,368      1,375,713        108,768
Net loss per share
  Basic.....................................................   $     (0.05)    $    (1.93)      $  (1.92)
  Diluted...................................................   $     (0.05)    $    (1.93)      $  (1.92)

SUMMARY OF CONSOLIDATED FINANCIAL POSITION
Total assets................................................   $   843,179     $  237,594         42,428
Loans, net..................................................       551,399         97,289         21,105
Real estate owned...........................................         5,001            372            564
Goodwill and other intangibles..............................        61,868         17,771          1,139
Deposits....................................................       712,762        192,563         35,659
Minority interest...........................................         3,500          4,094          2,200
Shareholders' equity........................................        95,834         34,742          4,401
Average assets..............................................       473,052         54,136          5,107
Average earning assets......................................       401,773         49,138          4,980
Average common equity.......................................        56,938          6,436            276

PER SHARE DATA
Common shares outstanding...................................    21,267,483      6,875,820        843,446
Book value per share........................................   $      4.51     $     5.05       $   5.22
Tangible book value per share...............................   $      1.60     $     2.47       $   3.87
Dividend payout ratio.......................................   $      0.00     $     0.00       $   0.00

SELECTED PERFORMANCE RATIOS
Return on average assets....................................         (0.09)%        (4.89)%        (4.09)%
Return on average common equity.............................         (0.73)%       (41.16)%       (75.72)%
Average common equity to average assets.....................         12.04%         11.89%          5.54%
Net yield on interest earning assets........................          5.34%          5.11%          5.66%
Efficiency ratio............................................         94.00%        181.33%        152.17%
Net interest income before provision for loan losses to
  average assets............................................          4.53%          4.64%          5.52%

SELECTED ASSET QUALITY RATIOS
Nonperforming assets to gross loans and OREO................          0.07%          2.23%          7.28%
Nonperforming assets to total assets........................          0.05%          0.94%          4.01%
Allowance for loan losses to gross loans....................          1.21%          2.00%          4.57%
Allowance for loan losses to nonperforming loans............      1,497.34%        106.95%         92.77%
Net charge-offs to average gross loans......................          0.05%          2.04%            --%

SELECTED CAPITAL RATIOS
Tier 1 Leverage Ratio.......................................          7.52%          9.45%         13.44%
Tier 1 Risk-Weighted Ratio..................................         11.74%         13.73%         12.16%
Total Risk Weighted Ratio...................................         12.92%         14.98%          7.09%
</TABLE>

OVERVIEW

    The Company serves as the holding company for PCC (and its wholly-owned
subsidiary, PSB), BOC and CalWest (formerly DNB). At December 31, 1999, the
Company had total assets of approximately

                                       16
<PAGE>
$843.2 million. In the following discussion of the evolution of the Company,
transactions that were effected by CFB prior to the CCB Merger are described as
having been effected by the Company.

    The Company is the successor-in-interest to CFB, which was organized on
September 11, 1997. In late 1999, the Company effected a series of mergers and
share exchanges as a part of an overall reorganization of certain of the banking
and bank holding company subsidiaries of the California Fund. In connection with
this reorganization, on December 13, 1999, the Company issued 2.4605 shares of
Company Common Stock to the California Fund in exchange for each of the
outstanding shares of PCC Common Stock. As a result of the PCC Share Exchange,
PCC became a wholly-owned subsidiary of the Company in a transaction accounted
for under the "as-if" pooling-of-interests method of accounting. On
December 14, 1999 CFB was merged into the Company, with the Company remaining as
the surviving corporation and becoming a wholly-owned subsidiary of the
California Fund. In the CCB Merger, each share of CFB common stock outstanding
immediately prior to the CCB Merger was converted into the right to receive
1.8296 shares of Company Common Stock. The CCB Merger is a combination accounted
for under the "as-if" pooling-of-interests method of accounting. Upon completion
of, and as a result of, the CCB Merger, the Company became the sole shareholder
of BOC and CalWest and the majority shareholder of SFB and NBB.

    Also, following the CCB Merger:

    - In order to become the sole shareholder of SFB, on December 23, 1999 the
      Company effected the BOC/SFB Merger, with BOC as the surviving
      corporation. The Company issued Company Common Stock to the minority
      shareholders of SFB in exchange for all of the SFB Common Stock held by
      said shareholders. The Company's exchange of shares with the SFB minority
      shareholders was accounted for under the purchase method of accounting.
      The merger of SFB with and into BOC was accounted for under the "as-if"
      pooling-of-interests method of accounting.

    - In order to become the sole shareholder of NBB, on December 30, 1999 the
      Company effected the CalWest/NBB Merger, with CalWest as the surviving
      corporation. The Company issued Company Common Stock to the minority
      shareholders of NBB in exchange for all of the NBB Common Stock held by
      said shareholders. The Company's exchange of shares with the NBB minority
      shareholders was accounted for under the purchase method of accounting.
      The merger of NBB with and into CalWest was accounted for under the
      "as-if" pooling-of-interests method of accounting.

ACQUISITION HISTORY OF THE COMPANY

    On November 14, 1997 the Company purchased shares of newly-issued SFB Common
Stock, which constituted 51.88% of the resulting issued and outstanding shares
of SFB Common Stock. At that time, SFB had one banking office, located in
Fullerton, California. The SFB Initial Investment was accounted for under the
purchase method of accounting. Following consummation of the SFB Initial
Investment, SFB was operated as a majority-owned subsidiary of the Company.

    On November 3, 1998 the Company purchased shares of NBB Common Stock in
NBB's initial public offering, which constituted 64.91% of the shares issued by
NBB in that offering. NBB commenced operations on November 3, 1998 at its
banking office in Torrance, California. The NBB Investment was accounted for
under the purchase method of accounting. Following consummation of the NBB
Investment, NBB was operated as a majority-owned subsidiary of the Company.

    On November 25, 1998, through a statutory merger, the Company became the
sole shareholder of Downey Bancorp, a California corporation and sole
shareholder of DNB. Downey Bancorp was then merged with and into the Company,
with the Company as the surviving corporation. The DB Acquisition was accounted
for under the purchase method of accounting. Following consummation of the DB
Acquisition, DNB was operated as a wholly-owned subsidiary of the Company.

                                       17
<PAGE>
    On December 31, 1998, through a statutory merger, the Company became the
sole shareholder of BOC. The BOC Acquisition was accounted for under the
purchase method of accounting. Following consummation of the BOC Acquisition,
BOC was operated as a wholly-owned subsidiary of the Company.

    The Company was granted the SFB Option in connection with the SFB Initial
Investment. On September 13, 1999 the Company exercised the SFB Option,
resulting in the Company's ownership interest in SFB increasing to 54.69%.

    On August 11, 1999, PSB was acquired by PCC. PCC was organized for the
purpose of facilitating the acquisition of PSB by the California Fund. Prior to
the PSB Acquisition, PSB's charter was converted from that of a state-chartered
savings and loan association to that of a state-chartered commercial bank and,
in addition, PSB became a member of the Federal Reserve System. The PSB
Acquisition was accounted for under the purchase method of accounting. Following
consummation of the PSB Acquisition, PSB was operated as a wholly-owned
subsidiary of PCC. On December 13, 1999, the Company issued 2.4605 shares of
Company Common Stock to the California Fund in exchange for each of the
outstanding shares of PCC Common Stock. Following the PCC Share Exchange, PCC is
a wholly-owned subsidiary of the Company. The PCC Share Exchange was a
transaction accounted for under the "as-if" pooling-of-interests method of
accounting.

    On December 14, 1999 the Company effected the CCB Merger, the BOC/SFB Merger
and the CalWest/NBB Merger.

    On February 29, 2000, the Company issued shares of Company Common Stock to
the California Fund in exchange for all of the outstanding shares of stock in
Sacramento Capital Co. ("SCC"), a bank holding company, and SCC was then merged
with and into the Company (the "CCB/SCC Merger"). SCC was formed by the
California Fund for the purpose of acquiring SCB, a single branch California
state-chartered commercial bank. At December 31, 1999, SCB had total assets of
$209.5 million. The acquisition of SCB by SCC was accounted for under the
purchase method of accounting. The merger of SCC with and into the Company was
accounted for under the "as-if" pooling-of-interests method of accounting. As a
result of the CCB/SCC Merger, the Company's total assets reached over
$1.0 billion.

    For information regarding capital activities of the Company, see Item 1.
Business--General and -- Evolution of the Company and Notes 1 and 2 of Notes to
Consolidated Financial Statements contained in Item 8. Financial Statements and
Supplementary Data.

FINANCIAL OVERVIEW FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND FOR THE
  PERIOD ENDED DECEMBER 31, 1997

    The consolidated financial statements of the Company include the accounts of
the Company and its wholly-owned and majority-owned subsidiaries and the results
of their operations since their respective acquisition dates as previously
discussed. All significant intercompany accounts and transactions have been
eliminated in consolidation.

    The Company had a net loss of $416,000 for the year ended December 31, 1999
compared to a net loss of $2.6 million for the year ended December 31, 1998.
Basic and diluted net loss per share were each ($0.05) in 1999 and ($1.93) per
share in 1998. Excluding goodwill and other intangible assets amortization, net
of related taxes, basic and diluted income per share for the year ended
December 31, 1999 was $0.16 and $0.15, respectively, as compared to basic and
diluted loss per share of ($1.84) for the year ended December 31, 1998. The
Company's return on average assets was (0.1)% and return on average common
equity was (0.7%) for the year ended December 31, 1999, as compared to (4.9)%
and (41.2)%, respectively, for the year ended December 31, 1998. Return on
average assets excluding goodwill and other intangible assets amortization, net
of related taxes, was 0.3% and return on average common equity excluding
goodwill and other intangible assets amortization, net of related taxes, was
2.1% for the year

                                       18
<PAGE>
ended December 31, 1999, as compared to (4.7)% and (39.2)%, respectively, for
the year ended December 31, 1998.

    The Company had a net loss of $2.6 million for the year ended December 31,
1998 compared to a net loss of $209,000 for the period ended December 31, 1997.
Basic and diluted net loss per share were each ($1.93) in 1998 and ($1.92) per
share in 1997. Excluding goodwill and other intangible assets amortization, net
of related taxes, basic and diluted loss per share for the year ended
December 31, 1998 was ($1.84) as compared to basic and diluted loss per share of
($1.83) for the period ended December 31, 1997. The Company's return on average
assets was (4.9)% and return on average common equity was (41.2)% for the year
ended December 31, 1998, as compared to (4.1)% and (75.7)%, respectively, for
the period ended December 31, 1997. Return on average assets excluding goodwill
and other intangible assets amortization, net of related taxes, was (4.7)% and
return on average common equity excluding goodwill and other intangible assets
amortization, net of related taxes, was (39.2)% for the year ended December 31,
1998, as compared to (3.9)% and (72.1)%, respectively, for the period ended
December 31, 1997.

    Due to the acquisition activity of the Company during 1999 and 1998, the
Company incurred certain acquisition related costs, including costs associated
with analysis, negotiation and performance of due diligence activities on
potential targets which did not result in closed transactions. Those costs were
one-time in nature and are not expected to be a part of the Company's ongoing
operating results. Additionally, many of the acquisitions executed by the
Company were consummated using the purchase method of accounting, and, as a
result, expenses include amortization of intangible assets (such as core deposit
intangibles and goodwill) which are also non-operating expense. As the following
table indicates, excluding the effect of those non-operating expenses, the
financial results of the Company have improved

                                       19
<PAGE>
for the year ended December 31, 1999 when compared to the year ended
December 31, 1998 and the period ended December 31, 1997.

<TABLE>
<CAPTION>
                                                                1999        1998        1997
                                                              ---------   ---------   ---------
                                                              (DOLLARS IN THOUSANDS, EXCEPT PER
                                                                     SHARE INFORMATION)
<S>                                                           <C>         <C>         <C>
Net income
  Net income................................................  $   (416)    $(2,649)    $  (209)
    ADJUSTMENTS TO NET INCOME:
    Real estate-related (income) expense....................      (121)       (203)          7
    Non-capitalized acquisition activity expenses...........       586         925         148
    Core deposit intangible amortization....................     1,008          --          --
    Goodwill amortization...................................     1,017         125          10
    Income taxes related to adjustments.....................      (611)       (300)        (64)
                                                              --------     -------     -------
    Operating income (loss).................................  $  1,463     $(2,102)    $  (108)
                                                              ========     =======     =======
  Revenues
    Net interest income, before provision for loan losses...  $ 21,445     $ 2,510     $   282
    Noninterest income......................................     2,875         736          56
    ADJUSTMENT TO REVENUE:
    Real estate-related (income) expense....................      (121)       (203)          7
                                                              --------     -------     -------
    Net operating revenues..................................  $ 24,199     $ 3,043     $   345
                                                              ========     =======     =======
  Noninterest expenses:
    Noninterest expense.....................................  $ 24,353     $ 5,643     $   535
    ADJUSTMENTS TO NONINTEREST EXPENSES:
    Non-capitalized acquisition activity expense............      (586)       (925)       (148)
    Core deposit intangible amortization....................    (1,008)         --          --
    Goodwill amortization...................................    (1,017)       (125)        (10)
                                                              --------     -------     -------
    Operating noninterest expense...........................  $ 21,742     $ 4,593     $   377
                                                              ========     =======     =======
  Per share information:
    Number of shares (weighted average).....................   7,667.4     1,375.7       108.8
    Diluted weighted average shares.........................   7,667.4     1,375.7       108.8
    Diluted weighted average shares used for operating net
      income (loss) per share...............................   7,795.9     1,375.7       108.8
    Basic net loss per share................................  $  (0.05)    $ (1.93)    $ (1.92)
    Diluted net loss per share..............................  $  (0.05)    $ (1.93)    $ (1.92)
    Operating basic net income (loss) per share.............  $   0.19     $ (1.53)    $ (3.27)
    Operating diluted net income (loss) per share...........  $   0.19     $ (1.53)    $ (3.27)
  Profitability measures:
    Return on average assets................................     (0.09)%     (4.89)%     (4.09)%
    Return on average common equity.........................     (0.73)%    (41.16)%    (75.72)%
    Return on equity........................................     (0.43)%     (7.62)%     (4.75)%
    Efficiency ratio........................................     94.00%     181.33%     152.17%
    Operating profitability measures
      Return on average tangible assets.....................      0.33%      (4.28)%     (2.18)%
      Return on average common equity.......................      2.57%     (32.65)%    (39.25)%
      Return on equity......................................      1.53%      (6.05)%     (2.46)%
      Efficiency ratio......................................     89.85%     150.94%     109.28%
</TABLE>

                                       20
<PAGE>
RESULTS OF OPERATIONS

NET INTEREST INCOME AND NET INTEREST MARGIN

1999 VS. 1998

    The Company's net interest income for the year ended December 31, 1999
increased $18.9 million, or 745.4%, when compared to the same period of 1998.
This increase was due to an increase of $29.0 million in interest income, which
was offset by an increase in interest expense of $10.1 million. Total interest
income and interest expense increased primarily due to the acquisitions in late
1998 of BOC and CalWest, a full year of operations for NBB (which, as previously
discussed, was merged with and into CalWest), and the acquisition in August of
1999 of PSB. As a result of these acquisitions, average outstanding interest-
earning assets increased to $401.8 million for the year ended December 31, 1999
as compared to $49.1 million during the same period of 1998.

    The overall yield on interest-earning assets rose to 8.17% in 1999 from
7.77% in 1998. The increase in the Company's overall yield on its
interest-earning assets resulted principally from the increase in the percentage
of interest-earning assets represented by loans during 1999 as compared to 1998.
Average loans outstanding increased to 66.7% of average total interest-earning
assets in 1999 as compared to 53.5% during 1998. During the year ended
December 31, 1999 the Company experienced an overall downward trend in yields on
its earning assets. This principally reflected the acquisition of the loan
portfolio of PSB, which included a higher percentage of lower yielding
single-family mortgages than is typically found in a commercial bank.
Additionally, competition for loans drove down average yields on the Company's
commercial loan portfolio, results of which were only slightly offset by actions
of the Board of Governors to raise rates during the latter half of 1999.

    The cost of average interest-bearing liabilities decreased to 3.82% in 1999
from 4.00% in 1998. The ratio of average total interest-bearing deposits to
total deposits increased during 1999 to 72.8% from 69.3% during 1998. Average
rates paid on deposit balances remained materially unchanged in 1999 compared to
1998. However, average outstanding certificates of deposits as a percentage of
average outstanding total interest-bearing deposits declined to 50.5% in 1999
from 55.9% in 1998 and lower-cost passbook savings accounts increased to 16.0%
of average total interest-bearing deposits during 1999 from 3.0% in 1998.

    As a result of the above factors, the net yield on earning assets increased
to 5.34% in 1999 from 5.11% in 1998.

1998 VS. 1997

    The Company's net interest income increased $2.2 million, or 790.1%, in 1998
due to an increase of $3.4 million in interest income partially offset by an
increase in interest expense of $1.2 million. Interest income and interest
expense increased primarily due to a full year of operations of SFB in 1998
versus two months in 1997 and the results of operations from acquired
institutions at the end of 1998. Lower yields on earning assets partially offset
increased interest income due to the higher volume of earning assets while the
cost of interest bearing liabilities remained approximately constant. The yield
on interest-earning assets declined to 7.77% in 1998 from 8.61% in 1997, due
primarily to decreases in the prime rate in the latter half of 1998, and the
cost of average interest-bearing liabilities decreased to 4.00% in 1998 from
4.08% in 1997. As a result of those factors, the net yield on earning assets
declined to 5.11% in 1998 from 5.66% in 1997.

    The following table presents, for the periods indicated, the distribution of
average assets, liabilities and shareholders' equity, as well as the total
dollar amounts of interest income from average interest-earning assets and the
resultant yields, and the dollar amounts of interest expense from average
interest-bearing liabilities and the resultant cost expressed in both dollars
and rates. Nonaccrual loans are included in the calculation of average loans
while nonaccrued interest thereon is excluded from the computation of yields
earned.

                                       21
<PAGE>
<TABLE>
<CAPTION>
                                                       YEAR ENDED                         YEAR ENDED
                                                   DECEMBER 31, 1999                  DECEMBER 31, 1998
                                            --------------------------------   --------------------------------
                                                        INTEREST    AVERAGE                INTEREST    AVERAGE
                                            AVERAGE      INCOME      YIELD     AVERAGE      INCOME      YIELD
                                            BALANCE    OR EXPENSE   OR COST    BALANCE    OR EXPENSE   OR COST
                                            --------   ----------   --------   --------   ----------   --------
                                                 (DOLLARS IN THOUSANDS)             (DOLLARS IN THOUSANDS)
<S>                                         <C>        <C>          <C>        <C>        <C>          <C>
ASSETS
Interest-earning assets:
Loans(1)..................................  $267,896    $25,004       9.33%    $26,275      $2,523       9.60%
Investment securities(2)..................    87,884      5,515       6.28       4,700         277       5.89
Federal funds sold and securities
  purchased under agreement to resell.....    39,659      1,972       4.97      10,569         573       5.42
Other earning assets......................     6,334        322       5.08       7,594         447       5.89
                                            --------    -------       ----     -------      ------      -----
    Total interest-earning assets.........   401,773     32,813       8.17      49,138       3,820       7.77
Non-earning assets:
Cash and demand deposits with banks.......    23,400                             3,101
Other assets..............................    47,879                             1,897
                                            --------                           -------
    Total assets..........................  $473,052                           $54,136
                                            ========                           =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits
  Interest-bearing demand.................  $ 38,071        488       1.28     $ 3,772          47       1.25
  Money market............................    58,712      1,815       3.09       9,512         285       3.00
  Savings.................................    46,668      1,082       2.32         977          24       2.46
  Time....................................   147,410      7,490       5.08      18,134         913       5.03
                                            --------    -------       ----     -------      ------      -----
    Total interest-bearing deposits.......   290,861     10,875       3.74      32,395       1,269       3.92
Short-term borrowing......................        --         --         --         374          41      10.96
Long-term debt............................     6,715        493       7.34          --          --         --
                                            --------    -------       ----     -------      ------      -----
    Total interest-bearing liabilities....   297,576     11,368       3.82      32,769       1,310       4.00
Noninterest-bearing liabilities:
  Demand deposits.........................   108,977                            14,333
  Other liabilities.......................     9,561                               598
                                            --------                           -------
    Total liabilities.....................   416,114                            47,700
Stockholders' equity......................    56,938                             6,436
                                            --------                           -------
Total liabilities and stockholders'
  equity..................................  $473,052                           $54,136
                                            ========                           =======
Net interest income.......................              $21,445                             $2,510
                                                        =======                             ======
Net yield on interest-earning assets......                            5.34%                              5.11%
                                                                      ====                              =====

<CAPTION>
                                                      PERIOD ENDED
                                                   DECEMBER 31, 1997
                                            --------------------------------
                                                        INTEREST    AVERAGE
                                            AVERAGE      INCOME      YIELD
                                            BALANCE    OR EXPENSE   OR COST
                                            --------   ----------   --------
                                                 (DOLLARS IN THOUSANDS)
<S>                                         <C>        <C>          <C>
ASSETS
Interest-earning assets:
Loans(1)..................................   $2,832       $311       10.98%
Investment securities(2)..................      501         28        5.59
Federal funds sold and securities
  purchased under agreement to resell.....      738         42        5.69
Other earning assets......................      909         48        5.28
                                             ------       ----       -----
    Total interest-earning assets.........    4,980        429        8.61
Non-earning assets:
Cash and demand deposits with banks.......      268
Other assets..............................     (141)
                                             ------
    Total assets..........................   $5,107
                                             ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits
  Interest-bearing demand.................   $  419          7        1.67
  Money market............................      914         35        3.83
  Savings.................................       84          2        2.38
  Time....................................    2,188        103        4.71
                                             ------       ----       -----
    Total interest-bearing deposits.......    3,605        147        4.08
Short-term borrowing......................        2         --          --
Long-term debt............................       --         --          --
                                             ------       ----       -----
    Total interest-bearing liabilities....    3,607        147        4.08
Noninterest-bearing liabilities:
  Demand deposits.........................    1,201
  Other liabilities.......................       23
                                             ------
    Total liabilities.....................    4,831
Stockholders' equity......................      276
                                             ------
Total liabilities and stockholders'
  equity..................................   $5,107
                                             ======
Net interest income.......................                $282
                                                          ====
Net yield on interest-earning assets......                            5.66%
                                                                     =====
</TABLE>

------------------------------

(1) Loan fees of $1.0 million, $74,000 and $71,000 are included in the
    computations for 1999, 1998 and 1997, respectively.

(2) Yields are calculated on historical cost and exclude the impact of the
    unrealized gain (loss) on available for sale securities.

                                       22
<PAGE>
    The following table sets forth changes in interest income and interest
expense and the amount of change attributable to variances in volume, rates and
the combination of volume and rates based on the relative changes of volume and
rates. Nonaccrual loans are included in total loans outstanding while nonaccrued
interest thereon is excluded from the computation of yields earned.

<TABLE>
<CAPTION>
                                                 YEAR ENDED DECEMBER 31, 1999
                                           COMPARED TO YEAR ENDED DECEMBER 31, 1998
                                          -------------------------------------------
                                          NET CHANGE     RATE      VOLUME      MIX
                                          ----------   --------   --------   --------
                                                        (IN THOUSANDS)
<S>                                       <C>          <C>        <C>        <C>
Interest Income:
Loans...................................   $22,481      $ (71)    $23,202    $  (650)
Investment securities...................     5,238         18       4,902        318
Federal funds sold......................     1,399        (47)      1,577       (131)
Other earning assets....................      (125)       (61)        (74)        10
                                           -------      -----     -------    -------
    Total interest income...............    28,993       (161)     29,607       (453)
                                           -------      -----     -------    -------
Interest Expense:
Interest-bearing demand.................       441          1         428         12
Money market............................     1,530         10       1,471         49
Savings.................................     1,058         (1)      1,122        (63)
Time....................................     6,577          8       6,509         60
Short-term borrowing....................       (41)       (41)        (41)        41
Long-term debt..........................       493         --          --        493
                                           -------      -----     -------    -------
    Total interest expense..............    10,058        (23)      9,489        592
                                           -------      -----     -------    -------
Net interest income.....................   $18,935      $(138)    $20,118    $(1,045)
                                           =======      =====     =======    =======
</TABLE>

<TABLE>
<CAPTION>
                                                      YEAR ENDED DECEMBER 31, 1998
                                               COMPARED TO PERIOD ENDED DECEMBER 31, 1997
                                          ----------------------------------------------------
                                          NET CHANGE        RATE         VOLUME         MIX
                                          ----------      --------      --------      --------
                                                             (IN THOUSANDS)
<S>                                       <C>             <C>           <C>           <C>
Interest Income:
Loans...................................    $2,212          $(39)        $2,574        $(323)
Investment securities...................       249             2            234           13
Federal funds sold......................       531            (2)           559          (26)
Other earning assets....................       399             6            353           40
                                            ------          ----         ------        -----
    Total interest income...............     3,391           (33)         3,720         (296)
                                            ------          ----         ------        -----
Interest Expense:
Interest-bearing demand.................        40            (2)            56          (14)
Money market............................       250            (8)           329          (71)
Savings.................................        22            --             21            1
Time....................................       810             7            751           52
Short-term borrowing....................        41            --              0           41
                                            ------          ----         ------        -----
    Total interest expense..............     1,163            (3)         1,157            9
                                            ------          ----         ------        -----
Net interest income.....................    $2,228          $(30)        $2,563        $(305)
                                            ======          ====         ======        =====
</TABLE>

                                       23
<PAGE>
NONINTEREST INCOME

1999 VS. 1998

    Noninterest income increased by $2.1 million, or 290.6%, to $2.9 million in
1999 from $736,000 in 1998. The increase was primarily due to activity resulting
from the acquisitions of BOC and CalWest in late 1998 and the impact of the
acquisition of PSB during August of 1999. Noninterest income for 1999 also
includes the impact of a loss on the sale of investment securities during the
period totaling $626,000. In connection with the CCB Merger, the PSB
Acquisition, the BOC/SFB Merger and the CalWest/NBB Merger, the Company
determined that certain available for sale securities and certain held to
maturity securities were not in accordance with the Company's defined interest
rate risk and credit risk policies. Accordingly, the Company transferred
$43.7 million of held to maturity securities to available for sale and recorded
an unrealized loss of $207,000. The Company subsequently sold $3.5 million of
these transferred securities and realized a loss of $16,000. In addition, the
Company sold other held to maturity securities, which had a carrying value of
$9.6 million, at amortized cost, which resulted in a realized loss of $361,000.

1998 VS. 1997

    Noninterest income increased by $680,000, or 1,214.3%, to $736,000 in 1998
from $56,000 in 1997. Included in noninterest income for 1998 is a one-time
recovery from the California Department of Transportation related to a prior
location of SFB totaling $369,000. The balance of the increase was primarily due
to income from an entire year of operations in 1998 for SFB versus two months in
1997 and results of operations from acquisitions completed at the end of 1998.

    The following table presents for the periods indicated the major categories
of noninterest income:

<TABLE>
<CAPTION>
                                                               YEARS (PERIOD) ENDED
                                                                   DECEMBER 31,
                                                          ------------------------------
                                                            1999       1998       1997
                                                          --------   --------   --------
                                                                  (IN THOUSANDS)
<S>                                                       <C>        <C>        <C>
Service charges and fees................................   $1,716      $ 98       $ 7
Net real estate owned income (expense)..................      121       203        (7)
Other income............................................    1,038       435        56
                                                           ------      ----       ---
    Total...............................................   $2,875      $736       $56
                                                           ======      ====       ===
</TABLE>

NONINTEREST EXPENSE

    Noninterest expenses are the costs, other than interest expense, associated
with providing banking and financial services to customers and conducting the
affairs of the Company. Also included are the costs associated with problem
assets, which include nonperforming and restructured loans.

1999 VS. 1998

    Noninterest expense increased $18.7 million, or 331.6%, to $24.3 million in
1999 from $5.6 million in 1998. The increase was primarily due to activity
resulting from the acquisitions of BOC and CalWest in late 1998 and the impact
of the acquisition of PSB during August of 1999. Also included in this increase
is the amortization of intangible assets totaling $2.0 million in 1999 compared
to $125,000 in 1998. The Company's efficiency ratio (defined as noninterest
expense, before the amortization of intangible assets, net of related taxes, to
total revenue before income or losses related to other real estate owned less
interest expense) was 94.0% for the year ended December 31, 1999, a decrease of
87.3%, from 181.3%% for 1998. Costs in 1999 continued to reflect expenditures
related to the Year 2000 issue, as well as costs associated with data conversion
activity associated with the BOC/SFB Merger and the CalWest/NBB Merger.
Noninterest expense for 1999 also includes $403,000 in costs associated with the
CCB Merger, BOC/SFB Merger and CalWest/NBB Merger which were recognized as
operating expenses during the period.

                                       24
<PAGE>
Noninterest expense for 1999 also does not reflect the full benefit of earnings
and cost savings anticipated from the CCB Merger, the BOC/SFB Merger, and the
CalWest/NBB Merger. No assurance can be given that such anticipated cost savings
will be realized.

1998 VS. 1997

    Noninterest expense increased $5.1 million, or 954.8%, to $5.6 million in
1998 from $535,000 in 1997. The increase in expense is largely attributable to
the cost of operations for an entire year versus two months for SFB. Also
included in this increase is the amortization of intangible assets, which for
1998 was $125,000 compared to $10,000 in 1997. The Company's efficiency ratio
was 181.3% for the year ended December 31, 1998, an increase of 29.1%, from
152.2% for 1997, primarily attributable to the cost of the 1998 acquisitions
recognized in 1998 without the benefit of a full year's earnings.

    The following table presents for the periods indicated the major categories
of noninterest expense:

<TABLE>
<CAPTION>
                                                           YEARS (PERIOD) ENDED
                                                               DECEMBER 31,
                                                      ------------------------------
                                                        1999       1998       1997
                                                      --------   --------   --------
                                                              (IN THOUSANDS)
<S>                                                   <C>        <C>        <C>
Salaries and employee benefits......................  $10,659     $2,018      $197
Occupancy and equipment.............................    3,264        489        39
Professional fees...................................    1,709      1,184       199
Data and item processing............................    1,996        246         8
Communications......................................      918        131        14
Business development and promotions.................      838        136         7
Year 2000...........................................      174        227        --
Amortization of intangibles.........................    2,026        125        10
Pre-opening costs...................................       --        605        --
Other...............................................    2,769        482        61
                                                      -------     ------      ----
    Total...........................................  $24,353     $5,643      $535
                                                      =======     ======      ====
</TABLE>

PROVISION FOR INCOME TAXES

    The Company recorded a tax benefit of $176,000 in 1999, and provisions of
$15,000 in 1998 and $2,000 in 1997. The effective tax rates were (18.7)%, 0.6%
and 0.0% for 1999, 1998 and 1997, respectively, as compared to the expected tax
rate of (34)%. The difference from the expected rate in 1999 is largely due to
the reversal of valuation allowances and the utilization of net operating loss
carryforwards, portions of which were applied to goodwill, as well as
non-deductible intangible asset amortization, all of which had the effect of
increasing the effective tax rate.

FINANCIAL CONDITION

    Total assets of the Company at December 31, 1999 were $843.2 million
compared to total assets of $237.6 million at December 31, 1998. Total earning
assets of the Company at December 31, 1999 totaled $708.6 million compared to
$198.4 million at December 31, 1998. The increase experienced year over year in
total assets and total earning assets is primarily attributable to the
acquisitions completed during 1998 and 1999. Total deposits at December 31, 1999
and 1998 were $712.8 million compared to $192.6 million, respectively, and the
increase is again attributable primarily to the Company's acquisitions during
1998 and 1999.

LOANS

    Total gross loans of the Company at December 31, 1999 were $559.8 million,
compared to $99.5 million at December 31, 1998, an increase of $460.3 million,
or 462.6%. At December 31, 1999 the four largest

                                       25
<PAGE>
lending categories were (i) residential real estate loans; (ii) commercial real
estate loans; (iii) construction loans and (iv) commercial loans. At
December 31, 1999, those categories accounted for $207.1 million,
$185.8 million, $63.2 million, and $59.8 million, or approximately 37.0%, 33.2%,
11.3%, and 10.7%, respectively, of total gross loans.

    Growth in the lending portfolio between year ends was principally due to the
acquisition of PSB during 1999. Due to PSB's previous thrift charter, which
required that a predominance of the institution's assets be invested in real
estate secured loans, the Company's loan portfolio reflects a substantially
higher real estate-related focus than would normally be found in a commercial
bank.

    Total loans of the Company at December 31, 1998 were $99.5 million compared
to $22.2 million at December 31, 1997. At December 31, 1998, the four largest
lending categories were: (i) commercial real estate loans, (ii) commercial
loans, (iii) loans to individuals and (iv) SBA loans. At December 31, 1998,
those categories accounted for $47.5 million, $34.5 million, $14.0 million and
$3.4 million, or approximately 47.7%, 34.7%, 14.1% and 3.5% of total gross
loans, respectively. The following table sets forth the amount of loans
outstanding for the Company at the end of each of the years (period) indicated,
according to type of loan. The Company has no foreign loans or energy-related
loans as of the dates indicated.

<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                  ------------------------------
                                                    1999       1998       1997
                                                  --------   --------   --------
                                                          (IN THOUSANDS)
<S>                                               <C>        <C>        <C>
Residential real estate loans...................  $207,118   $    --    $    --
Commercial real estate loans....................   185,750    47,502      6,131
Construction loans..............................    63,154        --         --
Commercial......................................    59,810    34,503      9,243
Consumer loans..................................    17,393    14,027      5,852
SBA loans.......................................     6,482     3,433        930
Other loans.....................................    20,077        26         17
                                                  --------   -------    -------
Gross loans.....................................   559,784    99,491     22,173
Less: allowance for loan losses.................    (6,750)   (1,986)    (1,013)
Deferred loan fees..............................    (1,635)     (216)       (55)
                                                  --------   -------    -------
Net loans.......................................  $551,399   $97,289    $21,105
                                                  ========   =======    =======
</TABLE>

    The following table shows the amounts of some categories of loans
outstanding as of December 31, 1999, which, based on remaining scheduled
repayments of principal, were due in one year or less, more than one year
through five years, and more than five years. Demand or other loans having no
stated maturity and no stated schedule of repayments are reported as due in one
year or less.

<TABLE>
<CAPTION>
                                                           DECEMBER 31, 1999
                                                        ------------------------
                                                        COMMERCIAL   REAL ESTATE
                                                        ----------   -----------
                                                             (IN THOUSANDS)
<S>                                                     <C>          <C>
Aggregate maturities of loans which are due:
Within one year.......................................   $21,212       $ 37,045
After one year but within five years:
  Interest rates are floating or adjustable...........     8,825         26,317
  Interest rates are fixed or predetermined...........     8,286         22,903
After five years:
  Interest rates are floating or adjustable...........    13,337        141,339
  Interest rates are fixed or predetermined...........     8,150        228,418
                                                         -------       --------
    Total.............................................   $59,810       $456,022
                                                         =======       ========
</TABLE>

                                       26
<PAGE>
    As of December 31, 1999, in management's judgment, a concentration of loans
existed in real estate-related loans, and to a lesser extent, in commercial
loans. At that date, real estate-related loans and commercial loans comprised
81.5% and 10.7% of total loans, respectively.

    As of December 31, 1998, in management's judgment, a concentration of loans
existed in commercial loans and real estate-related loans. At that date,
approximately 82.4% of the Company's loans were real estate-related and
commercial loans, representing 47.7% and 34.7% of total loans, respectively.

    Although management believes such concentrations to have no more than the
normal risk of collectibility of loans, a substantial decline in the performance
of the economy in general or a decline in real estate values in the Banks'
primary market areas in particular could have an adverse impact on
collectibility, increase the level of real estate-related nonperforming loans,
or have other adverse effects which alone or in the aggregate could have a
material adverse effect on the financial condition of the Company.

NONPERFORMING ASSETS

    Accrual of interest is discontinued on a loan when management believes,
after considering economic and business conditions and collection efforts, that
the borrower's financial condition is such that collection of interest is
doubtful. Generally, loans are placed on nonaccrual status when they become
90 days or more past due or at such earlier time as management determines timely
recognition of interest to be in doubt. The following table summarizes the loans
for which the accrual of interest has been discontinued and loans more than
90 days past due and still accruing interest, including those loans that have
been restructured and other real estate owned:

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                       ------------------------------
                                                         1999       1998       1997
                                                       --------   --------   --------
                                                           (DOLLARS IN THOUSANDS)
<S>                                                    <C>        <C>        <C>
Nonaccrual loans, not restructured...................    $413      $1,654     $  415
Accruing loans past due 90 days or more..............      --          --         14
Restructured loans...................................      --         203        663
                                                         ----      ------     ------
    Total nonperforming loans ("NPLs")...............     413       1,857      1,092
Other real estate owned ("OREO").....................      --         372        564
                                                         ----      ------     ------
    Total nonperforming assets ("NPAs")..............    $413      $2,229     $1,656
                                                         ====      ======     ======
Selected ratios:
  NPLs to total loans................................    0.07%       1.87%      4.92%
  NPAs to total loans and OREO.......................    0.07        2.23       7.28
  NPAs to total assets...............................    0.05        0.94       4.01
</TABLE>

    IMPAIRED LOANS.  "Impaired loans" are commercial, commercial real-estate,
other real-estate related and individually significant mortgage and consumer
loans for which it is probable that the Company will not be able to collect all
amounts due according to the contractual terms of the loan agreement. The
category of "impaired loans" is not coextensive with the category "nonaccrual
loans", although the two categories overlap. Nonaccrual loans include impaired
loans, which are not reviewed on a collective basis for impairment, and are
those loans on which the accrual of interest is discontinued when collectibility
of principal and interest is uncertain or payments of principal or interest have
become contractually past due 90 days. Accrual of interest may be discontinued
on a loan when management believes, after considering economic and business
conditions and collection efforts, that the borrower's financial condition is
such that collection of interest is doubtful. Management may choose to place a
loan on nonaccrual status due to payment delinquency or uncertain
collectibility, while not classifying the loan as impaired, if (i) it is
probable that the Company will collect all amounts due in accordance with the
contractual terms of the loan or (ii) the loan is not a commercial, commercial
real estate or an individually significant mortgage or

                                       27
<PAGE>
consumer loan. In determining whether or not a loan is impaired, the Company
applies its normal loan review procedures on a case-by-case basis taking into
consideration the circumstances surrounding the loan and borrower, including the
collateral value, the reasons for the delay, the borrower's prior payment
record, the amount of the shortfall in relation to the principal and interest
owed and the length of the delay. The Company measures impairment on a loan by
loan basis using either the present value of expected future cash flows
discounted at the loan's effective interest rate or at the fair value of the
collateral if the loan is collateral dependent, less estimated selling costs.
Loans for which an insignificant shortfall in amount of payments is anticipated,
but the Company expects to collect all amounts due, are not considered impaired.

    Loans aggregating $365,000 and $825,000 at December 31, 1999 and 1998,
respectively, have been designated as impaired. The total allowance for loan
losses related to these loans was $215,000 and $109,000 at December 31, 1999 and
1998, respectively. At December 31, 1997, loans aggregating $415,000 were
designated as impaired and the total allowance for loan losses related to these
loans was $85,000. The average balance of impaired loans during 1999, 1998 and
1997 was $774,000, $812,000 and $415,000, respectively.

    The amount of interest income that the Company would have recorded on
nonaccrual and impaired loans had the loans been current, totaled $8,000 and
$162,000 for the years ended December 31, 1999 and 1998, respectively, and
$193,000 for the period ended December 31, 1997. No accrued but unpaid interest
income on such loans was in fact included in the Company's net income for the
years ended December 31, 1999 and 1998 and the period ended December 31, 1997.
Interest income for 1999, 1998 and 1997 includes interest related to loans
identified as impaired at the end of each reporting period of $38,000, $126,000
and $3,000, respectively.

    At December 31, 1999, the Company had no OREO properties. At December 31,
1998, the Company had OREO properties with an aggregate carrying value of
$372,000. During 1998, properties with a total carrying value of $306,000 were
added to OREO as a result of foreclosures, properties with a total carrying
value of $467,000 were sold and properties were written down by approximately
$31,000. At December 31, 1997, the Company had OREO properties with an aggregate
carrying value of $564,000. During the period ended December 31, 1997,
properties with a total carrying value of $601,000 were added to OREO as a
result of the acquisition of SFB and properties with a total carrying value of
$37,000 were sold. All of the OREO properties are recorded by the Company at
amounts which are equal to or less than the fair market value based on current
independent appraisals reduced by estimated selling costs.

ALLOWANCE FOR LOAN LOSSES

    The allowance for loan losses is maintained at a level that management
believes will be adequate to absorb inherent losses on existing loans based on
an evaluation of the collectibility of the loans and prior loan loss experience.
The evaluations take into consideration such factors as changes in the nature
and volume of the portfolio, overall portfolio quality, review of specific
problem loans, and current and anticipated economic conditions that may affect
the borrower's ability to pay. The allowance for loan losses is based on
estimates, and ultimate losses may vary from the current estimates. These
estimates are reviewed periodically and, as adjustments become necessary, they
are reported in earnings in the periods in which they become known.

                                       28
<PAGE>
    The allowance for loan losses was $6.8 million, or 1.21%, of gross loans at
December 31, 1999, compared to $2.0 million, or 2.0%, of gross loans at
December 31, 1998, and $1.0 million, or 4.6% of gross loans at December 31,
1997. The increase in the allowance for loan losses year over year is primarily
due to the amounts acquired during the years through the Company's acquisitions,
$4.1 million in 1999 and $1.2 million in 1998. The decrease in the percentage of
the allowance for loan losses to gross loans from 1997 to 1999 is based on an
improvement in the key credit quality indicators resulting primarily from the
effect of the PSB Acquisition. Net charge-offs as a percentage of average loans
improved from 2.04% to 0.05% from 1998 to 1999 and the allowance for loan losses
as a percentage of nonperforming loans increased from 107% to nearly 1,500% from
1998 to 1999. The provision for loan losses for the year ended December 31, 1999
and 1998 was $819,000 and $340,000, respectively, and no provision was recorded
for the period ended December 31, 1997.

    The table below summarizes average loans outstanding, gross loans,
nonperforming loans and changes in the allowance for loan losses arising from
loan losses and additions to the allowance from provisions charged to operating
expense:

<TABLE>
<CAPTION>
                                                               YEARS (PERIOD) ENDED DECEMBER 31,
                                                              ------------------------------------
                                                                 1999         1998         1997
                                                              ----------   ----------   ----------
                                                                     (DOLLARS IN THOUSANDS)
<S>                                                           <C>          <C>          <C>
Average gross loans outstanding.............................   $267,896      $26,275      $ 2,832
Gross loans.................................................    559,784       99,491       22,173
Nonperforming loans.........................................        413        1,857        1,092
  Allowance for loan losses:
    Balance at beginning of period..........................      1,986        1,013           --
    Balance acquired during period..........................      4,087        1,168        1,013
    Loans charged off during period
      Commercial............................................        165            2           --
      Real estate-related...................................         23          623           --
      Installment...........................................         95           57           --
                                                               --------      -------      -------
        Total...............................................        283          682           --
                                                               --------      -------      -------
    Recoveries during period
      Commercial............................................         87           14           --
      Real estate-related...................................         22           75           --
      Installment...........................................         32           58           --
                                                               --------      -------      -------
        Total...............................................        141          147           --
                                                               --------      -------      -------
      Net loans charged off during period...................        143          535           --
      Provision for loan losses.............................        819          340           --
                                                               --------      -------      -------
        Balance at end of period............................   $  6,750      $ 1,986      $ 1,013
                                                               ========      =======      =======
Selected ratios:
  Net charge-offs to average gross loans....................       0.05%        2.04%          --%
  Provision for loan losses to average loans................       0.31         1.29           --
Allowance at end of period to gross loans outstanding at end
  of period.................................................       1.21         2.00         4.57
Allowance as percentage of nonperforming loans..............   1,497.34       106.95        92.77
</TABLE>

    In allocating the Company's allowance for loan losses, management has
considered the credit risk in the various loan categories in its portfolio. As
such, the allocations of the allowance for loan losses are based upon the
average aggregate historical net loan losses experienced in each of the Banks.
While every effort has been made to allocate the allowance to specific
categories of loans, management believes that any allocation of the allowance
for loan losses into loan categories lends an appearance of exactness that

                                       29
<PAGE>
does not exist. The following table indicates management's allocation of the
allowance as of each of the following dates, in thousands:

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                      ------------------------------
                                                        1999       1998       1997
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C>
Commercial, financial and agricultural..............   $2,456     $  945     $  455
Real estate-related.................................    1,210        720        279
Consumer............................................      394        269        197
Unallocated.........................................    2,690         52         82
                                                       ------     ------     ------
Total...............................................   $6,750     $1,986     $1,013
                                                       ======     ======     ======
</TABLE>

    The following table indicates the percent of loans in each category
expressed as a percentage of total gross loans as of each of the following
dates:

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                         ------------------------------
                                                           1999       1998       1997
                                                         --------   --------   --------
<S>                                                      <C>        <C>        <C>
Commercial, financial and agricultural.................    11.7%      38.1%      45.9%
Real estate-related....................................    81.5       47.7       27.7
Consumer...............................................     6.8       14.2       26.4
Unallocated............................................      --         --         --
                                                          -----      -----      -----
Total..................................................   100.0%     100.0%     100.0%
                                                          =====      =====      =====
</TABLE>

INVESTMENTS

    Total investments at December 31, 1999 totaled $155.7 million, compared to
$98.8 million at December 31, 1998, and $11.3 million at December 31, 1997. The
increases experienced year over year are a result of the acquisitions completed
in 1999 and 1998. At December 31, 1999, the Company's investments included
overnight Federal funds sold of $20.8 million, interest-bearing deposits with
other banks of $2.6 million, investment securities of $128.2 million and Federal
Reserve Bank ("FRB") stock and Federal Home Loan Bank stock of $4.1 million. At
December 31, 1998, the investments of the Company included overnight Federal
funds sold and securities purchased under agreements to resell investments of
$63.7 million, interest-bearing deposits with other banks of $4.5 million,
investment securities of $30.2 million and FRB stock of $452,000. The Company's
portfolio of investment securities during 1999 and 1998 primarily consisted of
U.S. treasury and agency securities, corporate bonds and municipal securities.
At December 31, 1999 and 1998, the carrying value of the Company's investment
securities classified as available for sale was $57.7 million and $21.7 million,
respectively, and the carrying value of the Company's investment securities held
to maturity totaled $70.6 million and $8.5 million, respectively. The Company
does not hold any investment securities in a trading account.

                                       30
<PAGE>
    The amortized cost and estimated market value of the Company's portfolio of
investment securities at December 31, 1999 and December 31, 1998 were as
follows:

<TABLE>
<CAPTION>
                                                                     DECEMBER 31, 1999
                                                      ------------------------------------------------
                                                                    GROSS        GROSS
                                                      AMORTIZED   UNREALIZED   UNREALIZED
                                                        COST        GAINS        LOSSES     FAIR VALUE
                                                      ---------   ----------   ----------   ----------
                                                                       (IN THOUSANDS)
<S>                                                   <C>         <C>          <C>          <C>
Investment securities available for sale:
  U.S. and state governments and agencies...........  $ 55,495        $--        $ (519)     $ 54,976
  Corporate bonds...................................        --         --            --            --
  Municipal obligations.............................       485          5            --           490
  Mortgage-backed securities........................     2,238         --           (48)        2,190
                                                      --------        ---        ------      --------
    Total available for sale........................    58,218          5          (567)       57,656
Investment securities held to maturity:
  U.S. and state governments and agencies...........  $  2,495        $--        $   (7)     $  2,488
  Corporate bonds...................................       416         --           (30)          386
  Municipal obligations.............................    12,069         --          (327)       11,742
  Mortgage-backed securities........................    55,612          7          (895)       54,724
                                                      --------        ---        ------      --------
    Total held to maturity..........................    70,592          7        (1,259)       69,340
                                                      --------        ---        ------      --------
    Total...........................................  $128,810        $12        $(1,826)    $126,996
                                                      ========        ===        ======      ========
</TABLE>

<TABLE>
<CAPTION>
                                                                   DECEMBER 31, 1998
                                                    ------------------------------------------------
                                                                  GROSS        GROSS
                                                    AMORTIZED   UNREALIZED   UNREALIZED      FAIR
                                                      COST        GAINS        LOSSES       VALUE
                                                    ---------   ----------   ----------   ----------
                                                                     (IN THOUSANDS)
<S>                                                 <C>         <C>          <C>          <C>
Investment securities available for sale:
  U.S. and state governments and agencies.........   $20,375        $35      $      --     $20,410
  Municipal obligations...........................       487         --             --         487
  Corporate bonds.................................       780          1             --         781
                                                     -------        ---      ---------     -------
    Total available for sale......................    21,642         36             --      21,678
Investment securities held to maturity:
  U.S. and state governments and agencies.........     4,241         10             --       4,251
  Municipal obligations...........................     1,630         --             --       1,630
  Corporate bonds.................................     2,640         --             --       2,640
                                                     -------        ---      ---------     -------
    Total held to maturity........................     8,511         10             --       8,521
                                                     -------        ---      ---------     -------
    Total.........................................   $30,153        $46      $      --     $30,199
                                                     =======        ===      =========     =======
</TABLE>

                                       31
<PAGE>
    The following tables show the maturities of investment securities at
December 31, 1999, and the weighted average yields of such securities:

<TABLE>
<CAPTION>
                                                                       DECEMBER 31, 1999
                                 ----------------------------------------------------------------------------------------------
                                                            AFTER ONE YEAR          AFTER FIVE YEARS
                                                            BUT WITHIN FIVE          BUT WITHIN TEN
                                   WITHIN ONE YEAR               YEARS                    YEARS               AFTER TEN YEARS
                                 -------------------      -------------------      -------------------      -------------------
                                  AMOUNT     YIELD         AMOUNT     YIELD         AMOUNT     YIELD         AMOUNT     YIELD
                                 --------   --------      --------   --------      --------   --------      --------   --------
                                                                     (DOLLARS IN THOUSANDS)
<S>                              <C>        <C>           <C>        <C>           <C>        <C>           <C>        <C>
Securities available for sale:
  U.S. treasuries..............  $10,938      5.13%       $ 2,975      4.73%       $    --      0.00%       $    --      0.00%
  U.S. and state governments
    and agencies...............      593      5.68         40,470      6.18             --      0.00             --      0.00
  Municipal obligations........       --      0.00            490      6.59             --      0.00             --      0.00
  Mortgage backed securities...    1,027      5.62          1,163      5.82             --      0.00             --      0.00
  Corporate bonds..............       --      0.00             --      0.00             --      0.00             --      0.00
                                 -------      ----        -------      ----        -------      ----        -------      ----
  Total available for sale.....  $12,558      5.19%       $45,098      6.08%       $    --      0.00%       $    --      0.00%
                                 =======                  =======                  =======                  =======
Total available for sale,
  amortized cost...............  $12,663                  $45,555                  $    --                  $    --
                                 =======                  =======                  =======                  =======
Securities held to maturity:
  U.S. treasuries..............  $   100      4.99%       $    --      0.00%       $    --      0.00%       $    --      0.00%
  U.S. and state governments
    and agencies...............    1,395      5.82          1,000      6.38             --      0.00             --      0.00
  Municipal obligations........      161      3.67            550      4.37          5,865      4.66          5,493      4.93
  Mortgage backed securities...       --      0.00          4,970      6.53         15,213      6.70         35,429      6.73
  Corporate bonds..............       --      0.00            416      7.12             --      0.00             --      0.00
                                 -------      ----        -------      ----        -------      ----        -------      ----
  Total held to maturity,
    amortized cost.............  $ 1,656      5.56%       $ 6,936      6.37%       $21,078      6.15%       $40,922      6.49%
                                 =======                  =======                  =======                  =======
  Total held to maturity, fair
    value......................  $ 1,651                  $ 6,820                  $20,668                  $40,201
                                 =======                  =======                  =======                  =======
</TABLE>

    Additional information concerning investment securities is provided in the
notes to the accompanying consolidated financial statements.

DEPOSITS

    Total deposits were $712.8 million at December 31, 1999 compared to
$192.6 million at December 31, 1998. The increase in total deposits since
December 31, 1998 is attributed primarily to the acquisition of PSB in 1999.
Noninterest bearing demand accounts were $151.1 million, or 21.2%, of total
deposits at December 31, 1999, compared to $93.1 million, or 48.4%, of total
deposits, at December 31, 1998. Interest bearing deposits are comprised of money
market accounts, regular savings accounts, time deposits of

                                       32
<PAGE>
under $100,000 and time deposits of $100,000 or more. The following table shows
the average amount and average rate paid on the categories of deposits for each
of the years or period indicated:

<TABLE>
<CAPTION>
                                                           YEAR (PERIOD) ENDED DECEMBER 31,
                                            ---------------------------------------------------------------
                                                   1999                  1998                  1997
                                            -------------------   -------------------   -------------------
                                            AVERAGE    AVERAGE    AVERAGE    AVERAGE    AVERAGE    AVERAGE
                                            BALANCE      RATE     BALANCE      RATE     BALANCE      RATE
                                            --------   --------   --------   --------   --------   --------
                                                                (DOLLARS IN THOUSANDS)
<S>                                         <C>        <C>        <C>        <C>        <C>        <C>
Noninterest-bearing demand................  $108,977       --%    $14,333        --%     $1,201        --%
Interest-bearing demand...................    38,071     1.28       3,772      1.25         419      1.67
Money market..............................    58,712     3.09       9,512      3.00         914      3.83
Savings...................................    46,668     2.32         977      2.46          84      2.38
Time......................................   147,410     5.08      18,134      5.03       2,188      4.71
                                            --------              -------                ------
  Total...................................  $399,838     2.72%    $46,728      2.72%     $4,806      3.06%
                                            ========     ====     =======      ====      ======      ====
</TABLE>

    Additionally, the following table shows the maturities of time certificates
of deposits and other time deposits of $100,000 or more at December 31, 1999:

<TABLE>
<CAPTION>
                                                              DECEMBER 31, 1999
                                                              -----------------
                                                               (IN THOUSANDS)
<S>                                                           <C>
Due in three months or less.................................       $41,571
Due in over three months through six months.................        21,575
Due in over six months through twelve months................        25,137
Due in over twelve months...................................         7,390
                                                                   -------
  Total.....................................................       $95,673
                                                                   =======
</TABLE>

CAPITAL RESOURCES

    Current risk-based regulatory capital standards generally require banks and
bank holding companies to maintain a ratio of "core" or "Tier 1" capital
(consisting principally of common equity) to risk-weighted assets of at least
4%, a ratio of Tier 1 capital to adjusted total assets (leverage ratio) of at
least 4% and a ratio of total capital (which includes Tier 1 capital plus
certain forms of subordinated debt, a portion of the allowance for loan losses
and preferred stock) to risk-weighted assets of at least 8%. Risk-weighted
assets are calculated by multiplying the balance in each category of assets
according to a risk factor, which ranges from zero for cash assets and certain
government obligations to 100% for some types of loans and adding the products
together.

                                       33
<PAGE>
    The Company and each of the Banks were well capitalized as of December 31,
1999 and December 31, 1998 for federal regulatory purposes. The following tables
detail the regulatory capital ratios of the Company and each of the Banks as of
December 31, 1999 and 1998.

<TABLE>
<CAPTION>
                                                                  AT DECEMBER 31, 1999
                                          ---------------------------------------------------------------------
                                                                    CAPITAL ADEQUACY         WELL CAPITALIZED
                                            ACTUAL CAPITAL             REQUIREMENT              REQUIREMENT
                                          -------------------      -------------------      -------------------
                                           AMOUNT     RATIO         AMOUNT     RATIO         AMOUNT     RATIO
                                          --------   --------      --------   --------      --------   --------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                       <C>        <C>           <C>        <C>           <C>        <C>
                                                                               = OR >                   = OR >
Total Capital vs. Risk Weighted Assets:
  Consolidated Company..................  $67,441     12.92%       $41,763      8.0%        $52,203     10.0%
  PCC...................................   41,672     11.36%        29,341      8.0%         36,676     10.0%
  PSB...................................   41,984     11.80%        28,463      8.0%         35,580     10.0%
  CalWest...............................    7,710     14.82%         4,163      8.0%          5,204     10.0%
  BOC...................................   11,067     10.84%         8,164      8.0%         10,205     10.0%
Tier I Capital vs. Risk Weighted Assets:
  Consolidated Company..................   61,301     11.74%        20,881      4.0%         31,322      6.0%
  PCC...................................   37,458     10.21%        14,671      4.0%         22,006      6.0%
  PSB...................................   37,770     10.62%        14,232      4.0%         21,348      6.0%
  CalWest...............................    7,068     13.58%         2,082      4.0%          3,122      6.0%
  BOC...................................    9,783      9.59%         4,082      4.0%          6,123      6.0%
Tier I Capital vs. Average Assets:
  Consolidated Company..................   61,301      7.52%        32,616      4.0%         40,770      5.0%
  PCC...................................   37,458      6.20%        24,172      4.0%         30,215      5.0%
  PSB...................................   37,770      6.30%        23,981      4.0%         29,976      5.0%
  CalWest...............................    7,068      9.82%         2,880      4.0%          3,600      5.0%
  BOC...................................    9,783      7.06%         5,542      4.0%          6,927      5.0%
</TABLE>

<TABLE>
<CAPTION>
                                                                 AT DECEMBER 31, 1998
                                         ---------------------------------------------------------------------
                                                                   CAPITAL ADEQUACY         WELL CAPITALIZED
                                           ACTUAL CAPITAL             REQUIREMENT              REQUIREMENT
                                         -------------------      -------------------      -------------------
                                          AMOUNT     RATIO         AMOUNT     RATIO         AMOUNT     RATIO
                                         --------   --------      --------   --------      --------   --------
                                                                (DOLLARS IN THOUSANDS)
<S>                                      <C>        <C>           <C>        <C>           <C>        <C>
                                                                              = OR >                   = OR >
Total Capital vs. Risk Weighted Assets:
  Consolidated Company.................  $20,331     14.98%       $10,858      8.0%        $13,572     10.0%
  SFB..................................    5,433     16.95%         2,564      8.0%          3,205     10.0%
  NBB..................................    4,741    172.00%           221      8.0%            276     10.0%
  CalWest..............................    4,384     11.60%         3,023      8.0%          3,779     10.0%
  BOC..................................    8,024     13.03%         4,926      8.0%          6,158     10.0%
Tier I Capital vs. Risk Weighted
  Assets:
  Consolidated Company.................   18,631     13.73%         5,428      4.0%          8,142      6.0%
  SFB..................................    5,027     15.69%         1,282      4.0%          1,922      6.0%
  NBB..................................    4,724    171.00%           111      4.0%            166      6.0%
  CalWest..............................    4,119     10.90%         1,512      4.0%          2,267      6.0%
  BOC..................................    7,254     11.78%         2,463      4.0%          3,695      6.0%
Tier I Capital vs. Average Assets:
  Consolidated Company.................   18,631      9.45%         7,886      4.0%          9,858      5.0%
  SFB..................................    5,027      9.57%         2,101      4.0%          2,626      5.0%
  NBB..................................    4,724     60.00%           315      4.0%            394      5.0%
  CalWest..............................    4,119      8.10%         2,034      4.0%          2,543      5.0%
  BOC..................................    7,254      6.96%         4,169      4.0%          5,211      5.0%
</TABLE>

                                       34
<PAGE>
LIQUIDITY

    The Banks rely on deposits as their principal source of funds and,
therefore, must be in a position to service depositors' needs as they arise.
Management attempts to maintain a loan-to-deposit ratio of approximately 80% and
a liquidity ratio (liquid assets, including cash and due from banks, Federal
funds sold and investment securities to deposits) of approximately 25%. The
average loan-to-deposit ratio was 67.0% for the year ended December 31, 1999,
56.2% for the year ended in 1998 and 58.9% for the period ended December 31,
1997. The average liquidity ratio was 44.6% for the year ended December 31,
1999, 29.5% for the year ended in 1998 and 31.4% for the period ended
December 31, 1997. At December 31, 1999, the Company's loan-to-deposit ratio was
78.5% and the liquidity ratio was 39.2%. At December 31, 1998, the Company's
loan-to-deposit ratio was 50.5% and the liquidity ratio was 57.7%. While
fluctuations in the balances of a few large depositors may cause temporary
increases and decreases in liquidity from time to time, the Company has not
experienced difficulty in dealing with such fluctuations from existing liquidity
sources.

    Should the level of liquid assets (primary liquidity) not meet the liquidity
needs of the Company, other available sources of liquid assets (secondary
liquidity), including the purchase of Federal funds, sale of securities under
agreements to repurchase, sale of loans, and discount window borrowings from the
FRB and borrowing under a line of credit with the Federal Home Loan Bank could
be employed. The Company has relied primarily upon the purchase of Federal funds
and the sale of securities under agreements to repurchase for its secondary
source of liquidity.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Market risk is the risk of loss in a financial instrument arising from
adverse changes in market prices and rates, foreign currency exchange rates,
commodity prices and equity prices. The Company's market risk arises primarily
from interest rate risk inherent in its lending and deposit taking activities.
To that end, management actively monitors and manages its interest rate risk
exposure. The Company does not have any market risk sensitive instruments
entered into for trading purposes. The Company manages its interest rate
sensitivity by matching the repricing opportunities on its earning assets to
those on its funding liabilities. Management uses various asset/liability
strategies to manage the repricing characteristics of its assets and liabilities
to ensure that exposure to interest rate fluctuations is limited within the
Company guidelines of acceptable levels of risk-taking. Hedging strategies,
including the terms and pricing of loans and deposits, and managing the
deployment of its securities are used to reduce mismatches in interest rate
repricing opportunities of portfolio assets and their funding sources.

    When appropriate, management may utilize off balance sheet instruments such
as interest rate floors, caps and swaps to hedge its interest rate position. A
Board of Directors approved hedging policy statement governs the use of these
instruments. As of December 31, 1999, the Company had not utilized any interest
rate swap or other such financial derivative to alter its interest rate risk
profile.

    One way to measure the impact that future changes in interest rates will
have on net interest income is through a cumulative gap measure. The gap
represents the net position of assets and liabilities subject to repricing in
specified time periods. Generally, a liability sensitive gap position indicates
that there would be a net positive impact on the net interest margin of the
Company for the period measured in a declining interest rate environment since
the Company's liabilities would reprice to lower market rates before its assets
would. A net negative impact would result from an increasing interest rate
environment. Conversely, an asset sensitive gap indicates that there would be a
net positive impact on the net interest margin in a rising interest rate
environment since the Company's assets would reprice to higher market interest
rates before its liabilities.

    The following table sets forth the distribution of repricing opportunities
of the Company's interest-earning assets and interest-bearing liabilities, the
interest rate sensitivity gap (i.e., interest rate sensitive

                                       35
<PAGE>
assets less interest rate sensitive liabilities), cumulative interest-earning
assets and interest-bearing liabilities, the cumulative interest rate
sensitivity gap, the ratio of cumulative interest-earning assets to cumulative
interest-bearing liabilities and the cumulative gap as a percentage of total
assets and total interest-earning assets as of December 31, 1999. The table also
sets forth the time periods during which interest-earning assets and
interest-bearing liabilities will mature or may reprice in accordance with their
contractual terms. The interest rate relationships between the repriceable
assets and repriceable liabilities are not necessarily constant and may be
affected by many factors, including the behavior of customers in response to
changes in interest rates. This table should, therefore, be used only as a guide
as to the possible effect changes in interest rates might have on the net
interest margins of the Company.

<TABLE>
<CAPTION>
                                                                    DECEMBER 31, 1999
                                -----------------------------------------------------------------------------------------
                                                            AMOUNTS MATURING OR REPRICING IN
                                -----------------------------------------------------------------------------------------
                                3 MONTHS OR   OVER 3 MONTHS   OVER 1 YEAR TO
                                   LESS       TO 12 MONTHS       5 YEARS       OVER 5 YEARS   NON-SENSITIVE(1)    TOTAL
                                -----------   -------------   --------------   ------------   ----------------   --------
                                                                 (DOLLARS IN THOUSANDS)
<S>                             <C>           <C>             <C>              <C>            <C>                <C>
ASSETS
  Cash and due from banks.....   $     497      $   2,072       $      --        $     --         $  39,576      $ 42,145
  Federal funds sold..........      20,791             --              --              --                --        20,791
  Investment securities.......         731         17,504          52,035          57,978                --       128,247
  Loans.......................     132,200         93,359          78,567         254,496              (473)      558,148
  Loans held for sale.........          --             --              --              --                --            --
  Other assets(2).............          --             --              --              --            93,846        93,846
                                 ---------      ---------       ---------        --------         ---------      --------
    Total assets..............     154,219        112,935         130,602         312,474           132,949       843,179
                                 ---------      ---------       ---------        --------         ---------      --------
LIABILITIES AND STOCKHOLDERS'
  EQUITY
  Non-interest bearing demand
    deposits..................          --             --              --              --           151,121       151,121
  Interest-bearing demand,
    money market and
    savings...................     262,500             --              --              --                --       262,500
  Time certificates of
    deposit...................     100,455        156,712          41,481             493                --       299,141
  Short term debt.............          --             --              --              --                --            --
  Long term debt..............          --             --          18,500              --                --        18,500
  Other liabilities...........          --             --              --              --            12,580        12,580
  Minority interest...........          --             --              --              --             3,500         3,500
  Stockholders' equity........          --             --              --              --            95,838        95,837
                                 ---------      ---------       ---------        --------         ---------      --------
    Total liabilities and
      stockholders' equity....     362,955        156,712          59,981             493           263,038      $843,179
                                 ---------      ---------       ---------        --------         ---------      ========
  Period Gap..................    (208,736)       (43,777)         70,621         311,901         $(130,089)
                                 ---------      ---------       ---------        --------         =========
  Cumulative interest earning
    assets....................     154,219        267,154         397,756         710,230
  Cumulative interest bearing
    earning liabilities.......     362,955        519,667         579,648         580,141
                                 =========      =========       =========        ========
  Cumulative gap..............   $(208,736)     $(252,513)      $(181,892)       $130,089
                                 =========      =========       =========        ========
  Cumulative interest earning
    assets to cumulative
    interest bearing
    liabilities...............        42.5%          51.4%           68.6%          122.4%
  Cumulative gap as a percent
    of:
    Total assets..............      (24.76)%       (29.95)%        (21.57)%         15.43%
    Interest earning assets...      (29.39)%       (35.55)%        (25.61)%         18.32%
</TABLE>

------------------------

(1) Assets or liabilities which are not interest rate-sensitive.

(2) Allowance for loan losses of $6.8 million as of December 31, 1999 is
    included in other assets.

                                       36
<PAGE>
    At December 31, 1999, the Company had $267.2 million in assets and
$519.7 million in liabilities repricing within one year. This means that
$252.5 million more of the Company's interest rate sensitive liabilities than
the Company's interest rate sensitive assets will change to the then current
rate (changes occur due to the instruments being at a variable rate or because
the maturity of the instrument requires its replacement at the then current
rate). The ratio of interest-earning assets to interest-bearing liabilities
maturing or repricing within one year at December 31, 1999 is 51.4%. Interest
expense is likely to be affected to a greater extent than interest income for
any changes in interest rates within one year from December 31, 1999. If rates
were to fall during this period, interest expense would decline by a greater
amount than interest income and net income would increase. Conversely, if rates
were to rise, the reverse would apply.

    Management is continuing to take steps to reduce the negative gap of the
Company by shortening the maturities in its investment portfolio and originating
more variable rate assets. Management strives to maintain a balance between its
interest-earning assets and interest-bearing liabilities in order to minimize
the impact on net interest income due to changes in market rates.

    In order to measure interest rate risk at December 31, 1999, the Company
used a simulation model to project changes in net interest income that result
from forecasted changes in interest rates. This analysis calculates the
difference between net interest income forecasted using a rising and a falling
interest rate scenario and net interest income forecast using a base market
interest rate derived from the current treasury yield curve. For the rising and
falling interest rate scenarios, the base market interest rate forecast was
increased or decreased, on an instantaneous and sustained basis, by 100 and 200
basis points. At December 31, 1999, the Company's net interest income exposure
related to these hypothetical changes in market interest rate was within the
current guidelines established by the Banks.

                      Sensitivity for Net Interest Income
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                NET INTEREST
                          ADJUSTED NET     PERCENTAGE CHANGE    NET INTEREST    MARGIN CHANGE
INTEREST RATE SCENARIO   INTEREST INCOME       FROM BASE       MARGIN PERCENT     FROM BASE
----------------------   ---------------   -----------------   --------------   -------------
<S>                      <C>               <C>                 <C>              <C>
Up 200 basis points          16,302              (6.90)%            3.48%           (0.26)
Up 100 basis points          16,932              (3.30)             3.61            (0.12)
BASE                         17,510               0.00              3.73           --
Down 100 basis points        18,176               3.80              3.88             0.14
Down 200 basis points        19,121               9.20              4.08             0.34
</TABLE>

    The Company measures the impact of market interest rate changes on the net
present value of estimated cash flows from its assets, liabilities and
off-balance sheet items, defined as market value of equity, using a simulation
model. This simulation model assesses the changes in market value of interest
rate sensitive financial instruments that would occur in response to an
instantaneous and sustained increase or decrease in market interest rates of 100
and 200 basis points. At December 31, 1999, the Company's market value of equity
exposure related to these changes in market interest rates was within the
current guidelines established by the Banks.

                                       37
<PAGE>
                        Market Value of Portfolio Equity
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                            PERCENTAGE OF
                                                                              PORTFOLIO
                                        PERCENTAGE CHANGE   PERCENTAGE OF    EQUITY BOOK
INTEREST RATE SCENARIO   MARKET VALUE       FROM BASE       TOTAL ASSETS        VALUE
----------------------   ------------   -----------------   -------------   -------------
<S>                      <C>            <C>                 <C>             <C>
Up 200 basis points          94,464          (15.50)%           11.20%          98.57%
Up 100 basis points         103,296           (7.60)            12.25          107.79
BASE                        111,792            0.00             13.26          116.65
Down 100 basis points       119,617            7.00             14.19          124.82
Down 200 basis points       128,337           14.80             15.22          133.92
</TABLE>

    The computation of prospective effects of hypothetical interest rate changes
are based on numerous assumptions, including relative levels of market interest
rates, asset prepayments and deposit decay, and should not be relied upon as
indictive of actual results. Further, the computations do not contemplate any
actions the Company may undertake in response to changes in interest rates.
Actual amounts may differ from those projections set forth above should market
conditions vary from the underlying assumptions.

RECENT LEGISLATION

    On November 12, 1999, President Clinton signed into law the
Gramm-Leach-Bliley Act of 1999, also referred to as the Financial Services
Modernization Act. The Financial Services Modernization Act repeals the two
affiliation provisions of the Glass-Steagall Act: Section 20, which restricted
the affiliation of Federal Reserve member banks with firms "engaged principally"
in specified securities activities, and Section 32, which restricts officer,
director or employee interlocks between a member bank and any company or person
"primarily engaged" in specific securities activities. In addition, the
Financial Services Modernization Act also contains provisions that expressly
preempt any state law restricting the establishment of financial affiliations,
primarily related to insurance. The general effect of the law is to establish a
comprehensive framework to permit affiliations among commercial banks, insurance
companies, securities firms, and other financial service providers by revising
and expanding the BHC Act framework to permit a holding company system to engage
in a full range of financial activities through a new entity known as a
Financial Holding Company. "Financial activities" is broadly defined to include
not only banking, insurance and securities activities, but also merchant banking
and additional activities that the Federal Reserve Board, in consultation with
the Secretary of the Treasury, determines to be financial in nature, incidental
to such financial activities or complementary activities that do not pose a
substantial risk to the safety and soundness of depository institutions or the
financial system generally.

    Generally, the Financial Services Modernization Act:

    - Repeals historical restrictions on, and eliminates many federal and state
      law barriers to, affiliations among banks, securities firms, insurance
      companies, and other financial services providers;

    - Provides a uniform framework for the functional regulation of the
      activities of banks, savings institutions and their holding companies;

    - Broadens the activities that may be conducted by national banks, banking
      subsidiaries of bank holding companies and their financial subsidiaries;

    - Provides an enhanced framework for protecting the privacy of consumer
      information;

    - Adopts a number of provisions related to the capitalization, membership,
      corporate governance, and other measures designed to modernize the Federal
      Home Loan Bank system;

    - Modifies the laws governing the implementation of the CRA; and

                                       38
<PAGE>
    - Addresses a variety of other legal and regulatory issues affecting both
      day-to-day operations and long-term activities of financial institutions.

    In order for the Company to take advantage of the ability to affiliate with
other financial services providers, the Company must become a "Financial Holding
Company" as permitted under an amendment to the BHC Act. To become a Financial
Holding Company, the Company would file a declaration with the Federal Reserve
Board, electing to engage in activities permissible for Financial Holding
Companies and certifying that the Company is eligible to do so because all of
its insured depository institution subsidiaries are well-capitalized and
well-managed. In addition, the Federal Reserve Board must also determine that
each of the Company's insured depository institution subsidiaries has at least a
"satisfactory" CRA rating. The Company meets the requirements to make an
election to become a Financial Holding Company. The Company is examining its
strategic business plan to determine whether, based upon market conditions, the
Company's relative financial condition, regulatory capital requirements, general
economic conditions, and other factors, the Company desires to utilize any of
its expanded powers provided in the Financial Services Modernization Act.

    The Financial Services Modernization Act also permits national banks to
engage in expanded activities through the formation of financial subsidiaries. A
national bank may have a subsidiary engaged in any activity authorized for
national banks directly or any financial activity, except for insurance
underwriting, insurance investments, real estate investment or development, or
merchant banking, which may only be conducted through a subsidiary of a
Financial Holding Company. Financial activities include all activities permitted
under new sections of the BHC Act or permitted by regulation.

    A national bank seeking to have a financial subsidiary, and each of its
depository institution affiliates, must be "well-capitalized" and
"well-managed." The total assets of all financial subsidiaries may not exceed
the lesser or 45% of a bank's total assets, or $50 billion. A national bank must
exclude from its assets and equity all equity investments, including retained
earnings, in a financial subsidiary. The assets of the subsidiary may not be
consolidated with the bank's assets. The bank must also have policies and
procedures to assess financial subsidiary risk and to protect the bank from such
risks and potential liabilities.

    The Company does not believe that the Financial Services Modernization Act
will have a material adverse effect on its operations in the near-term. However,
to the extent that it permits banks, securities firms and insurance companies to
affiliate, the financial services industry may experience further consolidation.
The Financial Services Modernization Act is intended to grant to community banks
certain powers as a matter of right that larger institutions have accumulated on
an ad hoc basis. Nevertheless, this act may have the result of increasing the
amount of competition that the Company faces from larger institutions and other
types of companies offering financial products, many of which may have
substantially more financial resources than the Company does.

RECENT ACCOUNTING PRONOUNCEMENTS

    In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES ("SFAS
No. 133"). SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires recognition of all
derivative instruments as either assets or liabilities on the balance sheet and
measurement of those instruments at fair value. Gains or losses resulting from
changes in the values of those derivatives would be accounted for depending on
the use of the derivative and whether it qualifies for hedge accounting. The key
criterion for hedge accounting is that the hedging relationship must be highly
effective in achieving offsetting changes in fair value of cash flows. If
certain conditions are met, a derivative may be designated specifically as
(a) a hedge of the exposure to changes in the fair value of a recognized asset
or liability or an unrecognized firm commitment (a fair value hedge) or (b) a
hedge of the exposure to variable cash flows of a forecasted transactions (a
cash flow

                                       39
<PAGE>
hedge). SFAS No. 133, as amended by Statement of Financial Accounting Standards
No. 137, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES--DEFERRAL
OF THE EFFECTIVE DATE OF FASB STATEMENT NO 133--AN AMENDMENT OF FASB STATEMENT
NO, 133 ("SFAS No. 137"), is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000. Management does not expect that the adoption of
SFAS No. 133 and SFAS No. 137 will have a material impact on the Company's
results of operations or financial position.

YEAR 2000 READINESS DISCLOSURE

    The Company and the Banks previously recognized the material nature of
business issues surrounding computer processing of dates into and beyond the
Year 2000 and began taking corrective action as required pursuant to the
interagency policy statements issued by the Federal Financial Institutions
Examination Council. Management believes the Company's and the Bank's systems
are Year 2000 compliant. Neither the Company nor any of the Banks has
experienced any interruptions to normal operations due to the start of the Year
2000.

    The Company's and the Banks' Year 2000 readiness costs were approximately
$1.2 million. The Company does not currently expect that it or any of the Banks
will apply any further funds to address Year 2000 issues.

    As of March 15, 2000, neither the Company nor any of the Banks have
experienced any material disruptions of their internal computer systems or
software applications and have not experienced any problems with the computer
systems of software applications of their third party vendors, suppliers or
service providers. The Company will continue to monitor these third parties to
determine the impact, if any, on the businesses of the Company or any of the
Banks and the actions any of them must take, if any, in the event of
non-compliance by any of these third parties. Based upon the Company's
assessment of compliance by third parties, there appears to be no material
business risk posed by any such non-compliance.

    The foregoing discussion is Year 2000 disclosure, subject to the provisions
of the Year 2000 Information and Readiness Disclosure Act.

INFLATION

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

                                       40
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONTENTS

<TABLE>
<S>                                                           <C>
Independent Auditors' Reports...............................  42
Consolidated Balance Sheets.................................  45
Consolidated Statements of Operations.......................  46
Consolidated Statements of Comprehensive Income (Loss)......  47
Consolidated Changes in Stockholders' Equity................  48
Consolidated Statements of Cash Flows.......................  49
Notes to Consolidated Financial Statements..................  52
</TABLE>

                                       41
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
California Community Bancshares, Inc.:

We have audited the accompanying consolidated balance sheet of California
Community Bancshares, Inc. (the "Company") as of December 31, 1999 and the
related consolidated statements of operations and comprehensive income (loss),
cash flows, and stockholders' equity for the year then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit. The consolidated financial statements of the
Company as of December 31, 1998 and for the year ended December 31, 1998 and the
period ended December 31, 1997, were audited by other auditors whose reports
dated February 23, 1999 and February 25, 1998 expressed unqualified opinions on
those financial statements.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of California Community
Bancshares, Inc. and subsidiaries as of December 31, 1999 and the results of
their operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.

                                          KPMG LLP

Sacramento, California
March 17, 2000

                                       42
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholder of
California Financial Bancorp and Subsidiaries:

We have audited the accompanying consolidated balance sheet of California
Financial Bancorp (formerly Belvedere Bancorp) and subsidiaries (the "Company")
as of December 31, 1998, and the related consolidated statements of operations,
comprehensive income(loss), changes in stockholder's equity, and cash flows for
the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We conducted our audit 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 audit provides a reasonable basis for our
opinion.

In our opinion, the 1998 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of December 31, 1998, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

Deloitte & Touche LLP
Los Angeles, California
February 23, 1999

                                       43
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and
Stockholders of Belvedere Bancorp:

We have audited the accompanying consolidated statements of operations and cash
flows of BELVEDERE BANCORP AND SUBSIDIARY (the Company) for the period from
inception (September 11, 1997) to December 31, 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the 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 audit provides a reasonable basis for our
opinion.

In our opinion, the consolidated statements referred to above present fairly, in
all material respects, the results of the Company's operations and cash flows
for the period from inception (September 11, 1997) to December 31, 1997 in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Orange County, California
February 25, 1998

                                       44
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
                                     ASSETS
Cash, due from banks, and money market mutual fund
  (Note 3)..................................................  $ 39,569   $ 17,191
Federal funds sold and securities purchased under agreements
  to resell (Note 5)........................................    20,791     63,689
                                                              --------   --------
  Total cash and cash equivalents...........................    60,360     80,880
Interest-bearing deposits with other banks..................     2,576      4,468
Investment securities available for sale, at fair value
  (Note 4)..................................................    57,656     21,678
Investment securities held to maturity, at amortized cost
  (Note 4)..................................................    70,592      8,511
Investment in Federal Reserve Bank and Federal Home Loan
  Bank stock, at cost.......................................     4,112        452
Loans receivable, net of allowance for loan losses of $6,750
  at December 31, 1999 and $1,986 at December 31, 1998
  (Notes 6 and 11)                                             551,399     97,289
Real estate owned, net (Note 7).............................     5,001        372
Premises and equipment, net (Note 8)........................    20,874      1,696
Accrued interest receivable.................................     4,644      1,004
Cash surrender value of life insurance (Note 14)............     1,471      2,224
Goodwill and other intangible assets (Note 2)...............    61,868     17,771
Other assets................................................     2,626      1,249
                                                              --------   --------
TOTAL ASSETS................................................  $843,179   $237,594
                                                              ========   ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
  Noninterest-bearing deposits (Note 9).....................  $151,121   $ 93,130
  Interest-bearing deposits (Note 9)........................   561,641     99,433
                                                              --------   --------
    Total deposits..........................................   712,762    192,563

  Deferred income tax liabilities, net (Note 13)............     6,694      1,142
  Trust preferred securities (Note 10)......................    18,500         --
  Accrued interest and other liabilities (Note 14)..........     5,889      5,053
                                                              --------   --------
    Total liabilities.......................................   743,845    198,758
MINORITY INTEREST IN SUBSIDIARIES:
  Minority interest in subsidiaries.........................        --      4,094
  Placer Capital Co. Preferred Stock issued to Placer
    Capital Funding LLC--$0.01 par value; 25,000,000
    authorized; one share issued and outstanding at
    December 31, 1999 (Notes 2, 10, and 11).................     3,500         --
COMMITMENTS AND CONTINGENCIES (Notes 12 and 18)
STOCKHOLDERS' EQUITY:
  Common stock--$0.01 par value; 75,000,000 shares
    authorized; 21,267,483 shares issued and outstanding at
    December 31, 1999, and no par value; 18,296,000 shares
    authorized; 6,875,776 shares issued and outstanding at
    December 31, 1998 (Notes 15, 16 and 19).................    99,450     37,581
  Accumulated other comprehensive (loss) income.............      (342)        19
  Accumulated deficit.......................................    (3,274)    (2,858)
                                                              --------   --------
    Total stockholders' equity..............................    95,834     34,742
                                                              --------   --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................  $843,179   $237,594
                                                              ========   ========
</TABLE>

                See notes to consolidated financial statements.

                                       45
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                       PERIOD FROM
                                                                                                        INCEPTION
                                                                                                  (SEPTEMBER 11, 1997)
                                                            YEAR ENDED           YEAR ENDED          TO DECEMBER 31,
                                                        DECEMBER 31, 1999    DECEMBER 31, 1998            1997
                                                        ------------------   ------------------   ---------------------
<S>                                                     <C>                  <C>                  <C>
INTEREST AND DIVIDEND INCOME:
  Interest and fees on loans..........................       $25,004              $ 2,523                 $  311
  Interest on deposits with other banks...............           225                  145                     13
  Interest on Federal funds sold and securities
    purchased under agreements to resell..............         1,972                  573                     42
  Interest on investment securities...................         5,515                  277                     28
  Dividends on Federal Reserve Bank and Federal Home
    Loan Bank stocks..................................            97                   14                      1
  Other...............................................            --                  288                     34
                                                             -------              -------                 ------
  Total interest income...............................        32,813                3,820                    429

INTEREST EXPENSE:
  Savings, money market and demand deposits...........         3,385                  356                     44
  Time certificates of deposit under $100.............         4,580                  472                     53
  Time certificates of deposit of $100 and over.......         2,910                  441                     50
  Other borrowings....................................           493                   41                     --
                                                             -------              -------                 ------
  Total interest expense..............................        11,368                1,310                    147
                                                             -------              -------                 ------
NET INTEREST INCOME BEFORE PROVISION FOR LOAN
  LOSSES..............................................        21,445                2,510                    282
PROVISION FOR LOAN LOSSES (Note 6)....................           819                  340                     --
                                                             -------              -------                 ------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES...        20,626                2,170                    282

NONINTEREST INCOME:
  Service charges and fees............................         1,716                   98                      7
  Commissions and referral fees.......................           368                   --                     --
  Gain on sale of loans, net..........................           512                   --                     --
  Loss on sale of securities, net.....................          (626)                  --                     --
  Real estate owned, net..............................           121                  203                     (7)
  Recovery from the Department of Transportation......            --                  369                     --
  Other income........................................           784                   66                     56
                                                             -------              -------                 ------
  Total noninterest income............................         2,875                  736                     56

NONINTEREST EXPENSES:
  Salaries and employee benefits (Note 14)............        10,659                2,018                    197
  Occupancy and premises and equipment (Notes 8 and
    12)...............................................         3,264                  489                     39
  Data and item processing............................         1,996                  246                      8
  Professional fees...................................         1,709                1,184                    199
  Preopening costs....................................            --                  605                     --
  Communications......................................           918                  131                     14
  Amortization of intangible assets...................         2,026                  125                     10
  Other operating expenses............................         3,781                  845                     68
                                                             -------              -------                 ------
  Total noninterest expense...........................        24,353                5,643                    535
                                                             -------              -------                 ------
LOSS BEFORE PROVISION FOR INCOME TAXES AND MINORITY
  INTERESTS...........................................          (852)              (2,737)                  (197)
                                                             -------              -------                 ------
PROVISION FOR INCOME TAX (BENEFIT) EXPENSE
  (Note 13)...........................................          (176)                  15                      2
                                                             -------              -------                 ------
LOSS BEFORE MINORITY INTERESTS........................          (676)              (2,752)                  (199)
MINORITY INTERESTS:
  Cost of minority interest (Note 10).................            94                   --                     --
  Minority interest in (loss) income of
    subsidiaries......................................          (354)                (103)                    10
                                                             -------              -------                 ------
NET LOSS..............................................       $  (416)             $(2,649)                $ (209)
                                                             =======              =======                 ======
BASIC AND DILUTED LOSS PER SHARE (Note 16)............       $  (.05)             $ (1.93)                $(1.92)
                                                             =======              =======                 ======
</TABLE>

                See notes to consolidated financial statements.

                                       46
<PAGE>
                     CALIFORNIA COMMUNITY BANCSHARES, INC.

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   FOR THE YEARS ENDED
                                                                       DECEMBER 31,
                                                              ------------------------------
                                                                1999       1998       1997
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
NET LOSS....................................................   $(416)    $(2,649)    $(209)
Other comprehensive income, net of related taxes:
Unrealized holding (losses) gains arising during the
  period....................................................    (353)         19        --
Reclassification of realized gains included in income.......      (8)         --        --
                                                               -----     -------     -----
  Total.....................................................    (361)         19        --
                                                               -----     -------     -----
COMPREHENSIVE LOSS..........................................   $(777)    $(2,630)    $(209)
                                                               =====     =======     =====
</TABLE>

                See notes to consolidated financial statements.

                                       47
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                 ACCUMULATED
                                                                                    OTHER           TOTAL
                                    COMMON STOCK   COMMON STOCK   ACCUMULATED   COMPREHENSIVE   SHAREHOLDERS'
                                     SHARES (1)       AMOUNT        DEFICIT     INCOME (LOSS)      EQUITY
                                    ------------   ------------   -----------   -------------   -------------
<S>                                 <C>            <C>            <C>           <C>             <C>
BALANCE, SEPTEMBER 11, 1997
  Net loss........................           --      $    --        $  (209)        $  --          $  (209)
  Initial capitalization..........          915            5             --            --                5
  Sale of common stock, net.......      842,531        4,605                           --            4,605
                                     ----------      -------        -------         -----          -------
BALANCE, DECEMBER 31, 1997........      843,446        4,610           (209)           --            4,401
  Net loss........................           --           --         (2,649)           --           (2,649)
  Net unrealized appreciation on
    investment securities
    available for sale, net of
    minority interest of $17......           --           --             --            19               19
  Sale of common stock............    6,032,330       32,971             --            --           32,971
                                     ----------      -------        -------         -----          -------
BALANCE, DECEMBER 31, 1998........    6,875,776       37,581         (2,858)           19           34,742
  Net loss........................           --           --           (416)           --             (416)
  Net unrealized depreciation on
    investment securities
    available for sale, net of
    minority interest of $15......           --           --             --          (361)            (361)
  SFB option exercised............      182,960        1,000             --            --            1,000
  Shares issued for PCC...........   13,040,657       53,000             --            --           53,000
  Shares issued in SFB purchase...      873,286        5,808             --            --            5,808
  Shares issued in NBB purchase...      287,488        2,021             --            --            2,021
  Stock options exercised.........        7,316           40             --            --               40
                                     ----------      -------        -------         -----          -------
BALANCE, DECEMBER 31, 1999........   21,267,483      $99,450        $(3,274)        $(342)         $95,834
                                     ==========      =======        =======         =====          =======
</TABLE>

------------------------

(1) The number of shares has been adjusted for the CCB Merger using the 1.8296
    exchange ratio.

                See notes to consolidated financial statements.

                                       48
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                PERIOD FROM
                                                                                                 INCEPTION
                                                                                               (SEPTEMBER 11,
                                                               YEAR ENDED      YEAR ENDED          1997)
                                                              DECEMBER 31,    DECEMBER 31,    TO DECEMBER 31,
                                                                  1999            1998              1997
                                                              -------------   -------------   ----------------
<S>                                                           <C>             <C>             <C>
NET LOSS....................................................    $   (416)        $(2,649)         $  (209)
CASH FLOWS FROM OPERATING ACTIVITIES:
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN
  OPERATING ACTIVITIES:
  Provision for loan losses.................................         819             340               --
  Minority interest in subsidiaries.........................        (354)           (103)              10
  Amortization of intangible assets.........................       2,026             125               10
  Depreciation and amortization.............................       1,115             218               24
  Accretion of discount on investment securities, net.......         164              (3)              --
  Amortization of loan fees/unearned discounts/deferred
    gains...................................................          49            (307)             (17)
  Gain on sale of loans.....................................        (512)             --               --
  Loss on sale of investment securities.....................         626              --               --
  Gain on sale of other real estate owned...................        (121)           (203)              (4)
  Loss on disposition of premises and equipment.............         201              --               --
  Dividends received on FHLB and FRB stock..................         (97)            (14)              (1)
  Decrease (increase) in accrued interest receivable and
    other assets............................................         306            (489)              42
  Payment of salary continuation obligation.................      (1,260)             --               --
  Deferred income tax liabilities, net......................       4,980              (2)              --
  (Decrease) increase in accrued interest payable and other
    liabilities.............................................      (9,236)          2,576              (15)
                                                                --------         -------          -------
    Net cash used in operating activities...................      (1,710)           (511)            (160)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of investment securities available for sale.....     (15,775)             --               --
  Purchases of investment securities held to maturity.......      (6,995)         (3,996)              (9)
  Proceeds from calls and maturities of investment
    securities available for sale...........................       6,600              --               --
  Proceeds from calls and maturities of investment
    securities held to maturity.............................       8,496             200               --
  Proceeds from sale of investment securities available for
    sale....................................................      46,469              --               --
  Proceeds from sale of investment securities held to
    maturity................................................       9,275              --               --
  Principal collected on investment securities available for
    sale....................................................       1,220             200               --
  Principal collected on investment securities held to
    maturity................................................       4,514           4,001               --
  Purchase of PCC, net of cash acquired.....................     (15,880)             --               --
  Net cash acquired in acquistions..........................          --          32,955           11,691
  Purchase of minority interest.............................      (2,075)             --               --
  Net disbursements of loans................................     (79,216)         (4,738)              46
  Purchase of loan participations...........................     (13,318)             --               --
  Proceeds from sale of loans...............................      10,509              --               --
  Refund from purchaser on deposit withheld on loan
    servicing rights sold...................................          --              24               --
  Purchases of premises and equipment.......................      (1,109)           (738)            (149)
  Proceeds from sale of other real estate owned.............       1,281             697               41
  Net decrease (increase) in interest-bearing deposits with
    other banks.............................................       1,892            (200)          (1,000)
  Proceeds from cash surrender value of life insurance
    policies................................................       2,307              --               --
  Purchases of Federal Reserve Bank stock...................        (627)           (269)              --
                                                                --------         -------          -------
    Net cash (used in) provided by investing activities.....     (42,432)         28,136           10,620

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net (decrease) increase in deposits.......................     (38,247)          6,203           (2,978)
  Capital contribution from minority shareholders...........          --           1,989               --
  Proceeds from the issuance of common stock and the
    exercise of options.....................................      61,869          32,971            4,610
                                                                --------         -------          -------
    Net cash provided by financing activities...............      23,622          41,163            1,632

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS............     (20,520)         68,788           12,092
BEGINNING CASH AND CASH EQUIVALENTS.........................      80,880          12,092               --
                                                                --------         -------          -------
ENDING CASH AND CASH EQUIVALENTS............................    $ 60,360         $80,880          $12,092
                                                                ========         =======          =======
</TABLE>

                                       49
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                PERIOD FROM
                                                                                                 INCEPTION
                                                                                               (SEPTEMBER 11,
                                                               YEAR ENDED      YEAR ENDED          1997)
                                                              DECEMBER 31,    DECEMBER 31,    TO DECEMBER 31,
                                                                  1999            1998              1997
                                                              -------------   -------------   ----------------
<S>                                                           <C>             <C>             <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Interest paid.............................................    $ 12,095         $ 1,228          $   116
  Taxes paid................................................       2,030               1               --
  Net change in unrealized loss on available for sale
    investment securities, net of taxes.....................         361              --               --
  Acquisition of other real estate owned through
    foreclosure.............................................          --             302               --
  Loans made to facilitate sale of real estate..............         426              --               --
  Loans reacquired through settlement of deposit withheld on
    loan servicing rights sold..............................          --             524               --
  Reduction of deferred tax asset valuation allowance
    against goodwill........................................         811              --               --
  Reduction of deferred tax asset valuation allowance to
    true-up prior years deferred tax assets.................         577              --               --
</TABLE>

                 See notes to consolidated financial statements

                                       50
<PAGE>
            SUPPLEMENTAL DISCLOSURE FOR ACQUISITION OF SUBSIDIARIES

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                   1999                  1998                   1997
                                              --------------   -------------------------   --------------
                                                                  CALWEST
                                                                 (FORMERLY      BANK OF
                                              PLACER CAPITAL       DOWNEY        ORANGE    SECURITY FIRST
                                                   CO.         NATIONAL BANK)    COUNTY         BANK
                                              --------------   --------------   --------   --------------
<S>                                           <C>              <C>              <C>        <C>
ASSETS ACQUIRED:
  Cash......................................     $ 18,994         $ 25,229      $ 34,726      $ 15,191
  Interest-bearing deposits in other
    banks...................................           --              293         1,976           999
  Federal funds sold........................       18,058               --            --            --
  Investment securities.....................      153,253            6,497        20,275         3,887
  Investment in Federal Reserve Bank and
    Federal Home Loan Bank stock............        2,936               90            --            --
  Loans.....................................      372,015           29,253        41,970        21,134
  Real estate owned.........................        6,215               --            --           601
  Premises and equipment....................       19,385              297           306           458
  Accrued interest receivable...............        3,958              271           491           235
  Cash surrender value of life insurance....        1,442               --         2,224            --
  Other assets..............................        1,122              124         1,053           857
  Goodwill..................................       32,421            6,646         5,858         1,148
  Core deposit intangible...................       10,816            1,097         2,992            --
                                                 --------         --------      --------      --------
                                                  640,615           69,797       111,871        44,510
LIABILITIES ASSUMED:
  Deposits..................................      554,352           57,348        93,353        38,637
  Accrued interest and other liabilities....       29,832              861         3,270           183
  Minority interest.........................        3,500                                        2,190
                                                 --------         --------      --------      --------
                                                  587,684           58,209        96,623        41,010
CASH PAID FOR COMMON STOCK..................     $ 52,931         $ 11,588      $ 15,248      $  3,500
                                                 ========         ========      ========      ========
</TABLE>

    The Company purchased the minority interests of National Business Bank and
Security First Bank during 1999, which resulted in additional goodwill of
$204,000 and $2,375,000, respectively. The Company consolidated the financial
records of National Business Bank and Security First Bank after the initial
investments in the majority interests of these banks in 1998 and 1997,
respectively. Accordingly, there are no amounts to report for assets acquired or
liabilities assumed.

                See notes to consolidated financial statements.

                                       51
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

    California Community Bancshares, Inc. (the "Company" or "CCB"),
successor-in-interest by statutory merger to California Financial Bancorp
("CFB"), effective December 14, 1999, is a Delaware corporation formed on
September 3, 1999, and is a registered bank holding company subject to the Bank
Holding Company Act of 1956, as amended. The predecessor company, CFB, was a
California corporation, incorporated on September 11, 1997, which changed its
name from Belvedere Bancorp to CFB effective April 16, 1998. The Company was
formed by the California Community Financial Institutions Fund Limited
Partnership, a California limited partnership (the "California Fund"), for the
purpose of consolidating most of the California Fund's financial institution
investments.

    At December 31, 1999, the Company had three banking subsidiaries, Placer
Sierra Bank ("PSB") through the Company's wholly-owned subsidiary Placer Capital
Co. ("PCC"), CalWest Bank ("CalWest"), and Bank of Orange County ("BOC"),
(collectively, the "Banks"). The Banks are subject to the laws of the State of
California and federal regulations governing the financial services industry.

    The Company effected certain mergers and share exchanges in 1999 as part of
an overall reorganization of certain of the banking and bank holding company
subsidiaries of the California Fund. The reorganization included: merging CFB
with and into CCB, with CCB as the surviving corporation 100% owned by the
California Fund (the "CCB Merger"); issuing shares of common stock of the
Company ("Company Common Stock") to the California Fund for all of the
outstanding shares of PCC common stock ("PCC Common Stock") resulting in PCC
being 100% owned by the Company (the "PCC Share Exchange"); merging Security
First Bank ("SFB") with and into BOC (the "BOC/SFB Merger"); and merging
National Business Bank ("NBB") with and into CalWest (the "NBB/CalWest Merger").

    In the CCB Merger, each share of common stock of CFB outstanding immediately
prior to the CCB Merger was automatically canceled and converted into the right
to receive 1.8296 shares of Company Common Stock (the "CCB Merger Exchange
Ratio"). The CCB Merger is a combination accounted for under the "as-if'
pooling-of-interests method of accounting. All share amounts herein have been
restated to give effect to the CCB Merger Exchange Ratio.

    In the PCC Share Exchange the Company issued 2.4605 shares of Company Common
Stock (the "PCC Exchange Ratio") to the California Fund in exchange for each of
the outstanding shares of PCC Common Stock. The PCC Share Exchange is a
transaction accounted for under the "as-if" pooling-of-interests method of
accounting. All share amounts herein have been restated to give effect to the
PCC Exchange Ratio, where appropriate.

    BOC and SFB were subsidiaries of CFB prior to the CCB Merger. Immediately
preceding the BOC/ SFB Merger, the Company owned 100% of the outstanding shares
of common stock of BOC ("BOC Common Stock") and 54.69% of the outstanding shares
of common stock of SFB ("SFB Common Stock"). The Company acquired the remaining
45.31% of SFB's outstanding shares from the minority interest shareholders
through an exchange of common stock and merged SFB with and into BOC with BOC as
the surviving corporation in the BOC/SFB Merger. SFB's minority shareholders
received 0.0938 shares of Company Common Stock for each share of SFB Common
Stock resulting in the Company issuing 873,286 shares of Company Common Stock.
This part of the transaction was accounted for under the purchase method of
accounting. As part of the BOC/SFB Merger, effective December 23, 1999, SFB was
merged with and into BOC in a combination accounted for under the "as-if"
pooling-of-interests method of accounting.

                                       52
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    CalWest, formerly Downey National Bank (which was a wholly-owned subsidiary
of Downey Bancorp prior to the DB Acquisition, as defined herein), and NBB were
subsidiaries of CFB prior to the CCB Merger. Immediately preceding the
CalWest/NBB Merger, the Company owned 100% of the outstanding shares of common
stock of CalWest ("CalWest Common Stock") and 64.91% of the outstanding shares
of common stock of NBB ("NBB Common Stock"). The Company acquired the remaining
35.09% of NBB Common Stock outstanding from the minority interest shareholders
through an exchange of Company Common Stock and merged NBB with and into CalWest
with CalWest as the surviving corporation in the NBB/CalWest Merger. NBB's
minority shareholders received 1.5053 shares of Company Common Stock for each
share of NBB Common Stock resulting in the Company issuing 287,488 shares of
Company Common Stock. This part of the transaction was accounted for under the
purchase method of accounting. As part of the NBB/CalWest Merger, effective
December 30, 1999, NBB was merged with and into CalWest in a combination
accounted for under the "as-if" pooling-of-interests method of accounting.

    On August 11, 1999, PSB was acquired by PCC, a wholly-owned subsidiary of
the California Fund created for the purpose of acquiring PSB (the "PSB
Acquisition"). Prior to the PSB Acquisition, PSB's charter was converted from a
state-chartered thrift to a state-chartered commercial bank. The total purchase
price paid for PSB by PCC was $74,931,000, net of a cash dividend of $8,000,000
paid by PSB. The transaction was accounted for under the purchase method of
accounting. PCC was initially capitalized through the sale of $53,000,000 of PCC
Common Stock to the California Fund, the sale of $3,500,000 of noncumulative
preferred stock to Placer Capital Funding LLC, a Delaware limited liability
company, wholly-owned by principals of the general partner of the California
Fund ("Placer Funding"), and the sale of $18,500,000 of debentures to Placer
Trust (a Delaware business trust, 100% of the common securities of which is
owned by PCC).

    On December 13, 1999, the Company issued 13,040,657 shares of Company Common
Stock to the California Fund in exchange for all of the outstanding shares of
PCC Common Stock in a transaction accounted for under the "as-if"
pooling-of-interests method of accounting. As a result of the PCC Share
Exchange, PCC became a wholly-owned direct subsidiary and PSB became an indirect
wholly-owned subsidiary of the Company.

    During 1999 and prior to the CCB Merger, the Company entered into a stock
subscription agreement with the California Fund to sell 182,960 shares of
Company Common Stock for $1,000,000. The Company used the proceeds to exercise
an option to purchase 2,500,000 shares (at $0.40 per share) of SFB Common Stock
(the "SFB Option"); the SFB Option was previously granted by SFB in connection
with the Company's initial investment in SFB in 1997.

    During 1998, the Company entered into several stock subscription agreements
with the California Fund to sell a total of 6,032,330 shares of Company Common
Stock to the California Fund for $32,971,000 and for the Company to subsequently
make the following investments:

    - $3,718,000 in NBB in exchange for 371,776 shares of NBB Common Stock;

    - $11,356,000 in Downey Bancorp, which is net of a cash dividend of
      $3,000,000 paid to Downey Bancorp, in exchange for 594,259 shares of
      common stock of Downey Bancorp (the "DB Acquisition"); and

    - $14,522,000 in BOC, which is net of a cash dividend paid to the Company by
      BOC of $375,000, in exchange for 346,274 shares of BOC Common Stock.

                                       53
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    During 1997, the Company entered into a stock subscription agreement with
the California Fund to sell 842,531 shares of Company Common Stock to the
California Fund for $4,605,000 and for the Company to subsequently invest
$3,500,000 in SFB in exchange for 8,750,000 shares (at $0.40 per share) of SFB
Common Stock.

    NATURE OF THE OPERATIONS--The Company provides a full range of banking
services to individual and corporate customers in California through the Banks.
PSB, located in Auburn, California, serves Placer, Sacramento, Nevada, El
Dorado, Plumas and Sierra Counties through 26 branches. BOC and CalWest serve
Orange, Fullerton, Anaheim, Torrance, Downey and the surrounding communities in
Los Angeles and Orange Counties through five branches. The Banks are subject to
competition from other financial institutions and the operating results of the
Banks are significantly affected by changes in market interest rates and by
fluctuations in real estate values in the Banks' primary service areas. The
Company and the Banks are also regulated by certain federal and state agencies
and undergo periodic examinations by those regulatory authorities.

    BASIS OF PRESENTATION--The consolidated financial statements are prepared in
accordance with generally accepted accounting principles and general practices
within the banking industry. The following is a summary of significant
principles used in the preparation of the accompanying consolidated financial
statements. The preparation of the consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions relating to the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities and the
reported amounts of income and expenses for the periods presented. Actual
results could differ from those estimates. Examples of material estimates, which
could change, include the allowance for loan losses and the carrying value of
the deferred tax assets.

    RECLASSIFICATIONS--Certain reclassifications have been made to prior years'
consolidated financial statements to conform to the 1999 presentation.

    PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include
the accounts of the holding company on a stand-alone basis and its wholly-owned
subsidiaries, PCC, BOC and CalWest (collectively referred to herein as the
"Company") and the results of their operations since their respective
acquisition dates as follows:

    - PSB purchased August 11, 1999 by PCC; 100% owned since December 13, 1999,
      as a result of the PCC Share Exchange;

    - BOC purchased December 31, 1998;

    - CalWest purchased November 25, 1998;

    - SFB, 51.88% owned since November 4, 1997; 54.69% owned since
      September 13, 1999 when the SFB Option was exercised; and merged with and
      into BOC and 100% owned as of December 23, 1999.

    - NBB, 64.91% owned since November 3, 1998; merged with and into CalWest and
      100% owned as of December 30, 1999.

    All significant intercompany accounts and transactions have been eliminated
in consolidation.

                                       54
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    CASH AND CASH EQUIVALENTS--For the purpose of reporting cash flows, cash and
cash equivalents include cash on hand, amounts due from banks, Federal funds
sold, securities purchased under agreements to resell, and money market mutual
funds.

    INVESTMENT SECURITIES--Investment securities which management has the
positive intent and ability to hold to maturity are classified as "held to
maturity" and are carried at amortized cost. Securities that are purchased and
held principally for the purpose of selling them in the near term are classified
as "trading" and carried at fair value, with gains and losses included in
operations. Securities not classified as either "held to maturity" or "trading"
are classified as "available for sale" and carried at fair value, with
unrealized gains and losses, net of the related tax effect, excluded from
operations and reported as a separate component of stockholders' equity in
accumulated other comprehensive income (loss). If the fair market value of a
security declines below its amortized cost and the decline is considered by
management to be other than temporary, the cost basis of the security is written
down to fair value and the amount of the writedown is included in operations.
Amortization of premiums and accretion of discounts on debt securities are
recorded as yield adjustments on such securities using a method similar to the
effective interest method. The specific identification method is used for
purposes of determining cost in computing realized gains and losses on
investment securities sold.

    LOANS RECEIVABLE--Loans receivable, which management has the intent and
ability to hold for the foreseeable future or until maturity, are carried at the
principal amount outstanding, net of allowance for loan losses, deferred loan
origination fees and costs, and any unamortized premiums or discounts on dealer
loans. Discounts or premiums on dealer loans are amortized to income using a
method similar to the interest method over the remaining period to contractual
maturity adjusted for anticipated prepayments. Interest on loans is calculated
using the simple-interest method on daily balances of the principal amount
outstanding and accrued daily for recognition in operations. Accrual of interest
is discontinued on a loan when management believes, after considering economic
and business conditions and collection efforts, that the borrower's financial
condition is such that collection of interest is doubtful. Generally, loans are
placed on nonaccrual status when they become 90 days or more past due or at such
earlier time as management determines timely recognition of interest to be in
doubt. When a loan is placed on nonaccrual status, interest accrual is
discontinued and all unpaid accrued interest is reversed against income. Cash
payments received related to nonaccrual loans are first recorded as a reduction
to the principal balance and then as interest income. A nonaccrual loan may be
returned to accrual status when the borrower has demonstrated the ability to
make future payments of principal and interest as scheduled.

    Nonrefundable fees and direct costs associated with the origination of loans
are deferred and netted against outstanding loan balances. The deferred net loan
fees and costs are recognized in interest income as an adjustment to yield over
the loan term using a method similar to the effective interest method.

    A loan is impaired when it is probable that the Company will be unable to
collect all amounts due (principal and interest) according to the contractual
terms of the loan agreement. Loans for which an insignificant shortfall in
amount of payments is anticipated, but the Company expects to collect all
amounts due, are not considered impaired. In determining whether or not a loan
is impaired, the Company applies its normal loan review procedures. The Company
measures impairment on a loan by loan basis using either the present value of
expected future cash flows discounted at the loan's effective interest rate or
at the fair value of the collateral, less estimated selling costs, if the loan
is collateral dependent. Consumer loans and other homogeneous smaller balance
loans are reviewed on a collective basis for impairment.

                                       55
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    ALLOWANCE FOR LOANS LOSSES--The allowance for loan losses is increased by
provisions charged to operations and reduced by loan charge-offs, net of
recoveries. Loan balances are charged against the allowance for loan losses when
management believes that the collection of the carrying amount is unlikely. The
allowance for loan losses is maintained at a level that management believes will
be adequate to absorb inherent losses on existing loans based on an evaluation
of the collectibility of the loans and prior loan loss experience. The
evaluation takes into consideration such factors as changes in the nature and
volume of the portfolio, overall portfolio quality, review of specific problem
loans, and current and anticipated economic conditions that may affect the
borrowers' ability to pay.

    The allowance for loan losses is based on estimates, and ultimate losses may
vary from the current estimates. These estimates are reviewed periodically and,
as adjustments become necessary, they are reported in operations in the periods
in which they become known. In addition, the Banks' state and federal bank
regulatory agencies, as an integral part of their examination processes,
periodically review the individual Banks' allowances for loan losses. The
agencies may require the Banks to recognize additions to the allowance for loan
losses based on their judgments from information available at the time of their
examinations, which may differ from those of management.

    SALE OF LOANS--From time to time, the Company sells the guaranteed portion
of Small Business Administration loans in the secondary market to provide funds
for additional lending and to generate servicing income. Under such agreements,
the Company continues to service the loans and the buyer receives its pro rata
share of principal collected together with interest. Loans held for sale are
valued at the lower of cost or market value. Additionally, the Company makes
whole loan sales, servicing released, to Freddie Mac (FHLMC) and Fannie Mae
(FNMA). Gains and losses on sales of loans are calculated in compliance with
Statement of Financial Accounting Standards No. 125 ACCOUNTING FOR TRANSFERS AND
SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF LIABILITIES ("SFAS
No. 125"), based on the difference between the cash received and the carrying
value of the loans sold, less related transaction costs. Any inherent risk of
loss on loans is transferred to the buyer at the date of sale on the portion of
the loan sold; however, the Company maintains the risk on the portion of the
loan retained, if any. Servicing assets and other retained interests in
transferred assets are measured by allocating the previous carrying amount of
the transferred assets between the assets sold, and retained interest, if any,
based on their relative fair values at the date of transfer. Servicing assets
are amortized in proportion to and over the period of estimated net servicing
income and assessed for asset impairment based on fair value. The total amounts
of servicing assets as of December 31, 1999 and 1998 were not considered
significant.

    The Company issues various representations and warranties associated with
the sale of loans. These representations and warranties may require the Company
to repurchase loans for a period of 90 days after the date of sale as defined
per the applicable agreement. The Company experienced no losses during the years
ended December 31, 1999 and 1998 and the period ended December 31, 1997
regarding these representations and warranties. The amount of loans subject to
repurchase as of December 31, 1999 was zero.

    OTHER REAL ESTATE OWNED--Other real estate owned ("OREO") represents real
estate acquired through foreclosure and is initially recorded at the lower of
the carrying value of the loan receivable or the fair value of the collateral,
less estimated selling costs, at the time of foreclosure. Loan balances in
excess of fair value of the real estate acquired at the date of foreclosure are
charged against the allowance for loan losses. After foreclosure, management
periodically performs valuations of OREO and any subsequent declines in the fair
market value is recognized with a charge to expense and a related decrease in
the

                                       56
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
OREO asset. Operating expenses and income, reduction in estimated values, and
gains or losses on disposition of OREO are charged to current operations.
Revenue recognition upon disposition of OREO is dependent on meeting certain
sales criteria, including a minimum initial investment in the OREO by the buyer.

    PREMISES AND EQUIPMENT--Premises and equipment are recorded at cost less
accumulated depreciation and amortization, which are charged to expense on a
straight-line basis over the estimated useful lives of the assets or, in the
case of leasehold improvements, over the term of the leases, whichever is
shorter. Rates of depreciation and amortization are based on the following
estimated useful lives: bank premises, 20 to 40 years; furniture and equipment,
three to six years; leasehold improvements, the shorter of the useful life or
the term of the lease. Expenditures for maintenance and repairs are expensed as
incurred, while major improvements that extend the estimated useful life of an
asset are capitalized. Upon the sale or retirement of assets, the accounts are
relieved of the cost and related accumulated depreciation and amortization, and
any resultant gain or loss is recognized in operations.

    INTANGIBLE ASSETS--Intangible assets include goodwill, the excess of the
purchase price over the fair value of net assets acquired, and core deposit
intangibles, the value of the long-term deposit relationships resulting from
deposit liabilities assumed in an acquisition. Goodwill is amortized using the
straight-line method over the estimated useful life, not to exceed 25 years.
Core deposit intangibles are amortized using a method that approximates the
expected run-off of the deposit base, which ranges from 7 to 10 years. The
Company periodically evaluates whether events and circumstances have occurred
that may affect the estimated useful lives or the recoverability of the
remaining balance of the intangible assets. An asset is deemed impaired if the
sum of the expected future cash flows is less than the carrying amount of the
asset and any excess value will be written off through a charge to current
operations. Management does not believe the value of the core deposit
intangibles or goodwill has been impaired.

    INCOME TAXES--The Company and its subsidiaries file a consolidated Federal
tax return. The Company records income taxes under the asset and liability
method. Income tax expense is derived by establishing deferred tax assets and
liabilities as of the reporting date for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis. Deferred tax
assets and liabilities are measured using enacted tax rates in effect for the
year in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
The Company's evaluation of the realizability of deferred tax assets includes
consideration of the amount and timing of future reversals of existing temporary
differences, as well as available taxable income in carryback years and
projections of future income. A valuation allowance related to the realizability
of deferred tax assets is established through a charge to income tax expense
when, in the opinion of management, it is more likely than not that deferred tax
assets will not be realized.

    ACCOUNTING FOR STOCK-BASED COMPENSATION--The Company accounts for its stock
option plans under Statement of Financial Accounting Standards No. 123,
ACCOUNTING FOR STOCK-BASED COMPENSATION ("SFAS No. 123"). This statement
establishes financial accounting and reporting standards for stock-based
employee compensation plans. These standards include the recognition of
compensation expense over the vesting period of the fair value of all
stock-based awards on the date of grant. Alternatively, SFAS No. 123 also
permits entities to continue to apply the provisions of Accounting Principles
Board Opinion No. 25,

                                       57
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES ("APB Opinion No. 25"), and provide pro
forma net earnings (loss) per share disclosures as if the fair-value based
method defined in SFAS No. 123 had been applied. The Company has elected to
continue to apply the provisions of APB Opinion No. 25 and provide the pro forma
disclosure requirements of SFAS No. 123 in the footnotes to its audited
consolidated financial statements (see Note 15).

    EARNINGS (LOSS) PER SHARE--Basic earnings (loss) per share is calculated by
dividing income available to common shareholders by the weighted average number
of common shares outstanding for the period and excludes the effect of all
potentially dilutive securities. Diluted earnings (loss) per share 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 from
issuance of common stock that then shared in earnings.

    When an entity has a loss from continuing operations, the inclusion of
potential common shares (in this case the vested portion of the stock options
granted) in the denominator of a diluted per share computation will always
result in an anti-dilutive per share amount. Thus, the diluted loss per share is
the same as the basic loss per share amount of $(0.05), $(1.93) and $(1.92) for
1999, 1998 and 1997, respectively. (See Note 16.)

    COMPREHENSIVE INCOME--The Company elected to present a separate statement of
comprehensive income. Comprehensive income is defined as the change in equity of
a business enterprise during a period from transactions and other events and
circumstances, excluding those resulting from investments by and distributions
to owners. Comprehensive income generally includes net income, foreign currency
items, minimum pension liability adjustments, and unrealized gains and losses on
investments in certain debt and equity investments (i.e., securities available
for sale).

    RELATED PARTY TRANSACTIONS--The Company has entered into certain related
party transactions with its affiliates in the normal course of business. These
transactions are conducted at market terms. (See Note 11.)

    SEGMENT REPORTING--On January 1, 1998, the Company adopted Statement of
Financial Accounting Standards No. 131, FINANCIAL REPORTING FOR SEGMENTS OF A
BUSINESS ENTERPRISE ("SFAS No. 131"). SFAS No. 131 requires corporations to
disclose certain financial information by "industry segment" as defined by the
statement. As of December 31, 1999 the Company does not have separate reportable
segments.

2. BUSINESS ACQUISITIONS

SFB INITIAL INVESTMENTS

    On November 14, 1997, the Company purchased 51.88% of SFB Common Stock for
an aggregate purchase price of $3,500,000. This transaction was accounted for
under the purchase method of accounting with the results of operations of the
business acquired included in the accompanying consolidated financial statements
from the date of acquisition. The amount paid in excess of the fair value of the
net tangible assets was recorded as goodwill and is being amortized over
15 years. At December 31, 1999 and 1998, goodwill, after amortization, amounted
to $1,157,000 and $1,062,000, respectively. During 1999, the SFB Option was
exercised, which resulted in additional goodwill of $173,000.

                                       58
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. BUSINESS ACQUISITIONS (CONTINUED)
NBB INITIAL INVESTMENT

    On November 3, 1998, the Company purchased 64.91% of NBB Common Stock for an
aggregate purchase price of $3,718,000. This transaction was accounted for under
the purchase method of accounting with the results of operations of the business
acquired included in the accompanying consolidated financial statements from the
effective date of acquisition. The amount paid in excess of the fair value of
the net tangible assets was recorded as goodwill and is being amortized over
15 years. At December 31, 1999 and 1998, goodwill, net of amortization, amounted
to $154,000 and $164,000, respectively.

DB ACQUISITION

    On November 25, 1998, the Company acquired all of the outstanding shares of
common stock of Downey Bancorp for an aggregate purchase price of $11,356,000,
net of a cash dividend of $3,000,000 paid to Downey Bancorp in the DB
Acquisition. Downey Bancorp was then merged with and into the Company. The
transaction was accounted for under the purchase method of accounting with the
results of operations of the business acquired included in the accompanying
consolidated financial statements from the effective date of acquisition. The
value of the long-term deposit relationships acquired was recorded as a core
deposit intangible and is being amortized over 7 years. At December 31, 1999 and
1998, the core deposit intangible, net of amortization, amounted to $927,000 and
$1,088,000, respectively. The amount paid in excess of the fair value of the net
tangible assets and the core deposit intangible was recorded as goodwill and is
being amortized over 25 years. At December 31, 1999 and 1998, goodwill, net of
amortization, amounted to $6,486,000 and $6,607,000, respectively.

BOC ACQUISITION

    On December 31, 1998, the Company completed its acquisition of all of the
outstanding shares of BOC Common Stock for an aggregate purchase price of
$14,522,000, net of a cash dividend of $375,000 paid to the Company. The
transaction was accounted for under the purchase method of accounting.
Accordingly, the results of operations are not included in the consolidated
statements of operations for the year ended December 31, 1998. The value of the
long-term deposit relationships acquired was recorded as a core deposit
intangible and is being amortized over 7 years. At December 31, 1999 and 1998,
the core deposit intangible, net of amortization, totaled $2,565,000 and
$2,992,000, respectively. The amount paid in excess of the fair value of the net
tangible assets and the core deposit intangible was recorded as goodwill and is
being amortized over 25 years. At December 31, 1999 and 1998, goodwill, net of
amortization, amounted to $5,624,000 and $5,858,000, respectively.

PSB ACQUISITION

    On August 11, 1999, PSB was acquired by PCC, a wholly-owned subsidiary of
the California Fund created for the purpose of acquiring PSB. Prior to the PSB
Acquisition, PSB's charter was converted from a state-chartered thrift to a
state-chartered commercial bank. The total purchase price paid for PSB by PCC
was $74,931,000, net of a cash dividend of $8,000,000 paid by PSB. The
transaction was accounted for under the purchase method of accounting. PCC was
initially capitalized through the sale of $53,000,000 of PCC Common Stock to the
California Fund, the sale of $3,500,000 of noncumulative preferred stock to
Placer Funding, and the sale of $18,500,000 of debentures to Placer Trust. The
value of the long term deposit relationships acquired was recorded as a core
deposit intangible and is being amortized over 10 years using a method that
approximates the expected run-off of the deposit base. At December 31,

                                       59
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. BUSINESS ACQUISITIONS (CONTINUED)
1999, the core deposit intangible totaled $10,396,000, net of accumulated
amortization. The cost of the acquisition was allocated on the basis of the
estimated fair value of the net assets acquired and liabilities assumed. The
amount paid in excess of the fair value of the net tangible assets and the core
deposit intangible asset was recorded as goodwill and is being amortized over
25 years. At December 31, 1999, goodwill amounted to $31,981,000.

    The estimated fair value of assets acquired and liabilities assumed relating
to the PSB Acquisition are summarized below, in thousands:

<TABLE>
<S>                                                           <C>
Goodwill....................................................  $32,421
Core deposit intangible.....................................   10,816
Bank premises and equipment.................................   17,117
Loans.......................................................   (1,174)
Investment securities.......................................   (2,918)
Net deferred tax liability..................................   (8,884)
                                                              -------
Total purchase adjustment...................................  $47,378
                                                              =======
</TABLE>

    On December 13, 1999, the Company issued 13,040,657 shares of Company Common
Stock to the California Fund in exchange for all of the outstanding shares of
PCC Common Stock. As a result of that exchange, PCC became a wholly-owned
subsidiary of the Company.

THE SFB OPTION EXERCISE

    During 1999 and prior to the CCB Merger, the Company entered into a stock
subscription agreement with the California Fund to sell 100,000 shares of
Company Common Stock for $1,000,000. The Company used the proceeds to exercise
an option to purchase 2,500,000 shares of SFB Common Stock which increased the
Company's investment in SFB from 51.88% to 54.69%.

BOC/SFB MERGER AND SFB MINORITY INTEREST INVESTMENT

    Immediately preceding the BOC/SFB Merger, the Company owned 100% of the
outstanding shares of BOC Common Stock and 54.69% of the outstanding shares of
SFB Common Stock. The BOC/SFB Merger involved the Company acquiring the
remaining 45.31% outstanding shares of SFB Common Stock from the minority
interest shareholders through an exchange of common stock and merging SFB with
and into BOC with BOC as the surviving corporation. SFB's minority shareholders
received 0.0938 shares of Company Common Stock for each share of SFB Common
Stock (the "BOC/SFB Exchange Ratio") resulting in the Company issuing 873,286
shares of Company Common Stock. This part of the transaction was accounted for
under the purchase method of accounting. The fair value of the shares exchanged
and expenses associated with the BOC/SFB Merger exceeded the fair value of the
minority interest by $2,375,000, which has been recorded as goodwill and is
being amortized over 15 years using the straight-line method. Goodwill relating
to the Company's initial investments of the majority interest in SFB, net of
accumulated amortization, was $1,157,000, at December 31, 1999, and is also
included in goodwill. Additionally, the accumulated deficit at the consummation
of the BOC/SFB Merger that related to the minority interest shareholders totaled
$542,000 and was reclassified as a reduction of common stock.

                                       60
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. BUSINESS ACQUISITIONS (CONTINUED)
    As part of the BOC/SFB Merger, effective December 23, 1999, SFB was merged
with and into BOC in a combination accounted for under the pooling-of-interests
method of accounting with assets, liabilities and stockholders' equity of both
entities carried forward at historical amounts and their results of operations
combined.

    Additionally, the obligation of SFB to issue shares of SFB Common Stock upon
conversion of outstanding debentures of Pacific Inland Bancorp, SFB's former
bank holding company (the "PIB Debentures"), was assumed by the Company at the
effective time of the BOC/SFB Merger. The PIB Debentures were issued in 1996 in
the principal amount of $1,050,000, bear interest at the rate of 12% annually,
expire in 2001, and were convertible on the basis of one share of SFB Common
Stock for each $0.40 in principal plus accrued, but unpaid interest.

    Upon completion of the BOC/SFB Merger, SFB Common Stock issuable under
outstanding PIB Debentures was converted into the right to acquire Company
Common Stock upon payment of the adjusted conversion price in an amount equal to
the number of shares of Company Common Stock the PIB Debenture holder would have
received pursuant to the BOC/SFB Merger, if he or she had exercised all his or
her PIB Debentures immediately prior to the BOC/SFB Merger. The adjusted
conversion price for the PIB Debentures equals $4.26 and is calculated by
dividing the $0.40 conversion price per share of SFB Common Stock for shares
issuable under the PIB Debentures immediately prior to the BOC/SFB Merger, by
the BOC/SFB Exchange Ratio. Over 90 percent of the PIB Debentures are held by
the California Fund.

CALWEST/NBB MERGER AND NBB MINORITY INTEREST INVESTMENT

    Immediately preceding the CalWest/NBB Merger, the Company owned 100% of the
outstanding shares of CalWest Common Stock and 64.91% of the outstanding shares
of NBB Common Stock. The CalWest/NBB Merger involved the Company acquiring the
remaining 35.09% of the outstanding shares of NBB Common Stock from the minority
interest shareholders through an exchange of Company Common Stock and merging
NBB with and into CalWest with CalWest as the surviving corporation. NBB's
minority shareholders received 1.5053 shares of Company Common Stock for each
share of NBB Common Stock resulting in the Company issuing 287,488 shares of
Company Common Stock. This part of the transaction was accounted for under the
purchase method of accounting. The fair value of the shares exchanged and
expenses associated with the CalWest/NBB Merger exceeded the fair value of the
minority interest by $204,000, which has been recorded as goodwill and is being
amortized over 15 years using the straight-line method. Goodwill relating to the
Company's initial investment in the majority interest in NBB, net of accumulated
amortization, was $154,000 at December 31, 1999, and is included in goodwill.
Additionally, the accumulated deficit at the consummation of the CalWest/NBB
Merger that related to the minority interest shareholders totaled $831,940 and
was reclassified as a reduction of common stock.

    As part of the NBB/CalWest Merger, effective December 30, 1999, NBB was
merged with and into CalWest in a combination accounted for under the
pooling-of-interests method of accounting with assets, liabilities and
stockholders' equity of both entities carried forward at historical amounts and
their results of operations combined.

PRO FORMA FINANCIAL INFORMATION

    Unaudited pro forma results of operations of the Company for the years ended
December 31, 1999 and 1998 are presented in the table below. Such pro forma
presentation has been prepared assuming that

                                       61
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. BUSINESS ACQUISITIONS (CONTINUED)
the acquisition of PCC, and the minority interests of SFB and NBB had each
occurred as of January 1, 1998, and as if the acquisitions of BOC, CalWest, and
the majority interests of NBB had each occurred at the date of the Company's
inception of September 11, 1997. The unaudited pro forma combined results
include (1) the historical accounts of the Company and of the acquired
businesses; and (2) pro forma adjustments, as may be required, including the
amortization of the excess purchase price over the fair value of the net assets
acquired, and the applicable income tax effects of these adjustments.

    On a pro forma basis, for the period from inception (September 11, 1997) to
December 31, 1997, the Company's revenue, net loss and net loss per share would
have been at $3.5 million, $(23,000) and $(0.01) per share, respectively. The
unaudited combined summary pro forma results of operations are intended for
informational purposes only and are not necessarily indicative of future
operating results of the Company or actual results that may have occurred had
these acquisitions occurred at the beginning of the periods indicated.

               UNAUDITED PRO FORMA COMBINED SUMMARY OF OPERATIONS
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                  FOR THE YEARS ENDED DECEMBER 31,
                                                  ---------------------------------
                                                      1999                1998
                                                  -------------       -------------
<S>                                               <C>                 <C>
Interest income.................................   $    56,818         $    52,602
Interest expense................................        22,326              22,219
                                                   -----------         -----------
  Net interest income...........................        34,528              30,382
Provision for loan losses.......................         1,213               1,235
                                                   -----------         -----------
  Net interest income after provision for loan
    losses......................................        33,315              29,148
Noninterest income..............................         5,415               7,128
Noninterest expense.............................        38,249              37,819
                                                   -----------         -----------
  Income (loss) before income taxes and minority
    interest....................................           481              (1,372)
Income tax expense..............................           926               1,502
Cost of minority interest/net income............           282                 282
                                                   -----------         -----------
  Net loss......................................   $      (727)        $    (3,777)
                                                   ===========         ===========

Net loss per share:
  Basic.........................................   $     (0.03)        $     (0.18)
  Diluted.......................................   $     (0.03)        $     (0.18)
Weighted average shares outstanding:
  Basic.........................................    21,267,483          21,267,483
  Diluted.......................................    21,267,483          21,267,483
</TABLE>

                                       62
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. CASH, DUE FROM BANKS, AND MONEY MARKET MUTUAL FUND

    Cash, due from banks, and money market mutual fund at December 31, 1999 and
1998 are comprised of the following, in thousands:

<TABLE>
<CAPTION>
                                                              1999       1998
                                                            --------   --------
<S>                                                         <C>        <C>
Cash and due from banks...................................  $39,569    $11,191
Money market mutual fund..................................       --      6,000
                                                            -------    -------
  Total...................................................  $39,569    $17,191
                                                            =======    =======
</TABLE>

    The Company is required to maintain reserve balances in cash with the
Federal Reserve Bank of San Francisco. The average reserve balance for 1999 and
1998 was approximately $1,767,000 and $1,495,000, respectively.

4. INVESTMENT SECURITIES

    The following table summarizes the Company's investment securities as of
December 31, 1999, in thousands:

<TABLE>
<CAPTION>
                                                                    GROSS        GROSS
                                                      AMORTIZED   UNREALIZED   UNREALIZED
                                                        COST        GAINS        LOSSES     FAIR VALUE
                                                      ---------   ----------   ----------   ----------
<S>                                                   <C>         <C>          <C>          <C>
Investment securities available for sale:
  U.S. and state governments and agencies...........  $ 55,495    $      --      $  (519)    $ 54,976
  Corporate bonds...................................        --           --           --           --
  Municipal obligations.............................       485            5           --          490
  Mortgage-backed securities........................     2,238           --          (48)       2,190
                                                      --------    ---------      -------     --------
    Total available for sale........................    58,218            5         (567)      57,656

Investment securities held to maturity:
  U.S. and state governments and agencies...........  $  2,495    $      --      $    (7)    $  2,488
  Corporate bonds...................................       416           --          (30)         386
  Municipal obligations.............................    12,069           --         (327)      11,742
  Mortgage-backed securities........................    55,612            7         (895)      54,724
                                                      --------    ---------      -------     --------
    Total held to maturity..........................    70,592            7       (1,259)      69,340
                                                      --------    ---------      -------     --------
    Total...........................................  $128,810    $      12      $(1,826)    $126,996
                                                      ========    =========      =======     ========
</TABLE>

                                       63
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. INVESTMENT SECURITIES (CONTINUED)
    The following table summarizes the Company's investment securities as of
December 31, 1998, in thousands:

<TABLE>
<CAPTION>
                                                                     GROSS        GROSS
                                                       AMORTIZED   UNREALIZED   UNREALIZED
                                                         COST        GAINS        LOSSES     FAIR VALUE
                                                       ---------   ----------   ----------   ----------
<S>                                                    <C>         <C>          <C>          <C>
Investment securities available for sale:
  U.S. and state governments and agencies............   $20,375        $35        $   --       $20,410
  Corporate bonds....................................       780          1            --           781
  Municipal obligations..............................       487         --            --           487
                                                        -------        ---        ------       -------
    Total available for sale.........................    21,642         36                      21,678

Investment securities held to maturity:
  U.S. and state governments and agencies............     4,241         10            --         4,251
  Corporate bonds....................................     2,640         --            --         2,640
  Municipal obligations..............................     1,630         --            --         1,630
                                                        -------        ---        ------       -------
    Total held to maturity...........................     8,511         10            --         8,521
                                                        -------        ---        ------       -------
    Total............................................   $30,153        $46        $   --       $30,199
                                                        =======        ===        ======       =======
</TABLE>

    At December 31, 1999, investment securities available for sale with a total
carrying value of approximately $21,794,000 were pledged by the Banks to secure
the Treasury, Tax and Loan Accounts, public deposits and bankruptcy deposits and
lines of credit with the Federal Reserve Bank of San Francisco. At December 31,
1998, investment securities available for sale with a carrying value of
approximately $2,052,000 were pledged to secure the Treasury, Tax and Loan
Accounts.

    In connection with the CCB Merger, the PSB Acquisition, the BOC/SFB Merger
and the CalWest/ NBB Merger, management determined that certain available for
sale securities and certain held to maturity securities were not in accordance
with the Company's defined interest rate risk and credit risk policies. The
Company transferred $43,658,000 of held to maturity securities to available for
sale and recorded an unrealized loss of $207,000. The Company subsequently sold
$3,496,000 of these transferred securities and realized a loss of $16,000. In
addition, the Company sold other held to maturity securities which had a
carrying value of $9,634,000, at amortized cost, which resulted in a realized
loss of $361,000. Under the applicable provisions of Statement of Financial
Accounting Standards No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND
EQUITY SECURITIES, the Company will continue to classify certain investment
securities as held to maturity in the future.

    All of the securities sold resulted in gross realized gains of $3,000 and
gross realized losses of $629,000.

                                       64
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. INVESTMENT SECURITIES (CONTINUED)
    The contractual maturities of investment securities as of December 31, 1999
are shown below, in thousands. Expected maturities may differ from contractual
maturities.

<TABLE>
<CAPTION>
                                                  AT DECEMBER 31, 1999
                                ---------------------------------------------------------
                                    AVAILABLE FOR SALE             HELD TO MATURITY
                                ---------------------------   ---------------------------
                                AMORTIZED COST   FAIR VALUE   AMORTIZED COST   FAIR VALUE
                                --------------   ----------   --------------   ----------
<S>                             <C>              <C>          <C>              <C>
Due in one year or less.......     $12,663         $12,558       $ 1,656         $ 1,651
Due after one year through
  five years..................      45,555          45,098         6,936           6,820
Due after five years through
  ten years...................          --              --        21,078          20,668
Due after ten years...........          --              --        40,922          40,201
                                   -------         -------       -------         -------
Total.........................     $58,218         $57,656       $70,592         $69,340
                                   =======         =======       =======         =======
</TABLE>

5. SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL

    The Banks enter into purchases of securities under agreements to resell
substantially identical securities. At December 31, 1999 and 1998, securities
purchased under agreements to resell amounted to $0 and $5,000,000,
respectively. During 1999 and 1998, the maximum month-end amount outstanding was
$5,000,000 for each year and the average balance outstanding was $3,687,000 and
$4,567,000, respectively. The average interest rates during 1999 and 1998 were
5.23% and 5.83%, respectively, and the interest rates at December 31, 1999 and
1998, were 0% (zero) and 5.82%, respectively.

    The amounts advanced under these agreements were collateralized by
short-term whole loans and are reflected as an asset in the consolidated balance
sheets. During the period, the securities were maintained at a third party
custodian's account designated by the Banks under a written custodial agreement
that explicitly recognizes the Banks' interest in the securities. At
December 31, 1998, these agreements matured within 90 days and no material
amount of agreements to resell securities was outstanding with any individual
dealer.

                                       65
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES

    Loans receivable at December 31, 1999 and 1998 are summarized as follows, in
thousands:

<TABLE>
<CAPTION>
                                                             1999       1998
                                                           --------   --------
<S>                                                        <C>        <C>
Loan type:
  Residential real estate loans..........................  $207,118   $    --
  Commercial real estate loans...........................   185,750    47,502
  Construction loans.....................................    63,154        --
  Commercial loans.......................................    59,810    34,503
  Consumer loans.........................................    17,393    14,027
  Small Business Administration loans....................     6,482     3,433
  Equity and other loans.................................    20,077        26
                                                           --------   -------
    Gross loans receivable...............................   559,784    99,491

Less:
  Deferred loan fees.....................................    (1,635)     (216)
  Allowance for loan losses..............................    (6,750)   (1,986)
                                                           --------   -------
    Total loans receivable, net..........................  $551,399   $97,289
                                                           ========   =======
</TABLE>

    Activities in the allowance for loan losses for the years ended
December 31, 1999 and 1998 and the period ended December 31, 1997 are summarized
as follows, in thousands:

<TABLE>
<CAPTION>
                                                        1999       1998       1997
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C>
Balance, beginning of year..........................    1,986      1,013     $   --
Provision for loan losses...........................      819        340         --
Charge-offs.........................................     (283)      (682)        --
Recoveries..........................................      141        147         --
Additions due to acquisitions.......................    4,087      1,168      1,013
                                                       ------     ------     ------
Balance, end of year................................   $6,750     $1,986     $1,013
                                                       ======     ======     ======
</TABLE>

    The Company grants commercial, real estate and consumer loans to customers
in the regions the Banks service in Northern and Southern California. Although
the Company has a diversified loan portfolio, a substantial portion of its
debtors' ability to honor their contracts is dependent upon the real estate
market in Northern and Southern California. Should the real estate market
experience an overall decline in property values or should other events occur,
including, but not limited to, adverse economic conditions (which may or may not
affect real property values), the ability of borrowers to make timely scheduled
principal and interest payments on the Company's loans may be adversely
affected, and in turn may result in increased delinquencies and foreclosures. In
the event of foreclosures under such conditions, the value of the property
acquired may be less than the appraised value when the loan was originated and
may, in some instances, result in insufficient proceeds upon disposition to
recover the Company's investment in the foreclosed property.

    At December 31, 1999 and 1998, the Company was servicing loans on behalf of
third party investors of approximately $49,327,000 and $3,529,000, respectively.

                                       66
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (CONTINUED)
    Nonaccrual loans amounted to approximately $413,000, $1,654,000 and $415,000
at December 31, 1999, 1998 and 1997, respectively. If nonaccrual loans had been
current throughout their terms, interest income would have increased by
approximately $4,000, $162,000 and $193,000 for the years ended December 31,
1999 and 1998 and the period ended December 31, 1997, respectively. Loans with
principal more than 90 days past due and still accruing amounted to $0 at
December 31, 1999 and 1998, and approximately $14,000 at December 31, 1997,
respectively. There were no restructured loans at December 31, 1999, and at
December 31, 1998 and 1997, the Company had restructured loans of approximately
$203,000 and $663,000, respectively, all of which were in compliance with the
modified terms, and the balances were current.

    At December 31, 1999 and 1998, loans that were considered impaired totaled
$365,000 and $825,000, respectively, which had a related allowance for loan
losses aggregating $215,000 and $109,000, respectively. For the years ended
December 31, 1999 and 1998, the Company recognized interest income on these
impaired loans of $38,000 and $177,000, respectively. The average outstanding
principal balance of impaired loans for the years ended December 31, 1999 and
1998 was $774,000 and $812,000, respectively.

    The Company has $175,259,000 in loans pledged at December 31, 1999 related
to a line of credit with the Federal Home Loan Bank; there were no amounts
outstanding on this line of credit at December 31, 1999.

7. REAL ESTATE OWNED

    The balance of real estate owned is comprised of the following at
December 31, 1999 and 1998, in thousands:

<TABLE>
<CAPTION>
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Other real estate owned, at cost............................   $   --      $372
Allowance to reduce to fair value after selling costs.......       --        --
                                                               ------      ----
Other real estate owned, net................................       --       372
                                                               ======      ====
Acquired for investment and development, net of accumulated
  depreciation..............................................   $5,001      $ --
                                                               ======      ====
</TABLE>

    Real estate owned assets, at December 31, 1999 includes $5.0 million of real
estate acquired for investment and development, which is primarily vacant land
zoned for commercial business use. This real estate investment was initially
recorded at the lower of cost or fair market value. Management periodically
performs valuations of this real estate and any declines in the fair value will
be recognized with a charge to expense and a related decrease in the real estate
asset.

    Included in the balance of real estate owned at December 31, 1998, is a loan
that was made to facilitate the sale of an OREO. The carrying value of the loan
was $205,000 at December 31, 1998. The loan was classified as an OREO due to a
contingent liability on performance bonds of $249,000. The reported balance is
reduced by principal and interest payments received on the loan. The loan was
repaid during 1999.

                                       67
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. REAL ESTATE OWNED (CONTINUED)
    A summary of the activity in the valuation allowance for the years ended
December 31, 1999 and 1998 is as follows, in thousands:

<TABLE>
<CAPTION>
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Balance, beginning of year..................................    $ --      $ 338
Additions due to acquisitions...............................      63         --
Charge-offs.................................................     (63)      (338)
                                                                ----      -----
Balance, end of year........................................    $ --      $  --
                                                                ====      =====
</TABLE>

8. PREMISES AND EQUIPMENT

    The major classes of premises and equipment at December 31, 1999 and 1998,
are as follows, in thousands:

<TABLE>
<CAPTION>
                                                              1999       1998
                                                            --------   --------
<S>                                                         <C>        <C>
Bank premises.............................................  $16,200    $    --
Leasehold improvements....................................    1,314      1,176
Furniture and equipment...................................    6,331      2,577
                                                            -------    -------
                                                             23,845      3,753
Accumulated depreciation and amortization.................   (2,971)    (2,057)
                                                            -------    -------
Premises and equipment, net...............................  $20,874    $ 1,696
                                                            =======    =======
</TABLE>

    The depreciation and amortization costs included in occupancy expense were
$1,115,000, $218,000 and $24,000 for the years ended December 31, 1999 and 1998
and the period ended December 31, 1997, respectively.

9. DEPOSITS

    At December 31, 1999 and 1998, deposits are summarized by category as
follows, in thousands:

<TABLE>
<CAPTION>
                                                            1999       1998
                                                          --------   --------
<S>                                                       <C>        <C>
Demand deposit accounts (non-interest bearing)..........  $151,121   $ 93,130
Demand deposit accounts (interest bearing)..............    55,561     14,986
Money market accounts...................................    91,004     29,426
Savings accounts........................................   115,935      8,729
Time certificates of deposit under $100,000.............   203,468     19,010
Time certificates of deposit of $100,000 and over.......    95,673     27,282
                                                          --------   --------
  Total.................................................  $712,762   $192,563
                                                          ========   ========
</TABLE>

                                       68
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. DEPOSITS (CONTINUED)
    Time certificate of deposit accounts are scheduled to mature as follows, in
thousands:

<TABLE>
<CAPTION>
                                                               YEAR ENDING
                                                              DECEMBER 31,
                                                           -------------------
                                                             1999       1998
                                                           --------   --------
<S>                                                        <C>        <C>
Within one year..........................................  $257,167   $35,772
Within two years.........................................    22,904     9,730
Within three years.......................................    10,371       201
Within four years........................................     3,875       539
Within five years........................................     4,331        --
Thereafter...............................................       493        50
</TABLE>

10. TRUST PREFERRED SECURITIES AND MINORITY INTEREST IN SUBSIDIARIES

    As described in Notes 1 and 2, when PCC acquired PSB it funded the
transaction through the sale of $53 million of PCC Common Stock to the
California Fund, the sale of $18.5 million of subordinated debentures and
issuance of $3.5 million of 8% noncumulative preferred stock. In the
consolidated financial statements of the Company, PCC's $3.5 million of
preferred stock is classified as a minority interest in subsidiary and the
dividends paid on the preferred stock are classified as cost of minority
interest.

    To facilitate the capital structure of the acquisition of PSB by PCC, Placer
Funding and Placer Trust were organized.

    Placer Funding obtained a $22 million commercial bank loan from an
unaffiliated bank which has a 5-year term and bears interest, at the option of
Placer Funding, based on one or more of the following:

        (i) at a fixed rate per annum as agreed upon between Placer Funding and
    the lender;

        (ii) at LIBOR plus 260 basis points;

       (iii) at the lender's reference rate.

    The loan will amortize with equal quarterly payments of $900,000 commencing
as of March 31, 2001, and every quarter thereafter on June 30, September 30,
December 31 and March 31, with the balance of the loan due at maturity on
August 11, 2004.

    Placer Funding used the proceeds of the term loan to purchase $18.5 million
of trust preferred securities from Placer Trust and $3.5 million to purchase one
share of 8% noncumulative preferred stock from PCC. Placer Trust used the
proceeds of the sale of $18.5 million of trust preferred securities to purchase
$18.5 million of subordinated debentures from PCC.

    The trust preferred securities represent preferred, undivided beneficial
interests in the assets of Placer Trust, which consist solely of the
subordinated debentures and payments under the debentures. The subordinated
debentures bear interest at a fixed interest rate of 8%, and will mature at the
expiration of 30 years after the date of issuance. The distributions on the
trust preferred securities are fixed at a rate per annum of 8% of the
liquidation value of the trust preferred securities.

    The trust preferred securities are subject to mandatory redemption, in whole
or in part, upon repayment of the subordinated debentures at maturity or their
earlier redemption. Subject to the approval of the Federal Reserve, if then
required under applicable capital guidelines or policies of the Federal

                                       69
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. TRUST PREFERRED SECURITIES AND MINORITY INTEREST IN SUBSIDIARIES (CONTINUED)
Reserve, the subordinated debentures are redeemable prior to maturity at the
option of Placer Capital at the expiration of 5 years after issuance or, under
some circumstances relating to tax treatment or capital treatment of the trust
preferred securities, within 90 days of the occurrence of such circumstances.

    PCC also obtained a $3 million revolving line of credit bearing interest at
a rate of LIBOR plus 210 basis points from the same commercial bank to
facilitate the timing of its payments of dividends on the noncumulative
preferred stock and interest on the subordinated debentures. The terms of the
revolving line of credit provide that at no time can the aggregate principal
amount of indebtedness outstanding under the revolving line of credit and the
term loan exceed $22 million.

    PCC pledged all of the shares of common stock of PSB to the commercial bank
lender to secure payment of amounts drawn on the revolving line of credit.
Placer Funding pledged all of the trust preferred securities and the
noncumulative preferred stock to the commercial bank lender to secure payment of
the term loan. The credit agreements entered into by PCC and Placer Funding with
the commercial bank lender each contain cross-default provisions.

11. RELATED PARTIES

    As part of its normal banking activities, the Company has extended loans to
its directors and officers and to directors and officers of its affiliates. In
the opinion of management, all such transactions are on terms similar to those
of transactions with nonaffiliated parties. Following is a summary of such loans
for the years ended December 31, 1999 and 1998, in thousands:

<TABLE>
<CAPTION>
                                                               1999       1998
                                                             --------   --------
<S>                                                          <C>        <C>
Balance, beginning of year.................................  $ 1,030     $  279
Loans granted or renewed...................................      865        406
Repayments.................................................   (1,674)      (491)
Other changes due to:
  Acquisitions.............................................       --        836
  Officer/director resignations............................     (191)        --
                                                             -------     ------
Balance, end of year.......................................  $    30     $1,030
                                                             =======     ======
</TABLE>

    To facilitate the capital structure of the PSB Acquisition, Placer Funding
and Placer Trust were organized. Placer Funding is owned by the principals of
Belvedere Capital Partners LLC, the general partner of the California Fund
("Belvedere") and Placer Trust is owned by PCC. When PCC acquired PSB it funded
the transaction through the sale of $53 million of PCC Common Stock to the
California Fund, the sale of $18.5 million of subordinated debentures and
issuance of $3.5 million of 8% noncumulative preferred stock. See also Notes 1,
2 and 10 for related parties information.

                                       70
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. RELATED PARTIES (CONTINUED)

    Under an agreement dated October 1, 1999, Belvedere serves as the exclusive
financial advisor to the Company pursuant to which the Company has agreed to pay
Belvedere (i) with respect to any debt financing obtained by the Company in
connection with an acquisition transaction, where Belvedere provides financial
advisory services, an amount equal to three percent (3%) of the aggregate amount
financed in the transaction; (ii) with respect to any equity financing by an
investor other than the California Fund obtained by the Company in connection
with an acquisition transaction, where Belvedere provides financial advisory
services, an amount equal to five percent (5%) of the aggregate amount financed
(including the value of any future specified and/or contingent financing
payments) in the transaction; (iii) with respect to any debt financing obtained
by the Company other than in connection with an acquisition transaction, where
Belvedere provides financial advisory services, an amount equal to three percent
(3%) of the aggregate amount financed; and (iv) with respect to any equity
financing by an investor other than the California Fund obtained by the Company
other than in connection with an acquisition transaction, where Belvedere
provides financial advisory services, an amount equal to five percent (5%) of
the aggregate amount financed (including the value of any future specified
and/or contingent financing payments).

    Under a substantially similar agreement dated August 10, 1999, Belvedere
served as the exclusive financial advisor to PCC and, in that capacity, provided
financial advisory services in connection with evaluating and negotiating the
PSB Acquisition. Belvedere is the general partner of the California Fund. The
Company assumed the obligations of PCC under that agreement and paid fees of
$660,000 to Belvedere in 2000 in connection with the PSB Acquisition. Ronald W.
Bachli, President and Chief Executive Officer and a director of the Company,
Richard W. Decker, Jr., Chairman of the Board of Directors and a director of the
Company and J.Thomas Byrom, Secretary and a director of the Company, are
principals of Belvedere.

    The Chief Executive Officer of the Company receives no compensation from the
Company. However, the Chief Executive Officer is compensated by Belvedere.
Except as described above, neither Belvedere nor the California Fund receives
any compensation from the Company or any of its subsidiaries.

12. LEASE OBLIGATIONS

    The Company leases administrative and office space under various
non-cancelable operating leases. Rental expense was $861,000, $150,000 and
$3,000 in 1999, 1998 and 1997, respectively, and is included in occupancy
expense. As of December 31, 1999, future minimum rental payments, net of
sublease income, required under operating leases that have initial or remaining
lease terms in excess of one year are as follows, in thousands:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------
<S>                                                           <C>
2000........................................................   $1,201
2001........................................................    1,078
2002........................................................      716
2003........................................................      383
2004........................................................      382
Thereafter..................................................    1,223
                                                               ------
                                                               $4,983
                                                               ======
</TABLE>

                                       71
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. INCOME TAXES

    Income tax expense (benefit) for the years ended December 31, 1999 and 1998
and the period ended December 31, 1997 consists of the following, in thousands:

<TABLE>
<CAPTION>
                                                             1999       1998       1997
                                                           --------   --------   ---------
<S>                                                        <C>        <C>        <C>
Current provision (benefit):
  Federal................................................   $ 336       $15      $      --
  State..................................................     389         2              2
                                                            -----       ---      ---------
                                                              725        17              2
Deferred provision (benefit):
  Federal................................................    (486)       (2)            --
  State..................................................    (415)       --             --
                                                            -----       ---      ---------
                                                             (901)       (2)            --
                                                            -----       ---      ---------
    Total................................................   $(176)      $15      $       2
                                                            =====       ===      =========
</TABLE>

    A reconciliation of the statutory federal income tax provision at the
expected statutory rate of 34% compared to the actual income tax provision
(benefit) is as follows, in thousands:

<TABLE>
<CAPTION>
                                                                      YEAR (PERIOD) ENDED DECEMBER 31,
                                               ------------------------------------------------------------------------------
                                                        1999                        1998                        1997
                                               ----------------------      ----------------------      ----------------------
<S>                                            <C>           <C>           <C>           <C>           <C>           <C>
Federal income tax (benefit) at statutory
  rate.......................................   $(321)        (34.0)%       $(931)        (34.0)%        $(67)        (34.0)%
State income taxes, net of federal income tax
  benefit....................................     (68)         (7.2)            1           0.0           (12)         (6.0)
Subsidiary losses not benefited or applied to
  goodwill...................................     594          62.9            --            --            --            --
Deferred tax asset valuation allowance.......    (900)        (95.2)        1,043          38.1            81          40.0
Net decrease in cash surrender value of life
  insurance policies.........................      33           3.5            --            --            --            --
Municipal investment income..................    (113)        (12.0)           --            --            --            --
Goodwill amortization........................     345          36.6            16           0.6            --            --
Acquisition and merger-related costs.........      99          10.5            --            --            --            --
Cost of minority interest....................      32           3.4            --            --            --            --
Other, net...................................     123          12.8          (114)          4.2            --           0.0
                                                -----         -----         -----         -----          ----         -----
                                                $(176)        (18.7)%       $  15           0.6%         $  2           0.0%
                                                =====         =====         =====         =====          ====         =====
</TABLE>

                                       72
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. INCOME TAXES (CONTINUED)
    The components of the deferred income tax assets and liabilities at
December 31 are summarized as follows, in thousands:

<TABLE>
<CAPTION>
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Deferred income tax assets:
  Provision for loan losses.................................  $  2,113   $   290
  Depreciation..............................................        --        (4)
  Deferred rent.............................................        --        46
  Start-up costs............................................       174         3
  Accrued expenses..........................................       146       483
  OREO writedown............................................        --        61
  Interest on non-accrual loans.............................         4       (81)
  Tax credits...............................................        --       113
  Future benefit of state income tax deduction..............       977        --
  Investment portfolio discount.............................     1,204        69
  Loan portfolio discount...................................       485        --
  Unrealized loss on securities.............................       223        --
  Other.....................................................       373        (6)
  Net operating loss carryforward...........................     3,913     2,076
                                                              --------   -------
Deferred income tax assets..................................     9,612     3,050
Valuation allowance.........................................      (660)   (2,345)
                                                              --------   -------
Deferred income tax assets, net.............................     8,952       705
Deferred income tax liabilities:
  Core deposit intangible...................................    (6,115)   (1,683)
  Deferred loan fees........................................      (562)       --
  FHLB dividend.............................................    (1,134)       --
  Bank premises and equipment...............................    (5,365)       --
  Real estate held for investment...........................    (1,990)       --
  Prepaid expenses..........................................      (209)       --
  Other.....................................................      (271)       (3)
  Investment premium........................................        --      (161)
                                                              --------   -------
Deferred income tax liabilities.............................   (15,646)   (1,847)
                                                              --------   -------
Deferred income tax liabilities, net........................  $ (6,694)  $(1,142)
                                                              ========   =======
</TABLE>

    The Company believes that a valuation allowance of $660,000 and $2,345,000
for deferred tax assets at December 31, 1999 and 1998, respectively, is adequate
to reduce the deferred tax assets to an amount that will more likely than not be
realized. The net change in the total valuation allowance was a decrease of
$1,685,000 for the year ended December 31, 1999, of which a portion was applied
as a reduction to goodwill and the remainder as a reduction of tax expense.

                                       73
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. EMPLOYEE BENEFIT PLANS

401(k) PLANS

    BOC and PSB each have defined contribution retirement plans that meet the
requirements of Section 401(k) of the Internal Revenue Code and are available to
substantially all BOC and PSB employees. BOC and PSB each contribute a
discretionary amount determined each year by the respective Banks' management;
BOC contributed $35,000 to the BOC 401(k) Plan during 1999, and PSB contributed
$70,000 for the five month period ended December 31, 1999. Vesting in the 401(k)
Plans is based on years of service, with 100 percent vesting at the end of five
full years of service. At the time of the BOC/SFB Merger, the Security First
Bank Profit Sharing Plan under Section 401(k) (the "SFB 401(k) Plan") and
Cafeteria Plan under Section 125 of the Internal Revenue Code were terminated.
The SFB 401(k) Plan was transferred into the BOC 401(k) Plan as of December 31,
1999.

SALARY CONTINUATION PLANS

    The PSB Board of Directors approved a salary continuation plan for four key
executives during 1998. Under the PSB salary continuation plan, PSB is obligated
to provide the executives, or designated beneficiaries, with annual benefits for
fifteen years after retirement or death. The estimated present value of these
future benefits are accrued over the period from the effective date of the plan
until the executives' expected retirement dates. The expense recognized under
this plan totaled $40,000 and the liability accrued as of December 31, 1999
totaled $194,000. Related to the PSB salary continuation plan, PSB invested in
single premium life insurance policies with cash surrender values totaling
$1,471,000 at December 31, 1999. Income earned on these policies since the PSB
Acquisition totaled $66,000 in 1999.

    During 1999, the salary continuation agreements with certain executive
officers of BOC were paid off in accordance with certain acceleration provisions
related to the Company's acquisition of BOC and the related life insurance
polices were liquidated. The agreements provided monthly cash payments to
officers on retirement or their beneficiaries in the event of death, beginning
in the month after their respective retirement dates or death, and extending for
a specified period of years thereafter. BOC funded its obligation related to the
officers' salary continuation agreements through the purchase of single premium
life insurance policies. At December 31, 1998, the cash surrender value of life
insurance amounted to $2,224,000. The present value of liability under the
agreements amounted to approximately $1,260,000 at December 31, 1998.

EMPLOYEE STOCK OWNERSHIP PLAN

    On July 15, 1999, the PSB Board of Directors authorized the termination of
PSB's defined contribution employee stock ownership plan (the "PSB ESOP") and
trust which covered all PSB employees who completed one year of service, as
defined in the PSB ESOP.  PSB made no contributions to the PSB ESOP during 1999.
During 1999, PSB began settlement of the PSB ESOP's net assets available for
benefit of the ESOP's participants.

SELF-INSURED HEALTH PLAN

    PSB adopted the Placer Savings Bank Health Plan (the "PSB Health Plan") on
January 1, 1997. This is a self-insured program for hospitalization and medical
coverage covering substantially all of the PSB employees and their eligible
dependents. PSB contracts with a commercial insurance carrier to limit its
annual losses to $25,000 per PSB Health Plan participant and $1,000,000 for the
PSB Health Plan in total.

                                       74
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. EMPLOYEE BENEFIT PLANS (CONTINUED)
Based upon estimates determined by the third-party plan administrator, provision
for claims are accrued annually to cover the aggregate liability for claims made
and potential claims. Accordingly, costs for the PSB Health Plan administration,
claims made and potential claims totaling $100,000 were accrued as of
December 31, 1999. The PSB Health Plan was terminated effective December 31,
1999 and replaced by the California Bankers Association Group Insurance Trust.

15. STOCK OPTION PLANS

    At December 31, 1999 the Company had three stock options plans: (i) the
California Community Bancshares, Inc. 1999 Stock Option Plan (the "CCB Plan")
adopted on October 12, 1999, (ii) the California Financial Bancorp 1999 Stock
Option Plan (the "CFB Plan") adopted February 19, 1999 and (iii) the Placer
Capital Co. 1999 Stock Option Plan (the "PCC Plan") adopted on August 20, 1999,
(collectively referred to as the "Company Plans"). The Company Plans are
administered by the Compensation Committee of the Board of Directors of the
Company.

THE CFB PLAN AND CCB PLAN

    The Company reserved an aggregate of 6,385,114 shares of authorized and
unissued Company Common Stock for the CCB Plan and the CFB Plan. As of
December 31, 1999 there are 6,103,356 shares under the CCB Plan for which
options may be granted and 281,758 shares subject to outstanding options under
the CFB Plan. The CFB Plan was assumed by the Company at the effective date of
the CCB Merger. All options outstanding under the CFB Plan were converted into
options to purchase Company Common Stock at the CCB Merger Exchange Ratio. All
share amounts and exercise prices have been adjusted to reflect the CCB Merger
Exchange Ratio.

    Prior to the CCB Merger, CFB's Board of Directors granted 462,889
non-statutory options under the CFB Plan, at exercise prices ranging from $4.06
to $6.94 per share generally with a four-year vesting period from the date of
grant and a term of 10 years. No further options will be granted under the CFB
Plan.

    The CCB Plan authorized the grant of both incentive and non-statutory
options that have terms of not more than 10 years and vest at least 20% per year
from the date of grant. Pursuant to the CCB Plan, options may be granted to
officers, directors and employees of the Company and of any of its subsidiaries
and to independent contractors who perform services for the Company or any of
its subsidiaries. Stock options are granted with an exercise price of not less
than 100 percent of the fair market value of Company Common Stock on the date of
grant. No options have been granted under the CCB Plan.

    Prior to the effective date of the BOC/SFB Merger, all options to purchase
SFB common stock outstanding under all stock option plans of SFB (the "SFB
Plans") became exercisable, whether or not previously vested and, as of the
effective date of the BOC/SFB Merger, all rights to purchase SFB common stock
under the SFB Plans terminated.

THE PCC STOCK OPTION PLAN

    Due to state securities law exemptions that were available to PCC when the
PCC Plan was adopted, the PCC Plan includes a provision which accelerates
unvested options in the event of a Change of Control, as defined in the PCC
Plan. CCB and PCC have determined that it is in the respective best interests
and advantage of their respective shareholders for PCC to grant options with
acceleration provisions in order to attract and retain directors, officers and
employees to CCB and its affiliates. The CCB Plan, other than

                                       75
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. STOCK OPTION PLANS (CONTINUED)
those options assumed from the CFB Plan, does not currently provide for
acceleration in the event of a Change of Control pursuant to policies of the
California Department of Corporations ("DOC").

    On February 29, 2000, CCB agreed to assume the stock options granted and to
be granted by PCC under the following conditions:

    - Should the DOC amend its non-acceleration policy and at the time should
      the CCB Plan not contain such a provision, amend the CCB Plan to provide
      for acceleration upon a Change of Control and then assume all options
      previously granted under the PCC Plan.

    - In the event CCB should become exempt from the DOC requirements by having
      registered its common stock on NASDAQ's national market system, amend the
      CCB Plan to provide for acceleration upon a Change of Control and then
      assume all options previously granted under the PCC Plan.

    - Should neither of the previous events have occurred in the event of a
      proposed transaction constituting a Change of Control of CCB, CCB shall
      assure that such transaction shall be expressly conditioned upon the
      acquiring party assuming all of the outstanding options granted under the
      PCC Plan, including the acceleration of vesting.

    Accordingly, options granted under the PCC Plan will be converted into
rights to receive Company Common Stock at an exchange ratio of 2.4605 (the
"PCC/CCB Exchange Ratio"). The share amounts and option prices have been
adjusted to reflect the PCC/CCB Exchange Ratio.

    PCC stock options are granted with an exercise price of not less than
100 percent of the fair market value of the Company's Common Stock adjusted for
the PCC/CCB Exchange Ratio on the date of grant. Stock options granted pursuant
to the PCC Plan have terms of not more than 10 years and vest at least
25 percent per year beginning on the first anniversary of the date of grant. Of
the 3,912,195 shares reserved under the PCC Plan, there are 2,601,310 shares
available, for which options may be granted as of December 31, 1999.

APB NO. 25 AND FAS 123 DISCLOSURE

    The following disclosures reflect the combination of the stock option data
and activity under the CCB Plan, the CFB Plan and the SFB Plans prior to the
BOC/SFB Merger (collectively the "CCB Plans") for

                                       76
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. STOCK OPTION PLANS (CONTINUED)
the years (period) indicated. Shown separately is the stock option data and
activity under the PCC Plan for the year ended December 31, 1999:

<TABLE>
<CAPTION>
                                                              YEAR (PERIOD) ENDED DECEMBER 31,
                                              ----------------------------------------------------------------
                                                      1999                  1998                  1997
                                              --------------------   -------------------   -------------------
                                                          WEIGHTED              WEIGHTED              WEIGHTED
                                                          AVERAGE               AVERAGE               AVERAGE
                                               SHARES      PRICE      SHARES     PRICE      SHARES     PRICE
                                              ---------   --------   --------   --------   --------   --------
<S>                                           <C>         <C>        <C>        <C>        <C>        <C>
THE CCB PLANS
--------------------------------------------
Outstanding at beginning of year (period)...    118,402    $4.26     123,428     $4.26          --       N/A
Granted.....................................    462,889    $5.52      20,167     $4.26     123,428     $4.26
Canceled....................................   (173,812)   $5.47     (25,193)    $4.26          --        --
Exercised...................................   (125,721)   $4.33          --        --          --        --
                                              ---------              -------               -------
Outstanding at end of year (period).........    281,758    $5.54     118,402     $4.26     123,428     $4.26
                                              =========              =======               =======
Exercisable at end of year (period).........     30,646    $6.17      43,818     $4.26      24,686     $4.26
                                              =========              =======               =======
THE PCC PLAN
--------------------------------------------
Outstanding at beginning of year............         --      N/a         N/a       N/a         N/a       N/a
Granted.....................................  1,323,188    $5.02         N/a       N/a         N/a       N/a
Canceled....................................    (12,303)   $4.06         N/a       N/a         N/a       N/a
Exercised...................................         --       --         N/a       N/a         N/a       N/a
                                              ---------
Outstanding at end of year..................  1,310,885    $5.03         N/a       N/a         N/a       N/a
                                              =========
Exercisable at end of year..................     25,000    $6.64         N/a       N/a         N/a       N/a
                                              =========
</TABLE>

    The table below provides the range of exercise prices, weighted-average
exercise prices and weighted-average remaining contractual lives for options
outstanding at December 31, 1999 for the CCB Plans and the PCC Plan.

<TABLE>
<CAPTION>
                                                                WEIGHTED-AVG
                                                   NUMBER        REMAINING     WEIGHTED-AVG     NUMBER
                           RANGE OF EXERCISE   OUTSTANDING AT   CONTRACTUAL      EXERCISE     EXERCISABLE    WEIGHTED-AVG
OPTION PLAN                     PRICES            12/31/99          LIFE          PRICE       AT 12/31/99   EXERCISE PRICE
-----------                -----------------   --------------   ------------   ------------   -----------   --------------
<S>                        <C>                 <C>              <C>            <C>            <C>           <C>
THE CCB PLANS............   $5.47 to $6.94         281,758      9.30 years         $5.54        30,646            $6.17
THE PCC PLAN.............   $4.06 to $6.64       1,310,885      9.76 years         $5.03        25,000            $6.64
</TABLE>

    The estimated fair value of options granted under the CCB Plans was $1.23,
$1.17 and $4.26 per share for 1999, 1998 and 1997, respectively. The fair value
of options granted under the PCC Plan was $1.28 per share for 1999. Under SFAS
No. 123, the fair value of stock-based awards to employees is calculated through
the use of option pricing models, even though such models were developed to
estimate the fair value of freely tradable, fully transferable options without
vesting restrictions, which significantly differ from the Company's stock option
awards. These models also require subjective assumptions, including future stock
volatility and expected time to exercise, which greatly affect the calculated
values. The fair

                                       77
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. STOCK OPTION PLANS (CONTINUED)
value of options granted under the CCB Plans and under the PCC Plan was
estimated on the date of grant using the Black-Scholes option-pricing model with
the following weighted-average assumptions used:

<TABLE>
<CAPTION>
                                                                THE CCB PLANS            THE PCC PLAN
                                                        ------------------------------   ------------
                                                          1999       1998       1997         1999
                                                        --------   --------   --------   ------------
<S>                                                     <C>        <C>        <C>        <C>
Volatility............................................     Zero       Zero       Zero         Zero
Dividend yield........................................     Zero       Zero       Zero         Zero
Risk free rate........................................    5.16%      6.50%      6.64%        5.92%
Expected life.........................................  5 years    5 years    5 years      5 years
</TABLE>

    The Company applies APB No. 25 and related Interpretations in accounting for
the Company Plans. Accordingly, no compensation cost has been recognized in
operations for the Company Plans in effect during the periods presented. Had
compensation cost for the Company Plans been determined based on the fair value
at the grant dates for awards under the Company Plans consistent with the method
of SFAS No. 123, the Company's net loss and loss per share for the years ended
December 31, 1999 and 1998 and the period ended December 31, 1997, would have
been increased to the pro forma amounts indicated below, in thousands, except
share data:

<TABLE>
<CAPTION>
                                                                YEAR (PERIOD) ENDED DECEMBER 31,
                                                              ------------------------------------
                                                                1999          1998          1997
                                                              --------      --------      --------
                                                               (IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                                           <C>           <C>           <C>
Net loss:
  As reported...............................................   $ (416)      $(2,649)       $ (209)
  Pro forma including the CCB Plans.........................   $ (476)      $(2,675)       $ (238)
  Pro forma including the CCB Plans and the PCC Plan........   $ (637)          N/A           N/A
Basic and diluted loss per share:
  As reported...............................................   $(0.05)      $ (1.93)       $(1.92)
  Pro forma including the CCB Plans.........................   $(0.06)      $ (1.94)       $(2.19)
  Pro forma including the CCB Plans and the PCC Plan........   $(0.08)          N/A           N/A
</TABLE>

    The pro forma amounts shown above may not be representative of the effects
on reported net income for future periods.

                                       78
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. BASIC AND DILUTED LOSS PER SHARE

    Basic and diluted loss per share was computed by dividing net loss by the
weighted average number of shares of common stock outstanding during the year.

<TABLE>
<CAPTION>
                                                              YEAR (PERIOD) ENDED DECEMBER 31,
                                                             ----------------------------------
                                                                1999         1998        1997
                                                             ----------   ----------   --------
                                                             (IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                                          <C>          <C>          <C>
Net loss...................................................  $     (416)  $   (2,649)  $   (209)
                                                             ==========   ==========   ========
Weighted average shares outstanding........................   7,667,368    1,375,713    108,768
                                                             ==========   ==========   ========
Basic net loss per share...................................  $    (0.05)  $    (1.93)  $  (1.92)
                                                             ==========   ==========   ========

Weighted average shares outstanding........................   7,667,368    1,375,713    108,768
                                                             ==========   ==========   ========
Effect of dilutive stock options...........................          --           --         --
                                                             ----------   ----------   --------
Diluted shares outstanding.................................   7,667,368    1,375,713    108,768
                                                             ==========   ==========   ========
Diluted net loss per share.................................  $    (0.05)  $    (1.93)  $  (1.92)
                                                             ==========   ==========   ========
</TABLE>

17. FAIR VALUE OF FINANCIAL INSTRUMENTS

    Fair value estimates are made at a discrete point in time based on relevant
market information and information about the financial instruments. Because no
active market exists for a significant portion of the Company's financial
instruments, fair value estimates are based on judgments regarding current
economic conditions, risk characteristics of various financial instruments,
prepayment assumptions, future expected loss experience and other such factors.
These estimates are subjective in nature and involve uncertainties and matters
of significant judgment and therefore cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.

    In addition, the fair value estimates are based on existing on- and
off-balance-sheet financial instruments without attempting to estimate the value
of existing and anticipated future customer relationships and the value of
assets and liabilities that are not considered financial instruments.
Significant assets and liabilities that are not considered financial assets or
liabilities include other real estate owned and premises and equipment.

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

    Investment Securities--For U.S. government and U.S. government agency
    securities, fair values are based on market prices. For other investment
    securities, fair values equal quoted market price, if available. If a quoted
    market price is not available, fair value is estimated using quoted market
    prices for similar securities.

    Loans--The fair value for loans with variable interest rates is the carrying
    amount. The fair value of fixed rate loans is derived by calculating the
    discounted value of future cash flows expected to be received by the various
    homogeneous categories of loans. All loans have been adjusted to reflect
    changes in credit risk.

    Other financial assets--The carrying amounts of cash and due from banks, and
    Federal funds sold, and interest bearing deposits with other financial
    institutions are considered to approximate fair value. The carrying amounts
    of accrued interest receivable are considered to approximate fair value.

                                       79
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

17. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
    Deposits--The fair value of demand deposits, savings deposits, and money
    market deposits is defined as the amounts payable on demand at year-end. The
    fair value of fixed maturity certificates of deposit is estimated based on
    the discounted value of the future cash flows expected to be paid on the
    deposits.

    Trust Preferred Securities--The fair value of trust preferred securities is
    based on rates currently available to the Company for similar securities
    with similar terms and remaining maturity. As the fixed rate of the trust
    preferred securities approximates current market rates, fair value
    approximates the carrying value.

    Other financial liabilities--The carrying amounts of accrued interest
    payable are considered to approximate fair value.

    Commitments to Extend Credit and Standby Letters of Credit--The Company has
    not estimated the fair value of off-balance sheet commitments to extend
    credit. Because of the uncertainty in attempting to assess the likelihood
    and timing of a commitment being drawn upon, coupled with the lack of an
    established market for these financial instruments, the Company does not
    believe it is meaningful or practicable to provide an estimate of fair
    value.

    The estimated fair values of the Company's financial instruments at
December 31, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                              1999                    1998
                                                      ---------------------   ---------------------
                                                      CARRYING                CARRYING
                                                       AMOUNT    FAIR VALUE    AMOUNT    FAIR VALUE
                                                      --------   ----------   --------   ----------
<S>                                                   <C>        <C>          <C>        <C>
Financial assets:
  Cash, due from banks, and money market mutual
    fund............................................  $ 39,569    $ 39,569    $ 17,191    $ 17,191
  Federal funds sold and securities purchased under
    agreements to resell............................    20,791      20,791      63,689      63,689
  Interest-bearing deposits with other banks........     2,576       2,576       4,468       4,468
  Investment securities available for sale..........    57,656      57,656      21,678      21,678
  Investment securities held to maturity............    70,592      69,340       8,511       8,521
  Investment in Federal Reserve Bank and Federal
    Home Loan Bank stock............................     4,112       4,112         452         452
  Loans receivable, net.............................   551,399     547,235      97,289      97,952
  Accrued interest receivable.......................     4,644       4,644       1,004       1,004
  Cash surrender value of life insurance............     1,471       1,471       2,224       2,224
Financial liabilities:
  Deposits..........................................  $712,762    $712,807    $192,563    $192,580
  Trust preferred securities........................    18,500      18,500          --          --
  Accrued interest payable..........................       670         670         221         221
</TABLE>

    The Company's balance sheet includes the following financial instruments:
cash, due from banks, and money market mutual funds, Federal funds sold and
securities purchased under agreements to resell, interest-bearing deposits with
other banks, investment in Federal Reserve Bank and Federal Home Loan Bank
stock, cash surrender value of life insurance, accrued interest receivable,
trust preferred securities and accrued interest payable. The Company considers
the carrying amounts of these instruments in the consolidated financial
statements to approximate the fair value for these financial instruments because
of

                                       80
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

17. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
the relatively short period of time between origination of the instruments and
their expected realization for current items, and the yields on long-term notes
reflect estimated current market yields.

18. COMMITMENTS AND CONTINGENCIES

    The Company is a defendant in various litigation arising in the normal
course of business. In the opinion of management, after consultation with legal
counsel, the ultimate outcome of such litigation or any other contingencies
would not have a material effect on the Company's consolidated financial
position or results of operations.

    In order to meet the financing needs of its customers in the normal course
of business, the Company is party to financial instruments with
off-balance-sheet risk. These financial instruments include commitments to
extend credit and standby letters of credit. These instruments involve, to
varying degrees, elements of credit and interest rate risk in excess of the
amounts recognized in the financial statements.

    The Company's exposure to credit loss in the event of non-performance by
other parties to the financial instrument for these commitments is represented
by the contractual amounts of those instruments.

    The Company uses the same loan policies in making commitments and
conditional obligations as it does for on-balance-sheet instruments. Commitments
generally have fixed expiration dates; however, 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 Company evaluates each
customer's creditworthiness on a case-by-case basis. The amount of collateral
obtained if deemed necessary by the Company upon extension of credit is based on
management's credit evaluation of the counterparty. Collateral held varies, but
may include accounts receivable, inventory, property, plant and equipment, and
income-producing commercial properties.

    The Company's commitment to extend credit and standby letters of credit are
as follows, in thousands:

<TABLE>
<CAPTION>
                                                             1999       1998
                                                           --------   --------
<S>                                                        <C>        <C>
Commitment to extend credit..............................  $102,833   $20,748
Standby and commercial letters of credit.................       554       668
</TABLE>

    At December 31, 1999 the Company had $152,429,000 readily available
borrowing capacity from the Federal Reserve Bank of San Francisco and the
Federal Home Loan Bank of San Francisco for which the Company has pledged assets
with a carrying value totaling $180,556,000. At December 31, 1998, the Company
had a line of credit with the Federal Reserve Bank of San Francisco for
$6,500,000 with securities pledged as collateral. The lines are intended to
support short-term liquidity. There were no borrowings outstanding against these
lines as of December 31, 1999 and 1998.

19. REGULATORY MATTERS

    The Company, as a bank holding company, is subject to regulation by the
Board of Governors of the Federal Reserve System (the "FRB") under the Bank
Holding Company Act of 1956, as amended.

    The Banks, as members of the Federal Reserve System, are subject to the
regulations of and regulation by the FRB. Additionally, the Company and the
Banks are subject to regulatory capital requirements administered by the state
and federal banking regulatory 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 consolidated financial

                                       81
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. REGULATORY MATTERS (CONTINUED)
statements. Under capital adequacy guidelines and the regulatory framework for
prompt correction action, the Company and Banks must meet specific capital
guidelines that involve quantitative measures of the Company's and the Banks'
assets, liabilities, and certain off-balance-sheet items as calculated under
regulatory accounting practices. The capital amounts and classification of the
Company and the Banks 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 the Banks to maintain minimum amounts and ratios (set
forth in the table below) of total and Tier I capital (as defined in the
regulations) to risk-weighted assets (as defined in the regulations), and of
Tier I capital to average assets (as defined in the regulations). Management
believes, as of December 31, 1999 and 1998, that the Company and Banks have met
all capital adequacy requirements to which they are subject.

    As of December 31, 1999 and 1998, the most recent notification from the
regulatory agencies categorized the Company and each of the Banks as "well
capitalized" under the regulatory framework for prompt corrective action. To be
categorized as well capitalized the Company and the Banks each must maintain
minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set
forth in the table. There are no conditions or events since that notification
which management believes have changed the Company's or any of the Banks'
categories.

    Actual capital amounts (in thousands) and ratios for the Company and the
Banks as of December 31, 1999 and 1998 are presented in the following table:

AS OF DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                                  CAPITAL ADEQUACY      WELL CAPITALIZED
                                             ACTUAL CAPITAL          REQUIREMENT           REQUIREMENT
                                           -------------------   -------------------   -------------------
                                            AMOUNT     RATIO      AMOUNT     RATIO      AMOUNT     RATIO
                                           --------   --------   --------   --------   --------   --------
                                                                             = OR >                = OR >
<S>                                        <C>        <C>        <C>        <C>        <C>        <C>
Total Capital vs. Risk Weighted Assets:
  Consolidated Company...................  $67,441     12.92%    $41,763      8.0%     $52,203     10.0%
  PCC....................................   41,672     11.36%     29,341      8.0%      36,676     10.0%
  PSB....................................   41,984     11.80%     28,463      8.0%      35,580     10.0%
  CalWest................................    7,710     14.82%      4,163      8.0%       5,204     10.0%
  BOC....................................   11,067     10.84%      8,164      8.0%      10,205     10.0%
Tier I Capital vs. Risk Weighted Assets:
  Consolidated Company...................   61,301     11.74%     20,881      4.0%      31,322      6.0%
  PCC....................................   37,458     10.21%     14,671      4.0%      22,006      6.0%
  PSB....................................   37,770     10.62%     14,232      4.0%      21,348      6.0%
  CalWest................................    7,068     13.58%      2,082      4.0%       3,122      6.0%
  BOC....................................    9,783      9.59%      4,082      4.0%       6,123      6.0%
Tier I Capital vs. Average Assets:
  Consolidated Company...................   61,301      7.52%     32,616      4.0%      40,770      5.0%
  PCC....................................   37,458      6.20%     24,172      4.0%      30,215      5.0%
  PSB....................................   37,770      6.30%     23,981      4.0%      29,976      5.0%
  CalWest................................    7,068      9.82%      2,880      4.0%       3,600      5.0%
  BOC....................................    9,783      7.06%      5,542      4.0%       6,927      5.0%
</TABLE>

                                       82
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. REGULATORY MATTERS (CONTINUED)
AS OF DECEMBER 31, 1998:

<TABLE>
<CAPTION>
                                                                 CAPITAL ADEQUACY      WELL CAPITALIZED
                                            ACTUAL CAPITAL          REQUIREMENT           REQUIREMENT
                                          -------------------   -------------------   -------------------
                                           AMOUNT     RATIO      AMOUNT     RATIO      AMOUNT     RATIO
                                          --------   --------   --------   --------   --------   --------
                                                                            = OR >                = OR >
<S>                                       <C>        <C>        <C>        <C>        <C>        <C>
Total Capital vs. Risk Weighted Assets:
  Consolidated Company..................  $20,331     14.98%    $10,858      8.0%     $13,572     10.0%
  SFB...................................    5,433     16.95%      2,564      8.0%       3,205     10.0%
  NBB...................................    4,741    172.00%        221      8.0%         276     10.0%
  CalWest...............................    4,384     11.60%      3,023      8.0%       3,779     10.0%
  BOC...................................    8,024     13.03%      4,926      8.0%       6,158     10.0%
Tier I Capital vs. Risk Weighted Assets:
  Consolidated Company..................   18,631     13.73%      5,428      4.0%       8,142      6.0%
  SFB...................................    5,027     15.69%      1,282      4.0%       1,922      6.0%
  NBB...................................    4,724    171.00%        111      4.0%         166      6.0%
  CalWest...............................    4,119     10.90%      1,512      4.0%       2,267      6.0%
  BOC...................................    7,254     11.78%      2,463      4.0%       3,695      6.0%
Tier I Capital vs. Average Assets:
  Consolidated Company..................   18,631      9.45%      7,886      4.0%       9,858      5.0%
  SFB...................................    5,027      9.57%      2,101      4.0%       2,626      5.0%
  NBB...................................    4,724     60.00%        315      4.0%         394      5.0%
  CalWest...............................    4,119      8.10%      2,034      4.0%       2,543      5.0%
  BOC...................................    7,254      6.96%      4,169      4.0%       5,211      5.0%
</TABLE>

                                       83
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

20. CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

    CCB's parent company only condensed balance sheets as of December 31, 1999
and 1998 are as follows, in thousands:

<TABLE>
<CAPTION>
                                                              1999       1998
                                                            --------   --------
<S>                                                         <C>        <C>
ASSETS
  Cash and cash equivalents...............................  $ 5,879    $ 3,107
  Premises and equipment, net.............................       80        236
  Investment in subsidiaries..............................   89,280     33,140
  Other assets............................................    2,103        781
                                                            -------    -------
    TOTAL ASSETS..........................................  $97,342    $37,264
                                                            =======    =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES--
  Accrued expenses and other liabilities..................  $ 1,508    $ 2,522
                                                            -------    -------
    Total liabilities.....................................    1,508      2,522
STOCKHOLDERS' EQUITY:
Common stock--$0.01 par value; 75,000,000 shares
  authorized; 21,267,483 shares issued and outstanding at
  December 31, 1999, and no par value; 10,000,000 shares
  authorized; and 6,875,776 shares issued and outstanding
  at December 31, 1998....................................   99,450     37,581
  Accumulated other comprehensive (loss) income...........     (342)        19
  Accumulated deficit.....................................   (3,274)    (2,858)
                                                            -------    -------
  Total stockholders' equity..............................   95,834     34,722
                                                            -------    -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................  $97,342    $37,264
                                                            =======    =======
</TABLE>

                                       84
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

20. CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (CONTINUED)
    CCB's parent company only condensed statements of operations for the years
ended December 31, 1999 and 1998 and for the period from inception
(September 11, 1997) through December 31, 1997, are as follows, in thousands:

<TABLE>
<CAPTION>
                                                                                    FOR THE PERIOD
                                                              FOR THE YEARS ENDED    SEPTEMBER 11
                                                                 DECEMBER 31,          THROUGH
                                                              -------------------    DECEMBER 31,
                                                                1999       1998          1997
                                                              --------   --------   --------------
<S>                                                           <C>        <C>        <C>
Interest income.............................................  $    41    $    28        $   7
Other.......................................................      158         --           --
Equity in undistributed net (loss) income in subsidiaries...     (713)      (531)          21
                                                              -------    -------        -----
Gross income................................................     (514)      (503)          28
Expenses:
  Interest expense..........................................       --         41           --
  Salaries and employee benefits............................      593        877           49
  Professional fees.........................................      403        925          148
  Occupancy and premises and equipment......................      270        105           --
  Goodwill amortization.....................................       91         77           10
  Other operating expenses..................................      299        223           20
                                                              -------    -------        -----
                                                                1,656      2,248          227
                                                              -------    -------        -----
Loss before provision for income taxes......................   (2,170)    (2,751)        (199)
Provision (benefit) for income taxes........................   (1,400)         1           --
                                                              -------    -------        -----
Loss before minority interest...............................     (770)    (2,752)        (199)
Minority interest in net loss (income) of subsidiaries......      354        103          (10)
                                                              -------    -------        -----
Net loss....................................................  $  (416)   $(2,649)       $(209)
                                                              =======    =======        =====
</TABLE>

                                       85
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

20. CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY (CONTINUED)
    CCB's parent company only condensed statements of cash flows for the year
ended December 31, 1999 and 1998 and for the period from inception
(September 11, 1997) through December 31, 1997, are as follows, in thousands:

<TABLE>
<CAPTION>
                                                                                    FOR THE PERIOD
                                                              FOR THE YEAR ENDED     SEPTEMBER 11
                                                                 DECEMBER 31,          THROUGH
                                                              -------------------    DECEMBER 31,
                                                                1999       1998          1997
                                                              --------   --------   --------------
<S>                                                           <C>        <C>        <C>
Net loss....................................................  $   (416)  $ (2,649)     $  (209)
Cash flows from operating activities:
  Equity in net loss (income) of subsidiaries...............       359        428          (11)
  Depreciation and amortization.............................        75        130           10
  Write down of equipment...................................       133         --           --
  Net change in other assets, accrued expenses and other
    liabilities.............................................    (1,265)     1,642          117
                                                              --------   --------      -------
    Net cash used in operating activities...................    (1,114)      (449)         (93)
Cash flows from investing activities:
  Acquisition of subsidiaries...............................   (52,931)   (30,144)      (3,500)
  Net increase in interest-bearing deposits with other
    banks...................................................        --        900         (900)
  Purchases of premises and equipment.......................       (82)      (282)          (6)
  Proceeds from sale of equipment...........................        30         --           --
                                                              --------   --------      -------
    Net cash used in investing activities...................   (57,983)   (29,526)      (4,406)
Cash flows from financing activities--
  Proceeds from issuance of common stock and from exercise
    of options..............................................    61,869     32,971        4,610
                                                              --------   --------      -------
    Net cash provided by financing activities...............    61,869     32,971        4,610
                                                              --------   --------      -------
Increase in cash and cash equivalents.......................     2,772      2,996          111
Beginning cash and cash equivalents.........................     3,107        111           --
                                                              --------   --------      -------
Ending cash and cash equivalents............................  $  5,879   $  3,107      $   111
                                                              ========   ========      =======
</TABLE>

21. SUBSEQUENT EVENTS

CCB STOCK OPTION PLAN-SECURITIES REGISTRATION

    The Company registered the securities reserved under the CCB Plan with the
SEC on Form S-8 on January 14, 2000. The CFB Plan as described in Note 15, was
assumed by the Company. As of December 31, 1999, there were 6,385,114 options
authorized for grant under the CCB Plan and CFB Plan.

SACRAMENTO COMMERCIAL BANK ACQUISITION (UNAUDITED)

    On March 1, 2000, the Company issued shares of Company Common Stock to the
California Fund in exchange for all of the outstanding shares of stock in
Sacramento Capital Co. ("SCC"), a bank holding company. SCC was formed by the
California Fund for the purpose of acquiring Sacramento Commercial Bank ("SCB"),
a single branch California state-chartered commercial bank. SCC was capitalized
through the sale of $33.4 million of SCC common stock to the California Fund and
through the sale of $4.7 million of non-voting preferred stock to CCB. The total
purchase price paid by SCC for SCB was $37.6 million, net of a cash dividend of
$4.0 million paid by SCB to SCC. At December 31, 1999, SCB had total assets,

                                       86
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

21. SUBSEQUENT EVENTS (CONTINUED)
deposits, and shareholders' equity of $209.5 million, $191.7 million and
$15.9 million, respectively. The acquisition of SCB by SCC was accounted for
under the purchase method of accounting. SCC was merged with and into the
Company in a transaction accounted for under the "as-if" pooling-of-interests
method of accounting.

22. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

    The quarterly results of the Company for the years ended December 31, 1999
and 1998 are presented below (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                         MARCH 31,   JUNE 30,   SEPT 30,    DEC 31,
                                                           1999        1999       1999       1999
                                                         ---------   --------   --------   ---------
<S>                                                      <C>         <C>        <C>        <C>
Interest income........................................   $ 3,478    $ 3,605    $ 3,797    $  21,933
Interest expense.......................................       895        873        961        8,639
                                                          -------    -------    -------    ---------
Net interest income before provision for loan losses...     2,583      2,732      2,836       13,294
Provision for loan losses..............................        60         91        198          470
                                                          -------    -------    -------    ---------
Net interest income after provision for loan losses....     2,523      2,641      2,638       12,824
Noninterest income.....................................       419        453        504        1,499
Amortization of intangible assets......................       281        293        294        1,158
Other noninterest expenses.............................     3,200      3,003      3,149       12,975
                                                          -------    -------    -------    ---------
Income (loss) before provision for income taxes and
  minority interests...................................      (539)      (202)      (301)         190
Provision for income tax (benefit) expense.............       173        116       (283)        (182)
Minority interests.....................................      (100)       (42)       (58)         (60)
                                                          -------    -------    -------    ---------
Net income (loss)......................................   $  (612)   $  (276)   $    40    $     432
                                                          =======    =======    =======    =========
Shares outstanding
  Basic................................................   6,875.8    6,875.8    6,911.6      9,980.5
  Diluted..............................................   6,875.8    6,875.8    7,035.1     10,129.7
Net income per share
  Basic................................................   $ (0.09)   $ (0.04)   $  0.01    $    0.04
  Diluted..............................................   $ (0.09)   $ (0.04)   $  0.01    $    0.04
</TABLE>

                                       87
<PAGE>
             CALIFORNIA COMMUNITY BANCSHARES, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

22. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (CONTINUED)

<TABLE>
<CAPTION>
                                                     MARCH 31,   JUNE 30,   SEPT 30,      DEC 31,
                                                       1998        1998       1998         1998
                                                     ---------   --------   ---------   -----------
<S>                                                  <C>         <C>        <C>         <C>
Interest income....................................   $  817      $  838    $     916   $     1,249
Interest expense...................................      309         294          303           404
                                                      ------      ------    ---------   -----------
Net interest income before provision for loan
  losses...........................................      508         544          613           845
Provision for loan losses..........................       18          18          262            42
                                                      ------      ------    ---------   -----------
Net interest income after provision for loan
  losses...........................................      490         526          351           803
Noninterest income.................................       72         387          227            50
Amortization of intangible assets..................       19          19           19            68
Other noninterest expenses.........................      783         862          951         2,922
                                                      ------      ------    ---------   -----------
Income (loss) before provision for income taxes and
  minority interests...............................     (240)         32         (392)       (2,137)
Provision for income tax (benefit) expense.........       --           1            1            13
Minority interests.................................      (12)        221            7          (319)
                                                      ------      ------    ---------   -----------
Net income (loss)..................................   $ (207)     $ (211)   $    (400)  $    (1,831)
                                                      ======      ======    =========   ===========
Shares outstanding
  Basic............................................    843.4       843.4      1,075.2       2,726.0
  Diluted..........................................    843.4       843.4      1,075.2       2,726.0
Net loss per share
  Basic............................................   $(0.25)     $(0.25)   $   (0.37)  $     (0.67)
  Diluted..........................................   $(0.25)     $(0.25)   $   (0.37)  $     (0.67)
</TABLE>

                                       88
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

    The Board of Directors of the Company appointed KPMG LLP as its auditors to
replace Deloitte & Touche, LLP on November 15, 1999. Deloitte & Touche, LLP's
report dated February 23, 1999 on the Company's consolidated financial
statements as of and for the year ended December 31, 1998 did not include an
adverse opinion or disclaimer opinion nor was it qualified as to audit scope or
accounting principles.

    During the Company's fiscal year ended December 31, 1998 and subsequent
period prior to appointing KPMG LLP, there were no disagreements with Deloitte &
Touche, LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which if not resolved to
Deloitte & Touche, LLP's satisfaction, would have caused them to make reference
to the subject matter of the disagreement in connection with their report.

    During the Company's fiscal year ended December 31, 1998 and subsequent
period prior to appointing KPMG LLP:

        (a) Deloitte & Touche, LLP had not advised the Company that there did
    not exist the internal controls necessary for the Company to develop
    reliable financial statements;

        (b) Deloitte & Touche, LLP had not advised the Company that information
    had come to their attention that had led them to no longer be able to rely
    on management's representations, or that had made Deloitte & Touche, LLP
    unwilling to be associated with the financial statements prepared by
    management;

        (c) Deloitte & Touche, LLP had not advised the Company that they needed
    to expand significantly the scope of their audit, or that information had
    come to their attention during such time period that if further investigated
    may (i) materially impact the fairness or reliability of either the
    previously issued audit report or the underlying financial statements, or
    the financial statements to be issued covering the fiscal period subsequent
    to the date of the most recent financial statements covered by an audit
    report or (ii) cause Deloitte & Touche, LLP to be unwilling to rely on
    management's representations or be associated with the Company's financial
    statements; and

        (d) Deloitte & Touche, LLP had not advised the Company that information
    has come to their attention of the type described in subparagraph (c) above,
    the issue not being resolved to their satisfaction prior to its dismissal.

    The Company had appointed Deloitte & Touche, LLP as its auditors, to replace
Arthur Andersen, LLP on November 19, 1998. Arthur Andersen, LLP's report dated
February 25, 1998 on the Company's consolidated financial statements as of and
for the period from the Company's inception (September 11, 1997) to December 31,
1997 did not include an adverse opinion or disclaimer opinion, nor was it
qualified as to audit scope or accounting principles.

    During the Company's period ended December 31, 1997, and subsequent period
prior to appointing Deloitte & Touche, LLP there were no disagreements with
Arthur Andersen, LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which if not
resolved to Arthur Andersen, LLP's satisfaction, would have caused them to make
reference to the subject matter of the disagreement in connection with their
report.

    During the Company's period ended December 31, 1997, and subsequent period
prior to appointing Deloitte & Touche, LLP:

        (e) Arthur Andersen, LLP had not advised the Company that there did not
    exist the internal controls necessary for the Company to develop reliable
    financial statements;

                                       89
<PAGE>
        (f) Arthur Andersen, LLP had not advised the Company that information
    had come to their attention that had led them to no longer be able to rely
    on management's representations, or that had made Arthur Andersen, LLP
    unwilling to be associated with the financial statements prepared by
    management;

        (g) Arthur Andersen, LLP had not advised the Company that they needed to
    expand significantly the scope of their audit, or that information had come
    to their attention during such time period that if further investigated may
    (i) materially impact the fairness or reliability of either the previously
    issued audit report or the underlying financial statements, or the financial
    statements to be issued covering the fiscal period subsequent to the date of
    the most recent financial statements covered by an audit report or (ii)
    cause Arthur Andersen, LLP to be unwilling to rely on management's
    representations or be associated with the Company's financial statements;
    and

        (h) Arthur Andersen, LLP had not advised the Company that information
    has come to their attention of the type described in subparagraph (c) above,
    the issue not being resolved to their satisfaction prior to its dismissal.

                                       90
<PAGE>
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

DIRECTORS

    The following table sets forth information as to each member of the Board of
Directors, such person's age, such person's position with the Company and the
period during which such person has served as a director of the Company.

<TABLE>
<CAPTION>
NAME                              AGE        POSITION WITH THE COMPANY     DIRECTOR OF THE COMPANY SINCE
----                            --------   ------------------------------  -----------------------------
<S>                             <C>        <C>                             <C>
Ronald W. Bachli..............     59      President, Chief Executive            1999
                                           Officer and Director

Richard W. Decker, Jr.........     55      Chairman of the Board and             1999
                                           Director

J. Thomas Byrom...............     52      Secretary and Director                1999

Joseph P. Heitzler............     55      Director                              1999

Robert J. Kushner.............     49      Director                              1999

Larry D. Mitchell.............     57      Director                              1999

Clifford R. Ronnenberg........     62      Director                              1999

Jaynie Studenmund.............     45      Director                              1999
</TABLE>

    RONALD W. BACHLI has been President, Chief Executive Officer and a director
of the Company since its incorporation in September, 1999. He also has been a
managing member of Belvedere and Vice Chairman and director of its predecessor
since December 1998. He is the Chairman of the Board of Directors of PSB and a
director of PCC, PSB, BOC and CalWest. Mr. Bachli received his B.S. in Finance
from the University of San Francisco in 1962 and his Juris Doctor degree from
the University of San Francisco School of Law in 1972. From 1982 until joining
the general partner of the California Fund in late 1998, Mr. Bachli was a
banking partner in the firm of Lillick & Charles LLP where he specialized in
regulatory, corporate finance, and mergers and acquisitions for financial
institutions.

    RICHARD W. DECKER, JR. has over 29 years of banking experience. Mr. Decker
is a managing member of Belvedere and was the President and a co-founder of its
predecessor. Mr. Decker was the Chief Executive Officer of CFB from January 1,
1999 to April 30, 1999. He is the Chairman of the respective Boards of Directors
of the Company and PCC, and also serves on the Boards of Directors of PCC, PSB
and BOC. Mr. Decker is also a director of Cerritos Valley Bancorp, which has a
class of securities registered under Section 12(g) of the Exchange Act.
Mr. Decker was co-founder and Vice Chairman of Independent Bancorp of Arizona.
Mr. Decker assisted in the formation of Pan American Savings Bank, where he
served for four years as a director and chairman of the audit committee.
Previously, he served as President, CEO and director of WestAmerica Bank,
headquartered in Marin County, California, and worked for 15 years in senior
management positions at First Interstate Bank of California, leaving in 1988 as
Executive Vice President, Chief Administrative Officer and a member of the
bank's "managing committee." Mr. Decker earned his BS degree from Long Beach
State University in 1967 and an MBA in 1969. In 1970, he earned an additional
graduate degree from the American Graduate School of International Management
(Thunderbird). In addition, he completed the Graduate School of Credit and
Financial Management at Stanford Business School and in 1986 completed the
Advanced Management Program (AMP) at Harvard Business School.

    J. THOMAS BYROM has been Chief Financial Officer of Belvedere and its
predecessor since 1997. He is secretary and a director of the Company, and is a
director of PCC, PSB, and CalWest. Prior to joining of Belvedere, Mr. Byrom was
President and Chief Financial Officer at Tracy Federal Bank, F.S.B., in Tracy,

                                       91
<PAGE>
California. Earlier in his career, Mr. Byrom was Senior Vice President in the
finance division at 1st Nationwide Bank, and Vice President in charge of profit
planning at Wells Fargo Bank.

    JOSEPH P. HEITZLER is a director of the Company and of CalWest and is a
resident of Rolling Hills, California. Mr. Heitzler is president of National
Mobile Television, Inc., a worldwide and the nation's largest provider of mobile
broadcasting facilities. Until July of 1997 when he sold the business to
National Mobile Television, Inc., Mr. Heitzler was president of VTE Mobile
Television, Inc. a major provider of mobile broadcasting facilities, primarily
for sporting events. Prior to becoming involved with VTE Mobile
Television, Inc., Mr. Heitzler was senior executive producer for CBS
Sports, Inc. and Emmy winning producer of NFL Football. Subsequently,
Mr. Heitzler was president of Forum Sports Entertainment, Inc. the then parent
company of the Los Angeles Lakers, Los Angeles Kings and the Forum.

    ROBERT J. KUSHNER is a director and Chairman of the Audit Committee of the
Company and a director of BOC. Mr. Kushner is a certified public accountant, and
has been a principal of the accounting firm of Kushner, Smith, Joanou & Gregson
LLP since 1979. Mr. Kushner received a B.S. degree in accounting and finance
from the University of Southern California in 1973. Mr. Kushner's previous
experience related to audit management positions with two different
international accounting firms. He was an appointed member of the State Board of
Accountancy's Administrative Committee and is a member of the American Institute
of Certified Public Accountants and the California Society of Certified Public
Accountants.

    LARRY D. MITCHELL is a director of the Company and of PSB. Mr. Mitchell has
29 years of experience in the computer industry with the Hewlett Packard
Company. Prior to his retirement in October 1997, he was site general manager of
Hewlett Packard, Roseville, California. Mr. Mitchell earned an AB degree in
Engineering Science from Dartmouth College and an MBA from the Stanford Business
School. Mr. Mitchell serves as a director of the Finisar Corporation (which has
a class of securities registered under Section 12(g) of the Exchange Act) and a
director of numerous non-profit community organizations.

    CLIFFORD R. RONNENBERG is a director of the Company and of BOC.
Mr. Ronnenberg is Chairman, CEO and sole shareholder of CR&R, Incorporated, a
leading environmental management, hauling and recycling company serving Southern
California. Mr. Ronnenberg also owns Haulaway Storage Containers with business
service operations in seven western states and serves as Vice President of
Ronnenberg Inc., a family owned mobile home park management company.

    JAYNIE M. STUDENMUND is a director of the Company and a resident of La
Canada, California. Ms. Studenmund is President and Chief Operating Officer of
PayMyBills.com, an idealab! Company that provides bill management and electronic
payment services via the internet. From 1985 through 1996, Ms. Studenmund worked
in a variety of management positions for First Interstate Bank of California,
including EVP for the Retail Banking Group, Area Manager for Southern
California, and Chief Marketing Officer. Following First Interstate Bank, Ms.
Studenmund served as the EVP for Retail Banking for Great Western Bank and Home
Savings of America. She was recruited to these savings and loan giants to help
with their rapid turnaround and conversion to more 'bank-like' capabilities. Her
experience prior to banking includes serving as a management consultant at Booz,
Allen & Hamilton. Ms. Studenmund has a BA from Wellesley College and an MBA from
the Harvard Business School.

    The Board of Directors held four (4) meetings in 1999. During 1999 each
director attended at least 75% of the total number of meetings of the Board of
Directors and committees on which he or she served.

COMMITTEES OF THE BOARD OF DIRECTORS

AUDIT COMMITTEE

    The Audit Committee of the Board of Directors consists of Mr. Kushner as
Chairman and Messrs. Byrom, Decker and Mitchell. The Audit Committee recommends
to the Board of Directors for its approval a certified public accounting firm to
conduct the Company's annual audit. The Audit Committee

                                       92
<PAGE>
also (i) confers from time to time with the Company's certified public
accountants regarding their audit work and the details thereof, and maintains a
communication link between the Company's certified public accountants and the
Company's Board of Directors; (ii) reviews management letters of the Company's
certified public accounting firm, (iii) oversees and evaluates the internal
audit function to ascertain that professional internal auditing is performed
throughout the Company and its subsidiaries (iv) approves revisions in policies
related to accounting, risk and internal control matters and meets and consults
with the Company's executive and financial officers to discuss accounting
policies, (v) reviews staffing of the Company's accounting and financial
departments and makes recommendations to the Board of Directors relating to
these departments, (vi) reviews, before publication, the Company's annual
consolidated financial statements and any other financial statements deemed to
be appropriate by the Committee, and (v) provides assistance and recommendations
to the Board of Directors with respect to the general financial needs, policies
and practices of the Company.

    The Audit Committee had four (4) meetings in 1999.

COMPENSATION COMMITTEE

    The Compensation Committee of the Board of Directors consists of
Mr. Heitzler as Chairman and Messrs. Decker and Ronnenberg. The Compensation
Committee's responsibilities include recommending to the Board of Directors
annual performance goals for the Company's executive officers, measuring and
reporting to the Board of Directors the annual performance of the Company's
executive officers, recommending to the Board of Directors base pay, annual
bonus awards, and long term incentive awards for the Company's executive
officers, recommending to the Board of Directors compensation and benefit plans
for employees of the Company, reviewing all human resource plans and policies of
the Company and recommending changes as appropriate to the Board of Directors,
recommending to the Board of Directors programs for management development and
executive retention and evaluating the state of employee relations, and
recommending actions to the Board of Directors as appropriate.

    The Compensation Committee had no meetings in 1999.

MARKETING COMMITTEE

    The Marketing Committee of the Board of Directors consists of
Ms. Studenmund as Chairperson and Messrs. Decker, Heitzler and Kushner. The
primary responsibility of the Marketing Committee is to oversee communications
with employees, customers and shareholders. This responsibility includes
preparation of the annual report, planning for the annual shareholders' meeting,
and communicating the Company's mission and corporate values.

    The Marketing Committee had no meetings in 1999.

TECHNOLOGY COMMITTEE

    The Technology Committee of the Board of Directors consists of Mr. Mitchell
as Chairman and Messrs. Byrom and Decker. The Technology Committee's primary
responsibility is to guide the use of technology resources throughout the
Company and its subsidiaries, and insure that such resources contribute to the
Company's overall goals.

    The Technology Committee had no meetings in 1999.

ALCO COMMITTEE

    The ALCO Committee of the Board of Directors, which was formed in the year
2000, consists of Mr. Byrom as Chairman and Messrs. Bachli, Decker and Kushner.
The ALCO Committee's primary responsibilities are to establish and monitor
management's compliance with consolidated limits for exposure to interest rate
risk; provide a forum for the Company's subsidiaries to communicate issues and

                                       93
<PAGE>
to seek guidance regarding interest rate risk, concentration risk,
asset/liability volume, mix and pricing, and investments and liquidity; provide
direction to Company staff regarding management of liquidity and investments;
and report to the Board of Directors on the Company's interest rate risk
exposure, asset/ liability management at the Company's subsidiaries, and
management of liquidity and investments.

EXECUTIVE OFFICERS

    The following table sets forth as to each of the persons who currently
serves as an Executive Officer of the Company, such person's age, such person's
current position with the Company, and the period during which the person has
served in such position:

<TABLE>
<CAPTION>
NAME                               AGE         POSITION WITH THE COMPANY     YEAR HIRED BY THE COMPANY
----                             --------   -------------------------------  -------------------------
<S>                              <C>        <C>                              <C>
Ronald W. Bachli...............     59      President and Chief Executive              1999
                                            Officer

Richard W. Decker, Jr..........     55      Chairman of the Board of                   1999
                                            Directors

David E. Hooston...............     43      Chief Financial Officer                    2000

Lynn M. Hopkins................     32      Controller                                 2000
</TABLE>

    For biographical information concerning Messrs. Bachli and Decker,
see--Directors.

    DAVID E. HOOSTON is the Chief Financial Officer of the Company. From 1998
through April 30, 1999 Mr. Hooston served as President, Chief Operating Officer
and director of CFB. Mr. Hooston also served as a member of the Board of
Directors of BOC, CalWest, SFB and NBB. Prior to that, he was the Chief
Operating Officer of SFB from 1995 to 1998 and from 1991 to 1995 he was a
financial consultant. Mr. Hooston received his BA degree in Business Economics
from the University of California, Santa Barbara in 1979 and is a member of the
American Institute of Certified Public Accountants and the California State
Society of Certified Public Accountants.

    LYNN M. HOPKINS, CPA is the Controller of the Company. Prior to joining the
Company, Ms. Hopkins was the Senior Vice President and Controller of Western
Bancorp, a bank holding company, headquartered in Newport Beach, California,
from August 1998. Prior to joining Western Bancorp, Ms. Hopkins was a Senior
Manager with KPMG LLP in the financial services assurance practice. Ms. Hopkins
received her BA degree in Economics from the University of California, Los
Angeles in 1989.

ITEM 11.  EXECUTIVE COMPENSATION

SUMMARY OF COMPENSATION

    The following table sets forth a summary of the compensation paid during
each of the Company's last three completed fiscal years for services rendered in
all capacities to Richard W. Decker, Jr., President and Chief Executive Officer
of the Company from January 1, 1999 to April 30, 1999, Harvey Ferguson, who
served as President and Chief Executive Officer from May 1, 1999 to
December 14, 1999 (who also serves Chief Executive Officer of BOC and CalWest
and was the only executive officer of the Company whose annual compensation
exceeded $100,000 for 1999), and Ronald W. Bachli, President and Chief Executive
Officer of the Company since December 14, 1999 (collectively, Messrs. Decker,
Ferguson, and Bachli are referred to herein as the "Named Executive Officers").

                                       94
<PAGE>
                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                  LONG TERM
                                                                                 COMPENSATION
                                                                                    AWARDS
                                                                                 ------------
                                                   ANNUAL COMPENSATION            SECURITIES
                                            ----------------------------------    UNDERLYING     ALL OTHER
                                                                  OTHER ANNUAL     OPTIONS/     COMPENSATION
NAME AND PRINCIPAL POSITION        YEAR      SALARY     BONUS     COMPENSATION     SARS (#)         ($)
---------------------------      --------   --------   --------   ------------   ------------   ------------
<S>                              <C>        <C>        <C>        <C>            <C>            <C>
Ronald W. Bachli, .............    1999          -0-        -0-       -0-              -0-              -0-
  President and Chief              1998          N/A        N/A       N/A              N/A              N/A
  Executive Officer(4)             1997          N/A        N/A       N/A              N/A              N/A
Richard W. Decker, Jr. ........    1999          -0-        -0-       -0-              -0-              -0-
  Chairman and Chief               1998          N/A        N/A       N/A              N/A              N/A
  Executive Officer(5)             1997          N/A        N/A       N/A              N/A              N/A

Harvey Ferguson, ..............    1999     $153,000   $100,000       -0-          110,287(1)    $  176,500(2)
  President and Chief              1998     $130,000   $ 15,000       -0-              -0-       $1,166,020(3)
  Executive Officer(5)             1997          N/A        N/A       N/A              N/A              N/A
</TABLE>

--------------------------

(1) Represents stock options granted under the CFB Plan and the PCC Plan in
    1999. The number of shares have been adjusted to reflect the conversion of
    options pursuant to the terms of the CCB Merger and the PCC Exchange Ratio.

(2) Includes $4,300 contributed by BOC to Mr. Ferguson's account in the BOC
    401(k) Plan, a $7,200 auto allowance and $165,000 which Mr. Ferguson would
    be entitled to receive in the event his employment is terminated without
    cause or in the event he chooses to terminate the agreement after a change
    of control. Mr. Ferguson will be entitled to other payments in the event of
    termination of employment. See--Employment Agreement with Harvey Ferguson.

(3) Includes $3,900 contributed by BOC to Mr. Ferguson's account in the BOC
    401(k) Plan, a $6,000 auto allowance and as a result of the BOC Acquisition,
    Mr. Ferguson received $945,000 under his prior salary continuation agreement
    with BOC and $211,120 in cancellation of his BOC stock options.

(4) Mr. Bachli has been the President and CEO of the Company since its
    incorporation in September 1999 and has not received any compensation from
    the Company. See Item 13. Certain Relationships and Related Transactions.

(5) Mr. Decker, as Chairman and Chief Executive Officer of CFB from December
    1998 to April 1999 and did not receive any compensation from the Company.
    Mr. Ferguson was President and Chief Executive Officer of CFB from April
    1999 to December 1999.

COMPENSATION OF DIRECTORS

    Except for Messrs. Decker, Bachli and Byrom, who serve without compensation,
members of the Board of Directors receive a retainer of $1,000 per month for
service as members of the Board of Directors. In addition, members of Board of
Director's committees receive a retainer of $500 per month for each committee of
which a director is a member and Board of Director's committee chairpersons
receive a retainer of $750 per month. Additionally, in 1999 certain directors
received options under the CFB Plan and PCC Plan. See--Directors' Options.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
  DECISIONS

    On December 13, 1999, the Company formed the Compensation Committee and
appointed Mr. Heitzler as Chairman and Messrs. Decker and Ronnenberg as members.
No member of the Compensation Committee is a current or former officer of the
Company except for Mr. Decker, who was Chief Executive Officer of CFB from
January 1 to April 30, 1999.

                                       95
<PAGE>
OTHER INFORMATION

    Certain incidental personal benefits to executive officers of the Company
(not otherwise disclosed in this Annual Report on Form 10-K) may result from
expenses incurred by the Company in the interest of attracting and retaining
qualified personnel. With respect to any individual Named Executive Officer, the
aggregate amount of such compensation for the 1999 fiscal year did not exceed
the lesser of $50,000 or ten percent (10%) of the compensation reported in the
Cash Compensation Table for such individual Named Executive Officer.

EMPLOYMENT AGREEMENT WITH HARVEY FERGUSON

    As a condition to the BOC Acquisition, Harvey Ferguson entered into an
employment agreement with BOC. The term of Mr. Ferguson's employment agreement
began on December 31, 1998, the effective date of the BOC Acquisition. Pursuant
to the employment agreement, Mr. Ferguson was employed by BOC as Chief Executive
Officer and was to receive base compensation of $130,000 per year and be
eligible for a discretionary annual bonus, in an amount not to exceed $20,000.

    In May of 1999, the agreement with BOC was terminated in consideration of a
new contract entered into by and among CFB, BOC, and Mr. Ferguson. Under the
terms of this new contract, Mr. Ferguson is to receive base compensation of
$165,000 per year and is eligible for a discretionary bonus. This new agreement
terminates in May 2002. As a result of the CCB Merger, CFB's obligations under
this agreement have been assumed by the Company.

    Mr. Ferguson also receives other benefits, including reimbursement of
expenses, insurance, an automobile allowance of $600 per month, vacation pay and
participation in other benefit programs generally provided to other employees
and/or senior executives.

    In the event of:

    - a merger in which neither the Company nor BOC is the surviving corporation
      the majority of the capital stock of which is not owned by the sole
      shareholder of the Company or BOC or an affiliate thereof; or

    - a transfer of all or substantially all of the assets of BOC or the
      Company; or

    - any other corporate reorganization in which there is a change in ownership
      of the outstanding shares of the Company or BOC wherein more than fifty
      percent (50%) of the outstanding shares of the Company or BOC are
      transferred to any other partnership, corporation, trust or business
      entity (each a "Change in Control"); or

    - the dissolution of the Company or BOC;

Mr. Ferguson's agreement shall not be terminated, but instead, the surviving or
resulting corporation shall be bound by and shall have the benefit of the
provisions of the agreement. Notwithstanding the foregoing, in the event of a
Change in Control and in the event that, during the twelve month period
following such Change in Control, Mr. Ferguson terminates his employment with
the Company or BOC following a reduction in Mr. Ferguson's duties or title, or a
reduction in his base salary, Mr. Ferguson shall receive a single sum severance
payment equal to twelve (12) months of his then current base salary, less
customary withholdings and taxes.

LONG TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR

    No Long Term Incentive Plan awards were made during 1999 to any of the Named
Executive Officers.

                                       96
<PAGE>
STOCK OPTIONS PLANS

CALIFORNIA COMMUNITY BANCSHARES, INC. 1999 STOCK OPTION PLAN

    The California Community Bancshares, Inc. 1999 Stock Option Plan (the "CCB
Plan") was designed to attract, retain and motivate directors, officers and key
employees of the Company and its subsidiaries by providing added incentives to
enlarge their proprietary interest in the Company, to increase their efforts on
behalf of the Company and its subsidiaries, and to continue their association
with the Company and its subsidiaries. The CCB Plan is subject to the approval
of the Company's shareholders. It permits the granting of nonqualified stock
options and incentive stock options during a period of ten years from the date
of adoption by the Board of Directors. The CCB Plan is administered by the
Compensation Committee of the Board of Directors.

    The total number of shares of Company Common Stock reserved under the CCB
Plan is 6,103,356, subject to adjustment if the outstanding shares of Company
Common Stock are increased, decreased, or changed into or exchanged for a
different number or kind of shares or securities of the Company, through a
reorganization, merger, recapitalization, reclassification, stock split, reverse
stock split, stock dividend, stock consolidation, or otherwise, without
consideration to the Company. Under the CCB Plan, all options are granted at an
exercise price of not less than 100% of the fair market value of the Company
Common Stock at the time the option is granted. The CCB Plan provides for the
granting of options for exercise periods of up to ten years from the date of the
grant, with the exact exercise period to be determined by the Board of Directors
or the stock option committee. The exercise period of an option granted to an
individual who owns more than 10% of the total combined voting power of all
classes of stock of the Bank may not exceed five years. No options have been
granted under the CCB Plan to date.

CALIFORNIA FINANCIAL BANCORP 1999 STOCK OPTION PLAN

    In connection with the CCB Merger, CCB assumed the California Financial
Bancorp 1999 Stock Option Plan (the "CFB Plan") and all outstanding options to
purchase shares CFB Common Stock under the CFB Plan were converted into options
to purchase shares of Company Common Stock. As of December 31, 1999, there were
options to purchase 281,758 shares of Company Common Stock outstanding under the
CFB Plan. No further options will be granted under the CFB Plan.

    The terms of the CFB Plan are essentially the same as those of the CCB Plan,
except that under the CFB Plan, if, in the event of changes of control, as
defined in the CFB Plan, the CFB Plan and unexercised options are terminated,
all option holders shall have the right to exercise the options prior to the
consummation of the transaction causing such termination.

PLACER CAPITAL CO. 1999 STOCK OPTION PLAN

    The Placer Capital Co. 1999 Stock Option Plan (the "PCC Plan") was designed
to attract, retain and motivate directors, officers and key employees of PCC and
its affiliates. "Affiliate" is defined to mean any corporation which controls,
is controlled by, or is under common control with, PCC.

    The total number of shares of PCC Common Stock available for issuance under
the PCC Plan is 3,912,195, subject to adjustment if the outstanding shares of
PCC Common Stock are increased, decreased, or changed into or exchanged for a
different number or kind of shares or securities of PCC, through a
reorganization, merger, or recapitalization. As of December 31, 1999, options to
purchase 1,310,885 shares of PCC Common Stock were outstanding under the PCC
Plan. The terms of the PCC Plan are essentially the same as those of the CFB
Plan.

    In consideration of PCC granting stock options to directors, officers and
employees of its affiliates, the Company has agreed to assume options granted
under the PCC Plan at the earliest time that the Company can legally provide for
the acceleration of stock options upon a change of control, as defined in the
PCC Plan. Additionally, in the event a proposed transaction constituting a
change of control of the Company is presented to the Company prior to the
assumption of options outstanding under the PCC Plan, the Company shall assure
that such transaction shall be expressly conditioned upon the acquiring party
assuming all of PCC's outstanding options.

                                       97
<PAGE>
GRANTS OF OPTIONS

    No individual grants of stock options during fiscal year 1999 were made to
the Named Executive Officers except as follows:

                       OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                  INDIVIDUAL GRANTS
---------------------------------------------------------------------------------------------------------------------
                               NUMBER OF
                              SECURITIES                                EXERCISE
                              UNDERLYING        % OF TOTAL OPTIONS      OR BASE
                            OPTIONS GRANTED   GRANTED TO EMPLOYEES IN    PRICE
NAME                              (#)               FISCAL YEAR          ($/SH)               EXPIRATION DATE
----                        ---------------   -----------------------   --------      -------------------------------
<S>                         <C>               <C>                       <C>           <C>
Ronald W. Bachli, .......          -0-                  N/A                N/A                      N/A
  President and Chief
  Executive Officer(3)
Richard W. Decker,                 -0-                  N/A                N/A                      N/A
  Jr. ...................
  Chairman and Chief
  Executive Officer(4)
Harvey Ferguson, ........       54,888(1)              21.0%             $5.47(1)     32,933 shares--04/30/09; 21,955
  President and Chief                                                                        shares--02/19/09
  Executive Officer(5)          55,399(2)               6.0%             $6.64(2)                12/14/09
</TABLE>

------------------------

(1) Represents stock options granted under the CFB Plan in 1999. The number of
    shares and the exercise price have been adjusted to reflect the conversion
    of options pursuant to the terms of the CCB Merger.

(2) Represents stock options granted under the PCC Plan in 1999. The number of
    shares and the exercise price have been adjusted to reflect the PCC Share
    Exchange Ratio.

(3) Mr. Bachli has been the President and Chief Executive Officer of the Company
    since its incorporation in September 1999.

(4) Mr. Decker was Chairman and Chief Executive Officer of CFB from December
    1998 to April 1999.

(5) Mr. Ferguson was President and Chief Executive Officer of CFB from April
    1999 to December 1999.

OPTIONS EXERCISED AND VALUE OF UNEXERCISED OPTIONS

    The following table shows exercises of stock options during fiscal year 1999
by the Named Executive Officers and the value at December 31, 1999 of
unexercised options on an aggregated basis held by such persons:

                 AGGREGATED IN LAST FISCAL YEAR AND FY-END 1999

<TABLE>
<CAPTION>
                                                                                            VALUE OF UNEXERCISED
                                                                    NUMBER OF SECURITIES        IN-THE-MONEY
                                                                   UNDERLYING UNEXERCISED        OPTIONS AT
                                                                   OPTIONS AT FY-END (#)       FY-END ($)(1)
                                    SHARES                         ----------------------   --------------------
                                   ACQUIRED       VALUE REALIZED        EXERCISABLE/            EXERCISABLE/
NAME                            ON EXERCISE (#)        ($)             UNEXERCISABLE           UNEXERCISABLE
----                            ---------------   --------------   ----------------------   --------------------
<S>                             <C>               <C>              <C>                      <C>
Ronald W. Bachli..............        -0-              -0-                N/A                      N/A
Richard W. Decker, Jr.........        -0-              -0-                N/A                      N/A

Harvey Ferguson...............        -0-              -0-           None / 110,287          None / $64,219
</TABLE>

------------------------

(1) Based on a per share price at December 31, 1999 of $6.64.

                                       98
<PAGE>
DIRECTORS' OPTIONS

    In 1999, the following directors of the Company received options under the
CFB Plan. The number of shares and exercise price have been adjusted to reflect
the conversion of options pursuant to the terms of the CCB Merger.

<TABLE>
<CAPTION>
                                             NUMBER OF SECURITIES
                                              UNDERLYING OPTIONS    EXERCISE OR BASE PRICE
NAME                                             GRANTED (#)                ($/SH)           EXPIRATION DATE
----                                         --------------------   ----------------------   ---------------
<S>                                          <C>                    <C>                      <C>
Joseph P. Heitzler.........................          1,829                   $6.94              08/26/02

Robert J. Kushner..........................         25,614                   $5.47              02/19/09

Clifford R. Ronnenberg.....................         45,740                   $5.47              09/19/09
</TABLE>

    Additionally, the following directors of the Company received options under
the PCC Plan. The number of shares and exercise price have been adjusted to
reflect the conversion of options at an exchange ratio of 2.4605.

<TABLE>
<CAPTION>
                                             NUMBER OF SECURITIES
                                              UNDERLYING OPTIONS    EXERCISE OR BASE PRICE
NAME                                             GRANTED (#)                ($/SH)           EXPIRATION DATE
----                                         --------------------   ----------------------   ---------------
<S>                                          <C>                    <C>                      <C>
Robert J. Kushner..........................         29,526                   $4.06              08/20/09

Robert J. Kushner..........................         14,387                   $6.64              12/13/09

Joseph P. Heitzler.........................         38,170                   $6.64              12/13/09

Larry D. Mitchell..........................         20,000                   $6.64              12/13/09

Larry D. Mitchell..........................         29,526                   $6.64              10/28/09

Clifford R. Ronnenberg.....................         20,000                   $6.64              12/13/09

Jaynie Studenmund..........................         20,000                   $6.64              12/13/09
</TABLE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The Company Common Stock constitutes the only outstanding class of voting
securities of the Company. As of March 15, 2000, there were 26,297,523 shares of
Company Common Stock outstanding and entitled to vote and approximately 416
shareholders of record.

    The following table lists any known shareholders with beneficial ownership
of five percent or more of the outstanding Company Common Stock and the
beneficial ownership of Company Common Stock of all directors and executive
officers of the Company and all current executive officers and directors of the
Company as a group. Information with respect to beneficial ownership is based
upon the Company's records and data supplied to the Company by its shareholders
as of March 15, 2000.

<TABLE>
<CAPTION>
                                                               AMOUNT AND
                                                               NATURE OF     PERCENTAGE OF
NAME, TITLE AND ADDRESS OF BENEFICIAL OWNER                   OWNERSHIP(1)     OWNERSHIP
-------------------------------------------                   ------------   -------------
<S>                                                           <C>            <C>
California Community Financial Institutions Fund Limited       25,461,979        95.6%
  Partnership(2) ...........................................
  One Maritime Plaza, Suite 825
  San Francisco, California 94111

Ronald W. Bachli(2) ........................................   25,461,979        95.6%
  President, Chief Executive Officer and Director
  One Maritime Plaza, Suite 825
  San Francisco, California 94111
</TABLE>

                                       99
<PAGE>

<TABLE>
<CAPTION>
                                                               AMOUNT AND
                                                               NATURE OF     PERCENTAGE OF
NAME, TITLE AND ADDRESS OF BENEFICIAL OWNER                   OWNERSHIP(1)     OWNERSHIP
-------------------------------------------                   ------------   -------------
<S>                                                           <C>            <C>
Richard W. Decker Jr.(2) ...................................   25,461,979        95.6%
  Chairman of the Board and Director
  One Maritime Plaza, Suite 825
  San Francisco, California 94111

J. Thomas Byrom(2) .........................................   25,461,979        95.6%
  Secretary and Director
  One Maritime Plaza, Suite 825
  San Francisco, California 94111

Joseph P. Heitzler(3) ......................................        2,583           *
  Director

Robert J. Kushner(4) .......................................        4,574           *
  Director

Larry D. Mitchell ..........................................          -0-           *
  Director

Clifford R. Ronnenberg(5) ..................................       88,082           *
  Director

Jaynie Studenmund ..........................................          -0-           *
  Director

David E. Hooston(6) ........................................       25,000           *
  Chief Financial Officer

Lynn M. Hopkins ............................................          -0-           *
  Controller

Directors and Executive Officers as a group.................   25,582,218(7)     95.9%
</TABLE>

------------------------

*   Beneficial ownership does not exceed one percent of common stock
    outstanding.

(1) Beneficial owner of a security includes any person who, directly or
    indirectly, through any contract, arrangement, understanding, relationship,
    or otherwise has or shares: (a) voting power, which includes the power to
    vote, or to direct the voting power, of such security; and/or
    (b) investment power, which includes the power to dispose, or to direct the
    disposition of, such security. Beneficial ownership also includes the right
    to acquire beneficial ownership of such security as defined above within
    60 days.

(2) The California Fund is the beneficial owner of 25,129,433 shares of Company
    Common Stock and 332,546 shares of Company Common Stock issuable upon
    conversion of PIB Debentures calculated using principal and accrued interest
    through March 15, 2000. Mr. Bachli, the President and Chief Executive
    Officer and a director of the Company, Mr. Decker, the Chairman of the Board
    and a director of the Company, and Mr. Byrom, Secretary and a director of
    the Company, are principals of Belvedere. Belvedere is the general partner
    of the California Fund.

(3) Includes 1,830 shares of Company Common Stock which may be purchased on the
    exercise of stock options.

(4) Represents 4,574 shares of Company Common Stock which may be purchased on
    the exercise of stock options.

(5) Includes 22,870 shares of Company Common Stock which may be purchased on the
    exercise of stock options.

                                      100
<PAGE>
(6) Represents 25,000 shares of Company Common Stock which may be purchased on
    the exercise of stock options.

(7) Includes 386,820 shares of Company Common Stock which may be issuable upon
    conversion of PIB Debentures or purchased on the exercise of stock options.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS WITH MANAGEMENT

    Some of the directors, officers and principal shareholders of the Company
and the companies with which they are associated have been customers of, and
have had banking transactions with, the Banks in the ordinary course of the
Banks' business since January 1, 1999, and the Banks expect to have such banking
transactions in the future. All loans and commitments to lend included in such
transactions were made in the ordinary course of business, on substantially the
same terms, including interest rates, collateral and repayment terms, as those
prevailing at the time for comparable transactions with other persons and in the
opinion of the Company, did not involve more than the normal risk of
collectibility or present other unfavorable features.

INVESTMENT BANKING SERVICES

    Belvedere is the general partner of the California Fund, which held 95.6%
percent of the outstanding Company Common Stock as of December 31, 1999. Ronald
W. Bachli, President and Chief Executive Officer and a director of the Company,
Richard W. Decker, Jr., Chairman of the Board and a director of the Company and
J. Thomas Byrom, secretary and a director of the Company, are principals of
Belvedere.

    Under an agreement dated October 1, 1999, Belvedere serves as the exclusive
financial advisor to the Company pursuant to which the Company has agreed to pay
Belvedere (i) with respect to any debt financing obtained by the Company in
connection with an acquisition transaction, where Belvedere provides financial
advisory services, an amount equal to three percent (3%) of the aggregate amount
financed in the transaction; (ii) with respect to any equity financing by an
investor other than the California Fund obtained by the Company in connection
with an acquisition transaction, where Belvedere provides financial advisory
services, an amount equal to five percent (5%) of the aggregate amount financed
(including the value of any future specified and/or contingent financing
payments) in the transaction; (iii) with respect to any debt financing obtained
by the Company other than in connection with an acquisition transaction, where
Belvedere provides financial advisory services, an amount equal to three percent
(3%) of the aggregate amount financed; and (iv) with respect to any equity
financing by an investor other than the California Fund obtained by the Company
other than in connection with an acquisition transaction, where Belvedere
provides financial advisory services, an amount equal to five percent (5%) of
the aggregate amount financed (including the value of any future specified
and/or contingent financing payments).

    Under a substantially similar agreement dated August 10, 1999, Belvedere
served as the exclusive financial advisor to PCC and, in that capacity, provided
financial advisory services in connection with evaluating and negotiating the
PSB Acquisition. The Company assumed the obligations of PCC under that agreement
and paid fees of $660,000 to Belvedere in 2000 in connection with the PSB
Acquisition.

REIMBURSEMENT AND TAX SHARING AGREEMENTS

    The Company has entered into agreements with each of the Banks pursuant to
which the Banks have agreed to reimburse the Company for certain expenses
incurred by the Company in rendering management services on terms and conditions
consistent with the requirements of Section 23A of the Federal Reserve Act. In
addition, the Company has entered into a tax sharing agreement with the Banks
providing for the allocation of tax obligations among the Company and the Banks
in compliance with the Interagency

                                      101
<PAGE>
Policy Statement on Income Tax Allocation in a Holding Company Structure, as
promulgated by the Board of Governors, the FDIC and the other federal bank
regulatory agencies.

EXECUTIVE COMPENSATION

    As indicated in Item 11. Executive Compensation, the Chief Executive Officer
of the Company receives no compensation from the Company. However, the Chief
Executive Officer is compensated by Belvedere. Except as disclosed above
under--Investment Banking Services, neither Belvedere nor the California Fund
receives any compensation from the Company or any of its subsidiaries.

FUNDING OF THE PSB ACQUISITION

    As described in Item 1. Business--Evolution of the Company--Placer Sierra
Bank Acquisition, when PCC acquired PSB it funded the transaction through the
sale of $53 million of PCC Common Stock to the California Fund, the sale of
$18.5 million of subordinated debentures and issuance of $3.5 million of 8%
noncumulative preferred stock.

    To facilitate the capital structure of the PSB Acquisition, Placer Funding,
a California limited liability company (owned by the principals of Belvedere)
and Placer Trust, a Delaware business trust, 100% of the common securities of
which is owned by PCC, were organized.

    Placer Funding obtained a $22 million commercial bank loan from an
unaffiliated bank, the terms of which are outlined in Note 10 of Notes to
Consolidated Financial Statements. Placer Funding used the proceeds of the Term
Loan to purchase $18.5 million of trust preferred securities from Placer Trust
and $3.5 million to purchase one share of 8% noncumulative preferred stock from
PCC. Placer Trust used the proceeds of the sale of $18.5 million of trust
preferred securities to purchase $18.5 million of subordinated debentures from
PCC. PCC obtained a $3.0 million revolving line of credit from the same
commercial bank when Placer Funding obtained the Term Loan.

    The trust preferred securities represent preferred, undivided beneficial
interests in the assets of Placer Trust, which consist solely of the
subordinated debentures and payments under the debentures. The subordinated
debentures bear interest at a fixed interest rate of 8%, and will mature at the
expiration of 30 years after the date of issuance. The distributions on the
trust preferred securities are fixed at a rate per annum of 8% of the
liquidation value of the trust preferred securities.

    The trust preferred securities are subject to mandatory redemption, in whole
or in part, upon repayment of the subordinated debentures at maturity or their
earlier redemption. Subject to the approval of the Federal Reserve, if then
required under applicable capital guidelines or policies of the Federal Reserve,
the subordinated debentures are redeemable prior to maturity at the option of
PCC at the expiration of 5 years after issuance or, under some circumstances
relating to tax treatment or capital treatment of the trust preferred
securities, within 90 days of the occurrence of such circumstances.

    PCC pledged all of the shares of PSB stock to the commercial bank lender to
secure payment of amounts drawn on the revolving line of credit. Placer Funding
pledged all of the trust preferred securities and the noncumulative preferred
stock to the commercial bank lender to secure payment of the Term Loan. The
credit agreements entered into between PCC and Placer Funding with the
commercial bank lender each contain cross-default provisions.

                                      102
<PAGE>
ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

<TABLE>
<CAPTION>
     EXHIBIT NO.        DESCRIPTION
---------------------   -----------
<C>                     <S>
        2.1             Amended and Restated Plan of Reorganization and Merger by
                        and between California Community Bancshares, Inc. and
                        California Financial Bancorp dated as of November 15,
                        1999(1)

        2.2             Plan of Reorganization and Merger Agreement by and between
                        California Community Bancshares, Inc., Bank of Orange County
                        and Security First Bank dated as of September 10, 1999(2)

        2.3             Plan of Reorganization and Merger Agreement by and between
                        California Community Bancshares, Inc., CalWest Bank and
                        National Business Bank dated as of September 14, 1999(3)

        2.4             Plan of Reorganization and Exchange Agreement by and between
                        the California Community Financial Institutions Fund Limited
                        Partnership and California Community Bancshares, Inc. dated
                        September 10, 1999(4)

        2.5             First Amendment to the Plan of Reorganization and Exchange
                        Agreement by and between the California Community Financial
                        Institutions Fund Limited Partnership and California
                        Community Bancshares, Inc. dated November 15, 1999(5)

        3.1             Certificate of Incorporation of Registrant as amended to
                        date(6)

        3.2             Bylaws of Registrant as amended to date(7)

        4               N/A

        9               N/A

       10.1             Revised California Community Bancshares, Inc. 1999 Stock
                        Option Plan*

       10.2             California Financial Bancorp 1999 Stock Option Plan*

       10.3             Placer Capital Co. 1999 Stock Option Plan*

       10.4             Financial Advisory Agreement by and between the California
                        Community Financial Institutions Fund Limited Partnership
                        and California Community Bancshares, Inc.(8)

       10.5             Employment Agreement dated May 4, 1999 by and among
                        Mr. Harvey Ferguson, Bank of Orange County and California
                        Financial Bancorp*

       10.6             Revised Assumption Agreement by and between California
                        Community Bancshares, Inc. and Placer Capital Co.*

       11               Statement re: computation of per share earnings is included
                        in Note 1 to the consolidated financial statements of
                        Registrant included under Item 8 to this Annual Report on
                        Form 10-K

       12               N/A

       13               N/A

       16.1             Letter re: change in certifying accountant from Deloitte &
                        Touche LLP dated April 14, 2000

       16.2             Letter re: change in certifying accountant from Arthur
                        Andersen LLP dated April 14, 2000

       18               N/A

       21               Subsidiaries of California Community Bancshares, Inc.
</TABLE>

                                      103
<PAGE>

<TABLE>
<CAPTION>
     EXHIBIT NO.        DESCRIPTION
---------------------   -----------
<C>                     <S>
       22               N/A

       23.1             Consent of KPMG LLP

       23.2             Consent of Deloitte & Touche LLP

       23.3             Consent of Arthur Andersen LLP

       24               Power of Attorney

       27               Financial Data Sheet
</TABLE>

------------------------

*   Management contracts and compensatory plans

(1) Attached as Exhibit I to the proxy statement/prospectus contained in Part I
    of Registration No. 333-87481 on Form S-4 filed by the Registrant (the "S-4
    Registration Statement") and incorporated herein by reference.

(2) Attached as Exhibit II to the proxy statement/prospectus contained in
    Part I of the S-4 Registration Statement and incorporated herein by
    reference.

(3) Attached as Exhibit III to the proxy statement/prospectus contained in
    Part I of the S-4 Registration Statement and incorporated herein by
    reference.

(4) Filed as Exhibit 2.4 to the S-4 Registration Statement and incorporated
    herein by reference.

(5) Filed as Exhibit 2.5 to the S-4 Registration Statement and incorporated
    herein by reference.

(6) Filed as Exhibit 3.1 to the S-4 Registration Statement and incorporated
    herein by reference.

(7) Filed as Exhibit 3.2 to the S-4 Registration Statement and incorporated
    herein by reference.

(8) Filed as Exhibit 10.2 to the S-4 Registration Statement and incorporated
    herein by reference.

REPORTS ON FORM 8-K

    The Company filed no Current Reports on Form 8-K during the quarter ended
December 31, 1999.

                                      104
<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.

<TABLE>
<S>                                                    <C>  <C>
                                                       CALIFORNIA COMMUNITY BANCSHARES, INC.

Date:  April 14, 2000                                  By:  /s/ RONALD W. BACHLI
                                                            -----------------------------------------
                                                            Ronald W. Bachli
                                                            PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>

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

<TABLE>
<CAPTION>
                  SIGNATURE                                     TITLE                           DATE
                  ---------                                     -----                           ----
<C>                                            <S>                                      <C>
            /s/ RONALD W. BACHLI               President and Chief Executive            April 14, 2000
    ------------------------------------         Officer and Director
              Ronald W. Bachli                   (principal executive officer)

           RICHARD W. DECKER, JR.*             Chairman and Director                    April 14, 2000
    ------------------------------------
           Richard W. Decker, Jr.

              J. THOMAS BYROM*                 Secretary and Director                   April 14, 2000
    ------------------------------------
               J. Thomas Byrom

             ROBERT J. KUSHNER*                Director                                 April 14, 2000
    ------------------------------------
              Robert J. Kushner

           CLIFFORD R. RONNENBERG*             Director                                 April 14, 2000
    ------------------------------------
           Clifford R. Ronnenberg

             JOSEPH P. HEITZLER*               Director                                 April 14, 2000
    ------------------------------------
             Joseph P. Heitzler

             LARRY D. MITCHELL*                Director                                 April 14, 2000
    ------------------------------------
              Larry D. Mitchell
</TABLE>

                                      105
<PAGE>

<TABLE>
<CAPTION>
                  SIGNATURE                                     TITLE                           DATE
                  ---------                                     -----                           ----
<C>                                            <S>                                      <C>
            JAYNIE M. STUDENMUND*              Director                                 April 14, 2000
    ------------------------------------
            Jaynie M. Studenmund

              DAVID E. HOOSTON*                Chief Financial Officer                  April 14, 2000
    ------------------------------------         (principal accounting officer and
              David E. Hooston                   principal financial officer)
</TABLE>

<TABLE>
<S>   <C>                                                    <C>                         <C>
*By                   /s/ RONALD W. BACHLI
             --------------------------------------
                        Ronald W. Bachli
                       AS ATTORNEY-IN-FACT
</TABLE>

                                      106