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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington D.C. 20549



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FORM 10-Q

|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTER ENDED JUNE 30, 2002

OR

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

For the transition period from ______ to ______

Commission File No. 0-20862

VINEYARD NATIONAL BANCORP

(Exact Name of Registrant as Specified in its Charter)


|                                                                                              |  |                                                
|--------------------------------------------------------------------------------------------- |  | -----------------------------------------------
|California
(State or other jurisdiction of
incorporation or organization)                     |  | 33-0309110
(IRS employer
identification number)
|9590 Foothill Boulevard
Rancho Cucamonga, California
(Address of principal executive offices) |  | 91730
(Zip Code)                               

Registrants telephone number, including area code: (909) 987-0177

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 [ ]

APPLICABLE TO CORPORATE ISSUER

Indicate the number of shares outstanding of the issuers common stock on the
latest practicable date: 1,925,792 shares of common stock as of July 31, 2002.





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TABLE OF CONTENTS



|                          |                                                                                               |                                                            |  |  |  |  |  | 
|------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------- |  |  |  |  |  | 
|PART I                   
|                          | ITEM I. FINANCIAL STATEMENTS                                                                 
|                          |                                                                                               | CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION            
|                          |                                                                                               | CONSOLIDATED STATEMENTS OF INCOME                         
|                          |                                                                                               | CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
|                          |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS                     
|                          | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                          | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II OTHER INFORMATION
|                          | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                          | ITEM 2. CHANGES IN SECURITIES                                                                
|                          | ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                      
|                          | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                          | ITEM 5. OTHER INFORMATION                                                                    
|                          | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES               



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VINEYARD NATIONAL BANCORP

FORM 10-Q INDEX
FOR THE PERIODS ENDED JUNE 30, 2002 AND 2001,
AND DECEMBER 31, 2001

|                               |  |                                                                                       |  |                                                                                                            |    |  |    | 
|------------------------------ |  | ------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------- | -- |  | -- | 
|PART I  FINANCIAL INFORMATION
|                              
|ITEM 1.                        |  | Financial Statements                                                                  |  |                                                                                                            |    | 
|                              
|                               |  |                                                                                       |  | Consolidated Statements of Financial Condition
at June 30, 2002 and December 31, 2001                      |    |  | 3  | 
|                              
|                               |  |                                                                                       |  | Consolidated Statements of Income
for the Six Months and Three Months Ended June 30, 2002 and 2001         |    |  | 4  | 
|                              
|                               |  |                                                                                       |  | Consolidated Statements of Changes in Stockholders Equity
for the Six Months Ended June 30, 2002 and 2001 |    |  | 5  | 
|                              
|                               |  |                                                                                       |  | Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 2002 and 2001                      |    |  | 6  | 
|                              
|                               |  |                                                                                       |  | Notes to Consolidated Financial Statements                                                                 |    |  | 7  | 
|                              
|ITEM 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  |                                                                                                            | 10 | 
|                              
|ITEM 3.                        |  | Quantitative and Qualitative Disclosure About Market Risk                             |  |                                                                                                            | 20 | 
|                              
|PART II  OTHER INFORMATION   
|                              
|ITEM 1.                        |  | Legal Proceedings                                                                     |  |                                                                                                            | 21 | 
|                              
|ITEM 2.                        |  | Changes in Securities                                                                 |  |                                                                                                            | 21 | 
|                              
|ITEM 3.                        |  | Defaults upon Senior Securities                                                       |  |                                                                                                            | 21 | 
|                              
|ITEM 4.                        |  | Submission of Matters to a Vote of Security Holders                                   |  |                                                                                                            | 21 | 
|                              
|ITEM 5.                        |  | Other Information                                                                     |  |                                                                                                            | 21 | 
|                              
|ITEM 6.                        |  | Exhibits and Reports on Form 8-K                                                      |  |                                                                                                            | 22 | 
|                              
|                               |  |                                                                                       |  | Signatures                                                                                                 |    |  | 24 | 

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements as referenced in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
inherently unreliable and actual results may vary. Factors which could cause
actual results to differ from these forward-looking statements include changes
in the competitive marketplace, changes in the interest rate environment,
economic conditions, outcome of pending litigation, risks associated with
credit quality and other factors discussed in the Companys filings with the
Securities and Exchange Commission. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.

Page 2 of 24



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PART I




ITEM I. FINANCIAL STATEMENTS




VINEYARD NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
AT JUNE 30, 2002 AND DECEMBER 31, 2001
(Unaudited)

|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |              |        |         |         | 
|----------------------------------------------------------------------------------------------------------------------------------- | -------- | ------------------- | -------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- | ------ | -------------------- | ------- | ------------ | ------ | ------- | ------- | 
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        | Dollars in Thousands
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                     
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        | June 30,             |         | December 31,
|                                                                                                                                    |          | 2002                |                                                    | 2001                                                                                                                                  
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                       
|Assets                                                                                                                              |          |                     |                                                    |                                                                                                                                       
|Cash and due from banks                                                                                                             |          | $                   | 12,580                                             |                                                                                                                                        |        | $                    | 8,430   |             
|Federal funds sold                                                                                                                  |          |                     | 2,192                                              |                                                                                                                                        |        |                      | 6,280   |             
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|                                                                                                                                    |          |                     |                                                    | Total Cash and Cash Equivalents                                                                                                        |        |                      | 14,772  |              |        |         | 14,710  | 
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|Investment securities                                                                                                               |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|                                                                                                                                    |          | Available-for-sale  |                                                    |                                                                                                                                        | 49,543 |                      |         |              | 30,550 |        
|Loans, net of unearned income                                                                                                       |          |                     | 193,326                                            |                                                                                                                                        |        |                      | 133,107 |             
|Loans held for sale                                                                                                                 |          |                     | 643                                                |                                                                                                                                        |        |                      | 4,471   |             
|                                                                                                                                    |          |                     | Less: Allowance for possible loan losses           |                                                                                                                                        |        | (2,080               | )       |              |        | (1,450  | )      
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|                                                                                                                                    |          |                     | Net
Loans                                          |                                                                                                                                        |        | 191,889              |         |              |        | 136,128 |        
|Bank premises and equipment                                                                                                         |          |                     | 5,363                                              |                                                                                                                                        |        |                      | 5,388   |             
|Accrued interest                                                                                                                    |          |                     | 1,369                                              |                                                                                                                                        |        |                      | 900     |             
|Other real estate owned                                                                                                             |          |                     |                                                   |                                                                                                                                        |        |                      |        |             
|Federal Home Loan Bank and other stock, at cost                                                                                     |          |                     | 1,595                                              |                                                                                                                                        |        |                      | 177     |             
|Other assets                                                                                                                        |          |                     | 3,527                                              |                                                                                                                                        |        |                      | 3,433   |             
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|                                                                                                                                    |          |                     |                                                    | Total Assets                                                                                                                           |        | $                    | 268,058 |              |        | $       | 191,286 | 
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|Liabilities and Stockholders Equity                                                                                                |          |                     |                                                    |                                                                                                                                       
|Liabilities                                                                                                                         |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|                                                                                                                                    | Deposits |                     |                                                    |                                                                                                                                        |        |                      |         |              |       
|                                                                                                                                    |          |                     | Demand deposits                                    |                                                                                                                                        | $      | 51,457               |         |              | $      | 45,951  |        
|                                                                                                                                    |          |                     | Savings and NOW deposits                           |                                                                                                                                        |        | 31,251               |         |              |        | 31,277  |        
|                                                                                                                                    |          |                     | Money market deposits                              |                                                                                                                                        |        | 53,933               |         |              |        | 19,949  |        
|                                                                                                                                    |          |                     | Time deposits in denominations of $100,000 or more |                                                                                                                                        |        | 28,142               |         |              |        | 27,093  |        
|                                                                                                                                    |          |                     | Other time deposits                                |                                                                                                                                        |        | 41,001               |         |              |        | 35,111  |        
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|                                                                                                                                    |          |                     |                                                    | Total Deposits                                                                                                                         |        |                      | 205,784 |              |        |         | 159,381 | 
|Federal Home Loan Bank advances                                                                                                     |          |                     | 31,500                                             |                                                                                                                                        |        |                      | 3,000   |             
|Company obligated preferred securities of subsidiary trust holding
floating rate junior subordinated deferrable interest debentures |          |                     | 12,000                                             |                                                                                                                                        |        |                      | 12,000  |             
|Convertible debenture                                                                                                               |          |                     | 3,650                                              |                                                                                                                                        |        |                      | 3,750   |             
|Accrued employee salary and benefits                                                                                                |          |                     | 1,274                                              |                                                                                                                                        |        |                      | 1,252   |             
|Accrued interest and other liabilities                                                                                              |          |                     | 1,740                                              |                                                                                                                                        |        |                      | 1,448   |             
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|                                                                                                                                    |          |                     |                                                    | Total Liabilities                                                                                                                      |        |                      | 255,948 |              |        |         | 180,831 | 
|Stockholders Equity                                                                                                                |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|                                                                                                                                    |          | Contributed capital |                                                    |                                                                                                                                        |        |                      |         |              |        |        
|                                                                                                                                    |          |                     |                                                    | Common stock-authorized 15,000,000 shares, no par
value; issued and outstanding 1,925,792 and 1,876,126
in 2002 and 2001, respectively |        |                      | 2,370   |              |        |         | 2,151   | 
|                                                                                                                                    |          |                     |                                                    | Additional paid-in surplus                                                                                                             |        |                      | 3,307   |              |        |         | 3,307   | 
|                                                                                                                                    |          |                     | Retained earnings                                  |                                                                                                                                        |        | 6,140                |         |              |        | 5,032   |        
|                                                                                                                                    |          |                     | Accumulated other comprehensive income             |                                                                                                                                        |        | 293                  |         |              |        | (35     | )      
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|                                                                                                                                    |          |                     |                                                    | Total Stockholders Equity                                                                                                             |        |                      | 12,110  |              |        |         | 10,455  | 
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |             
|                                                                                                                                    |          |                     |                                                    | Total Liabilities and Stockholders Equity                                                                                             |        | $                    | 268,058 |              |        | $       | 191,286 | 
|                                                                                                                                    |          |                     |                                                    |                                                                                                                                        |        |                      |         |             

See accompanying notes to financial statements.

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VINEYARD NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS AND THREE MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)

|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |       |     |       |       | 
|---------------------------------- | -------------------------------------------------------------- | ------------------------------------- | -------------------------------------------------------- | ---------------------------------------------------------------- | --- | ------------------------- | ----- | --------------------------- | --- | ----- | ----- | ----- | --- | --- | ----- | ----- | --- | ----- | ----- | 
|                                   |                                                                |                                       |                                                          |                                                                  |     | Dollars in Thousands     
|                                   |                                                                |                                       |                                                          |                                                                  |     |                          
|                                   |                                                                |                                       |                                                          |                                                                  |     | Six Months Ended June 30, |       | Three Months Ended June 30,
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                            
|                                   |                                                                |                                       |                                                          |                                                                  |     | 2002                      |       | 2001                        |     | 2002  |       | 2001 
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |      
|Interest Income                    |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|                                   | Interest and fees on loans                                     |                                       | $                                                        | 7,116                                                            |     |                           | $     | 4,377                       |     |       | $     | 3,806 |     |     | $     | 2,347 |    
|                                   | Interest on investment securities                              |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |       |    
|                                   |                                                                |                                       | Obligations of U.S. Government agencies
and corporations |                                                                  |     | 1,076                     |       |                             |     | 267   |       |       |     | 626 |       |       |     | 194   |      
|                                   | Interest on other securities                                   |                                       |                                                          | 9                                                                |     |                           |       | 7                           |     |       |       | 7     |     |     |       | 5     |    
|                                   | Interest on deposits                                           |                                       |                                                          |                                                                 |     |                           |       | 6                           |     |       |       |      |     |     |       | 2     |    
|                                   | Interest on Federal funds sold                                 |                                       |                                                          | 39                                                               |     |                           |       | 446                         |     |       |       | 29    |     |     |       | 219   |    
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|                                   |                                                                |                                       |                                                          | Total Interest Income                                            |     |                           | 8,240 |                             |     |       | 5,103 |       |     |     | 4,468 |       |     |       | 2,767 | 
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|Interest Expense                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|                                   | Interest on savings deposits                                   |                                       |                                                          | 68                                                               |     |                           |       | 92                          |     |       |       | 33    |     |     |       | 46    |    
|                                   | Interest on NOW and money market deposits                      |                                       |                                                          | 528                                                              |     |                           |       | 248                         |     |       |       | 351   |     |     |       | 136   |    
|                                   | Interest on time deposits in denominations of
$100,000 or more |                                       |                                                          | 601                                                              |     |                           |       | 373                         |     |       |       | 302   |     |     |       | 217   |    
|                                   | Interest on other time deposits                                |                                       |                                                          | 618                                                              |     |                           |       | 739                         |     |       |       | 295   |     |     |       | 391   |    
|                                   | Interest on borrowed funds                                     |                                       |                                                          | 664                                                              |     |                           |       | 65                          |     |       |       | 347   |     |     |       | 65    |    
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|                                   |                                                                |                                       |                                                          | Total Interest Expense                                           |     |                           | 2,479 |                             |     |       | 1,517 |       |     |     | 1,328 |       |     |       | 855   | 
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|                                   |                                                                |                                       |                                                          | Net Interest Income                                              |     |                           | 5,761 |                             |     |       | 3,586 |       |     |     | 3,140 |       |     |       | 1,912 | 
|Provision for Possible Loan Losses |                                                                |                                       | (535                                                     | )                                                                |     |                           | (300  | )                           |     |       | (335  | )     |     |     | (300  | )    
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|                                   |                                                                |                                       |                                                          | Net Interest Income After Provision
for Possible Loan and Losses |     |                           | 5,226 |                             |     |       | 3,286 |       |     |     | 2,805 |       |     |       | 1,612 | 
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|Other Income                       |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|                                   |                                                                | Fees and service charges              |                                                          |                                                                  | 740 |                           |       |                             | 764 |       |       |       | 353 |     |       |       | 314 |      
|                                   |                                                                | Gain on sale of investment securities |                                                          |                                                                  | 179 |                           |       |                             |    |       |       |       | 101 |     |       |       |    |      
|                                   |                                                                | Litigation recovery                   |                                                          |                                                                  | 180 |                           |       |                             |    |       |       |       | 180 |     |       |       |    |      
|                                   |                                                                | Other income                          |                                                          |                                                                  | 102 |                           |       |                             | 148 |       |       |       | 39  |     |       |       | 162 |      
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|                                   |                                                                |                                       |                                                          | Total Other Income                                               |     |                           | 1,201 |                             |     |       | 912   |       |     |     | 673   |       |     |       | 476   | 
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|Other Expense                      |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|                                   |                                                                |                                       | Salaries and employee benefits                           |                                                                  |     | 2,275                     |       |                             |     | 2,044 |       |       |     | 954 |       |       |     | 1,090 |      
|                                   |                                                                |                                       | Occupancy expense of premises                            |                                                                  |     | 390                       |       |                             |     | 310   |       |       |     | 198 |       |       |     | 166   |      
|                                   |                                                                |                                       | Furniture and equipment expenses                         |                                                                  |     | 359                       |       |                             |     | 281   |       |       |     | 211 |       |       |     | 143   |      
|                                   |                                                                |                                       | Other expense                                            |                                                                  |     | 1,569                     |       |                             |     | 1,293 |       |       |     | 861 |       |       |     | 685   |      
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|                                   |                                                                |                                       |                                                          | Total Other Expense                                              |     |                           | 4,593 |                             |     |       | 3,928 |       |     |     | 2,224 |       |     |       | 2,084 | 
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|Income Before Income Taxes         |                                                                |                                       | 1,834                                                    |                                                                  |     |                           | 270   |                             |     |       | 1,254 |       |     |     | 4     |      
|Income Tax (Provision)/Benefit     |                                                                |                                       | (726                                                     | )                                                                |     |                           | 361   |                             |     |       | (500  | )     |     |     | 361   |      
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|Net Income                         |                                                                | $                                     | 1,108                                                    |                                                                  |     | $                         | 631   |                             |     | $     | 754   |       |     | $   | 365   |      
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|Basic Earnings Per Share           |                                                                | $                                     | 0.58                                                     |                                                                  |     | $                         | 0.34  |                             |     | $     | 0.40  |       |     | $   | 0.20  |      
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      
|Diluted Earnings Per Share         |                                                                | $                                     | 0.44                                                     |                                                                  |     | $                         | 0.31  |                             |     | $     | 0.29  |       |     | $   | 0.17  |      
|                                   |                                                                |                                       |                                                          |                                                                  |     |                           |       |                             |     |       |       |       |     |     |       |      

See accompanying notes to financial statements.

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VINEYARD NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)

|                                                            |  |                      |           |        |  |         |       |            |       |               |       |       |       |       |       |  |     |             |     |   |  |   |        | 
|----------------------------------------------------------- |  | -------------------- | --------- | ------ |  | ------- | ----- | ---------- | ----- | ------------- | ----- | ----- | ----- | ----- | ----- |  | --- | ----------- | --- | - |  | - | ------ | 
|                                                            |  | Dollars in Thousands
|                                                            |  |                     
|                                                            |  |                      |           |        |  |         |       |            |       |               |       |       |       |       |       |  |     | Accumulated |     |   |  |  
|                                                            |  | Number of            |           |        |  |         |       | Additional |       |               |       |       |       | Other |       |  |     |            
|                                                            |  | Shares               |           | Common |  | Paid-in |       | Retained   |       | Comprehensive |       |       |       |      
|                                                            |  | Outstanding          |           | Stock  |  | Capital |       | Earnings   |       | Income        |       | Total
|                                                            |  |                      |           |        |  |         |       |            |       |               |       |      
|Balance January 1, 2001                                     |  |                      | 1,864,828 |        |  | $       | 2,112 |            |       | $             | 3,307 |       |       | $     | 3,876 |  |     | $           |    |   |  | $ | 9,295  | 
|Stock options exercised                                     |  |                      | 2,160     |        |  |         | 6     |            |       |               |       |       |       |       |       |  | 6   |            
|Net income                                                  |  |                      |           |        |  |         |       |            | 631   |               |       |       |       |       | 631   | 
|Unrealized security holding gains
(net of $19 tax)          |  |                      |           |        |  |         |       |            |       |               | 27    |       |       |       | 27    | 
|                                                            |  |                      |           |        |  |         |       |            |       |               |       |       |       |       |       |  |     |             |     |   |  |   |        | 
|Total other comprehensive income                            |  |                      |           |        |  |         |       |            |       |               |       |       | 27    |      
|Total comprehensive income                                  |  |                      |           |        |  |         |       |            |       |               |       |       | 658   |      
|Balance, June 30, 2001                                      |  |                      | 1,866,988 |        |  | $       | 2,118 |            |       | $             | 3,307 |       |       | $     | 4,507 |  |     | $           | 27  |   |  | $ | 9,959  | 
|                                                            |  |                      |           |        |  |         |       |            |       |               |       |       |       |       |       |  |     |             |     |   |  |   |        | 
|                                                           
|                                                            |  |                      |           |        |  |         |       |            |       |               |       |       |       |       |       |  |     | Accumulated |     |   |  |  
|                                                            |  | Number of            |           |        |  |         |       | Additional |       |               |       |       |       | Other |       |  |     |            
|                                                            |  | Shares               |           | Common |  | Paid-in |       | Retained   |       | Comprehensive |       |       |       |      
|                                                            |  | Outstanding          |           | Stock  |  | Capital |       | Earnings   |       | Income        |       | Total
|                                                            |  |                      |           |        |  |         |       |            |       |               |       |      
|Balance January 1, 2002                                     |  |                      | 1,876,126 |        |  | $       | 2,151 |            |       | $             | 3,307 |       |       | $     | 5,032 |  |     | $           | (35 | ) |  | $ | 10,455 | 
|Stock options exercised                                     |  |                      | 29,666    |        |  |         | 119   |            |       |               |       |       |       |       |       |  | 119 |            
|Convertible debenture option                                |  |                      | 20,000    |        |  |         | 100   |            |       |               |       |       |       |       |       |  | 100 |            
|Net Income                                                  |  |                      |           |        |  |         |       |            | 1,108 |               |       |       |       |       | 1,108 | 
|Unrealized security holding gains
(net of $162 tax)         |  |                      |           |        |  |         |       |            |       |               | 432   |       |       |      
|less reclassification adjustment for gains
(net of $75 tax) |  |                      |           |        |  |         |       |            |       |               | (104  | )     |       |       | 328   | 
|                                                            |  |                      |           |        |  |         |       |            |       |               |       |       |       |       |       |  |     |             |     |   |  |   |        | 
|Total other comprehensive income                            |  |                      |           |        |  |         |       |            |       |               |       |       | 328   |      
|Total comprehensive income                                  |  |                      |           |        |  |         |       |            |       |               |       |       | 1,436 |      
|Balance, June 30, 2002                                      |  |                      | 1,925,792 |        |  | $       | 2,370 |            |       | $             | 3,307 |       |       | $     | 6,140 |  |     | $           | 293 |   |  | $ | 12,110 | 
|                                                            |  |                      |           |        |  |         |       |            |       |               |       |       |       |       |       |  |     |             |     |   |  |   |        | 

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VINEYARD NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)

|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                      |         |          |      |     |         |  
|-------------------------------------------- | ------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------- | ------ | ------------------------------------------------------------------ | ---------------- | ----------------------------------------- | ------ | -------------------- | ------- | -------- | ---- | --- | ------- | -
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        | Dollars in Thousands
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        | June 30,             |         | June 30,
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        | 2002                 |         | 2001    
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                      |         |         
|Cash Flows From Operating Activities         |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     
|                                             |                                                                                            | Net Income                                                                       |        | $                                                                  | 1,108            |                                           |        | $                    | 631     |         
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                      |         |         
|                                             |                                                                                            | Adjustments to Reconcile Net Income
to Net Cash Provided by Operating Activities |        |                                                                    |                  |                                           |        |                      |         |         
|                                             |                                                                                            |                                                                                  |        | Depreciation and amortization                                      |                  |                                           | 621    |                      |         |          | 258  |    
|                                             |                                                                                            |                                                                                  |        | Provision for possible loan losses                                 |                  |                                           | 535    |                      |         |          | 300  |    
|                                             |                                                                                            |                                                                                  |        | Adjustment to Allowance for loan losses relating to acquired loans |                  |                                           | 198    |                      |         |          |      |    
|                                             |                                                                                            |                                                                                  |        | Increase in deferred taxes                                         |                  |                                           |        |                      | (475    | )       
|                                             |                                                                                            |                                                                                  |        | Increase/(decrease) in taxes payable                               |                  |                                           | 770    |                      |         |          | (96  | )  
|                                             |                                                                                            |                                                                                  |        | Increase in other assets                                           |                  |                                           | (333   | )                    |         |          | (98  | )  
|                                             |                                                                                            |                                                                                  |        | Gain on sale investment securities                                 |                  |                                           | (179   | )                    |         |         
|                                             |                                                                                            |                                                                                  |        | Decrease in loans held for sale                                    |                  |                                           | 3,828  |                      |         |         
|                                             |                                                                                            |                                                                                  |        | Decrease in unearned loan fees                                     |                  |                                           | (224   | )                    |         |          | (61  | )  
|                                             |                                                                                            |                                                                                  |        | Increase in interest receivable                                    |                  |                                           | (469   | )                    |         |          | (110 | )  
|                                             |                                                                                            |                                                                                  |        | (Decrease)/increase in interest payable                            |                  |                                           | (282   | )                    |         |          | 257  |    
|                                             |                                                                                            |                                                                                  |        | (Decrease)/increase in accrued expense and
other liabilities       |                  |                                           | (174   | )                    |         |          | 258  |    
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                      |         |         
|                                             |                                                                                            |                                                                                  |        |                                                                    | Total Adjustment |                                           |        | 4,291                |         |          |      | 233 |        
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                      |         |         
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  | Net Cash Provided By Operating Activities |        |                      | 5,399   |          |      |     | 864     |  
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                      |         |         
|Cash Flows From Investing Activities         |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     
|                                             | Proceeds from sales of investment securities available-for-sale                            |                                                                                  |        | 15,854                                                             |                  |                                           |       
|                                             | Proceeds from maturities of investment securities available-for-sale                       |                                                                                  |        | 3,500                                                              |                  |                                           |        | 7,000                |        
|                                             | Proceeds from principal reductions MBS securities                                          |                                                                                  |        | 3,735                                                              |                  |                                           |        |                      |        
|                                             | Purchase of investment securities available-for-sale                                       |                                                                                  |        | (41,556                                                            | )                |                                           |        | (17,000              | )      
|                                             | Purchase of Federal Home Loan Bank & other stock                                           |                                                                                  |        | (1,418                                                             | )                |                                           |        | (126                 | )      
|                                             | Recoveries on loans previously written off                                                 |                                                                                  |        | 109                                                                |                  |                                           |        | 12                   |        
|                                             | Net loans made to customers and principal
collection of loans                              |                                                                                  |        | (60,206                                                            | )                |                                           |        | (15,527              | )      
|                                             | Proceeds from sale of property, plant & equipment                                          |                                                                                  |        |                                                                   |                  |                                           |        | 1                    |        
|                                             | Capital expenditures                                                                       |                                                                                  |        | (377                                                               | )                |                                           |        | (275                 | )      
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                      |         |         
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  | Net Cash Used In Investing Activities     |        |                      | (80,359 | )        |      |     | (25,915 | )
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                      |         |         
|Cash Flows From Financing Activities         |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     
|                                             | Net increase in demand deposits, NOW
accounts, savings accounts, and money market
Deposits |                                                                                  |        | 5,506                                                              |                  |                                           |        | 14,822               |        
|                                             | Net increase in certificates of deposits                                                   |                                                                                  |        | 40,897                                                             |                  |                                           |        | 16,049               |        
|                                             | Net change in Federal Home Loan Bank Advances                                              |                                                                                  |        | 28,500                                                             |                  |                                           |        |                      |        
|                                             | Issuance of Convertible Debentures                                                         |                                                                                  |        |                                                                    |                  | 3,546                                     |       
|                                             | Stock options exercised                                                                    |                                                                                  |        | 119                                                                |                  |                                           |        | 6                    |        
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                      |         |         
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  | Net Cash Provided By Financing Activities |        |                      | 75,022  |          |      |     | 34,423  |  
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     
|Net Increase in Cash and Cash Equivalents    |                                                                                            |                                                                                  | 62     |                                                                    |                  |                                           | 9,372  |                     
|Cash and Cash Equivalents, Beginning of year |                                                                                            |                                                                                  | 14,710 |                                                                    |                  |                                           | 16,793 |                     
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     
|Cash and Cash Equivalents, End of quarter    |                                                                                            | $                                                                                | 14,772 |                                                                    |                  | $                                         | 26,165 |                     
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     
|Supplemental Information                     |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     
|                                             |                                                                                            |                                                                                  |        | Change in valuation allowance for investment securities            |                  | $                                         | 566    |                      |         | $        | 46   |    
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     
|                                             |                                                                                            |                                                                                  |        | Income Tax Paid                                                    |                  | $                                         | 46     |                      |         | $        | 265  |    
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     
|                                             |                                                                                            |                                                                                  |        | Conversion
of debentures                                           |                  | $                                         | 100    |                      |         |          |     |    
|                                             |                                                                                            |                                                                                  |        |                                                                    |                  |                                           |        |                     

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NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements have been prepared in accordance with
accounting principal generally accepted in the United States of
America for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by accounting principal generally accepted in the United States of
America for complete financial statements.
In the opinion of Management, all adjustments considered necessary for a fair
statement of the results for the interim period presented have been included
and are of a normal recurring nature. For further information, refer to the
financial statements and footnotes thereto included in the Companys Annual
Report on Form 10-K for the year ended December 31, 2001. The results of
operations for the six month period ended June 30, 2002, are not necessarily
indicative of the results to be expected for the full year.

The consolidated financial statements include
Vineyard National Bancorp (the Company) and its
wholly owned subsidiaries, Vineyard Bank (the Bank), and
Vineyard Statutory Trust I (the Trust). Intercompany balances and
transactions have been eliminated.

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

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No.
141 requires that all business combinations initiated after June 30, 2001 be
accounted for by a single method  the purchase method. SFAS No. 141 also
specifies the criteria required for intangible assets to be recognized and
reported apart from goodwill. SFAS No. 142 requires that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually. SFAS No. 142 also requires
that intangible assets with definite useful lives be amortized over their
respective estimated useful lives to their estimated residual values, and
reviewed for impairment in accordance with SFAS No. 121 (as superceded by SFAS
No. 144), Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of. The Company is required to adopt the provisions of
SFAS No. 141 immediately and SFAS No. 142 effective January 1, 2002. The adoption of SFAS No. 141 and 142 did
not have a material
impact on the financial condition or operating results of the Company.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. This Statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. This Statement requires that the fair
value of a liability for an asset retirement obligation be recognized in the
period in which it is incurred if a reasonable estimate of fair value can be
made. The associated asset retirement costs are capitalized as part of the
carrying amount of the long-lived asset. This Statement is effective for
financial statements issued for fiscal years beginning after June 15, 2002. The
Company does not expect adoption of SFAS No. 143 to have a material impact on
the financial condition or operating results of the Company.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. SFAS No. 144 establishes a single accounting
model for the impairment or disposal of long-lived assets, including
discontinued operations. SFAS No. 144 superseded SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of, and APB Opinion No. 30, Reporting the Results of Operations  Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. This Statement is effective for
financial statements issued for fiscal years beginning after December 15, 2001.
The adoption of SFAS No. 144 did not have a material
impact on the financial condition or operating results of the Company.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
Nos. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. Among other provisions, SFAS 145 rescinds SFAS No. 4, Reporting
Gains and Losses from Extinguishment of Debt. Accordingly, gains or losses
from extinguishment of debt shall not be reported as extraordinary items unless
the extinguishment qualifies as an extraordinary item under the criteria of APB
No. 30. Gains or losses from extinguishment of debt that do not meet the
criteria of APB No. 30 should be reclassified to income from continuing
operations in all prior periods presented. This Statement is effective for
fiscal years beginning after May 15, 2002. The Company does not expect the
adoption of SFAS 145 to have a material impact on the financial position or
results of operations.

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NOTE 2  PARENT COMPANY ITEMS

During the second quarter ended June 30, 2001, the Company issued $3.75 million
of Convertible Subordinated Debentures (the Debentures) in a private
placement offering. The majority of the net proceeds were contributed into the
Bank as additional capital to support its growth. The Debentures are due June
30, 2008, carry an interest coupon of 10% per annum, and may be converted into
common stock at any time prior to maturity or redemption at a price of $5.00
per share. The Debentures are redeemable at the option of the Company
beginning July 1, 2003, in whole or in part, based on pre-determined redemption
prices and contingent on satisfaction of certain market price conditions. The
private placement offering was marketed to institutional and accredited
investors, with a minimum principal amount of $3 million to become effective.

With the issuance of the Debentures and with their convertibility feature, the
Companys Diluted Earnings Per Share (EPS) calculations now contain a
measurable difference as discussed in Note 3 below. The Debentures were
registered on March 13, 2002 and trade under CUSIP number 927427 AA 2.

On December 18, 2001, Vineyard Statutory Trust I, a wholly owned subsidiary of
Vineyard National Bancorp, issued $12.0 million of Floating Rate Trust
Securities. The Trust invested the gross proceeds from the offering in
Floating Rate Junior Subordinated Deferrable Interest Debentures issued by
Vineyard National Bancorp. The subordinated debentures were issued concurrent
with the issuance of the Trust Securities. Vineyard National Bancorp will pay
the interest on the junior subordinated debentures to the Trust, which
represents the sole revenue and sole source of dividend distributions by the
Trust to the holders of the Trust Securities. Vineyard National Bancorp has
guaranteed, on a subordinated basis, payment of the Trusts obligation.
Vineyard National Bancorp has the right, assuming no default has occurred, to
defer payments of interest on the junior subordinated debentures at any time
for a period not to exceed 20 consecutive quarters. The Trust Securities will
mature on December 18, 2031 but can be called at any time commencing in 2006 at
par. The subordinated debentures have a variable interest rate which accrues
and is payable on a quarterly basis.

The net proceed to the statutory trust from the sale of the trust preferred
securities was approximately $11.6 million after deducting offering expenses.
The statutory trust subsequently invested all of the proceeds from the sale of
the trust preferred securities in subordinated debentures issued by the
Company. The Company infused approximately $8.0 million of the net proceeds
from the sale of the subordinated debentures into Vineyard Bank to fund its
operations. The remainder of the net proceeds from the sale of the
subordinated debentures may be used primarily to infuse additional capital into
Vineyard Bank to fund its operations and maintain its status as well
capitalized, for general corporate purposes, acquisitions or investments.

The trustee of the statutory trust is State Street Bank & Trust Co.

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NOTE 3  EARNINGS PER SHARE AND BOOK VALUE

Basic EPS excludes dilution and is computed by dividing income available to
common stockholders by the weighted-average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution that could occur
if securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the entity.

The following tables set forth the Companys earnings per share calculations
for the six and three month periods ended June 30, 2002 and 2001 and the
Companys book value per share at June 30, 2002 and December 31, 2001. In the
following table, (1) Debentures refer to the amount of possible shares that
can be issued from the conversion of the Debentures, and (2) Options refer to
stock options previously granted to employees of the Company and which were
outstanding and exercisable at each measurement date.

|                                                                         |                            |   |                                   |           |                                     |   |           |           |      |   |           |   |  |   |           |   | 
|------------------------------------------------------------------------ | -------------------------- | - | --------------------------------- | --------- | ----------------------------------- | - | --------- | --------- | ---- | - | --------- | - |  | - | --------- | - | 
|                                                                         |                            |   | For the Six Months Ended June 30, |           | For the Three Months Ended June 30,
|                                                                         |                            |   |                                   |           |                                    
|                                                                         |                            |   | 2002                              |           | 2001                                |   | 2002      |           | 2001
|                                                                         |                            |   |                                   |           |                                     |   |           |           |     
|Shares
outstanding at the end of the period                              |                            |   | 1,925,792                         |           |                                     |   | 1,866,988 |           |      |   | 1,925,792 |   |  |   | 1,866,988 |  
|Impact
of weighting shares issued during the period                      |                            |   | (30,733                           | )         |                                     |   | (1,196    | )         |      |   | (18,902   | ) |  |   | (240      | )
|                                                                         |                            |   |                                   |           |                                     |   |           |           |      |   |           |   |  |   |           |  
|Used
in Basic EPS                                                        |                            |   | 1,895,059                         |           |                                     |   | 1,865,792 |           |      |   | 1,906,890 |   |  |   | 1,866,748 |  
|Dilutive
effect of outstanding stock options                             |                            |   | 119,877                           |           |                                     |   | 14,823    |           |      |   | 120,796   |   |  |   | 37,516    |  
|Dilutive
effect of convertible debentures                                |                            |   | 747,127                           |           |                                     |   | 252,762   |           |      |   | 745,000   |   |  |   | 502,747   |  
|                                                                         |                            |   |                                   |           |                                     |   |           |           |      |   |           |   |  |   |           |  
|Used
in Diluted EPS                                                      |                            |   | 2,762,063                         |           |                                     |   | 2,133,377 |           |      |   | 2,772,686 |   |  |   | 2,407,011 |  
|                                                                         |                            |   |                                   |           |                                     |   |           |           |      |   |           |   |  |   |           |  
|Net
Income                                                               |                            | $ | 1,108                             |           |                                     | $ | 631       |           |      | $ | 754       |   |  | $ | 365       |  
|Plus:
Interest on Convertible Debentures assuming conversion (after tax) |                            |   | 111                               |           |                                     |   | 38        |           |      |   | 55        |   |  |   | 38        |  
|                                                                         |                            |   |                                   |           |                                     |   |           |           |      |   |           |   |  |   |           |  
|Net
Income applicable to common shares                                   |                            | $ | 1,219                             |           |                                     | $ | 669       |           |      | $ | 809       |   |  | $ | 403       |  
|                                                                         |                            |   |                                   |           |                                     |   |           |           |      |   |           |   |  |   |           |  
|                                                                        
|Basic
Earnings Per Share                                                 |                            | $ | 0.58                              |           |                                     | $ | 0.34      |           |      | $ | 0.40      |   |  | $ | 0.20      |  
|Diluted
Earnings Per Share                                               |                            | $ | 0.44                              |           |                                     | $ | 0.31      |           |      | $ | 0.29      |   |  | $ | 0.17      |  
|                                                                        
|                                                                         |                            |   | June 30,                          |           | December 31,                       
|                                                                         |                            |   | 2002                              |           | 2001                               
|                                                                         |                            |   |                                   |           |                                    
|Period-end shares outstanding                                            |                            |   |                                   |           |                                     |   |           |          
|                                                                         | Basic                      |   |                                   | 1,925,792 |                                     |   |           | 1,876,126 |     
|                                                                         | Debentures                 |   |                                   | 730,000   |                                     |   |           | 503,425   |     
|                                                                         | Dilutive Effect of Options |   |                                   | 82,828    |                                     |   |           | 49,485    |     
|                                                                         |                            |   |                                   |           |                                     |   |           |          
|                                                                         |                            |   | 2,738,620                         |           |                                     |   | 2,429,036 |          
|                                                                         |                            |   |                                   |           |                                     |   |           |          
|Basic book value                                                         |                            | $ | 6.29                              |           |                                     | $ | 5.57      |          
|Diluted book value                                                       |                            | $ | 5.88                              |           |                                     | $ | 5.33      |          

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

OVERVIEW

Vineyard National Bancorp (the Company) is a one-bank holding company. Its
principal asset is the common stock of, and its principal operations are those
conducted by, Vineyard Bank, a state banking association (the Bank). The
Bank is a community bank located in the Inland Empire region of Southern
California. The Bank focuses on the needs of commercial businesses with annual
sales of less than $10 million, retail community businesses, single family
residence developers/builders, individuals and local public and private
organizations. The Bank operates six full-service branches located in Rancho
Cucamonga, Chino, Diamond Bar, Crestline, Blue Jay, and La Verne, in addition
to a loan production office in Manhattan Beach. Shares of the Companys common
stock are traded on the NASDAQ SmallCap under the ticker symbol VNBC.

RESULTS OF OPERATIONS

Net earnings for the quarter ended June 30,
2002 amounted to $754,000, or $0.29
per diluted share, compared with net earnings of $365,000, or $0.17 per diluted
share, for the similar quarter ended in 2001, or an increase of 107%. The net
earnings for the second quarter of 2002 under-states the significant
improvement in operating performance over the same period in 2001. Operating
income before loan loss provisions and income taxes in the second quarter of
2002 was $1,589,000, as compared to $304,000 for the second quarter of 2001, or
an improvement of over 420%. Net earnings for the second quarter of 2002
produced an annualized return on average equity of 26.3% for the period.

For the six months ended June 30, 2002, net
earnings were $1,108,000, or $0.44
per diluted share, compared with earnings of $631,000, or $0.31 per diluted
share, for the similar six month period in 2001, or an increase in net earnings
of 76.0%. Operating income before loan loss provisions and income taxes for
the six months ended June 30, 2002, was $2,369,000, as compared to $570,000 for
the same period in 2001, or an improvement of over 315%. Net earnings for the
first six months of 2002 produced an annualized return on average equity of
19.6% for the period.

For the quarter ended June 30, 2002, the Companys net interest income before
its provision for possible loan losses increased by $1,228,000, or 64.2% as
compared with the same period in 2001. Other operating income for the second
quarter of 2002 increased by $197,000 or 41.4%, as compared to the same period
in 2001. Total net revenues (net interest income and other operating income)
for the second quarter of 2002 increased by $1,425,000 or 59.7% as compared to
the same period in 2001.

For the six months ended June 30, 2002, total assets increased by $76.8
million, or 40.1%, to $268.1 million over year-end 2001 results. The Companys
growth in its loan portfolio produced an increase of $56.4 million or 41.0% for
the six months ended June 30, 2002, bringing gross loans outstanding to $194.0
million as compared to the prior year-end 2001s level of $137.6 million.

The Company augmented its liquidity position by increasing its investment
portfolio by $14.9 million during the first six months of 2002, to an amount of
$51.7 million. These liquid assets are further available to support the
Companys lending initiatives. During the second quarter of 2002, the Company
also increased its liquidity line of credit with the Federal Home Loan Bank of
San Francisco to an amount equal to 20% of the Companys total assets. At June
30, 2002, the Company had outstanding $31.5 million in FHLB advances to support
its operations.

For the six months ended June 30, 2002, total deposits increased by $46.4
million, or 29.1%, to $205.8 million at June 30, 2002, compared to year-end
2001s level of $159.4 million. During this period of deposit growth,
supported principally from the Banks six community banking centers, the
average cost of deposit funds actually decreased from year end 2001 levels to
approximately 2.0%. The Company continues to focus on acquiring local
depository relationships through targeted efforts by its personnel and
marketing campaigns.

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NET INTEREST INCOME

The operations of the Company are substantially dependent on its net interest
income, which is the difference between interest income earned from its
interest-earning assets and the interest expense incurred on its
interest-bearing liabilities. The Companys net interest margin is its net
interest income divided by its average interest-earning assets. Net interest
income and net interest margin are affected by several factors, including (1)
the level of, and the relationship between, the dollar amount of
interest-earning assets and interest-bearing liabilities, (2) the relationship
between the repricing or maturity of the Companys adjustable rate and fixed
rate loans and short term investment securities and its deposits and
borrowings, and (3) the magnitude of the Companys non-interest-earning assets,
including nonaccrual loans and OREO.

Though the Company is asset-sensitive, its loan portfolio is sufficiently
blended in composition and complexity to
weather the effects of the market rate decreases experienced over the past
eighteen months, with only a modest net interest margin compression. A
substantial portion of the Companys immediately repricable loan portfolio have
reached their floor rates and do not continue to adjust downward if the Federal
Reserve Bank lowers rates. The effect of this also contributed to the minimal
compression experienced. Loan fee income, which is included in interest
income, also stabilized interest income during a period of declining interest
rates.

An additional form of funding for the Banks growth is debt issued by the
Company which results in a higher consolidated cost of funds. For the six
months ended June 30, 2002, the average effective cost of funds for the Bank
was 2.0% compared to 2.4% for the Company. The result of the increase in
interest expense affects the Companys net interest margin. The Companys net
interest margin decreased from 6.2% at year end 2001 to 5.6% at June 30, 2002.
However, the Banks net interest margin remained consistently strong decreasing
from 6.4% at year end 2001 to 6.1% at June 30, 2002, a compression of only 30
basis points principally from the effect of new lending originations and yields
less than the original, existing portfolio.

The following table shows average balance sheet data, related revenues and
costs, and effective weighted average yields and costs, for the three and six
months ended June 30, 2002 and 2001.

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|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |      |   |     |  
|------------------------------------------- | -------------------------- | ------------------------------------------ | ---------------------------------- | ------- | ----------------------------------- | ------- | -------- | ----- | ----- | ----- | ------- | ------ | -------- | ------- | ----- | ------ |  | ------- | ------- | ----- |  | ----- |  | ---- | - | --- | -
|                                            |                            |                                            |                                    |         | Dollars in Thousands               
|                                            |                            |                                            |                                    |         |                                    
|                                            |                            |                                            |                                    |         | For the Three Months Ended June 30,
|                                            |                            |                                            |                                    |         |                                    
|                                            |                            |                                            |                                    |         | 2002                                |         | 2001    
|                                            |                            |                                            |                                    |         |                                     |         |         
|                                            |                            |                                            |                                    |         | Average                             |         |          |       |       |       | Average |        | Average  |         |       |        |  |         | Average
|                                            |                            |                                            |                                    |         | Balance                             |         | Interest |       | Yield |       | Balance |        | Interest |         | Yield
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |      
|Assets                                      |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            | Loans                      |                                            | $                                  | 167,217 |                                     |         | $        | 3,806 |       |       |         | 9.1    | %        |         | $     | 86,650 |  |         | $       | 2,347 |  |       |  | 10.9 | %
|                                            | Investment securities      |                                            |                                    | 49,812  |                                     |         |          | 626   |       |       |         | 5.0    | %        |         |       | 13,450 |  |         |         | 200   |  |       |  | 5.9  | %
|                                            | Federal funds sold         |                                            |                                    | 7,329   |                                     |         |          | 29    |       |       |         | 1.6    | %        |         |       | 20,238 |  |         |         | 218   |  |       |  | 4.3  | %
|                                            | FHLB & other stock         |                                            |                                    | 1,054   |                                     |         |          | 6     |       |       |         | 2.3    | %        |         |       | 177    |  |         |         | 3     |  |       |  | 6.8  | %
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            |                            |                                            | Total Interest-earning assets      |         |                                     | 225,412 |          |       |       | 4,467 |         |        |          | 7.9     | %     |        |  | 120,515 |         |       |  | 2,768 |  |      |   | 9.2 | %
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|Other assets                                |                            |                                            | 19,743                             |         |                                     |         |          |       |       |       | 17,874  |        |          |         |       |       
|                                            |                            | Allowance for possible loan losses         |                                    |         | (1,723                              | )       |          |       |       |       |         |        | (914     | )       |       |        |  |        
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            |                            |                                            | Total assets                       |         | $                                   | 243,432 |          |       |       |       |         |        | $        | 137,475 |       |        |  |         |        
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|Liabilities and Stockholders Equity        |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            | Savings deposits           |                                            | $                                  | 76,163  |                                     |         |          | 384   |       |       |         | 2.0    | %        |         | $     | 39,124 |  |         |         | 182   |  |       |  | 1.9  | %
|                                            | Time deposits              |                                            |                                    | 66,480  |                                     |         |          | 597   |       |       |         | 3.6    | %        |         |       | 43,679 |  |         |         | 609   |  |       |  | 5.6  | %
|                                            | Short Term Borrowings      |                                            |                                    | 20,643  |                                     |         |          | 85    |       |       |         | 1.7    | %        |         |       | 2,483  |  |         |         | 65    |  |       |  | 10.5 | %
|                                            | Trust Preferred Securities |                                            |                                    | 12,000  |                                     |         |          | 168   |       |       |         | 5.6    | %        |         |       |       |  |         |         |      |  |       | 
|                                            | Convertible debentures     |                                            |                                    | 3,650   |                                     |         |          | 94    |       |       |         | 10.3   | %        |         |       |       |  |         |         |      |  |       | 
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            |                            |                                            | Total interest-bearing liabilities |         |                                     | 178,936 |          |       |       | 1,328 |         |        |          | 3.0     | %     |        |  | 85,286  |         |       |  | 856   |  |      |   | 4.0 | %
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            | Demand deposits            |                                            |                                    | 51,424  |                                     |         |          |       |       |       |         | 39,914 |          |         |       |        | 
|                                            | Other liabilities          |                                            |                                    | 1,628   |                                     |         |          |       |       |       |         | 2,437  |          |         |       |        | 
|Stockholders equity                        |                            |                                            | 11,444                             |         |                                     |         |          |       |       |       | 9,838   |        |          |         |       |       
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            |                            | Total liabilities and
Stockholders equity |                                    | $       | 243,432                             |         |          |       |       |       |         | $      | 137,475  |         |       |        |  |        
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|Net Interest Spread                         |                            |                                            |                                    |         |                                     |         | 5.0      | %     |       |       |         |        |          |         | 5.2   | %     
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|Net Interest Income
and Net Interest Margin |                            |                                            |                                    | $       | 3,139                               |         |          |       | 5.6   | %     |         |        |          | $       | 1,912 |        |  |         | 6.4     | %    
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                           
|                                            |                            |                                            |                                    |         | For the Six Months Ended June 30,  
|                                            |                            |                                            |                                    |         |                                    
|                                            |                            |                                            |                                    |         | 2002                                |         | 2001    
|                                            |                            |                                            |                                    |         |                                     |         |         
|                                            |                            |                                            |                                    |         | Average                             |         |          |       |       |       | Average |        | Average  |         |       |        |  |         | Average
|                                            |                            |                                            |                                    |         | Balance                             |         | Interest |       | Yield |       | Balance |        | Interest |         | Yield
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |      
|Assets                                      |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            | Loans                      |                                            | $                                  | 156,728 |                                     |         | $        | 7,116 |       |       |         | 9.2    | %        |         | $     | 82,823 |  |         | $       | 4,377 |  |       |  | 10.7 | %
|                                            | Investment securities      |                                            |                                    | 44,670  |                                     |         |          | 1,076 |       |       |         | 4.9    | %        |         |       | 9,373  |  |         |         | 273   |  |       |  | 5.8  | %
|                                            | Federal funds sold         |                                            |                                    | 4,846   |                                     |         |          | 39    |       |       |         | 1.6    | %        |         |       | 18,693 |  |         |         | 446   |  |       |  | 4.8  | %
|                                            | FHLB & other stock         |                                            |                                    | 761     |                                     |         |          | 8     |       |       |         | 2.1    | %        |         |       | 177    |  |         |         | 7     |  |       |  | 8.0  | %
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            |                            |                                            | Total Interest-earning assets      |         |                                     | 207,005 |          |       |       | 8,239 |         |        |          | 8.0     | %     |        |  | 111,066 |         |       |  | 5,103 |  |      |   | 9.3 | %
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|Other assets                                |                            |                                            | 19,065                             |         |                                     |         |          |       |       |       | 17,713  |        |          |         |       |       
|                                            |                            | Allowance for possible loan losses         |                                    |         | (1,624                              | )       |          |       |       |       |         |        | (837     | )       |       |        |  |        
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            |                            |                                            | Total assets                       |         | $                                   | 224,446 |          |       |       |       |         |        | $        | 127,942 |       |        |  |         |        
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|Liabilities and Stockholders Equity        |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            | Savings deposits           |                                            | $                                  | 66,344  |                                     |         |          | 596   |       |       |         | 1.8    | %        |         | $     | 37,306 |  |         |         | 340   |  |       |  | 1.8  | %
|                                            | Time deposits              |                                            |                                    | 64,369  |                                     |         |          | 1,219 |       |       |         | 3.8    | %        |         |       | 39,345 |  |         |         | 1,112 |  |       |  | 5.7  | %
|                                            | Short Term Borrowings      |                                            |                                    | 15,022  |                                     |         |          | 140   |       |       |         | 1.9    | %        |         |       | 1,242  |  |         |         | 65    |  |       |  | 10.6 | %
|                                            | Trust Preferred Securities |                                            |                                    | 12,000  |                                     |         |          | 339   |       |       |         | 5.7    | %        |         |       |       |  |         |         |      |  |       | 
|                                            | Convertible debentures     |                                            |                                    | 3,694   |                                     |         |          | 185   |       |       |         | 10.1   | %        |         |       |       |  |         |         |      |  |       | 
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            |                            |                                            | Total interest-bearing liabilities |         |                                     | 161,429 |          |       |       | 2,479 |         |        |          | 3.1     | %     |        |  | 77,893  |         |       |  | 1,517 |  |      |   | 3.9 | %
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            | Demand deposits            |                                            |                                    | 50,246  |                                     |         |          |       |       |       |         | 38,046 |          |         |       |        | 
|                                            | Other liabilities          |                                            |                                    | 1,677   |                                     |         |          |       |       |       |         | 2,382  |          |         |       |        | 
|Stockholders equity                        |                            |                                            | 11,114                             |         |                                     |         |          |       |       |       | 9,621   |        |          |         |       |       
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|                                            |                            | Total liabilities and
Stockholders equity |                                    | $       | 224,466                             |         |          |       |       |       |         | $      | 127,942  |         |       |        |  |        
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|Net Interest Spread                         |                            |                                            |                                    |         |                                     |         | 4.9      | %     |       |       |         |        |          |         | 5.3   | %     
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     
|Net Interest Income
and Net Interest Margin |                            |                                            |                                    | $       | 5,760                               |         |          |       | 5.6   | %     |         |        |          | $       | 3,586 |        |  |         | 6.5     | %    
|                                            |                            |                                            |                                    |         |                                     |         |          |       |       |       |         |        |          |         |       |        |  |         |         |       |  |       |  |     

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The Companys gross interest income on all interest-earning assets for the
three and six months ended June 30, 2002 was $4,468,000 and
$8,240,000,
respectively, an increase of $1,701,000 or 61.4% and $3,137,000 and 61.5%,
respectively, as compared with the results from the same periods in 2002. The
effective yield on all interest-earning assets for the three and six months
ended June 30, 2002 were 7.9% and 8.0%, respectively, as compared to the 9.2%
and 9.3% levels reported for the same periods in 2001, respectively. The
average balance of the loan portfolio outstanding for the six month period
ended June 30, 2002 increased by $73.9 million or 89.2% compared to the average
balance of the loan portfolio outstanding for the same prior period end 2001.
The Company has introduced business lines associated with the origination of
single-family residence construction lending along the coastal communities of
the Los Angeles and Orange counties, expanded commercial and industrial
lending, and commercial real estate mortgage products, with a de-emphasis on
consumer installment lending. In augmenting the earning assets of the Bank,
management invested in U.S. Government agency bonds and U.S.
Government-sponsored mortgage-backed securities which contributed to the
increase in interest income. The average balance of the investment securities
was $44.7 million generating interest income of $1,076,000 for the six months
ended June 30, 2002 as compared to the average balance of $9.4 million for the
same period ended 2001 generating interest income of $273,000.

The Company funds its operations through deposits, equity capital and short
term borrowings. During the six months ended June 30, 2002, total funding
growth was $74.9 million, with deposit growth of $46.4 million and FHLB
borrowings of $28.5 million. The Bank utilized advances from a credit line
established with the Federal Home Loan Bank (FHLB). The Bank has a total
borrowing capacity from the FHLB of up to 20% of its total assets. Such
borrowing facility is utilized by the Bank as an alternative source of
liquidity and all borrowings are collateralized by certain loans and/or
investment securities pledged by the Bank. These borrowings are short term,
typically three to twelve months, with a floating rate tied to Libor indices.
Interest expense relating to such borrowings were $85,000 and $140,000 for the
three and six months ended June 30, 2002 for increases of $20,000 or 30.8% and
$75,000 or 115.4%, respectively. In addition, certain funds from the issuance
of the convertible debentures and the statutory trust preferred securities as
discussed in Note 2 of ITEM 1  Financial Statements above were downstreamed
from the holding company to the Bank as equity and utilized as other sources of
funding by the Bank. Interest expense on the convertible debenture were
$94,000 and $185,000 for the three and six months ended June 30, 2002,
respectively, compared to none during the same prior year periods. Interest
expense on the trust preferred securities were $168,000 and $339,000 for the
three and six months ended June 30, 2002, respectively, compared to none during
the same prior year periods. The interest expense relating to these
instruments, combined with the increase of FHLB Advances and the growth in
interest-bearing deposits, increased the gross interest expense on all
interest-bearing liabilities for the three and six months ended June 30, 2002
to $1,328,000 and $2,479,000, respectively, an increase of $472,000 or 55.1%
and $962,000 or 63.4% as compared with the same respective periods in 2001.
The Companys average effective cost of funding, inclusive of demand deposits
and Company debt, for the three and six months ended June 30, 2002 were 2.3%
and 2.4%, respectively, as compared to 2.7% and 2.6% for the same periods in
2001. The Banks average effective cost of funding, exclusive of Company debt,
was 2.0% for the both three and six month periods ended June 30, 2002 as
compared to 2.7% and 2.9% for the same respective periods in 2001, for a
continuing favorable decline.

The effect of these changes to the balance sheet composition and the Companys
growth, and the compression on market interest rates has produced net interest
income, before its provision for credit losses, for the three and six months
ended June 30, 2002 of $3,139,000 and $5,760,000, respectively, an increase of
$1,227,000 or 64.2% and $2,174,000 or 60.6% over the same periods in 2001,
respectively.

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The following table sets forth the composition of the Companys loan portfolio
as of the dates indicated. As the table illustrates, changes in the Companys
loan portfolio have begun to take shape along the product lines consistent with
its efforts to broaden and diversify its lending operations.

|                                       |             |                               |        |          |         |           |    |              |      |           |         |         |  |  |    |     |   | 
|-------------------------------------- | ----------- | ----------------------------- | ------ | -------- | ------- | --------- | -- | ------------ | ---- | --------- | ------- | ------- |  |  | -- | --- | - | 
|                                       |             |                               |        | June 30, |         | Portfolio |    | December 31, |      | Portfolio
|Dollars in Thousands                   |             | 2002                          |        | %        |         | 2001      |    | %           
|                                       |             |                               |        |          |         |           |    |             
|Commercial and industrial              |             | $                             | 20,064 |          |         |           | 10 | %            |      | $         | 20,219  |         |  |  | 15 | %  
|Real Estate  construction             |             |                               | 61,957 |          |         |           | 32 | %            |      |           | 33,254  |         |  |  | 24 | %  
|Real Estate  mortgage                 |             |                               |        |          |         |           |    |              |      |           |         |         |  |  |    |    
|                                       | Commercial  |                               |        | 77,705   |         |           |    | 40           | %    |           |         | 52,458  |  |  |    | 38  | %
|                                       | Residential |                               |        | 26,882   |         |           |    | 14           | %    |           |         | 19,063  |  |  |    | 14  | %
|Consumer loans to individuals          |             |                               | 6,843  |          |         |           | 4  | %            |      |           | 8,318   |         |  |  | 6  | %  
|Loans held for sale                    |             |                               | 643    |          |         |           | 0  | %            |      |           | 4,471   |         |  |  | 3  | %  
|All other loans (including overdrafts) |             |                               | 40     |          |         |           | 0  | %            |      |           | 184     |         |  |  | 0  | %  
|                                       |             |                               |        |          |         |           |    |              |      |           |         |         |  |  |    |    
|                                       | Gross Loans |                               | $      | 194,134  |         |           |    | 100          | %    |           | $       | 137,967 |  |  |    | 100 | %
|                                       |             |                               |        |          |         |           |    |              |      |           |         |         |  |  |    |    
|Unearned income on installment loans   |             |                               | (67    | )        |         |           |    |              | (117 | )         |         |        
|Deferred loan fees                     |             |                               | (98    | )        |         |           |    |              | (272 | )         |         |        
|                                       |             |                               |        |          |         |           |    |              |      |           |         |         |  |  |    |    
|                                       |             | Loans, Net of Unearned Income |        | $        | 193,969 |           |    |              |      | $         | 137,578 |         |  | 
|                                       |             |                               |        |          |         |           |    |              |      |           |         |         |  |  |    |    

PROVISIONS FOR POSSIBLE LOAN LOSSES

During the three month period ended June 30, 2002, a provision of $335,000 was
made as compared to $300,000 for the same period in 2001. Total provisions for
possible loan losses was $535,000 for the six month period ended June 30, 2002
as compared to $300,000 for the same period in 2002. Net loan charge-offs were
$102,000 for the six months ended June 30, 2002, as compared to $33,000 for the
same period in 2001.

The Companys allowance for possible loan losses increased to $2,080,000 at
June 30, 2002, or 1.07% of gross loans outstanding, compared with $1,450,000,
or 1.05% at December 31, 2001. Additions to the reserve are effected through
the provision for loan losses, which is an operating expense of the Company. A
further addition to reserve was through an adjustment of $197,000 relating to
the purchased allowance for loan loss on the acquired loan portfolio. Such
loan portfolio was acquired at fair value. The difference between the amount
paid and the fair value of the loans represents the premium relating to such
loans and is amortized over the life of the loans as a charge to expense.

Although the Company maintains an allowance for possible loan losses at a level
it considers to be adequate to provide for losses, based on presently known
conditions, there can be no assurance that such losses will not exceed the
estimated amounts, thereby adversely affecting future results of operations.
The calculation for the adequacy of the allowance for possible loan losses, and
therefore the requisite amount of the provision for possible loan losses, is
based on several factors, including underlying loan collateral, delinquency
trends, borrowers cash flow and historic loan loss experience. All of these
factors can change without notice based on market and economic conditions and
other factors. See Asset Quality for an expanded discussion on the Companys
allowance for possible loan losses.

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NONINTEREST INCOME

Noninterest income for the three and six months ended June 30, 2002 were
$673,000 and $1,201,000, respectively, as compared to $476,000 and $912,000 for
the same respective periods in 2001. This represents an increase of $197,000 or
41.3% and $289,000 or 31.7%, respectively.

Contributing to the increase in Noninterest Income was the gain recognized on
the sale of investment securities of $101,000 during the three months ended
June 30, 2002, for a total of $179,000 for the six months ended June 30, 2002.
It is managements intent to hold the investment securities in the
available-for-sale portfolio in accordance with SFAS No. 115. During 2002,
management sold certain investment securities to manage liquidity and interest
rate risk during a time when the market environment was favorable and
therefore, generated a gain from such sales.

During the second quarter of 2002, the Company received $180,000 in a
litigation recovery from one of its former commercial insurance couriers. This
stems from a legal proceeding in 1999 whereby the Bank accrued a loss $860,000
in recognition of the amount of liability determined by the court. This
related to the settlement of a lawsuit brought by a former borrower of the Bank
on a claim regarding the wrongful foreclosure of the borrowers property.

Fees and service charges represents service charges on deposit accounts, fees
associated with mortgage loans originated for sale, fees associated with Visa
check cards, and other income.

Other income consists of fee income from various services offered, sales
commissions, safe deposit rental, and sundry other income.

NONINTEREST EXPENSES

Noninterest expense for the three and six months ended June 30, 2002 were
$2,224,000 and $4,593,000, respectively, as compared to $2,084,000 and
$3,928,000 for the same periods in 2001, respectively, representing an increase
of $140,000 or 6.7% and $665,000 or 16.9%, respectively. Noninterest expense
consists primarily of (i) salaries and other employee expenses, (ii) occupancy
expenses, (iii) furniture and equipment expenses, and (iv) marketing, office
supplies, postage and telephone, insurance, data processing, professional fees
and other noninterest expense.

Management has implemented several structural changes within the operations of
the Company in order to support its strategic plan initiatives. Seasoned and
experienced individuals have been recruited during the year 2001, and through
the second quarter 2002, from other local financial institutions to head the
respective areas of credit administration, finance, information technology, and
business development for commercial and community banking. With the addition
of these individuals and the entire cadre of existing personnel, the Company
has been able to produce significant growth in deposits and loans, over the
same period in 2001, while providing for the infrastructure to support
longer-term growth. These changes have increased the Companys expenses
associated with salaries and other benefits by $231,000 or 11.3% for the six
months ended June 30, 2002 as compared to the same period in 2001.

Expenses related to occupancy and furniture & equipment were $409,000 and
$749,000 for the three and six months ended June 30, 2002, respectively,
representing increases of $100,000 or 32.4% and $158,000 or 26.7% for the same
periods in 2001, respectively. In connection with the increase in bank
personnel as discussed above, occupancy expense and furniture & equipment
expense have increased to accommodate a larger work force. These expenses
consist of rent, taxes, maintenance, repair and depreciation of bank owned and
leased branch buildings. In December 2001, the Company acquired an additional
branch location in the city of La Verne and the costs associated with the
occupancy expense of that location are included in this increase as well as the
first full year of operation for the loan production office located in
Manhattan Beach.

Other expenses increased $176,000 or 25.7% and $276,000 or 21.3% for the three
and six months ended June 30, 2002 as compared to the respective prior periods
in 2001. The increase is predominately in the areas of business development
expense as the sales team increases its campaign efforts on marketing new
products and services, data processing expense related to the acquisition and
ongoing processing for the new La Verne branch, and holding company operating
expenses.

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The following table sets forth the breakdown of noninterest expenses for the
six and three month periods ended June 30, 2002 and 2001:

|                                |                                         |                             |       |                           |       |                             |       |      |       |      |     |     |       |   |       |     |       | 
|------------------------------- | --------------------------------------- | --------------------------- | ----- | ------------------------- | ----- | --------------------------- | ----- | ---- | ----- | ---- | --- | --- | ----- | - | ----- | --- | ----- | 
|                                |                                         |                             |       | Dollars in Thousands     
|                                |                                         |                             |       |                          
|                                |                                         |                             |       | Six Months Ended June 30, |       | Three Months Ended June 30,
|                                |                                         |                             |       |                           |       |                            
|                                |                                         |                             |       | 2002                      |       | 2001                        |       | 2002 |       | 2001
|                                |                                         |                             |       |                           |       |                             |       |      |       |     
|Salaries and employee benefits  |                                         | $                           | 2,275 |                           |       | $                           | 2,044 |      |       | $    | 954 |     |       | $ | 1,089 |    
|Occupancy expense of premises   |                                         |                             | 390   |                           |       |                             | 310   |      |       |      | 198 |     |       |   | 166   |    
|Furniture and equipment expense |                                         |                             | 359   |                           |       |                             | 281   |      |       |      | 211 |     |       |   | 143   |    
|Other non-interest expenses:    |                                         |                             |       |                           |       |                             |       |      |       |      |     |     |       |   |       |    
|                                | Data processing                         |                             |       | 356                       |       |                             |       | 345  |       |      |     | 164 |       |   |       | 179 |      
|                                | Business development expense            |                             |       | 271                       |       |                             |       | 176  |       |      |     | 167 |       |   |       | 100 |      
|                                | Office supplies, postage, and
telephone |                             |       | 254                       |       |                             |       | 177  |       |      |     | 139 |       |   |       | 88  |      
|                                | Professional expenses                   |                             |       | 216                       |       |                             |       | 189  |       |      |     | 93  |       |   |       | 106 |      
|                                | Bank insurance and assessments          |                             |       | 85                        |       |                             |       | 79   |       |      |     | 44  |       |   |       | 43  |      
|                                | Other                                   |                             |       | 387                       |       |                             |       | 327  |       |      |     | 254 |       |   |       | 170 |      
|                                |                                         |                             |       |                           |       |                             |       |      |       |      |     |     |       |   |       |    
|                                |                                         | Total Non-Interest Expenses |       | $                         | 4,593 |                             |       | $    | 3,928 |      |     | $   | 2,224 |   |       | $   | 2,084 | 
|                                |                                         |                             |       |                           |       |                             |       |      |       |      |     |     |       |   |       |    

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FINANCIAL CONDITION, CAPITAL RESOURCES & LIQUIDITY AND ASSET QUALITY

During the six months ended June 30, 2002, the Companys assets increased by
approximately $76.8 million or 40.1% as compared to December 31, 2001. The
Company continued to have adequate cash resources with $14.8 million of cash
and funds held on deposit at other financial institutions and $49.5 million in
investment securities at June 30, 2002. The overall levels in liquidity
increased by $19.1 million or 42.1% and resulted in increased levels of higher
yielding investment securities and decreased levels of Federal funds sold. The
Companys investment portfolio had $506,000 of unrealized gains on estimated
fair values when compared to book values at June 30, 2002. There was one loan
placed on non-accrual status (not generating income currently) at June 30,
2002. Such loan is fully secured by real estate. The Company has no other
non-performing assets including OREO.

The Bank is a member in the Federal Home Loan Bank. This provides for an
alternative funding source for the Bank in the form of a credit line. This
line provides for a maximum advance of up to 20% of the Banks total assets
based on qualifying collateral. The FHLB system functions as a source of credit
to institutions that are members of the FHLB. Advances are secured by the
Banks mortgage loans, qualifying investment securities, and the capital stock
of the FHLB owned by the Bank. Subject to the FHLBs advance policies and
requirements, these advances can be requested for any business purpose in which
the Bank is authorized to engage. In granting advances, the FHLB considers a
members creditworthiness and other relevant factors. At June 30, 2002,
utilization of the advance line reached $31.5 million in outstanding balances.

As detailed more specifically earlier in the report, total outstanding loans
increased during the six month period ended June 30, 2002 by $56.4 million or
41.0% primarily in the area of real estate including construction, and
commercial and residential mortgages.

During the six month period ended June 30, 2002, total deposits increased by
$46.4 million or 29.1%. Most areas of deposit product types experienced growth
over the year-end 2001 levels, such as: demand deposits by $5.5 million, money
market accounts by $34.0 million, time deposits in excess of $100,000 by $1.0
million, and other time deposits increased by $5.9 million. Managements
efforts to generate significant levels of liquidity in the first six months of
2002 to support its lending activities were a result of a targeted and focused
campaign to generate deposits in the communities the Company serves. These
efforts were supported by increased activities by the Companys business
development personnel, marketing and advertising campaigns, and promotional
interest rates on certain products.

Total stockholders equity increased from $10,455,000 at December 31, 2001, to
$12,110,000 at June 30, 2002, principally as a result of net income generated
for the six months ended.

The Companys primary regulators, the Federal Reserve Bank, and the Banks
primary regulators, the California Department of Financial Institutions (DFI)
and the Federal Deposit Insurance Corporation (FDIC), adopted risk-based
capital guidelines which require bank holding companies and banks to maintain
minimum total capital of 8% (of which 4% must consist of Tier 1 capital) of
risk-weighted assets. Further, the Federal Reserve Bank and FDIC generally
require bank and bank holding companies to have a minimum leverage ratio of at
least 4% to be considered adequately capitalized for Federal regulatory
purposes. As of June 30, 2002, the Company had a ratio of total capital to
risk-weighted assets of 14.6%, a ratio of Tier 1 capital to risk-weighted
assets of 7.7%, and a leverage capital ratio of 6.3%. As of June 30, 2002, the
Bank had a ratio of total capital to risk-weighted assets of 12.5%, a ratio of
Tier 1 capital to risk-weighted assets of 11.5%, and a leverage capital ratio
of 9.5%. Further, since the Banks Total Capital, Tier 1, and Leverage ratios
exceed 10%, 6%, and 5%, respectively, the Bank is considered Well-Capitalized
under the regulatory framework for prompt corrective action. The Banks
capital ratios were favorably impacted by the contribution from the Company to
the Bank of $11.2 million in capital generated by the sale of the Debentures
and Trust Preferred Securities during 2001. The Companys management believes
that, under current regulations, the Company and the Bank will continue to meet
these minimum capital requirements in the foreseeable future, and for the Bank
to continue to be Well-Capitalized.

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ASSET QUALITY 

NON-PERFORMING LOANS

The following table sets forth information regarding the Companys
non-performing loans at June 30, 2002 and December 31, 2001:

|                                           |                        |                            |                           |   |                      |     |              |   |   |   | 
|------------------------------------------ | ---------------------- | -------------------------- | ------------------------- | - | -------------------- | --- | ------------ | - | - | - | 
|                                           |                        |                            |                           |   | Dollars in Thousands
|                                           |                        |                            |                           |   |                     
|                                           |                        |                            |                           |   | June 30,             |     | December 31,
|                                           |                        |                            |                           |   | 2002                 |     | 2001        
|                                           |                        |                            |                           |   |                      |     |             
|Accruing Loans More Than 90 Days Past Due1 |                        | $                          | 0                         |   |                      | $   | 0            |  
|Renegotiated
loans2                        |                        |                            | 0                         |   |                      |     | 0            |  
|Non-accrual loans                          |                        |                            |                           |   |                      |     |              |  
|                                           | Aggregate loan amounts |                            |                           |   |                      |     |              |   |  
|                                           |                        |                            | Commercial and industrial |   |                      | 110 |              |   |   | 0 | 
|                                           |                        |                            | Real estate               |   |                      | 0   |              |   |   | 0 | 
|                                           |                        |                            |                           |   |                      |     |              |  
|                                           |                        | Total Non-Accrual Loans    |                           |   | 110                  |     |              |   | 0 |  
|                                           |                        |                            |                           |   |                      |     |              |  
|                                           |                        | Total Non-Performing Loans |                           | $ | 110                  |     |              | $ | 0 |  
|                                           |                        |                            |                           |   |                      |     |              |  



---

|(1) |  | Reflects loans for which there has been no payment of interest and/or
principal for 90 days or more. Ordinarily, loans are placed on non-accrual
status (accrual of interest is discounted) when the Bank has reason to believe
that continued payment of interest and principal is unlikely.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Renegotiated loans are those that have been renegotiated to provide a
deferral of interest or principal. The Bank had no renegotiated loans at June
30, 2002 or at December 31, 2001.                                                                                                        

The policy of the Company is to review each loan in the loan portfolio on an
on-going basis to identify problem credits. In addition, as an integral part
of its review process of the Bank, the DFI and the FDIC also classify problem
credits upon their scheduled examinations of the Bank. There are three
classifications for problem loans: substandard, doubtful and loss.
Substandard loans have one or more defined weaknesses and are characterized by
the distinct possibility that the Bank will sustain some loss if the
deficiencies are not corrected. Doubtful loans have the weaknesses of
substandard loans with the additional characteristic that the weaknesses make
collection or liquidation in full, on the basis of currently existing facts,
conditions and values, questionable. A loan classified as loss is considered
uncollectible and of such little value that the continuance as an asset of the
institution is not warranted. Another category designated special mention is
maintained for loans which do not currently expose the Bank to a significant
degree or risk to warrant classification in a substandard, doubtful or loss but
do possess credit deficiencies or potential weaknesses deserving managements
close attention.

As of June 30, 2002, the Banks classified loans consisted of approximately
$2,751,000 of loans classified as substandard.

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ALLOWANCE FOR POSSIBLE LOAN LOSSES

The allowance for possible loan losses is a general reserve established by
management to absorb losses inherent in the entire portfolio. The level of and
ratio of additions to the reserve are based on a continuous analysis of the
loan portfolio and, at June 30, 2002, reflected an amount, which, in managements
judgment, was adequate to provide for known and inherent loan losses. In
evaluating the adequacy of the allowance, management gives consideration to the
composition of the loan portfolio, the performance of loans in the portfolio,
evaluations of loan collateral, prior loss experience, current economic
conditions and the prospects or worth of respective borrowers or guarantors.

The allowance for loan losses at June 30, 2002, was approximately $2,080,000 or
1.07% of total loans and leases, as compared to $1,450,000 or 1.05% of total
loans at December 31, 2001. The following table provides certain information
with respect to the Companys allowance for loan losses as well as charge-off
and recovery activity.

|                                                                                      |             |                           |       |                      |     |              |       |   |    | 
|------------------------------------------------------------------------------------- | ----------- | ------------------------- | ----- | -------------------- | --- | ------------ | ----- | - | -- | 
|                                                                                      |             |                           |       | Dollars in Thousands
|                                                                                      |             |                           |       |                     
|                                                                                      |             |                           |       | June 30,             |     | December 31,
|                                                                                      |             |                           |       | 2002                 |     | 2001        
|                                                                                      |             |                           |       |                      |     |             
|Allowance for Possible Loan Losses,
Beginning of Period                               |             | $                         | 1,450 |                      |     | $            | 784   |  
|                                                                                      |             |                           |       |                      |     |              |       |  
|                                                                                      | Charge-offs |                           |       |                      |     |              |       |   |   
|                                                                                      |             | Commercial and industrial |       |                      | 100 |              |       |   | 69 | 
|                                                                                      |             | Real estate  mortgage    |       |                      |    |              |       |   |   | 
|                                                                                      |             | Consumer loans            |       |                      | 111 |              |       |   | 60 | 
|                                                                                      |             |                           |       |                      |     |              |       |  
|                                                                                      |             |                           | 211   |                      |     |              | 129   |  
|                                                                                      |             |                           |       |                      |     |              |       |  
|                                                                                      | Recoveries  |                           |       |                      |     |              |       |   |   
|                                                                                      |             | Commercial and industrial |       |                      | 42  |              |       |   | 3  | 
|                                                                                      |             | Real estate  mortgage    |       |                      |    |              |       |   |   | 
|                                                                                      |             | Consumer loans            |       |                      | 67  |              |       |   | 19 | 
|                                                                                      |             |                           |       |                      |     |              |       |  
|                                                                                      |             |                           | 109   |                      |     |              | 22    |  
|                                                                                      |             |                           |       |                      |     |              |       |  
|Net charge-offs                                                                       |             |                           | 102   |                      |     |              | 107   |  
|Additions charged to operations                                                       |             |                           | 535   |                      |     |              | 773   |  
|                                                                                      |             |                           |       |                      |     |              |       |  
|Adjustment: Acquisition of Loan Portfolio Allowance                                   |             |                           | 197   |                      |     |              |      |  
|Allowance for Possible Loan Losses, End of Period                                     |             | $                         | 2,080 |                      |     | $            | 1,450 |  
|                                                                                      |             |                           |       |                      |     |              |       |  
|Ratio of Net Charge-offs During the Year
to Average Loans Outstanding During the Year |             |                           | 0.06  | %                    |     |              | 0.11  | %
|                                                                                      |             |                           |       |                      |     |              |       |  
|Ratio of Allowance for Possible Loan Losses to
Loans at Period End                    |             |                           | 1.07  | %                    |     |              | 1.05  | %
|                                                                                      |             |                           |       |                      |     |              |       |  

In accordance with SFAS No. 114 (as amended by SFAS No. 118), Accounting by
Creditors for Impairment of a Loan, loans identified as impaired are
measured on the present value of expected future cash flows discounted at the
loans effective interest rate, except that as a practical expedient, a
creditor may measure impairment based on a loans observable market price, or
the fair value of the collateral if the loan is collateral dependent. A loan
is impaired when it is probable the creditor will not be able to collect all
contractual principal and interest payments due in accordance with the terms of
the loan agreement. Loan impairment is evaluated on a loan-by-loan basis as
part of normal loan review procedures of the Bank.

Recent Legislation

On July 30, 2002, President Bush signed into law
the Sarbanes-Oxley Act of 2002, or the SOA. The stated goals of the
SOA are to increase corporate responsibility, to provide for enhanced
penalties for accounting and auditing improprieties at publicly
traded companies and to protect investors by improving the accuracy
and reliability of corporate disclosures pursuant to the securities
laws.

The SOA is the most far-reaching U.S. securities
legislation enacted in some time. The SOA generally applies to all
companies, both U.S. and non-U.S., that file or are required to file
periodic reports with the Securities and Exchange Commission, or the
SEC, under the Securities Exchange Act of 1934, or the Exchange Act.
Given the extensive SEC role in implementing rules relating to many
of the SOAs new requirements, the final scope of these
requirements remains to be determined.

The SOA includes very specific additional
disclosure requirements and new corporate governance rules, requires
the SEC and securities exchanges to adopt extensive additional
disclosure, corporate governance and other related rules and mandates
further studies of certain issues by the SEC and the Comptroller
General. The SOA represents significant federal involvement in
matters traditionally left to state regulatory systems, such as the
regulation of the accounting profession, and to state corporate law,
such as the relationship between a board of directors and management
and between a board of directors and its committees.

This SOA addresses, among other matters: audit
committees; certification of financial statements by the chief
executive officer and the chief financial officer; the forfeiture of
bonuses and profits made by directors and senior officers in the
twelve month period covered by restated financial statements; a
prohibition on insider trading during pension plan black out periods;
disclosure of off-balance sheet transactions; a prohibition on
personal loans to directors and officers; expedited filing
requirements for Forms 4s; disclosure of a code of ethics and
filing a Form 8-K for a change or waiver of such code;
real time filing of periodic reports; the formation of a
public accounting oversight board; auditor independence; and various
increased criminal penalties for violations of securities laws.

The SOA contains provisions which became effective
upon enactment on July 30, 2002 and provisions which will become
effective from within 30 days to one year from enactment. The SEC has
been delegated the task of enacting rules to implement various of the
provisions with respect to, among other matters, disclosure in
periodic filings pursuant to the Exchange Act.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company realizes income principally from the differential or spread between
the interest earned on loans, investments, other interest-earning assets and
the interest paid on deposits and borrowings. The Company, like other
financial institutions is subject to interest rate risk (IRR) to the degree
that its interest-earning assets reprice differently than its interest-bearing
liabilities. The Companys primary objective in managing interest rate risk is
to minimize the adverse impact of changes in interest rates on the Companys
net interest income and capital, while maintaining an asset-liability balance
sheet mix that produces the most effective and efficient returns.

A sudden and substantial increase or decrease in interest rates may adversely
impact the Companys income to the extent that the interest rates associated
with the assets and liabilities do not change at the same speed, to the same
extent, or on the same basis. The Company has adopted formal policies and
practices to monitor its interest rate risk exposure. As a part of its risk
management practices, the Company uses the net portfolio value (NPV)
methodology to gauge interest risk exposure.

The Company monitors interest rate sensitivity by estimating the change in NPV
over a range of interest rate scenarios utilizing an interest rate model. The
Sensitivity Measure is the decline in the NPV ratio, as a percentage, caused by
a 200 basis point increase or decrease in interest rates, whichever produces
the largest decline. The higher the institutions sensitivity measure, the
greater is its exposure to IRR.

The following reflects the Companys net interest income sensitivity analysis
as of June 30, 2002

|             |  |                 |  |                      |         |             |  |  |         | 
|------------ |  | --------------- |  | -------------------- | ------- | ----------- |  |  | ------- | 
|             |  |                 |  | Dollars in Thousands
|             |  |                 |  |                     
|             |  | Estimated Net   |  | Market               |         | Market     
|Simulated    |  | Interest Income |  | Value of             |         | Value of   
|Rate Changes |  | Sensitivity     |  | Assets               |         | Liabilities
|             |  |                 |  |                      |         |            
|+200         |  | -4.52%          |  |                      | 263,608 |             |  |  | 242,958 | 
|-200         |  | -0.08%          |  |                      | 276,265 |             |  |  | 244,579 | 

These estimates are based upon a number of assumptions, including: the nature
and timing of interest rate levels including yield curve, prepayments on loans
and securities, pricing strategies on loans and deposits, replacement of asset
and liability cashflows, and other assumptions. While the assumptions used are
based on current economic and local market conditions, there is no assurance as
to the predictive nature of these conditions including how customer preferences
or competitor influences might change.

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PART II

OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

The Company is involved in litigation in the ordinary course of its business.
Management does not presently believe that any of the existing routine
litigation is likely to have a material adverse impact on the Companys
financial condition or results of operations.




ITEM 2. CHANGES IN SECURITIES

Not Applicable




ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable




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

On May 22, 2002, the Company held its annual meeting of stockholders for the purpose of
the election of directors of the Company, the amendment of the 1997 Incentive Stock Option
Plan, and the ratification of Vavrinek, Trine, Day & Company, LLP as the Companys
independent accountants.



|1. |  | Election of Directors of the Company to serve until the next annual stockholders meeting
|-- |  | -----------------------------------------------------------------------------------------

|                   |  |          |           |          |  |           |  |           |  |  |        |  |  |  |  | 
|------------------ |  | -------- | --------- | -------- |  | --------- |  | --------- |  |  | ------ |  |  |  |  | 
|                   |  | Number   |           | Number   |  | Number    |  |           |  | 
|                   |  | of Votes |           | of Votes |  | of Votes  |  | Broker   
|                   |  | For      |           | Against  |  | Abstained |  | Non-Votes
|                   |  |          |           |          |  |           |  |          
|Frank S. Alvarez   |  |          | 1,510,455 |          |  |           |  |           |  |  | 55,985 | 
|Charles L. Kreagle |  |          | 1,508,835 |          |  |           |  |           |  |  | 57,605 | 
|Norman Morales     |  |          | 1,508,970 |          |  |           |  |           |  |  | 57,470 | 
|Joel H. Ravitz     |  |          | 1,509,103 |          |  |           |  |           |  |  | 57,337 | 
|Lester Stroh       |  |          | 1,497,726 |          |  |           |  |           |  |  | 68,714 | 



|2. |  | Amendment of the 1997 Incentive Stock Option Plan to increase the number of authorized shares by 200,000
|-- |  | --------------------------------------------------------------------------------------------------------

|         |  |          |        |           |  |           |       |  |  |  |         | 
|-------- |  | -------- | ------ | --------- |  | --------- | ----- |  |  |  | ------- | 
|Number   |  | Number   |        | Number    |  |           |       | 
|of Votes |  | of Votes |        | of Votes  |  | Broker   
|For      |  | Against  |        | Abstained |  | Non-Votes
|         |  |          |        |           |  |          
|999,088  |  |          | 73,848 |           |  |           | 5,383 |  |  |  | 488,121 | 



|3. |  | Ratification of Vavrinek, Trine, Day & Company, LLP as the Companys independent accountants
|-- |  | --------------------------------------------------------------------------------------------

|          |  |          |        |           |  |           |       |  |  |  |  | 
|--------- |  | -------- | ------ | --------- |  | --------- | ----- |  |  |  |  | 
|Number    |  | Number   |        | Number    |  |           |       | 
|of Votes  |  | of Votes |        | of Votes  |  | Broker   
|For       |  | Against  |        | Abstained |  | Non-Votes
|          |  |          |        |           |  |          
|1,548,465 |  |          | 11,195 |           |  |           | 6,780 | 






ITEM 5. OTHER INFORMATION

Not Applicable




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



| | a) |  | Exhibit 99  Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
| | -- |  | ------------------------------------------------------------------------------------
|
| | b) |  | Reports on Form 8-K: None                                                           

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CERTIFICATION OF CHIEF EXECUTIVE OFFICER OF VINEYARD NATIONAL BANCORP

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, 18 U.S.C. Section 1350, and accompanies the quarterly report on
Form 10-Q (Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934) for the quarter ended June 30, 2002 of Vineyard National
Bancorp.

I, Norman Morales, President and Chief Executive Officer of Vineyard National
Bancorp, certify that to the best of my knowledge:



| | (i)  |  | the Form 10-Q fully complies with the requirements of Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C.
78m(a) or 78o(d)); and        
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | the information contained in the Form 10-Q fairly presents, in all
material respects, the financial condition and results of operations of
Vineyard National Bancorp.

|                      |  |     |  |                                                     
|--------------------- |  | --- |  | ----------------------------------------------------
|Date: August 14, 2002 |  |     |  |                                                     
|                      |  | By: |  | /s/ NORMAN MORALES                                  
|                      |  |     |  |                                                     
|                      |  |     |  | Norman Morales
President and Chief Executive Officer

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CERTIFICATION OF DIRECTOR OF FINANCE AND OPERATIONS
OF VINEYARD NATIONAL BANCORP

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, 18 U.S.C. Section 1350, and accompanies the quarterly report on
Form 10-Q (Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934) for the quarter ended June 30, 2002 of Vineyard National
Bancorp.

I, Jill A. Pierce, Executive Vice President and Director of Finance and Operations of Vineyard National
Bancorp, certify that to the best of my knowledge:



| | (iii) |  | the Form 10-Q fully complies with the requirements of Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. 78m(a) or 78o(d)); and        
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (iv)  |  | the information contained in the Form 10-Q fairly presents, in all
material respects, the financial condition and results of operations of
Vineyard National Bancorp.

|                      |  |     |  |                                                                           
|--------------------- |  | --- |  | --------------------------------------------------------------------------
|Date: August 14, 2002 |  |     |  |                                                                           
|                      |  | By: |  | /s/ JILL A. PIERCE                                                        
|                      |  |     |  |                                                                           
|                      |  |     |  | Jill A. Pierce
Executive Vice President
Director of Finance and Operations

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on this 14th day of August 2002.

| |  |                           |  |                                                                           
| |  | ------------------------- |  | --------------------------------------------------------------------------
| |  | VINEYARD NATIONAL BANCORP
| |  | By:                       |  | /s/ NORMAN MORALES                                                        
| |  |                           |  |                                                                           
| |  |                           |  | Norman Morales
President and Chief Executive Officer                      
| |  | By:                       |  | /s/ JILL A. PIERCE                                                        
| |  |                           |  |                                                                           
| |  |                           |  | Jill A. Pierce
Executive Vice President
Director of Finance and Operations
| |  | By:                       |  | /s/ FRANK S. ALVAREZ                                                      
| |  |                           |  |                                                                           
| |  |                           |  | Chairman of the Board of Directors                                        
| |  | By:                       |  | /s/ CHARLES L. KEAGLE                                                     
| |  |                           |  |                                                                           
| |  |                           |  | Director                                                                  
| |  | By:                       |  | /s/ JOEL H. RAVITZ                                                        
| |  |                           |  |                                                                           
| |  |                           |  | Director                                                                  
| |  | By:                       |  | /s/ LESTER STROH, M.D.                                                    
| |  |                           |  |                                                                           
| |  |                           |  | Director                                                                  

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