<PAGE>
                     SECURITIES AND EXCHANGE COMMISSION
                            Washington D.C 20549

                                  FORM 10-K

X		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
		 EXCHANGE ACT OF 1934

                 For the Fiscal Year Ended December 31, 1998
                                    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. 33-8743

                           ORANGE NATIONAL BANCORP
            (Exact Name of Registrant as Specified in Charter)
  
				     			               1201 East Katella Avenue
    					 		               Orange, California 92867
				  		California		           	(714) 771-4000		   	        33-0190684
(State of Incorporation)   (Address and Telephone Number   (I.R.S. Employer
	  							                of Principal Executive Offices)	Identification No.)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                                (Title of Class)

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 periods 
that the Registrant was required to file such reports), and (2) has 
been subject to such filing requirements for the past 90 days. Yes X   
No    

Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be 
contained, to the best of Registrant's knowledge, in definitive proxy 
or information statements incorporated by reference in Part III of this 
Form 10-K or any amendment to this Form 10-K.      

The aggregate market value of the voting shares held by nonaffiliates 
of the Registrant was $37,097,336 as of February 28,1999.  The 
aggregate market value of the voting shares held by nonaffiliates 
includes all stockholders except officers and directors and was 
computed based on a market price of $27.63 per share.

2,000,171 Shares of Common Stock were outstanding at February 28, 1999.

             DOCUMENTS INCORPORATED BY REFERENCE
  
Part III of this Form 10-K incorporates by reference portions of the 
Proxy Statement to be filed with the Securities and Exchange Commission 
in connection with the Annual Meeting of Shareholders to be held on May 
17, 1999.


<PAGE>
                           ORANGE NATIONAL BANCORP

                       1998 ANNUAL REPORT ON FORM 10-K

                              TABLE OF CONTENTS


PART I
                                
Item 1.		Business							                                                 3

Item 2.		Properties							                                              18

Item 3.		Legal Proceedings							                                       19

Item 4.		Submissions of Matters to a Vote of Security Holders			       	19


PART II

Item 5.		Market for Registrant's Common Equity and Related
         Stockholder Matters	                                         		19

Item 6.		Selected Financial Data						                                 	21

Item 7.		Management's Discussion and Analysis of Financial Condition 
         and Results of Operations		                                    22

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk				 27

Item 8.		Financial Statements and Supplementary Data					               28

Item 9.		Changes in and Disagreements with Accountants on Accounting 
         and Financial Disclosures		                                    28


PART III
                                
Item 10.		Directors and Executive Officers of the Registrant					       29

Item 11.		Executive Compensation					                                  	29

Item 12.		Security Ownership of Certain Beneficial Owners and 
          Management			                                                 29

Item 13.		Certain Relationships and Related Transactions					           29


PART IV

Item 14.		Exhibits, Financial Statement Schedules, and
          Reports on Form 8-K		                                        	30

        				Signatures						                                           	31
  
		        		Index to Exhibits						                                    	33
<PAGE>
PART I

ITEM 1. BUSINESS


General

		Orange National Bancorp ("Bancorp" or "Company") was organized and 
incorporated as a bank holding company under the laws of the State of 
California on July 28, 1986.  The Company acquired all the outstanding 
capital stock of Orange National Bank ("Bank") in a one-bank holding 
company organization at the direction of the Board of Directors of the 
Bank.  The Company commenced operations as a bank holding company 
within the definition of the Bank Holding Company Act of 1956, as 
amended, and is subject to the supervision and regulation of the Board 
of Governors of the Federal Reserve System.  The Bank became a wholly-
owned subsidiary of the Bancorp on January 16, 1987, with the approval 
of the Office of the Comptroller of the Currency ("OCC") and the 
Federal Reserve Board ("FRB").  The Bank was organized and chartered as 
a national banking association on October 31, 1979 and opened for 
business on that date.  

		Substantially all consolidated operating earnings and net earnings 
are presently derived from banking related activities.  Such banking 
related activities would continue to represent the Company's primary 
source of operating earnings and net earnings for the foreseeable 
future.  The Bank currently has six branch offices located throughout 
Orange County, California.


Narrative Description of Business

		The Company is engaged in the ownership of one commercial bank.  The 
Company does not consider its business to be seasonal nor to be 
dependent upon a single customer or a few customers.  Thus, the loss of 
any one customer would not have a material adverse effect upon the 
Company or its subsidiary.  Neither the Company nor its subsidiary 
operate outside the United States nor derive revenues from customers 
located outside of the United States.

		The Bank offers a full range of commercial banking services, 
including the acceptance of demand, money-market, savings and time 
deposits; and the origination of commercial, real estate, Small 
Business Administration, personal, equity, home improvement, 
automobile, installment and term loans; and letters and lines of 
credit.  The Bank also offers travelers' checks, safe deposit boxes, 
notary public, international banking and other customary bank services 
to its customers, except trust services.  The lobby of each branch is 
open from 9:00 a.m. to 5:00 p.m., Monday through Thursday and 9:00 a.m. 
through 6:00 p.m. on Friday.  Selected branches are open on Saturday.  
Each branch has an automated teller machine ("ATM") that is included on 
several national ATM networks.  In addition, drive-up services are 
available at three branch offices.  The Federal Deposit Insurance 
Corporation ("FDIC") insures the deposits of the Bank up to a maximum 
of $100,000, subject to certain limitations.  The Bank is a member of 
the Federal Reserve System.

		The Bank currently does not issue MasterCard or VISA credit cards, 
but honors merchant drafts under both types of cards.

		The principal sources of the Bank's income are interest income and 
fees from the Bank's loan portfolio, interest income on the Bank's 
investments and gains on sales of loans.  These sources comprised 
66.8%, 20.5% and 3.0%, respectively, of the Bank's total income for 
1998.  Other sources of income include fees on deposit accounts and 
other customer services.







<PAGE>
Distribution of Assets, Liabilities, and Stockholders' Equity

		The following schedule presents the average balances of the 
Company's asset, liability, and stockholders' equity accounts and the 
distribution percentage of each item based on total average assets.  
Average balances were computed using the average daily balances for the 
years ended December 31:
<TABLE>
<CAPTION>
							                    1998              1997              1996
			             					Dollars 	Percent 	Dollars 	Percent 	Dollars 	Percent
			               					 		          (dollars in thousands)
<S>                 <C>       <C>     <C>       <C>     <C>       <C>
Assets
Cash and due
 from banks	       	$ 19,665   	7.8% 	$ 23,212  	10.5%  $ 20,415   	9.4%
Securities		       			27,700  	11.0    	26,134  	11.8    	44,937  	20.7
Federal funds sold	  	54,177  	21.5		   29,362  	13.3	   	29,725	  13.7
Loans			          			139,521  	55.4	  	131,077	  59.4	  	109,802  	50.7
Less allowance
 for credit losses	  	(1,580) 	(0.6)	  	(1,488) 	(0.7)  		(1,487) 	(0.7)
	Net loans	       			137,941  	54.8		  129,589  	58.7	  	108,315  	50.0
Premises and
 equipment, net      		5,510	   2.2	    	5,187   	2.4	    	5,382   	2.5
Other assets			  	     6,875	   2.7		    7,193    3.3		    7,998	   3.7

			Total	assets	   	$251,868 	100.0% 	$220,677 	100.0%	 $216,772 	100.0%


Liabilities and
 stockholders' equity
Liabilities
	Deposits:
		Noninterest
   bearing demand	 	$ 84,499	  33.5% 	$ 76,444 	 34.6% 	$ 67,662	  31.2%
		Money market
   demand and NOW	   103,142  	41.0	    91,931  	41.7   	101,562  	46.9
		Savings			         	12,186   	4.8    	11,485	   5.2    	12,420   	5.7
		Time			         		  28,088	  11.2  	  19,423	   8.8	    15,969	   7.4

			Total deposits	  	227,915  	90.5   	199,283	  90.3   	197,613  	91.2

	Other liabilities	    2,097	   0.8	     1,793	   0.8	     1,381	   0.6

			Total liabilities 230,012	  91.3   	201,076  	91.1   	198,994  	91.8

Stockholders' equity:
	Common stock        		7,950   	3.2     	7,770   	3.5     	7,594   	3.5
	Retained earnings		  13,906	   5.5	    11,831	   5.4  	  10,184	   4.7

			Total
    stockholders'
    equity	        	  21,856	   8.7	    19,601	   8.9	    17,778	   8.2

			Total liabilities
    and	stockholders'
    equity	        	$251,868  100.0%	 $220,677	 100.0%	 $216,772	 100.0%
</TABLE>

<PAGE>
Interest Income Rates

		Average interest-earning assets, their yields and amounts earned by 
category are presented in the following chart for the years ended 
December 31.  Amounts outstanding are the average daily balances for 
the respective years, including nonaccrual loans.  Yields and amounts 
earned include loan origination fees.  The Company does not have tax-
exempt income bonds or notes in its securities portfolio.
<TABLE>
<CAPTION>
			                    								        1998	      1997	      1996
                             												(dollars in thousands)
<S>                                  <C>        <C>        <C>
Securities:
	Average outstanding	             				$27,700   	$26,134   	$44,937
	Average yield		                     				5.78%     	6.02%     	5.85%
	Amount of interest earned        					$1,602    	$1,573	    $2,627
Federal funds sold:
	Average outstanding             					$54,177	   $29,362   	$29,725
	Average yield					                     	5.32%     	5.44%     	5.23%
	Amount of interest earned				        	$2,881	    $1,598    	$1,555
Loans:
	Average outstanding	            				$139,521  	$131,077	  $109,802
	Average yield				                    		10.49%    	10.44%    	10.67%
	Amount of interest and fees earned 		$14,633	   $13,686	   $11,712
Total interest-earning assets:
	Average outstanding					            $221,398  	$186,573  	$184,464
	Average yield		                     				8.63%	     9.04%     	8.62%
	Amount of interest earned					       $19,116   	$16,857	   $15,894
</TABLE>

Interest Expense Rates

		The following table presents the Company's average interest-bearing 
deposits, the average rate paid on such deposits and the amounts paid 
or accrued for the years indicated.  Amounts outstanding are the 
average daily balances outstanding for the years ended December 31:
<TABLE>
<CAPTION>
                       											    1998	      1997	       1996
                           												(dollars in thousands)
<S>                                 <C>         <C>        <C>
NOW and money market (1):
	Average outstanding           					$103,142   	$91,931   	$101,562
	Average rate paid				                 	2.44%	     2.34%      	2.47%
	Amount of interest paid or accrued	 	$2,517    	$2,154     	$2,510
Savings:
	Average outstanding	            				$12,186   	$11,485	    $12,420
	Average rate paid				                 	2.01%     	2.02%      	2.00%
	Amount of interest paid or accrued				 $245      	$232       	$249
Time:
	Average outstanding		            			$28,088   	$19,423    	$15,969
	Average rate paid					                 5.00%     	4.98%      	4.76%
	Amount of interest paid or accrued	 	$1,403      	$967       	$760
Total interest-bearing liabilities:
	Average outstanding					           $143,416  	$122,839   	$129,951
	Average rate paid					                 2.90%     	2.73%     	2.71%
	Amount of interest paid or accrued	 	$4,165    	$3,353    	$3,519

Net yield on interest-earning assets	 		6.75%     	7.24%     	6.71%
<FN> 
(1) NOW and money markets include only interest-bearing transaction 
accounts.
</FN>
</TABLE>
<PAGE>
Rate/Volume Analysis of Net Interest Income

		The following table presents the cause and amounts of change in 
interest income and expense for the years ended December 31:  
<TABLE>
<CAPTION>
		         	               1998 over 1997 (1)       1997 over 1996 (1)
                 								Volume  	Rate   	Total   	Volume  	Rate  	Total
                 								           	(dollars in thousands)
<S>                      <C>     <C>      <C>     <C>      <C>    <C>
Increase (decrease) in:
Interest income:
Investment securities		  $   94	 $  (65)	 $   29 	$(1,099)	$  45 	$(1,054)
Federal funds sold      		1,351	    (68)  	1,283     	(19)   	62      	43
Loans					              	   882	     65	     947 	  2,269	  (295) 	 1,974

	Total interest income 		$2,327 	$(  68) 	$2,259	 $ 1,151 	$(188) $   963

Interest expense:
Money market deposits	  	$  263 	$  100  	$  363  $  (238)	$(118)	$  (356)
Savings deposits	          		14     	(1)     	13     	(19)    	2	     (17)
Time deposits		        		   431	      5	     436  	   164	    43   	  207

	Total	interest expense		$  708 	$  104  	$  812	 $   (93)	$ (73) $  (166)

	Net interest income   		$1,619 	$ (172) 	$1,447  $ 1,244 	$(115) $ 1,129

<FN>
(1) The variance not solely due to rate or volume is allocated to the 
rate variance.  Nonaccrual loans have been included in this 
analysis.  Loan fees of $1.0 million, $1.1 million and $1.0 million 
for 1998, 1997, and 1996, respectively, have been included in this 
analysis.  The Company does not have tax-exempt income bonds or 
notes in its securities portfolio.
</FN>
</TABLE>
Securities

		The Bank's Board of Directors reviews all securities transactions on 
a monthly basis.  There are no securities from a single issuer other 
than securities of the U.S. Government, Agencies and corporations whose 
aggregate market value is greater than 10% of stockholders' equity.  
The Bank does not invest in derivative financial instruments.  The Bank 
purchases mortgage-backed securities of investment grade only.   The 
following schedule summarizes the amounts and the distribution of the 
Bank's held-to-maturity securities as of December 31:
<TABLE>
<CAPTION>
	    	                   1998                1997                1996
        		 						Amortized 	Market  	Amortized  Market  	Amortized 	Market
  					           Cost(1)	   Value    Cost(1)    Value	   Cost(1)	   Value
                       										       (dollars in thousands)
<S>               <C>       <C>        <C>      <C>       <C>       <C>
Mortgage-backed
 securities	     	$17,640   $17,691  	 $9,037  	$8,972   	$10,937  	$10,844

<FN>
(1)	Held-to-maturity securities are stated at amortized cost (i.e., cost 
adjusted for amortization of premium and accretion of discount.)
</FN>
</TABLE>


<PAGE>
		The following schedule summarizes the available-for-sale securities 
as of December 31:
<TABLE>
<CAPTION>
		     	                   1998               1997                1996
           								Amortized 	Market 	 Amortized	Market  	Amortized 	Market
            								Cost (2) 	 Value   	Cost (2) 	Value   	Cost (2)  	Value
                  										       (dollars in thousands)
<S>                 <C>       <C>       <C>      <C>       <C>       <C>
U.S. Treasury
 securities and
 obligations of
 other U.S.
 Government agencies
 and Corporations	 		$14,503	  $14,512  	$8,992  	$8,976  	$28,992  	$28,899
Mortgage-backed
 securities	         	25,241   	25,226      	-       	-        	-        	-  
Other							             911	      911	     170	     170	      174	      174

	Total	available
 -for-sale
 securities         	$40,655  	$40,649	  $9,162	  $9,146	  $29,166	  $29,073

<FN>
(2)	Available-for-sale securities are stated at fair value with 
unrealized gains and losses being reported as an adjustment to 
stockholders' equity net of the related tax effect.
</FN>
</TABLE>
Maturity of Securities
  
		The following table summarizes the maturities of the Company's 
securities and their weighted average yield as of December 31, 1998:
<TABLE>
<CAPTION>
                                   											Carrying 	Market 	Average
                                 										  	Amount(1)  Value 	Yield(2)
							                                     				(dollars in thousands)
<S>                                            <C>      <C>       <C>
Mortgage-backed securities (3)				             $42,866  $42,917	  5.85%

U.S. Treasury Securities and
obligations of U.S. Government
Agencies and corporations:
	Due within one year				                        	9,000   	9,000  	5.31%
	Due after one year but within five years			    	5,512   	5,512  	5.75%
Other					                                				     911	     911  	6.00%

		Total securities		 		                       	$58,289 	$58,340  	5.67%

<FN>
(1)	Held-to-maturity securities are stated at amortized cost (i.e., cost 
adjusted for amortization of premiums and accretion of discounts).  
Available-for-sale securities are recorded at fair value.

(2)	Weighted average yield is the computed using the investment yield 
and the amortized cost of securities.

(3)	Mortgage-backed securities are not scheduled for maturities due to 
the periodic principal payments received and unknown amount of 
expected prepayments.
</FN>
</TABLE>
<PAGE>
Loan Portfolio
  
		A major part of the Bank's objective is serving the credit needs of 
customers in Orange County and surrounding areas.  Credit decisions are 
based upon the judgement of the Bank's lending personnel and Loan 
Committee.  The legal lending limit to each customer is restricted to a 
percentage of the Bank's total capital, the exact percentage depends on 
the nature of the particular loan and the collateral involved.  Credit 
risk is inherent to any loan portfolio and it is the management of this 
risk, which defines the quality of the portfolio.  The Bank has a 
policy to obtain collateral for loans under most circumstances.  The 
Bank has a highly diversified portfolio, a solid underwriting process, 
a loan review program and an active loan service function which 
management believes serves to minimize the possibility of material loss 
in the loan portfolio.

		The three general areas in which the Bank has directed virtually all 
of its lending activities are (a) real estate loans, (b) commercial 
loans, and (c) loans to individuals.  These three categories accounted 
for 63.8%, 28.2%, and 7.8%, respectively, of the Bank's loan portfolio 
as of December 31, 1998.  Commercial real estate loans are originated 
for terms of up to 25 years.  Commercial loans are primarily funded to 
small- and medium-sized businesses for terms ranging from 30 days to 5 
years.  Consumer installment loans are for a maximum term of 48 months 
on unsecured loans and for a term of the depreciable life of tangible 
property used as collateral on secured loans.  

		Variable interest rate loans comprise 64% of the loan portfolio as 
of December 31, 1998.

		The Bank had standby letters of credit of $0.5 million and 
commitments to extend credit of $23.9 million as of December 31, 1998.  
The Bank presently has sufficient liquidity to fund all loan 
commitments.

		The Bank originates loan commitments that are unsecured.  The Bank 
had funded unsecured loans to companies or individuals of $1.9 million 
with unfunded unsecured commitments of $3.9 million as of December 31, 
1998.  The Bank has a lending policy to obtain collateral whenever 
available or desirable, subject to the degree of risk the Bank is 
willing to undertake.

		The allowance for credit losses is established through a provision 
for credit losses charged to expense.  Loans are charged against the 
allowance for credit losses when management believes that 
collectibility of the principal is unlikely.  The allowance is an 
amount that management believes will be adequate to absorb estimated 
losses on existing loans that may become uncollectible, based on 
evaluation of the collectibility of loans and prior loan loss 
experience.  This evaluation also takes into consideration such factors 
as changes in the nature and volume of the loan portfolio, overall 
portfolio quality, review of specific problem loans, and current 
economic conditions that may affect the borrower's ability to pay.  
While management uses the best information available to make its 
evaluation, future
adjustments to the allowance may be necessary if there are significant 
changes in economic or other conditions.  In addition, the OCC 
periodically reviews the Company's allowance for credit losses as an 
integral part of their normal recurring examination process, and may 
require the Company to make additions to the allowance based on their 
judgment about information available to them at the time of their 
examinations.

		A loan is impaired when it is probable the creditor will be unable 
to collect all contractual principal and interest payments due in 
accordance with terms of the loan agreement.  Impaired loans are 
measured based on the present value of expected future cash flows 
discounted at the loan's effective interest rate or, as a practical 
expedient, at the loan's observable market price or the fair value of 
the collateral if the loan is collateral dependent.  The amount of 
impairment, if any, and any subsequent changes are included in the 
allowance for credit losses
<PAGE>
Loan Portfolio Composition

		The composition of the Bank's loan portfolio (all domestic) as of 
December 31 is presented in the following table:
<TABLE>
<CAPTION>
         									      1998	      1997	      1996	      1995	      1994
                          											(dollars in thousands)
<S>                   <C>        <C>        <C>        <C>         <C>
Dollars
Real estate:
	Commercial	       			$ 86,049  	$ 78,534	  $ 64,611	  $ 61,891   	$61,881
	Construction	        			5,074	       118	     1,412      	 242     	2,286
Commercial and
 industrial	          		40,217    	44,301    	44,766    	41,361    	40,976
Loans to individuals		 	11,180	    10,586    	10,256	    10,343     	9,384
Other						       		       241	       122	       152	     1,207	       177

		Total	loans				      142,761   	133,661	   121,197	   115,044   	114,704

Unearned net loan fees
 and premiums	         	(1,097)     	(891)     	(837)     	(807)     	(536)
Allowance for credit
 losses		            	  (1,524)	   (1,581)	   (1,369)	   (1,513)	   (1,465)

		Total, net		      		$140,140  	$131,189  	$118,991  	$112,724  	$112,703


Unsecured loans,
 included in
 table above	          	$1,901    	$3,910	    $2,836	    $4,753	    $3,743


Percentages
Real estate:
	Commercial			           	60.2%	     58.8%     	53.3%	     53.8%     	53.9%
	Construction		          		3.6       	0.1       	1.2       	0.2       	2.0
Commercial and industrial 28.2	      33.1	      36.9      	36.0      	35.7
Loans to individuals		    	7.8       	7.9       	8.5       	9.0       	8.2
Other				          				    0.2	       0.1	       0.1	       1.0   	    0.2

		Total loans	        			100.0%    	100.0%    	100.0%	    100.0%    	100.0%
</TABLE>



















<PAGE>
Loan Maturities and Sensitivity to Changes in Interest Rates

		The following table presents the repricing and maturities of the 
Bank's loan portfolio by category as of December 31, 1998.  In 
addition, the table presents the distribution between those loans with 
predetermined (fixed) interest rates and those with variable (floating) 
interest rates maturing after one year.   Floating rate loans generally 
fluctuate with changes in the prime interest rate.  The table excludes 
unearned net loan fees and premiums of $1,097,000.
<TABLE>
<CAPTION>
										                               	After
									                              		one but
                 										Within one  within five    	After
										                  year (1)	     years    	five years	     Total
                   											        (dollars in thousands)
<S>                          <C>         <C>         <C>          <C>
Real estate:
	Commercial	             				$47,267    	$11,443    	$27,339     	$86,049
	Construction		             			5,074         	-          	-        	5,074
Commercial and industrial		 		36,044      	3,752        	421      	40,217
Loans to individuals			      	10,039      	1,141	         -       	11,180
Other						              			     241	         -  	        -   	       241

                   										$98,665    	$16,336    	$27,760    	$142,761


	Distribution between fixed and floating interest rates after one year:

Fixed interest rates				                	$14,602    	$27,760	     $42,362
Floating interest rates					               1,734	         -      	  1,734

                              											$16,336    	$27,760     	$44,096

<FN>
 (1)	Demand loans and overdrafts are included in the "within one year" 
column with scheduled repayments reported in the periods in which 
the final payments are due.
</FN>
</TABLE>

Credit Risk Management

		The Bank manages its loan portfolio through a process designed to 
assure acceptable quality of loans entering the portfolio and to bring 
any potential losses or potential defaults in existing loans to the 
attention of the appropriate management personnel.  Each lending 
officer has primary responsibility to conduct credit and documentation 
reviews of the loans for which he is assigned.   The Bank's Senior Vice 
President and Senior Credit Officer are responsible for general 
supervision of the loan portfolio and adherence by the loan officers to 
the loan policies of the Bank.  The Bank currently engages an outside 
consulting firm to periodically review the loan portfolio to provide 
suggested risk rating of selected loans.  Bank management reviews the 
suggested ratings along with all other available information to 
properly monitor the loan portfolio, including all loan evaluations 
made during periodic examinations by the OCC.

		In accordance with the Bank's loan policies, management presents a 
written report to the Bank's Board of Directors at its monthly meeting.   
The Directors review the delinquency report listing of all loans 30 
days or more past due and the watch list report including loans having 
increased credit risk, both delinquency and other factors, over the 
rest of the portfolio.  Additionally, the Directors review a monthly 
report including all loans originated the prior month.
<PAGE>
		As previously noted, the Bank maintains an allowance for credit 
losses to provide for potential losses in the loan portfolio.  
Additions to the allowance for credit losses are charged to operations 
in the form of a provision for possible credit losses.   All loans that 
are judged to be uncollectible are charged against the allowance while 
any recoveries are credited to the allowance.  The allowance for credit 
losses is maintained at a level determined by management to be 
adequate, based on the performance of loans in the Bank's portfolio, 
evaluation of collateral for such loans, the prospects or worth of the 
prospective borrowers or guarantors, and such other factors which, in 
the Bank's judgement, deserve consideration in the estimation of 
possible losses.  The allowance for credit losses is established and 
maintained after analyzing loans identified by management with certain 
unfavorable features affixing a risk of loss attributable to each loan.  
An inherent risk of loss in accordance with industry standards and 
economic conditions is then allocated to specific loan pools and to the 
remainder of the portfolio on an aggregate basis.

		The following table presents information with respect to loans that 
were accounted for on a nonaccrual basis or contractually past due 90 
days or more as to interest or principal payments, or restructured as 
of December 31:
<TABLE>
<CAPTION>
                     									   1998	    1997	    1996 	   1995	    1994
								                               			(dollars in thousands)

<S>                             <C>      <C>      <C>      <C>      <C>
Loans on non-accrual basis		   	$1,631  	$2,447  	$2,464  	$3,055  	$3,163
Loans past due 90 days or more
 and still accruing interest		      76	     660       	7	      33	     158
Troubled debt restructuring,
 not included above		               -  	     - 	      -        -  	     -

	Total					                   		$1,707  	$3,107  	$2,471  	$3,088  	$3,321
</TABLE>

		If all such loans had been current in accordance with their original 
terms during the year ended December 31, 1998, the gross interest 
income would have been approximately $382,000.  The amount of interest 
income included in earnings on these nonaccrual loans was $203,000 in 
1998.

		Loans are generally placed on nonaccrual status when principal or 
interest payments are past due 90 days or more.  Certain loans are 
placed on nonaccrual status earlier if there is reasonable doubt as to 
the collectibility of interest or principal.  Loans that are in the 
renewal process, have sufficient collateral, or are in the process of 
collection continue to accrue interest.
  
		Management has no knowledge of any additional loans not disclosed in 
this section on nonaccrual, past due, or troubled debt restructuring 
that may be potential problem loans.   The Bank has no loans to foreign 
borrowers.  The Company has quantified its impaired loans in Note 4 of 
the Notes to the Consolidated Financial Statements.  Loans on 
nonaccrual status are greater than the total impaired loans because the 
collateral value of certain nonaccrual loans are large enough that 
management believes all principal and interest will be collected on 
those loans and therefore do not meet the definition of impaired.  A 
loan is impaired when it is probable the creditor will be unable to 
collect all contractual principal and interest payments due in 
accordance with the terms of the loan agreement.  Impaired loans are 
valued primarily at the fair value of the underlying collateral.

		There were no loan concentrations exceeding 10% of the total loan 
portfolio and no other interest-bearing assets that would be required 
to be in the paragraphs above, if such assets were classified as loans 
as of December 31, 1998, 1997, 1996, 1995 and 1994.













<PAGE>
		The following table presents loans outstanding, charge-offs, 
recoveries on loans previously charged-off, the allowance for credit 
losses, and pertinent ratios during the years ended and as of December 
31:
<TABLE>
<CAPTION>
									                   1998	     1997	     1996	     1995	     1994
								                            			(dollars in thousands)
<S>                       <C>       <C>       <C>       <C>       <C>
Average gross loans		    	$139,521 	$131,077 	$109,802 	$114,820 	$114,718

Total gross loans
 at end of period	      		$142,761 	$133,661 	$120,360 	$114,237 	$114,168


Allowance for loan losses:
Balance,
 beginning of period	     		$1,581   	$1,369   	$1,513   	$1,465   	$1,524

Charge-offs:
	Commercial and industrial	   		78       	14      	252      	302      	459
	Real estate construction		    	-	        -        	-        	-        	-
	Commercial real estate			     121       	44	      125	       70       	25
	Installment	         				      -	         8  	     10	       16	        4

                  									    199	       66   	   387	      388	      488
Recoveries:
	Commercial and industrial	   		41      	122       	30       	63      	129
	Leases					                   	-        	-        	-        	45       	-
	Commercial real estate			       1        	9        	8        	8       	-
	Installment		       			        -	         7	       -	        -	         2

                  									     42  	    138   	    38	      116	      131

Net charge-offs (recoveries)			157      	(72)     	349      	272      	357

Additions charged
 to operations	           		   100   	   140	      205   	   320   	   298

Balance, end of period	   		$1,524	   $1,581   	$1,369   	$1,513	   $1,465

Net charge-offs (recoveries)
 during the period to
 average gross loans
 outstanding during year	    	0.11%   	(0.05%)   	0.32%    	0.24%    	0.31%
</TABLE>

		The Bank has allocated the allowance for credit losses to provide 
for the possibility of losses being incurred within loan categories as 
of December 31 are set forth in the table below:
<TABLE>
<CAPTION>
						      1998           1997          1996          1995          1994
							Percent	    	  Percent	     	Percent		     Percent		     Percent
							Of Loan		      Of Loan		     Of Loan     		Of Loan	     	Of Loan
       Cate-   Allow  Cate-  Allow  Cate-  Allow  Cate-  Allow  Cate-  Allow
							gory    -ance  gory	  -ance 	gory   -ance 	gory   -ance  gory   -ance
                    											(dollars in thousands)
<S>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C> 
Real estate:
	Commer-
  cial 	60.2%	$1,296	 58.8%	$1,265 	53.3% $  959	 53.8%	$  594	 53.9%	$  468
	Constru-
  ction 	3.6     	-   	0.1     	-	   1.2      	9  	0.2      	3  	2.0    	124
Commer-
 cial and
 indust-
 rial  	28.2    	217 	33.1    	298	 36.9    	343 	36.0    	831	 35.7    	744
Loans to
 indiv
 -iduals 7.8     	11  	7.9	     18  	8.5     	58  	9.0     	62  	8.2    	108
Other	   0.2      -	   0.1	     -	   0.1      -	   1.0	     23	  0.2	     21

							100.0%	$1,524	100.0%	$1,581	100.0%	$1,369	100.0%	$1,513	100.0%	$1,465
</TABLE>

<PAGE>
		Included in the Bank's allocation of its allowance for credit losses 
are specific reserves on certain identified loans and general reserves 
for unknown potential losses.  Management classifies loans through its 
internal loan review system that uses an independent third party 
reviewer and review of loans from its regulators.   None of these 
classifications indicate trends or uncertainties, which will materially 
impact future operating results, liquidity, or capital resources.  The 
allowance provides for the potential adverse effects of current 
economic conditions.  However, the full effects of the economy on the 
loan portfolio cannot be predicted with any certainty.   See discussion 
in Item 7 - Management's Discussion and Analysis of Financial Condition 
and Results of Operations.   Any loans which management doubts the 
ability of borrowers to comply with loan repayment terms are provided 
for in the allowance.


Summary of Deposits
  
		Deposits are currently the Bank's sole source of funds.   The Bank 
can obtain additional funds when needed to meet occasional declines in 
deposits or other short-term liquidity needs, through the overnight 
purchase of federal funds.   However, the Bank does not currently use 
these sources of funds.   Generally, the Bank has funds in excess of 
the needs for its deposit withdrawals or short-term liquidity needs and 
it, therefore, sells federal funds to other financial institutions or 
invests in short-term securities.

		The Bank's deposits are attracted primarily from individuals and 
commercial enterprises.  The Bank also attracts some deposits from 
municipalities and other government agencies.  The Bank does not have 
foreign deposits, brokered deposits or variable rate fixed-term 
deposits.  The Bank does not expect to obtain future deposits through 
the use of brokered deposits.  The Bank had noninterest-bearing demand 
deposits of $99.9 million, interest-bearing NOW and money market 
accounts of $113.9 million, time deposits for individuals and 
corporations of $33.3 million, and savings of $13.3 million as of 
December 31, 1998.

		The Company had interest-bearing deposits of 61.6% and 57.4% of 
total deposits as of December 31, 1998 and 1997, respectively.  While 
the Bank does not experience material repeated seasonal fluctuations in 
deposit levels, the Bank's relative growth in deposits and loans may be 
affected by seasonal and economic changes, which, in turn, may impact 
liquidity.  The Bank has a deposit concentration from five customers of 
$43,048,000 as of December 31, 1998.  Management believes it has 
sufficient liquidity to meet loan commitments and deposit demands.

		The following table sets forth information regarding the Bank's 
average balances of deposits, as a percentage of average total deposits 
and average interest paid by category for the years ended December 31:
<TABLE>
<CAPTION>
                           										MMDA	                      		 Total
				 				               	Demand	   and NOW 	 Savings	     Time	  Deposits
                          											(dollars in thousands)
<S>                     <C>       <C>        <C>       <C>       <C>
1998
Average balance			     	$84,499	  $103,142  	$12,186	  $28,088  	$227,915
Percent of total		       		37.1%     	45.3%     	5.3%    	12.3%    	100.0%
Average interest
 rate paid			               0.0%	      2.4%     	2.0%     	5.0%      	1.8%

1997
Average balance		     		$76,444   	$91,931  	$11,485  	$19,423  	$199,283
Percent of total       				38.4%	     46.1%     	5.8%     	9.7%    	100.0%
Average interest
 rate paid	               		0.0%      	2.3%     	2.0%     	5.0%      	1.7%

1996
Average balance		     		$67,662  	$101,562  	$12,420  	$15,969  	$197,613
Percent of total       				34.2%     	51.4%     	6.3%	     8.1%    	100.0%
Average interest
 rate paid	               		0.0%      	2.5%     	2.0%     	4.8%      	1.8%
</TABLE>



<PAGE>
		The following table indicates the amount and maturity of the Bank's 
time certificates of deposit over $100,000 as of December 31, 1998:
<TABLE>
<CAPTION>
                                             										        		Percent of 
                                                       Balance     Total
                                           										(dollars in thousands)
<S>                                                     <C>        <C>
Less than three months			                              	$16,217   		84.9%
Three months through six months			                         	936    		4.9
Six months through twelve months			                      	1,728    		9.1
Over twelve months			                                 	     211		    1.1

	Total time certificates of deposit over $100,000     		$19,092  		100.0%
</TABLE>

Return on Equity and Assets

		The following table indicates the key financial ratios of the 
Company for the years ended December 31:
<TABLE>
<CAPTION>
										                                             1998	   1997	   1996
<S>                                                   <C>     <C>     <C>
Profitability ratios:

	Rate of return on average total assets		             	1.32%  	1.45%  	1.02%

	Rate of return on average stockholders' equity			    15.24%	 16.32% 	12.38%

Capital ratios:

	Cash dividend payment ratio to net earnings		       	41.74%	 25.73% 	32.60%

	Average stockholders' equity to average total assets  8.68%	  8.88%	  8.20%
</TABLE>


Competition

		The banking business in southern California and the market areas 
served by the Bank are highly competitive with respect to both loans 
and deposits and are dominated by a relatively small number of major 
banks with many offices operating over a wide geographic area.  The 
Bank is one of several locally owned independent banks located in the 
Bank's primary service area.  The Bank also competes for loans and 
deposits with other commercial banks, including many which are much 
larger than the Bank, as well as with savings and loan associations, 
finance companies, credit unions, brokerage houses and other financial 
institutions.   Larger commercial banks offer certain services (such as 
trust and investment services) which the Bank does not offer directly 
(but some of which it offers indirectly through correspondent 
institutions).  Such banks also have substantially higher lending 
limits than the Bank has or will have due to their larger capital base.  
The growth of money market funds and quasi-financial institutions, such 
as certain activities of retailers and other which are not subject to 
the same regulatory controls, also presents a source of competition for 
the Bank.  With the decline in interest rates, depositors have been 
seeking alternative investments to earn higher yields than the Bank is 
currently paying.

		In order to compete with the other financial institutions in its 
primary service area, the Bank relies principally upon local 
promotional activities, personal contact by its officers, directors, 
employees, and stockholders, extended hours, and specialized services.  
For customers whose loan demands exceed the Bank's lending limit, the 
Bank has attempted and will continue in the future to attempt to 
arrange for such loans on a participation basis with other banks.  The 
Bank also assists customers requiring other services not offered by the 
Bank in obtaining such services from its correspondent banks.

<PAGE>
Supervision and Regulation

		The Company is subject to the regulation of the Federal Reserve Bank 
Holding Company Act of 1956, as amended, and the Board of Governors of 
the Federal Reserve System.  The Bank is subject to the regulation of 
the FDIC and the OCC.  Among other regulations, the OCC establishes 
minimum capital requirements, which the Bank exceeds as of December 31, 
1998.

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

		On October 1, 1998, the FDIC adopted two new rules governing minimum 
capital levels that FDIC-supervised banks must maintain against the 
risks to which they are exposed.  The first rule makes risk-based 
capital standards consistent for two types of credit enhancements 
(i.e., recourse arrangements and direct credit substitutes) and 
requires different amounts of capital for different risk positions in 
asset securitization transactions.  The second rule permits limited 
amounts of unrealized gains on equity securities to be recognized for 
risk-based capital purposes.  The Bank may apply these rules on 
September 1, 1998.

		In August 1997, Governor Wilson of California signed Assembly Bill 
1432 ("AB1432") which provides for certain changes in the banking laws 
of California.  Effective January 1, 1998 AB1432 eliminates the 
provisions regarding impairment of contributed capital and the 
assessment of shares when there is an impairment of capital.  AB1432 
now allows the DFI to close a bank, if the DFI finds that the bank's 
tangible shareholders' equity is less than 3% of the bank's total 
assets or $1 million.  AB1432 also moved administration of the Local 
Agency Program from the California Department of Financial Institutions 
to the California State Treasurer's office.

		The Economic Growth and Regulatory Paperwork Reduction Act (the 
"1996 Act") as part of the Omnibus Appropriations Bill was enacted on 
September 30, 1996 and includes many banking related provisions.  The 
most important banking provision is the recapitalization of the Savings 
Association Insurance Fund ("SAIF").  The 1996 Act provides for a one 
time assessment, payable on November 30, 1996, of approximately 65 
basis points per $100 of deposits of SAIF insured deposits including 
SAIF insured deposits which were assumed by banks in acquisitions of 
savings associations.  For the years 1997 through 1999 the banking 
industry will assist in the payment of interest on Financing 
Corporation ("FICO") bonds that were issued to help pay for the clean 
up of the savings and loan industry.  Banks will pay approximately 1.3 
cents per $100 of deposits for this special assessment, and after the 
Year 2000, banks will pay approximately 2.4 cents per $100 of deposits 
until the FICO bonds mature in 2017.  There is a three-year moratorium 
on conversions of SAIF deposits to Bank Insurance Fund ("BIF") 
deposits.  The 1996 Act also has certain regulatory relief provisions 
for the banking industry.  Lender liability under the Superfund is 
eliminated for lenders who foreclose on property that is contaminated 
provided that the lenders were not involved with the management of the 
entity that contributed to the contamination.  There is a five-year 
sunset provision for the elimination of civil liability under the Truth 
in Savings Act.  The FRB and Department of Housing and Urban 
Development are to develop a single format for Real Estate Settlement 
Procedures Act and Truth in Lending Act ("TILA") disclosures.  TILA 
disclosures for adjustable mortgage loans are to be simplified.  
Significant revisions are made to the Fair Credit Reporting Act 
("FCRA") including requiring that entities which provide information to 
credit bureaus conduct an investigation if a consumer claims the 
information to be in error.  Regulatory agencies may not examine for 
FCRA compliance unless there is a consumer complaint investigation that 
reveals a violation or where the agency otherwise finds a violation.  
In the area of the Equal Credit Opportunity Act, banks that self-test 
for compliance with fair lending laws will be protected from the 
results of the test provided that appropriate corrective action is 
taken when violations are found.
<PAGE>
		During 1996, new federal legislation amended the Comprehensive 
Environmental Response, Compensation, and Liability Act ("CERCLA") and 
the underground storage tank provisions of the Resource Conversation 
and Recovery Act to provide lenders and fiduciaries with greater 
protections from environmental liability.  In June 1997, the U.S. 
Environmental Protection Agency ("EPA") issued its official policy with 
regard to the liability of lenders under CERCLA as a result of the 
enactment of the Asset Conservation, Lender Liability and Deposit 
Insurance Protection Act of 1996.  California law provides that, 
subject to numerous exceptions, a lender acting in the capacity of a 
lender shall not be liable under any state or local statute, regulation 
or ordinance, other than the California Hazardous Waste Control Law, to 
undertake a cleanup, pay damages, penalties or fines, or forfeit 
property as a result of the release of hazardous materials at or from 
the property.

		In 1997, California adopted the Environmental Responsibility 
Acceptance Act (the "Act") (Cal. Civil Code '' 850-855) to facilitate 
(i) the notification of government agencies and potentially responsible 
parties (e.g., for cleanup) of the existence of contamination and 
(ii) the cleanup or other remediation of contamination by the 
potentially responsible parties.  The Act requires, among other things, 
that owners of sites who have actual awareness of a release of a 
hazardous material that exceeds a specified notification threshold to 
take all reasonable steps to identify the potentially responsible 
parties and to send a notice of potential liability to the parties and 
the appropriate oversight agency.

		On September 28, 1995, Assembly Bill 1482 (known as the Caldera, 
Weggeland, and Killea California Interstate Banking and Branching Act 
of 1995 and referred to herein as "CIBBA") was enacted which allows for 
early interstate branching in California.  Under the federally enacted 
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 
("IBBEA"), discussed in more detail below, individual states could 
"opt-out" of the federal law that would allow banks on an interstate 
basis to engage in interstate branching by merging out-of-state banks 
with host state banks after June 1, 1997.  In addition under IBBEA, 
individual states could also "opt-in" and allow out-of-state banks to 
merge with host state banks prior to June 1, 1997.  The host-state is 
allowed under IBBEA to impose certain nondiscriminatory conditions on 
the resulting depository institution until June 1, 1997.  California, 
in enacting CIBBA, authorizes out-of-state banks to enter California by 
the acquisition of or merger with a California bank that has been in 
existence for at least five years.

		Section 3824 of the California Financial Code ("Section 3824") as 
added by CIBBA provides for the election of California to "opt-in" 
under IBBEA allowing interstate bank  merger transactions prior to July 
1, 1997 of an out-of-state bank with a California bank that has been in 
existence for at least five years.  The early "opt in" has the 
reciprocal effect of allowing California banks to merge with out-of-
state banks where the states of such out-of-state banks have also 
"opted in" under IBBEA.  The five-year age limitation is not required 
when the California bank is in danger of failing or in certain other 
emergency situations.

		Under IBBEA, California may also allow interstate branching through 
the acquisition of a branch in California without the acquisition of an 
entire California bank.  Section 3824 provides an express prohibition 
against interstate branching through the acquisition of a branch in 
California without the acquisition of the entire California bank.  
IBBEA also has a provision allowing states to "opt-in" with respect to 
permitting interstate branching through the establishment of de novo or 
new branches by out-of-state banks.  Section 3824 provides that 
California expressly prohibits interstate branching through the 
establishment of de novo branches of out-of-state banks in California, 
or in other words, California did not "opt-in" this aspect of IBBEA.  
CIBBA also amends the California Financial Code to include agency 
provisions to allow California banks to establish affiliated insured 
depository institution agencies out-of-state as allowed under IBBEA.

		Other provisions of CIBBA amend the intrastate branching laws, 
govern the use of shared ATM's, and amend intrastate branch acquisition 
and bank merger laws.  Another banking bill enacted in California in 
1995 was Senate Bill 855 (known as the State Bank Parity Act and is 
referred to herein as the "SBPA").  SBPA went into effect on January 1, 
1996, and its purpose is to allow a California state bank to be on a 
level playing field with a national bank by the elimination of certain 
disparities and allowing the DFI authority to implement certain changes 
in California banking law which are parallel to changes in national 
banking law such as closer conformance of California's version of 
Regulation O to the FRB's version of Regulation O and certain other 
changes including allowing the repurchase of stock with the prior 
written consent of the DFI.
<PAGE>
		On September 29, 1994, IBBEA was enacted which has eliminated many 
of the current restrictions to interstate banking and branching.  IBBEA 
permits full nationwide interstate banking to adequately capitalized 
and adequately managed bank holding companies beginning September 29, 
1995 without regard to whether such transaction is expressly prohibited 
under the laws of any state.  IBBEA's branching provisions permit full 
nationwide interstate bank merger transactions to adequately 
capitalized and adequately managed banks beginning June 1, 1997.  
However, states retain the right to completely opt out of interstate 
bank mergers and to continue to require that out-of-state banks comply 
with the states' rules governing entry.

		The states that opt out must enact a law after September 29, 1994 
and before June 1, 1997 that (i) applies equally to all out-of-state 
banks and (ii) expressly prohibits merger transactions with out-of-
state banks.  States that opt out of allowing interstate bank merger 
transactions will preclude the mergers of banks in the opting out state 
with banks located in other states.  In addition, banks located in 
states that opt out are not permitted to have interstate branches.  
States can also "opt in" which means states can permit interstate 
branching earlier than June 1, 1997.

		The laws governing interstate banking and interstate bank mergers 
provide that transactions, which result in the bank holding company or 
bank controlling or holding in excess of ten percent of the total 
deposits nationwide or thirty percent of the total deposits statewide, 
will not be permitted except under certain specified conditions.  
However, any state may waive the thirty- percent provision for such 
state.  In addition, a state may impose a cap of less than thirty 
percent of the total amount of deposits held by a bank holding company 
or bank provided such cap is not discriminatory to out-of-state bank 
holding companies or banks.

		On September 23, 1994, the Riegle Community Development and 
Regulatory Improvement Act of 1994 (the "1994 Act") was enacted which 
covers a wide range of topics including small business and commercial 
real estate loan securitization, money laundering, flood insurance, 
consumer home equity loan disclosure and protection as well as the 
funding of community development projects and regulatory relief. 

		The major items of regulatory relief contained in the 1994 Act 
include an examination schedule that has been eased for the top rated 
banks and will be every 18 months for CAMEL 1 banks with less than $250 
million in total assets and CAMEL 2 banks with less than $100 million 
in total assets (the $100 million amount was amended to $250 million by 
the 1996 Act discussed above).  The 1994 Act amends Federal Deposit 
Insurance Corporation Improvement Act of 1991 with respect to the 
Section 124, the mandate to the federal banking agencies to issue 
safety and soundness regulations, including regulations concerning 
executive compensation allowing the federal banking regulatory agencies 
to issue guidelines instead of regulations.

		Further regulatory relief is provided in the 1994 Act, as each of 
the federal regulatory banking agencies, including the National Credit 
Union Administration Board, is required to establish an internal 
regulatory appeals process for insured depository institutions within 6 
months.  In addition, the Department of Justice 30 day waiting period 
for mergers and acquisitions is reduced by the 1994 Act to 15 days for 
certain acquisitions and mergers.

		In the area of currency transaction reports, the 1994 Act requires 
the Secretary of the Treasury to allow financial institutions to file 
such reports electronically.  The 1994 Act also requires the Secretary 
of the Treasury to publish written rulings concerning the Bank Secrecy 
Act, and staff commentary on Bank Secrecy Act regulations must also be 
published on an annual basis.

		The procedures for forming a bank holding company have also been 
simplified.  The formal application process for many holding company 
formations is now a simplified 30-day notice procedure.  In addition, 
the Securities Act of 1933 has been amended by the 1994 Act to further 
simplify the securities issuance in connection with a bank holding 
company formation.


Pending Legislation and Regulations

		There are pending legislative proposals to reform the Glass-Steagall 
Act to allow affiliations between banks and other firms engaged in 
"financial activities," including insurance companies and securities 
firms.  Certain other pending legislative proposals include bills to 
let banks pay interest on business checking accounts, to cap consumer 
liability for stolen debit cards, and to give judges the authority to 
force high-income borrowers to repay their debts rather than cancel 
them through bankruptcy.

		It is impossible to predict what effect the enactment of the above-
mentioned legislation will have on the Bancorp, the Bank and on the 
financial institutions industry in general.  Moreover, it is likely 
that other bills affecting the business of banks may be introduced in 
the future by the United States Congress or California legislature.
<PAGE>
Taxation

		The Company reports its income and expenses using the accrual method 
of accounting and uses the calendar year as its tax year for both 
federal income and state franchise tax purposes.  The Company is 
subject to the federal income tax, under existing provisions of the 
Internal Revenue Code of 1986, as amended, in generally the same manner 
as other corporations.

		The Internal Revenue Service has examined through the Company's 1995 
federal income tax return.  The 1995 examination did not result in a 
material adjustment to the tax return or a material adverse affect on 
the financial statements.


Employees

		The Bank had 117 full-time and 6 part-time employees, including 46 
principal officers as of February 28, 1999.  The Bank's employees are 
not represented by a union or covered by a collective bargaining 
agreement.  The management of the Bank believes that, in general, its 
employee relations are good.


ITEM 2.		PROPERTIES

		The Bank and the Company's head office, including a branch office, 
is located in a two-story building located at 1201 East Katella Avenue, 
Orange, California.  The Bank owns both the land and the building.  
This building is approximately 16,000 square feet of interior and 
exterior floor space and is located on a lot of approximately 55,000 
square feet.  The facility is in good condition and adequate for the 
Bank's present operations with adequate parking, an automated teller 
machine and drive-up teller stations.

		The Bank leases the premises at its five full-service branch 
offices.  Each branch has an automated teller machine.  Drive-up teller 
banking is available at two leased branches.  The Bank also leases 
premises for administrative functions.  The principal terms relating to 
premises currently leased by the Bank and the net book value of 
leasehold improvements as of December 31, 1998 are detailed below.  
None of the leases contain any unusual terms and all are "net" or 
"triple net" leases.
<TABLE>
<CAPTION>
                       									Expiration	Square	Monthly	Renewal  	Net Book
Office Location                     Date  	 Feet   Rental	Options     Value
<S>                               <C>      <C>    <C>    <C>      <C>
Branches
77 Plaza	 Square, Orange			       04/30/08 	9,443	$8,860	4 @ 5 yrs.	$681,768
1800 West Katella Avenue, Orange	 12/31/07	 5,266 	8,057	2 @ 5 yrs.	 245,380
7510 East Chapman Avenue, Orange	 09/30/04 	3,300	10,599	2 @ 5 yrs.	 115,733
800 Glenneyre, Laguna Beach			    08/31/07 	5,894 	9,933	1 @ 5 yrs.	 147,709
25255 Cabot Road, Laguna Hills	   01/01/04 	6,737 	8,203	3 @ 5 yrs.	 220,214

Administration
115 North Glassell Street, Orange 12/31/00 	1,600   	640	1 @ 5 yrs.  	17,092
1249 East Katella Avenue, Orange	 01/06/03	13,845	11,429	2 @ 5 yrs.  159,191

                                                     													$1,587,087

</TABLE>




<PAGE>
ITEM 3.		LEGAL PROCEEDINGS

		To the best of management's knowledge, there are no pending or 
threatened legal proceedings to which the Bank or the Company is or may 
become a party, which may have a materially adverse effect upon the 
Bank, the Company or their property.   However, in the normal course of 
business, the Bank, or the Company may initiate actions to protect 
their interests and may occasionally be made a party to actions 
relating thereto seeking to recover damages from the Bank, or the 
Company.


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

		None



                                 PART II


ITEM 5.		MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
					STOCKHOLDER MATTERS
  

Stock Market Information

		Shares of Company's common stock are traded on the National 
Association of Securities Dealers Automated Quotation system (NASDAQ), 
under the ticker symbol OGNB.  Active traders for the stock are Everen 
Securities, 620 Newport Center Drive, Suite 1300, Newport Beach, 
California 92660 and Smith Barney, 650 Town Center Drive, Suite 100, 
Costa Mesa, California 92626.

		The following table summarizes the approximate high and low prices 
for the Company's common stock since the first quarter of 1996.
<TABLE>
<CAPTION>
							                   1998                1997              1996

	Calendar Quarter		  High	     Low	      High	     Low	     High  	  Low
<S>                <C>       <C>       <C>       <C>       <C>      <C>
		1st quarter		   	$25.750  	$23.750  	$15.125  	$13.125  	$12.50 	 $10.50

 	2nd quarter     		31.250   	25.125   	18.000   	13.750   	15.00   	11.75

		3rd quarter    			30.000   	17.000   	21.125	   17.500   	14.50   	13.25
  
		4th quarter	    		27.750   	19.000   	24.250   	19.750   	13.75   	12.75
</TABLE>










<PAGE>
History of Cash and Stock Dividends and Stock Splits
  
		The Company has a history of paying cash dividends to its 
stockholders.  In recent years, the Company has paid dividends 
quarterly.  The following table summarizes the cash dividend history of 
the Company:
<TABLE>
<CAPTION>
									                         Cash Dividends Paid   
				Year	     		               	 Per Share	      Total
<S>                                <C>        <C> 
				1984	                       			$0.09	     $  143,568
				1985				                        0.10        	166,320
				1986			                        	0.12        	200,584
				1987				                        0.16        	250,730
				1988			                        	0.13        	202,734
				1989			                        	0.17        	267,329
				1990			                        	0.18	        290,008
				1991			                          	-              	-
				1992			                        	0.30        	485,130
				1993			                          	-              	-
				1994	                        			0.05         	91,956    
				1995		                        		0.25        	473,947
				1996			                        	0.37        	718,417
				1997		                        		0.42        	823,974
				1998			                        	0.70      	1,389,986
</TABLE>
		For comparative purposes, dividends per share for all years are 
computed after the effects of stock splits and stock dividends.  The 
Company declared a three-for-two stock split on October 15, 1985, a 5% 
stock dividend on November 16, 1988, a three-for-two stock split on 
November 20, 1989, and a 5% stock dividend on July 31, 1995. 

		The Company's ability to pay dividends is dependent upon the 
dividend payment it receives from its subsidiary Bank.  Future dividend 
payments will depend on future profitability, meeting regulatory 
requirements and the outlook of economic conditions.

		The Company declared a $0.15 per common share quarterly dividend on 
January 20, 1999 to the stockholders of record as of February 11, 1999, 
paid on March 1, 1999.

		The Company had approximately 451 stockholders of record as of 
February 28, 1999.


Transfer Agent and Registrar
  
		U.S Stock Transfer Corporation
		1745 Gardena Avenue
		Glendale, CA 91204-2991











<PAGE>
ITEM 6.		SELECTED FINANCIAL DATA

		The selected financial data presented below as of and for the years 
ended December 31 is derived from and should be read in conjunction 
with the consolidated financial statements and the notes thereto of the 
Company which have been audited by McGladrey & Pullen, LLP, independent 
certified public accountants.  The consolidated financial statements as 
of December 31, 1998 and 1997 and for the three years in the period 
ended December 31, 1998 and the report thereon of McGladrey & Pullen, 
LLP are included with Item 14 of this Form 10-K.
<TABLE>
<CAPTION>
									               1998	      1997	      1996	      1995	      1994
            										(dollars in thousands, except for per share amounts)
<S>                   <C>        <C>        <C>        <C>        <C>
Financial condition 

Total assets		     			$285,862	  $242,279	  $218,845	  $207,928  	$206,510

Loans, net	       					140,140   	131,189   	118,991   	112,724   	112,703

Deposits	         					260,334   	218,792   	198,364   	188,991   	190,406

Stockholders' equity	 		23,723    	21,586    	18,956    	17,262    	14,782


Results of operations

Interest income		    		$19,116   	$16,857   	$15,894   	$16,571	   $13,908

Net interest income	  		14,951    	13,504    	12,375	    13,430    	11,400

Provisions for
 possible credit losses		 	100       	140       	205       	320       	298
  
Other income		        			2,783     	3,707     	2,713     	2,781     	2,612

Other expense		      			12,157    	11,776    	11,547    	12,187    	11,962

Income from
 continuing operations			5,477     	5,295     	3,336     	3,703     	1,060

Loss from
 discontinued operations	 		-         	-         	-         	-       	(225)

Net earnings	        				3,330     	3,198     	2,201     	2,524       	835


Basic earnings
 per share	            		$1.67     	$1.63	     $1.13     	$1.31	     $0.43

Dilutive earnings
 per share	             		1.64	      1.60      	1.13      	1.30      	0.43

Cash dividends
 per share		             	0.70      	0.42      	0.37      	0.25      	0.05

Weighted average number
 of common shares
 outstanding
 (in thousands)	       	 1,989	     1,961     	1,944     	1,932     	1,931
</TABLE>
		Earnings per share from continuing operations in 1994 were $0.58.  
Earnings per share prior to 1995 are restated to reflect 5% stock 
dividends in 1995
<PAGE>
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
				RESULTS OF OPERATIONS


Forward Looking Statements

		Certain statements in this filing, including without limitation 
statements containing the words "believes," "anticipates," "intends," 
"expects," "pro forma," and words of similar import, constitute 
forward-looking statements.  Such forward-looking statements involve 
known and unknown risks, uncertainties and other factors that may cause 
the actual results, performance or achievements of the Company to be 
materially different from any future results, performance or 
achievements expressed or implied by such forward-looking statements.  
Such factors include, among others, the following: general economic 
conditions in the Company's market areas; variances in interest rates; 
changes in or amendments to regulatory authorities' capital 
requirements or other regulations applicable to the Company; increased 
competition for loans and deposits; and other factors referred to 
elsewhere in this filing.  Given these uncertainties, shareholders are 
cautioned not to place undue reliance on forward-looking statements.  
The Company disclaims any obligation to update such factors which are 
not considered to be material or to publicly announce the result of any 
revisions to any of the forward-looking statements included herein 
which are not considered to be material to reflect future events or 
developments.


Results of Operations

		Total interest income was $19.1 million in 1998, an increase of $2.2 
million or 13.4% from the $16.9 million in 1997.   Total interest 
income in 1997 increased $1.0 million or 6.1% from the $15.9 million in 
1996.  The average interest-earning assets were $221.4 million in 1998, 
an increase of $34.8 million, or 18.7% from the $186.6 million in 1997.  
The average interest-earning assets in 1997 increased $2.1 million or 
1.1% from the $184.5 million in 1996.  The average yield decreased in 
1998 by 0.4% from 1997 and increased in 1997 by 0.4% from 1996.  The 
increase in interest income in 1998 resulted from a larger average of 
interest-earning assets and partially offset by a lower general 
interest rate environment.  A higher general interest rate environment 
existed in 1997.

		Interest income on loans was $14.6 million in 1998, an increase of 
$0.9 million or 6.9% from the $13.7 million in 1997.  Total interest 
income on loans in 1997 increased $2.0 million or 16.9% from the $11.7 
million in 1996.  The increase in 1998 resulted from the increase in 
the average loan portfolio during 1998 in spite of lower long-term 
interest rates as compared to 1997 and interest collected on nonaccrual 
loans.  The average loan portfolio was $139.5 million in 1998, an 
increase of $8.4 million or 6.4% from the $131.1 million in 1997.  The 
yield on the loan portfolio was 10.5% in 1998, an increase of 0.1% from 
the 10.4% in 1997.  The average loan portfolio in 1997 increased $21.3 
million or 19.4% from the $109.8 million in 1996.  The increase in the 
average loan portfolio resulted from continued loan demand during 1998 
and 1997.  The yield on loans changes with the movements in the prime 
rate as approximately 64% of the loan portfolio are based on variable 
rates.

		Interest income on securities was $1.6 million in both 1998 and 
1997.  Interest income on securities in 1997 decreased $1.0 million or 
40.1% from the $2.6 million in 1996.  Interest income on securities in 
1998 remained unchanged from 1997 although the average size of the 
investment securities portfolio increased and interest rates were 
slightly lower.  The average balance of securities was $27.7 million in 
1998, an increase of $1.6 million or 6.0% from the $26.1 million in 
1997.  The yield on securities was 5.8% in 1998, a decrease of 0.2% 
from the 6.0% in 1997.  The decrease in interest income from securities 
in 1997 resulted from the decrease in the average balance of securities 
and slightly higher yields.  The average balance of securities in 1997 
decreased $18.8 million or 41.8% from the $44.9 million in 1996.  The 
yield on securities increased 0.2% in 1997 from 1996.

		Interest income on federal funds sold was $2.9 million in 1998, an 
increase of $1.3 million or 80.3% from the $1.6 million in 1997.  
Interest income on federal funds sold in 1997 remained unchanged at 
$1.6 million from 1996.  The average balance in federal funds sold was 
$54.2 million in 1998, an increase of $24.8 million or 84.5% from the 
$29.4 million in 1997.  The yield on federal funds sold was 5.3% in 
1998, a decrease of 0.1% from the 5.4% in 1997.  The interest income on 
federal funds sold remaining constant in 1997 and 1996 although the 
average balance of federal funds sold decreased and the yield increased 
slightly in 1997.  The average balance in federal funds sold was $29.4 
million in 1997, a decrease of $0.4 million or 1.2% from the $29.7 
million in 1996.  The yield on federal funds sold was 5.4% in 1997, an 
increase of 0.2% from the 5.2% in 1996.
<PAGE>
		Interest expense was $4.2 million in 1998, an increase of $0.8 
million or 24.2% from the $3.4 million in 1997.  The increase resulted 
from an increase in interest-bearing deposits and a slight increase in 
deposit rates.  The average interest-bearing deposits were $143.4 
million in 1998, an increase of $20.6 million or 16.8% from the $122.8 
million in 1997.  The average rate paid on such deposits was 2.9% in 
1998, an increase of 0.2% from the 2.7% in 1997.  Interest expense was 
$3.4 million in 1997, a decrease of $0.1 million or 4.7% from the $3.5 
million in 1996.  The 1997 decrease resulted from a decrease in the 
average interest-bearing deposits and a very slight increase in deposit 
rates.  The rate increase in 1997 was 0.02% over the 2.7% in 1996.  The 
average interest-bearing deposits in 1997 decreased $7.2 million or 
5.5% from the $130.0 million in 1996.

		The provision for credit losses was $100,000, $140,000 and $205,000 
in 1998, 1997 and 1996, respectively.  The decreased provision in 1998 
from 1997 and 1996 reflect a higher quality loan portfolio resulting 
from an improved local economy in Orange County.  The Company also 
experienced recoveries in 1998 and 1997 on amounts previously charged-
off.  These recoveries offset the need for additional provision.   
Management believes that the current allowance for credit losses is 
adequate to provide for potential losses in the portfolio. The current 
local economic outlook for 1999 is promising.  However, assurance 
cannot be made and, accordingly, future provisions for credit losses 
cannot be estimated at this time.  See Note 1 in the Notes to 
Consolidated Financial Statements.

		Other income was $2.8 million in 1998, a decrease of $0.9 million or 
24.9% from the $3.7 million in 1997.  The decrease in 1998 resulted 
from decreased gains on the sale of SBA loans and decreased service 
charges on deposits.  Other income in 1997 increased $1.0 million or 
36.6% from the $2.7 million in 1996.  The increase in 1997 resulted 
from the increase in gains on the sale of SBA loans.

		Other expenses were $12.2 million in 1998, an increase of $0.4 
million or 3.2% from the $11.8 million in 1997.  The increase in other 
expenses in 1998 resulted from nonrecurring costs associated with the 
relocation of several offices.  Other expenses in 1997 increased $0.3 
million or 2.0% from the $11.5 million in 1996.  The 1997 increase 
resulted from overall expense increases.

		Provision for income taxes was $2.1 million in both 1998 and 1997.  
The income tax provision in 1998 was computed at the full tax rate on 
higher pretax earnings, less certain permanent tax differences.  The 
pretax earnings were $5.5 million in 1998, an increase of $0.2 million 
or 3.4% from the $5.3 million in 1997.  The provision for income taxes 
in 1997 increased $1.0 million or 84.8% from the $1.1 million in 1996.  
A reduction of the valuation allowance on the deferred tax asset 
lowered the taxable expense by $0.2 million in 1996. The increase in 
1997 resulted from higher pretax earnings and no reduction of a 
valuation allowance on the deferred tax asset.  Through 1996, 
management determined that portions of the valuation allowance were no 
longer necessary as the deferred tax assets are considered to be more 
likely than not to be realized.  Accordingly, the provision for income 
taxes is less than the amount computed at the federal statutory rate in 
1996.  See Note 8 in the Notes to Consolidated Financial Statements.  
The provisions in FASB Statement No. 109 and the effect of alternative 
minimum tax have the potential for producing, under certain conditions, 
significant distortions in future income tax provisions and the 
effective tax rate.

		Net earnings were $3.3 million in 1998, an increase of $0.1 million 
or 4.1% from the $3.2 million in 1997.  The increase in 1998 resulted 
from increased net interest income of $1.4 million, and offset by 
decreased other income of $0.9 million and increased other expenses of 
$0.4 million.  Net earnings increased $1.0 million or 45.3% from the 
$2.2 million in 1996.  The increase in 1997 resulted from increased 
interest income of $1.0 million, increase gains on sale of SBA loans of 
$0.8 million, and offset by lower tax of $1.0 million.   While 
management is optimistic about the future, the effects of future 
economic conditions on the collectibility of loans cannot be predicted 
with absolute certainty and its effects on future profitability cannot 
be determined.

<PAGE>
Financial Condition

		The Company experienced continued asset growth in 1998.  Total 
assets were $285.9 million as of December 31, 1998, an increase of 
$43.6 million or 18.0% from the $242.3 million as of December 31, 1997.  
Total assets increased $23.5 million or 10.7% in 1997.

		Total interest-earning assets were $255.7 million as of December 31, 
1998, an increase of $55.7 million or 27.9% from the $200.0 million as 
of December 31, 1997.  Total interest-earning assets increased $15.3 
million or 8.3% in 1997.  The Company continues to focus its efforts on 
originating quality loans.  The increases in the loan and investment 
securities portfolios were funded from the increase in deposits.
 
 		The investment securities portfolio was $58.3 million as of December 
31, 1998, an increase of $40.1 million or 220.6% from the $18.2 million 
as of December 31, 1997.  The investment securities portfolio decreased 
$21.8 million or 54.6% in 1997.  The increase in 1998 resulted from the 
large number of investment security purchases.  The Company did not 
purchase investment securities in 1997 and early 1998 due to the flat 
yield curve.  The Company believes securities are the best available 
investment after its liquidity needs are met through cash, cash due 
from banks and federal funds sold.  Generally, mortgage backed 
securities are classified as either held-to-maturity or available-for-
sale and U.S. Treasury and Agency securities are classified as 
available-for-sale.  The market values increased slightly in 1998 
resulting from lower short-term and long-term interest rates.

		The loan portfolio was $140.1 million as of December 31, 1998, an 
increase of $8.9 million or 6.8% from the $131.2 million as of December 
31, 1997.  The loan portfolio increased $12.2 million or 10.3% in 1997.  
The increase in 1998 resulted from continued loan demand, primarily SBA 
lending on commercial real estate.  The quality of the loan portfolio 
continues to improve resulting from a healthier Orange County economy.

		Total deposits were $260.3 million as of December 31, 1998, an 
increase of $41.5 million or 19.0% from the $218.8 million as of 
December 31, 1997.  Total deposits increased $20.4 million or 10.3% in 
1997.  The deposit increase between years reflects a general increase 
in balances maintained by large depositors.


Credit Risk Management

		As previously noted, the Bank maintains an allowance for credit 
losses to provide for potential losses in the loan portfolio.  
Additions to the allowance for credit losses are charged to operations 
in the form of a provision for possible credit losses.   All loans that 
are judged to be uncollectible are charged against the allowance while 
any recoveries are credited to the allowance.  The allowance for credit 
losses is maintained at a level determined by management to be 
adequate, based on the performance of loans in the Bank's portfolio, 
evaluation of collateral for such loans, the prospects or worth of the 
prospective borrowers or guarantors, and such other factors which, in 
the Bank's judgement, deserve consideration in the estimation of 
possible losses.  The allowance for credit losses is established and 
maintained after analyzing loans identified by management with certain 
unfavorable features affixing a risk of loss attributable to each loan.  
An inherent risk of loss in accordance with industry standards and 
economic conditions is then allocated to specific loan pools and to the 
remainder of the portfolio on an aggregate basis.


Liquidity

		The Company maintains substantial liquid and other short-term assets 
to meet the funding of loan demand, deposit withdrawals and maturities, 
and operating costs.  The Company currently meets its funding needs 
from its deposit base, and cash flow from operations, loan sales, and 
loan principal reductions.

		The loan-to-deposit ratio was 53.8% and 60.0% as of December 31, 
1998 and 1997, respectively.  The decrease of the loan-to-deposit ratio 
resulted from deposit growth exceeding loan demand.  The ratio of 
liquid assets (cash, cash due from banks, interest-bearing deposits at 
financial institutions, federal funds sold, and investments with 
maturities of one year or less) to demand deposits was 39.3% and 44.5% 
as of December 31, 1998 and 1997, respectively.  The decrease of the 
liquid asset ratio resulted from the increase in deposits being 
invested into loans and investment securities with maturities longer 
than one year.

		The Company has a relatively stable and significant base of core 
deposits.   Thus, the Company has not used brokered deposits and avoids 
using other wholesale, highly rate-sensitive, short-term funds.  The 
Company had five customers with an aggregate deposit of $43.0 million 
as of December 31, 1998.
<PAGE>
		Other funding sources available to the Company include reduction of 
its federal funds sold, sale of its available-for-sale securities, 
increasing deposits, and borrowing on its established credit resources.  
The Company may borrow funds under securities sold with agreements to 
repurchase such securities that have not been pledged.  The Company had 
unpledged securities of $52.3 million as of December 31, 1998.  
Liquidity needs may also be met through federal funds purchased from 
correspondent banks and/or direct borrowings from the Federal Reserve 
Bank.  The Company has established Federal Funds borrowing lines with 
various banks up to $8.0 million.  The Company has also established a 
borrowing capacity of $14.5 million with the FHLB.  The Company would 
need to pledge certain defined collateral, consisting of loans and/or 
securities prior to borrowing from the FHLB.  The Company has yet to 
use these facilities.

		Management believes the Bank has sufficient liquidity to meet its 
loan commitments, deposit withdrawals and operating costs.


Capital Management

		Capital management requires that sufficient capital be maintained 
for anticipated growth and to provide depositors assurance that their 
funds are on deposit with a solvent institution.  The Bank is subject 
to various regulatory capital requirements.  The Bank must meet 
specific capital guidelines that involve qualitative measures of the 
Bank's assets and certain off-balance sheet items as calculated under 
regulatory accounting practices.  The Bank's capital amounts and 
classification are also subject to qualitative judgments by the 
regulators about components, risk weightings and other factors.  Tier I 
capital for the Bank under the regulations is defined as stockholders' 
equity before any unrealized gains or losses on its available-for-sale 
securities portfolio.  Total capital is defined as Tier I capital plus 
the allowance for credit losses, subject to certain limitations.  The 
table below sets forth the Bank's actual capital ratios, the minimum 
capital required for adequacy purposes and to be categorized as "well 
capitalized" for the capital ratios of total risk-based, Tier I risk-
based and Tier I leverage.  The Bank's capital ratios exceeded the 
"well capitalized" threshold prescribed in the rules of its principal 
federal regulator as of December 31, 1998.
<TABLE>
<CAPTION>
											                                                   To Be Well
											                                                  Capitalized Under
                      									                For Capital	  Prompt Corrective
                         								Actual 	  Adequacy Purposes Action Provisions
                      					 	Amount 	Ratio  	Amount	Ratio    	Amount 	Ratio
                     									         	(dollars in thousands)
<S>                         <C>      <C>     <C>      <C>    <C>      <C>
December 31, 1998
Total capital
 (to risk-weighted assets)  $24,484 	13.7%   $14,314 	8.0%	  $17,893 	10.0%
Tier I capital
 (to risk-weighted assets)  	22,960 	12.8%    	7,157 	4.0%  	 10,736  	6.0%
Tier I capital
 (to average assets)       		22,960  	8.4%   	10,942 	4.0%   	13,678  	5.0%

December 31, 1997
Total capital
 (to risk-weighted assets)  $22,563  13.9%  	$12,962 	8.0% 	 $16,202 	10.0%
Tier I capital
 (to risk-weighted assets)  	20,982 	13.0%    	6,481 	4.0%    	9,721  	6.0%
Tier I capital
 (to average assets)	       	20,982  	9.0%    	9,368 	4.0%   	11,710  	5.0%
</TABLE>
		Management believes that the Bank is properly and adequately 
capitalized, as evidenced by these ratios as of December 31, 1998.  The 
most recent notification from the Office of the Comptroller of the 
Currency categorized the Bank as "well capitalized" as of June 30, 1997 
under the regulatory framework for prompt corrective action.


Off-Balance Sheet Analysis
  
		The contractual amounts associated with certain financial 
transactions are not recorded as assets or liabilities on the balance 
sheet.  Off-balance sheet treatment is generally considered appropriate 
either where exchange of the underlying asset or liability has not 
occurred or is not assured, or where contractual amounts are used 
solely to determine cash flows to be exchanged.
<PAGE> 
		The Company's off-balance sheet financial instruments consist of 
commitments to extend credit and standby letters of credit.  A majority 
of these commitments are with variable interest rates.  Additional 
information about off-balance sheet financial instruments is provided 
in Note 10 of Notes to Consolidated Financial Statements.


Impact of Inflation and Changing Prices
  
		The financial statements and related data presented herein have been 
prepared in accordance with generally accepted accounting principles, 
which require the measurement of financial position and operating 
results in terms of historical dollars without considering changes in 
the relative purchasing power of money over time due to inflation.

		Unlike most industrial companies, virtually all of the assets and 
liabilities of a financial institution are monetary in nature.  As a 
result, interest rates have a more significant impact on a financial 
institution's performance than the effects of general levels of 
inflation.  Interest rates do not necessarily move in the same 
direction or in the same magnitude as the price of goods and services.  
In the current interest rate environment, the liquidity and the 
maturity structure of the Company's assets and liabilities are critical 
to the maintenance of acceptable performance levels.


Year 2000 Issue

		The "Year 2000 issue" results from the fact that many computer 
programs use only two digits to represent a year, such as "98" to 
represent "1998," which means that in the Year 2000 such programs could 
incorrectly treat the Year 2000 as the year 1900.  This issue has grown 
in importance as the use of computers and microchips has become more 
pervasive throughout the economy, and interdependencies between systems 
have multiplied.  The issue must be recognized as a business problem, 
rather than simply a computer problem, because of the way its effects 
could ripple through the economy.  The Year 2000 issue could materially 
and adversely affect the Company either directly or indirectly.  This 
could happen if any of its critical computer systems or equipment 
containing embedded logic fail, if the local infrastructure (electric 
power, phone system, or water system) fails, if its significant vendors 
are adversely impacted, or if its borrowers or depositors are adversely 
impacted by their internal systems or those of their customers or 
suppliers.  Failure of the Company to complete testing and renovation 
of its critical systems on a timely basis could have a material adverse 
effect on the Company's financial condition and results of operations, 
as could Year 2000 problems faced by others with whom the Company does 
business.

		Federal banking regulators have responsibility for supervision and 
examination of banks to determine whether each institution has an 
effective plan for identifying, renovating, testing and implementing 
solutions for Year 2000 processing and coordinating Year 2000 
processing capabilities with its customers, vendors and payment system 
partners.  Bank examiners are also required to assess the soundness of 
a bank's internal controls and to identify whether further corrective 
action may be necessary to assure an appropriate level of attention to 
Year 2000 processing capabilities.

		The Company has a written plan to address its risks associated with 
the impact of the Year 2000.  The plan directs the Company's Year 2000 
compliance efforts under the framework of a five-step program mandated 
by the Federal Financial Institutions Examination Council ("FFIEC").  
The FFIEC's five-step program consists of five phases: awareness, 
assessment, renovation, validation and implementation.  In the 
awareness phase, which the Company has completed, the Year 2000 problem 
is defined and executive level support for the necessary resources to 
prepare the Company for Year 2000 compliance is obtained.  In the 
assessment phase, which the Company has also completed, the size and 
complexity of the problem and details of the effort necessary to 
address the Year 2000 issues are assessed.  Although the awareness and 
assessment phases are completed, the Company continues to evaluate new 
issues as they arise.  In the renovation phase, which the Company has 
substantially completed, the required incremental changes to hardware 
and software components are installed.  In the validation phase, which 
the Company has also substantially completed the initial phase, the 
hardware and software components are tested.  In the implementation 
phase, changes to hardware and components are brought on line and re-
testing of such changes are completed.  The implementation phase is 
currently 60% complete, with an expected completion in April 1999.
<PAGE>
		The Company is using both internal and external resources to 
identify, correct or reprogram, and test its systems for Year 2000 
compliance.  The Company has identified 25 vendor or software 
applications which management believes are material to its operations.  
Based on information received from its vendors and testing results, the 
Company believes that substantially all material applications of its 
operations are Year 2000 compliant as of December 31, 1998.  The 
Company has not identified any material applications that the Company 
does not believe are fully Year 2000 compliant as of December 31, 1998.

		The Company is also making efforts to ensure that its customers, 
particularly its significant customers, are aware of the Year 2000 
problem.  The Company has either sent Year 2000 correspondence to, or 
met personally with its significant deposit and loan customers.  A 
customer of the Company is deemed significant if the customer possesses 
either of the following characteristics: (1) total indebtedness to the 
Company of $500,000 or more, or (2) an average ledger deposit balance 
greater than $500,000.

		The Company has amended its credit authorization documentation to 
include consideration of the Year 2000 problem.  The Bancorp assesses 
its significant customer's Year 2000 readiness and assigns the customer 
an assessment of "low," "medium" or "high" risk.  Risk evaluation of 
the Company's significant customers was completed in September 1998.  
The Company evaluates any depositor or lending customer determined to 
have a high or medium risk on an ongoing basis.  Currently, 2% of loan 
customers are considered high risk and are being monitored closely for 
progress.  Substantially all deposit customers are either low risk or 
compliant, the exception being those loan customers considered high 
risk.

		It is impossible to quantify the total potential cost of Year 2000 
problems or to determine the Company's worst-case scenario in the event 
the Company's Year 2000 remediation efforts or the efforts of those 
with whom it does business are not successful, due to the wide range of 
possible issues and large number of variables involved.  In order to 
deal with the uncertainty associated with the Year 2000 problem, the 
Company has developed a contingency plan to address the possibility 
that efforts to mitigate the Year 2000 risk are not successful either 
in whole or part.  These plans include but are not limited to manual 
processing of information for critical information technology systems 
and having increased cash on hand.  The contingency plan will be 
validated, after which the appropriate implementation training will be 
scheduled.

		The Company incurred and expensed $0.1 million of Year 2000 costs 
through December 31, 1998.  These Year 2000-related costs have been 
funded from the continuing operations of the Company.  These costs were 
approximately 7% of the Company's 1998 information systems budget.  The 
Company currently estimates its costs to complete its Year 2000 
compliance at approximately $0.3 million.  This estimate includes the 
cost of purchasing hardware and software licenses, the cost of the time 
of internal staff and the cost of consultants. Testing is not expected 
to add significant incremental costs.


Current Accounting Developments

		In June 1998, FASB issued Statement of Financial Accounting 
Standards No. 133, "Accounting for Derivative Instruments and Hedging 
Activities" ("SFAS 133").  SFAS 133 establishes accounting and 
reporting standards for derivative instruments and hedging activities.  
SFAS 133 is effective for all fiscal quarters of fiscal years beginning 
after June 15, 1999.  The Company does not invest in derivative 
instruments nor engage in hedging activities.

		Management does not believe the application of the Statement to 
transactions of the Bank that have been typical in the past will 
materially affect the Bank's financial position and results of 
operations.

<PAGE>
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

Interest Rate Sensitivity

		The Company uses asset liability management on its balance sheet to 
minimize the exposure of interest rate movements on its net interest 
income.  The principal function of asset liability management is to 
manage the interest rate risk in the balance sheet by maintaining a 
proper balance, match and mix between rate-sensitive interest-earning 
assets and rate-sensitive interest-bearing liabilities.  The term 
"rate-sensitive" refers to those assets and liabilities that are 
"sensitive" to fluctuations in interest rates.  When interest rates 
fluctuate, earnings may be affected in many ways as the interest rates 
of assets and liabilities change at different times or by different 
amounts.

		The Company minimizes its interest rate risk in the balance sheet by 
emphasizing the origination of variable interest rate loans that have 
the ability to reprice overnight and maintaining a high volume of 
federal funds sold to offset the deposits that may potentially reprice 
overnight.

		A repricing gap is the difference between total interest-earning 
assets and total interest-bearing liabilities available for repricing 
during a given time interval.  	A positive repricing gap exists when 
total interest-earning assets exceed total interest-bearing liabilities 
within a repricing period and a negative repricing gap exists when 
total interest-bearing liabilities are in excess of interest-earning 
assets within a repricing period.

		Generally, a positive repricing gap increases net interest income in 
a rising rate environment and decreases net interest income in a 
falling rate environment.  A positive repricing gap may increase net 
interest income in a falling rate environment depending on the amount 
of the excess repricing gap and extent of the drop in interest rates.  
A negative repricing gap tends to increase net interest income in a 
falling rate environment and decrease net interest income in a rising 
rate environment.  The net interest income of the Company will benefit 
from a rising rate environment based on the positive repricing gap.

		The following table displays the repricing period for interest-
earning assets and interest-bearing liabilities and the related 
repricing gap as of December 31, 1998:
<TABLE>
<CAPTION>
                                         												After one
                  										Due within	 Due within  	but within   	After
   								               		0-3 months	 4-12 months  five years 	five years
									                        		     (dollars in thousands)
<S>                           <C>          <C>        <C>         <C>
Interest-earning assets (1)	 	$159,162   	 $6,500    	$20,927    	$69,124
Interest-bearing liabilities		 152,016	     7,037	      1,404	          2

Repricing gap		          				    7,146    	  (537)	    19,523     	69,122

Cumulative repricing gap			  	$  7,146    	$6,608    	$26,131    	$95,253

Cumulative gap as a
 percent of earning assets      			2.8%      	2.6%	      10.2%      	37.3%
<FN>
(1)	Includes collateralized mortgage obligations in the one-year to 
five-year maturities based on the average expected lives.
</FN>
</TABLE>
		The Company had available-for-sale securities of $40.6 million 
recorded at market value as of December 31, 1998.  The available-for-
sale securities consist of collateralized mortgage obligations and 
medium-term government agency notes.  The Company also had held-to-
maturity securities of $17.6 million recorded at amortized cost as of 
December 31, 1998. The held-to-maturity securities are collateralized 
mortgage obligations that may be repaid without penalties.  The value 
of these securities is subject to fluctuation based upon current long-
term interest rates.

		The Company had $144.4 million of interest-earning assets and $127.2 
million of interest-bearing demand and savings deposits as of December 
31, 1998 that are able to reprice overnight.

		The estimated effect on net interest income for a 10% decrease from 
prevailing interest rates over a one-year period would be a decline of 
approximately $0.9 million.





<PAGE>
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

		The consolidated financial statements of the Company follow 
on pages F-1 to F-25.  The Independent Auditor's Report is set 
forth on Page F-1.


ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
				AND FINANCIAL DISCLOSURES

				None




                                PART III


ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

		For information concerning the directors and executive 
officers of the Bancorp, see "Election of Directors" included in 
the Bancorp's definitive proxy statement ("Proxy Statement"), 
which information is incorporated by reference.  The Proxy 
Statement will be filed with the SEC within the time period 
specified by General Instruction G to Form 10-K.


ITEM 11.	EXECUTIVE COMPENSATION

		For information concerning management remuneration, see 
"Executive Compensation" included in the Proxy Statement, which 
information is incorporated herein by reference.


ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
				MANAGEMENT

		For information concerning security ownership of beneficial 
owners and management, see "Stock Ownership of Certain 
Beneficial Owners and Management" included in the Proxy 
Statement, which information is incorporated herein by 
reference.


ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

		For information concerning related party transactions, see 
"Certain Transactions" included in the Proxy Statement, which 
information is incorporated herein by reference.

<PAGE>
                                 PART IV


ITEM 14.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

		The following financial statements of the Company and 
subsidiary are included in this Form 10-K.   Page number 
references follow:
  
  
				Independent auditor's report					                                	F-1

				Consolidated balance sheets as of December 31, 1998 and 1997			  	F-2

				Consolidated statements of earnings for the three years ended 
     December 31, 1998	                                              	F-3

				Consolidated statements of comprehensive income for the three 
     years ended December 31, 1998                                   	F-4

				Consolidated statements of stockholders' equity for the three 
     years ended December 31, 1998                                   	F-5

				Consolidated statements of cash flows for the three years ended 
     December 31, 1998	                                              	F-6

				Notes to consolidated financial statements				            	F-7 to F-25



				Schedules

						All schedules are omitted as the information is not 
required, is not material, or is otherwise furnished.



				Exhibits

						See Index to exhibits at Page 33 of this Form 10-K



				Reports on Form 8-K

		The Company did not file reports on Form 8-K during the 
quarter ended December 31, 1998.
<PAGE>
                                Signatures

		Pursuant to the requirements of Section 13 or 25(d) of the 
Securities Exchange Act of 1934, the Registrant has duly caused this 
report to be signed on its behalf by the undersigned, thereunto duly 
authorized.



		ORANGE NATIONAL BANCORP

  

 
By:		/s/   KENNETH J. COSGROVE			Date:    	     MARCH 17, 1999	
		 Kenneth J. Cosgrove, President
		 and Chief Executive Officer



By:		/s/   ROBERT W. CREIGHTON			Date:    	     MARCH 17, 1999	
		 Robert W. Creighton, Secretary
		 and Chief Financial Officer



By:		/s/   JERRO M. OTSUKI				    Date:    	    MARCH 17, 1999	
		 Jerro M. Otsuki, Vice President
		 and Controller








<PAGE>
                                Signatures

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



		ORANGE NATIONAL BANCORP




			/s/	   MICHAEL W. ABDALLA			 	     MARCH 17, 1999	
		 Michael W. Abdalla				             Date
		 Director


			/s/  MICHAEL J. CHRISTIANSON				    MARCH 17, 1999	
		 Michael J. Christianson				         Date
		 Director					


			/s/  KENNETH J. COSGROVE				        MARCH 17, 1999	
		 Kenneth J. Cosgrove				             Date
		 Director


			/s/  ROBERT W. CREIGHTON				        MARCH 17, 1999	
		 Robert W. Creighton				             Date
		 Director


											     	
		 Charles R. Foulger				               Date
		 Director


			/s/ GERALD R. HOLTE					             MARCH 17, 1999	
		 Gerald R. Holte				                  Date
		 Director


			/s/  JAMES E. MAHONEY				            MARCH 17, 1999	
		 James E. Mahoney				                 Date
		 Director


			/s/  WAYNE F. MILLER					            MARCH 17, 1999	
		 Wayne F. Miller				                  Date
		 Director


			/s/  SAN E. VACCARO					             MARCH 17, 1999	
		 San E. Vaccaro				                   Date
		 Director
         
<PAGE>
INDEX TO EXHIBITS


Exhibit No.

	3.1		Registrant's Articles of Incorporation - filed as exhibit 3 to 
the Registrant's Registration Statement on Form S-4, File No. 
33-8743, and are hereby incorporated by reference.

	3.2		Registrant's Bylaws - filed as exhibit 3.1 to the Registrant's 
Registration Statement on Form S-1, File No. 33-13162, are 
hereby incorporated by reference.

	10.1		Material contracts of the Bank were each filed as exhibits 10, 
10.1, 10.3, 10.4, and 10.5 to the Registrant's Registration 
Statement on Form S-4, File No. 33-8743, and are hereby 
incorporated by reference.  Material contracts of the Bank were 
each filed as exhibits 10.6 through 10.22 to the Registrant's 
1997 Annual Report on Form 10-K, File No. 33-8743, and are 
hereby incorporated by reference.

	21			Subsidiary of the Registrant - Orange National Bank, a 
National Banking Association.

23			Consent of Independent Accountants, page 34.

	27			Financial Data Schedule, page 21.
<PAGE>
EXHIBIT 23.1


CONSENT OF INDEPENDENT ACCOUNTANTS


To The Board of Directors
Orange National Bancorp
Orange, California



		We hereby consent to the incorporation of our report dated January 
22, 1999, except for the last paragraph of Note 10, as to which the 
date is February 11, 1999, included in this Form 10-K in the previously 
filed Registration Statement of Orange National Bancorp on Form S-8 
(No. 333-44741 and No. 0-15365).

 
 
 

McGLADREY & PULLEN, LLP



Anaheim, California
March 17, 1999
<PAGE>




INDEPENDENT AUDITOR'S REPORT




To the Board of Directors
Orange National Bancorp
Orange, California


We have audited the accompanying consolidated balance sheets of Orange 
National Bancorp and subsidiary as of December 31, 1998 and 1997, and 
the related consolidated statements of earnings, comprehensive income, 
stockholders' equity and cash flows for each of the three years in the 
period ended December 31, 1998.  These financial statements are the 
responsibility of the Company's management.  Our responsibility is to 
express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of 
Orange National Bancorp and subsidiary as of December 31, 1998 and 
1997, and the results of their operations and their cash flows for each 
of the three years in the period ended December 31, 1998, in conformity 
with generally accepted accounting principles.



McGLADREY & PULLEN, LLP



Anaheim, California
January 22, 1999, except for the last paragraph of Note 10 as to which 
the date is February 11, 1999.


<PAGE>
ORANGE NATIONAL BANCORP
CONSOLIDATED BALANCE SHEETS
December 31, 1998 and 1997

<TABLE>
<CAPTION>
										                                         1998	       1997
                   										                   (dollars in thousands)
<S>                                              <C>         <C>
Assets
Cash and cash equivalents (Note 2)			           	$ 74,931  	 $ 81,147
Securities (Note 3): 
	Held-to-maturity securities
  (fair value of $17,691 in 1998
		and $8,972 in 1997)			                          	17,640      	9,037
 	Available-for-sale securities 	               			40,649      	9,146
Loans, net of allowance for
 credit losses of $1,524 in 1998
	and $1,581 in 1997 (Notes 4, 5 and 12) 	 		     	140,140    	131,189
Premises and equipment, net (Note 6) 				           5,438      	5,057 
Other real estate owned, net (Note 5) 	 	            		-         	126 
Accrued interest receivable 	 		                   	1,212        	985 
Cash value of life insurance 	 	                  		5,021	      4,808
Other assets  (Note 8)	 		                    	       831         784

			Total assets			                              	$285,862   	$242,279


Liabilities 	 	 	 	 
Deposits (Note 7) 	 	                        	 	 $260,334   	$218,792
Accrued interest payable and other liabilities 			  1,805	      1,901

			Total liabilities		                          		262,139    	220,693

Commitments and Contingencies (Notes 10 and 11)		     	-          	-  

Stockholders' Equity (Notes 10, 11 and 13)
	Common stock, no par value or stated value;
		authorized 20,000,000 shares; issued and
		outstanding 1,996,788 in 1998
  and 1,970,046 in 1997	                          		8,036      	7,864
	Retained earnings  		                           		15,718     	13,778
	Accumulated other comprehensive income (loss)	 		    (31)	       (56)

			Total stockholders' equity 	               			  23,723	     21,586

			Total liabilities and stockholders' equity		 	$285,862   	$242,279










<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
ORANGE NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF EARNINGS
Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>
						                                			     1998	      1997	      1996
      									                        (in thousands, except per share data)
<S>                                         <C>        <C>        <C>
Interest Income:
	Loans		                                				$14,633   	$13,686   	$11,712
	Securities                              					1,602     	1,573     	2,627
	Federal funds sold 			                       2,881   	  1,598   	  1,555

			Total interest income                  			19,116    	16,857    	15,894

Interest Expense, deposits 	              		  4,165	     3,353	     3,519

			Net interest income                    			14,951    	13,504    	12,375

Provision for Credit Losses (Note 5) 	   		     100	       140	       205

			Net interest income after
    provision for credit losses 	           	14,851    	13,364    	12,170

Other Income (Note 9)                      			2,783     	3,707     	2,713

Other Expenses (Notes 9 and 10)	           		12,157    	11,776    	11,547

			Earnings before income taxes	           	 	5,477     	5,295     	3,336

Provision for Income Taxes (Note 8) 			       2,147	     2,097   	  1,135

			Net earnings (Note 11)	               		 $ 3,330   	$ 3,198   	$ 2,201






Basic earnings per share		                 	$  1.67   	$  1.63   	$  1.13

Weighted average number of common
 shares outstanding (in thousands)			         1,989	     1,961	     1,944


Diluted earnings per share	               		$  1.64   	$  1.60	   $  1.13

Weighted average number of common
 shares and diluted potential
 common shares (in thousands)		               2,036	     2,000	     1,951





<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
ORANGE NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>
					                                				     1998	     1997	     1996
     								                                  (dollars in thousands)
<S>                                          <C>       <C>       <C>
Net earnings			                            		$3,330   	$3,198	   $2,201

Other comprehensive income:
	Unrealized gains (losses) on
  available-for-sale securities	                	10       	68      	(21)

	Reclassification adjustment
  for losses included in net earnings           	-         	9       	24

	Reclassification adjustment
  for losses included in net earnings
	 for securities transferred			                  35	       40	       73

		Other comprehensive income
   before income taxes	                         	45	      117       	76

	Provision for income taxes	             		      20	       50 	      30

		Other comprehensive income            			      25	       67	       46

Comprehensive income                      			$3,355   	$3,265   	$2,247




























<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
ORANGE NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>
                                              										Accumulated
                                                  										Other
                                              										Comprehensive
   							               	     Common Stock    	Retained  	Income
							                      Shares   	Amount  	Earnings	  (Loss)	    Total
							                           (in thousands, except per share data)
<S>                           <C>      <C>       <C>       <C>       <C>
Balance, December 31, 1995   	1,934   	$7,510 	  $9,920   	$(169)   	$17,261

Net earnings	                  		-        	-     	2,201      	-       	2,201
Cash dividend paid
 ($.37 per share)               	-        	-      	(718)     	-        	(718)
Exercise of stock options       	19      	166       	-       	-         	166
Other comprehensive income 	     -  	      -  	      -     	  46	         46

Balance, December 31, 1996   	1,953    	7,676   	11,403    	(123)    	18,956

Net earnings	                  		-        	-     	3,198      	-       	3,198 
Cash dividend paid
 ($.42 per share)               	-        	-      	(823)     	-        	(823) 
Exercise of stock options       	17      	188       	-       	-         	188 
Other comprehensive income 	     -  	      -  	      -  	     67	         67

Balance, December 31, 1997   	1,970    	7,864	   13,778     	(56)    	21,586 

Net earnings	                 	 	-        	-     	3,330      	-       	3,330 
Cash dividend paid
 ($.70 per share)               	-        	-    	(1,390)     	-      	(1,390) 
Exercise of stock options       	27      	172       	-       	-         	172 
Other comprehensive income 	     -  	      -  	      -     	  25	         25

Balance, December 31, 1998   	1,997   	$8,036	  $15,718    	$(31)   	$23,723



















<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
ORANGE NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>
                                									     1998	      1997	      1996
							                      		                 (dollars in thousands)
<S>                                         <C>        <C>        <C>
Cash Flows from Operating Activities
	Net earnings		                           		$ 3,330   	$ 3,198   	$ 2,201
	Adjustments to reconcile
  net earnings to net cash
		provided by operating activities:
		Depreciation and amortization 		             	553       	504      	 537  
		Provision for credit losses 		               	100       	140       	205
		Deferred income taxes (benefits) 		           	88      	(111)      	(78)  
		(Gain) on sale of loans 		                  	(654)   	(1,374)    	 (560) 
		Provision for losses on
   other real estate owned                     		-         	11       	160
		Proceeds from loan sales 		               	10,553    	19,264     	5,984
		Origination of loans held for sale 	     		(9,898)  	(17,890)   	(5,424)  
		(Increase) decrease in other assets 		      	(382)      	374      	(615)
		Gain on cash value of life insurance		      	(213)     	(219)	     (183)
		Increase (decrease) in other liabilities 		   (96)	      376	       435

			Net cash provided by operating activities  3,381	     4,273	     2,662

Cash Flows from Investing Activities
	Proceeds from maturities of
  held-to-maturity securities	               	5,529     	1,909    	 1,542
	Purchase of held-to-maturity securities			 (14,132)       	-        	 -  
	Proceeds from sales and maturities of
  available-for-sale securities             	23,667    	19,986    	36,565
	Purchase of available-for-sale securities	 (55,125)       	-   	 (38,482) 
	Net increase in loans made to customers 		 	(9,084)	  (11,460)   	(7,274)  
	Purchase of life insurance policies	          		-      	 (872)       	-
	Proceeds from sale of
  other real estate owned                     		158     	1,431     	1,396
	Purchases of bank premises and equipment 		   (934)	     (349) 	    (223)

			Net cash provided by (used in)
    investing activities                	 	 (49,921) 	  10,645  	  (6,476)

Cash Flows from Financing Activities
	Net increase in deposits 		                	41,542    	20,428     	9,372
	Proceeds from exercise of stock options		     	172       	188       	166
	Dividends paid		                        	   (1,390)	     (823) 	    (718)

			Net cash provided by
    financing activities                     40,324	    19,793	     8,820

			Increase (decrease) in
    cash and cash equivalents              		(6,216)	   34,711    	 5,006

Cash and cash equivalents
 at beginning of year                      		81,147    	46,436	    41,430

Cash and cash equivalents
 at end of year	                          		$74,931   	$81,147   	$46,436




<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
Note 1.	Summary of Significant Accounting Policies

	Principles of consolidation and basis of presentation

		The consolidated financial statements include the accounts of Orange 
National Bancorp and its wholly-owned subsidiary Orange National Bank 
("Bank").  These entities are collectively referred to herein as the 
Company.  The Bank provides a full range of banking services to its 
commercial and consumer customers through six branches located in 
Orange County, California.  All significant intercompany balances and 
transactions have been eliminated in consolidation.

	Use of estimates in the preparation of financial statements

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

	Cash and cash equivalents

		The Company includes cash on hand, cash due from banks, time 
deposits and federal funds sold in its definition of cash and cash 
equivalents for purposes of balance sheet presentation and reporting 
the statement of cash flows.

	Held-to-maturity securities

		Securities classified as held-to-maturity are those debt securities 
the Company has both the intent and ability to hold to maturity 
regardless of changes in market conditions, liquidity needs or changes 
in general economic conditions.  These securities are carried at cost 
adjusted for amortization of premiums and accretion of discounts, 
computed using the interest method over their contractual lives.  The 
sale of a security within three months of its maturity date or after at 
least 85% of the principal outstanding has been collected is considered 
a maturity for purposes of classification and disclosure.

	Available-for-sale securities

		Securities classified as available-for-sale are those debt 
securities that the Company intends to hold for an indefinite period of 
time, but not necessarily to maturity.  Any decision to sell a security 
classified as available-for-sale would be based on various factors, 
including significant movements in interest rates, changes in the 
maturity mix of the Company's assets and liabilities, liquidity needs, 
regulatory capital considerations, and other similar factors.  
Securities available-for-sale are carried at fair value.  Unrealized 
gains or losses, net of the related deferred tax effect, are reported 
as comprehensive income.  Realized gains or losses, computed using the 
cost of the specific securities sold, are included in earnings.

	Securities transfers

		Transfers of debt securities into the held-to-maturity 
classification from the available-for-sale classification are made at 
fair value on the date of transfer.  The unrealized holding gains or 
losses on the date of transfer are retained as a separate component of 
stockholders' equity and in the carrying value of the held-to-maturity 
securities. Such amounts are amortized over the remaining contractual 
lives of the securities using the interest method.


<PAGE>
	Loans

		Loans are stated at the amount of unpaid principal reduced by 
undisbursed loan funds, unearned loan fees and allowance for credit 
losses.  Interest on loans is accrued as earned using the simple-
interest method on principal amounts outstanding, only if deemed 
collectible.  	Loan origination and commitment fees together with 
certain direct loan origination costs are deferred, and the net 
deferral amount is amortized as an adjustment to the yield on loans 
over their contractual lives.  Collateral is obtained on substantially 
all loans.  Such collateral is primarily first trust deeds on property.

		The accrual of interest on loans is discontinued when, in 
management's opinion, the borrower may be unable to meet payments as 
they become due, generally at 90 days past due.  When an interest 
accrual is discontinued, all unpaid accrued interest is reversed.  
Generally, interest income is not subsequently recognized until all 
principal and interest amounts are received, and future principal and 
interest payments are expected to be collected.

		A loan is considered impaired when, in management's opinion, it is 
probable the creditor will be unable to collect all contractual 
principal and interest payments due in accordance with the terms of the 
loan agreement.  Impaired loans are measured based on the present value 
of expected future cash flows discounted at the loan's effective 
interest rate or, as a practical expedient, at the loan's observable 
market price or the fair value of the collateral if the loan is 
collateral dependent.  The amount of impairment, if any, and any 
subsequent changes are included in the allowance for credit losses.

	Allowance for credit losses

		The allowance for credit losses is established through a provision 
for credit losses charged to expense.  Loans are charged against the 
allowance for credit losses when management believes that 
collectibility of the principal is unlikely.  The allowance is an 
amount that management believes will be adequate to absorb estimated 
losses on existing loans that may become uncollectible, based on 
evaluation of the collectibility of loans and prior loan loss 
experience.  This evaluation also takes into consideration such factors 
as changes in the nature and volume of the loan portfolio, overall 
portfolio quality, review of specific problem loans, and current 
economic conditions that may affect the borrower's ability to pay.  
While management uses the best information available to make its 
evaluation, future adjustments to the allowance may be necessary if 
there are significant changes in economic or other conditions.  In 
addition, the Office of the Comptroller of the Currency, as an integral 
part of their examination process, periodically reviews the Company's 
allowance for credit losses, and may require the Company to make 
additions to the allowance based on their judgment about information 
available to them at the time of their examinations.

	Sale of loans

		The Company sells the guaranteed portion of small business 
administration loans in the secondary market to provide funds for 
additional lending and to generate servicing income.  Under such 
agreements, the Company continues to service the loans and the buyer 
receives the principal collected together with interest.  Loans held 
for sale are valued at the lower of cost or market value.

		Gains and losses on sales of loans are calculated on a predetermined 
formula in compliance with Statement of Financial Accounting Standards 
No. 125, "Accounting for Transfers and Servicing of Financial Assets 
and Extinguishment of Liabilities" ("SFAS 125") based on the difference 
between the selling price and the cost of the loans sold.  Any inherent 
risk of loss on loans is transferred to the buyer at the date of sale 
on the portion of the loan sold.  However, the Company maintains the 
risk on the portion retained.
<PAGE>
		The Company has issued various representations and warranties 
associated with the sale of loans.  These representations and 
warranties may require the Company to repurchase loans for a period of 
90 days after the date of sale as defined per the applicable sales 
agreement.  The Company did not experience losses during the years 
ended December 31, 1998, 1997 and 1996 regarding these representations 
and warranties.

	Premises and equipment

		Premises and equipment are stated at cost less accumulated 
depreciation and amortization.  Depreciation is computed using the 
straight-line method over the following estimated useful lives:  
Buildings and leasehold improvements - 4 to 28 years; furniture and 
equipment - 3 to 10 years.  Improvements to leased property are 
amortized over the lesser of the term of the lease or life of the 
improvements.

	Other real estate owned

		Other real estate owned ("OREO") represents properties acquired 
through foreclosure or other proceedings.  OREO is held for sale and is 
recorded at the lower of the carrying amounts of the related loans or 
the estimated fair value of the properties less estimated costs of 
disposal.  Any write-down to estimated fair value less cost to sell at 
the time of transfer to OREO is charged to the allowance for credit 
losses.  Properties are evaluated regularly by management with any 
further reductions of the carrying amount to the estimated fair value 
less estimated costs to dispose charged to the reserve for OREO losses 
as necessary.  Depreciation is recorded on each OREO after such 
properties have been owned for one year.  Depreciation and additions to 
or reductions from valuation allowances are recorded in income.

	Income taxes

		Deferred taxes are provided on an asset and liability method whereby 
deferred tax assets are recognized for deductible temporary differences 
and operating loss and tax credit carryforwards, and deferred tax 
liabilities are recognized for taxable temporary differences.  
Temporary differences are the differences between the reported amounts 
of assets and liabilities and their tax bases.  Deferred tax assets are 
reduced by a valuation allowance when management determines that it is 
more likely than not that some portion or all of the deferred tax 
assets will not be realized.  Deferred tax assets and liabilities are 
adjusted for the effects of changes in tax laws and rates on the date 
of enactment.
 
	Stock-based compensation

		The Company has adopted Statement of Financial Accounting Standards 
No. 123 "Accounting for Stock-Based Compensation" ("SFAS 123").  SFAS 
123 establishes financial accounting and reporting standards for stock-
based compensation plans.  The Company has elected to continue 
accounting for stock-based employee compensation plans in accordance 
with Accounting Principles Board Opinion No. 25, "Accounting for Stock 
Issued to Employees," ("APB No. 25") and related Interpretations, as 
SFAS 123 permits, and to follow the pro forma net earnings, pro forma 
earnings per share, and stock-based compensation plan disclosure 
requirements set forth in SFAS 123.

	Earnings per share

		The Company is required to present basic and diluted earnings per 
share amounts.  Diluted per share amounts assume the conversion, 
exercise or issuance of all potential common instruments unless the 
effect is to reduce a loss or increase the earnings per common share 
from continuing operations.  The weighted-average shares outstanding 
used to compute dilutive earnings per share include incremental shares 
from stock options of 46,708; 38,365; and 7,658; for the years ended 
December 31, 1998, 1997 and 1996, respectively.


<PAGE>
	Current accounting development

		In June 1998, FASB issued Statement of Financial Accounting 
Standards No. 133, "Accounting for Derivative Instruments and Hedging 
Activities" ("SFAS 133").  SFAS 133 establishes accounting and 
reporting standards for derivative instruments and hedging activities.  
SFAS 133 is effective for all fiscal quarters of fiscal years beginning 
after June 15, 1999.  The Company does not invest in derivative 
instruments nor engage in hedging activities.


Note 2.	Cash and cash equivalents

		Cash and cash equivalents consisted of the following as of December 
31:
<TABLE>
<CAPTION>
										                                      1998	      1997
              										                    (dollars in thousands)
<S>                                           <C>        <C>
	Cash on hand				                         	   $ 1,264   	$ 1,827
	Cash due from banks			                       	16,277    	27,820
	Federal funds sold			                        	57,390	    51,500

                                    										$74,931   	$81,147
</TABLE>

		The Company maintains amounts due from banks that exceed federally 
insured limits.  The Company has not experienced any losses in such 
accounts.  In addition, federal funds sold were placed with two 
financial institutions.

		The Company is required to maintain a reserve balance in cash or on 
deposit with the Federal Reserve Bank.  The required and actual reserve 
balances maintained were $742,000 and $1,248,000 as of December 31, 
1998, respectively.


Note 3.	Securities

		Carrying amounts and fair values of held-to-maturity securities are 
summarized as follows as of December 31:
<TABLE>
<CAPTION>
                       								Amortized  	Unrealized	Unrealized   	Fair
                								          Cost	       Gains     Losses	     Value
									                  (dollars in thousands)
<S>                             <C>         <C>          <C>       <C>
					1998
	Mortgage-backed securities	   	$17,640    	$     76	    $(25)    	$17,691

					1997
	Mortgage-backed securities		   $ 9,037    	$     -     	$(65)    	$ 8,972

</TABLE>
		Securities pledged as collateral on public deposits and treasury, 
tax and loan payments had a carrying amount of $5,999,000 and 
$5,748,000 at December 31, 1998 and 1997, respectively.



<PAGE>
		Carrying amounts and fair values of available-for-sale securities 
are summarized as follows as of December 31:
<TABLE>
<CAPTION>
                           			 			Amortized	Unrealized	Unrealized 	Fair
				 		                              Cost	     Gains    Losses	    Value
                									                  (dollars in thousands)
<S>                                 <C>         <C>     <C>       <C>
					1998
	U.S. Treasury securities
  and obligations
		of other U.S. Government
		corporations and agencies	       	$14,503	    $12    	$( 3)    	$14,512
	Mortgage-backed securities	        	25,241	     48     	(63)     	25,226
	Other	                       					     911   	  -     	  -     	     911

                            								$40,655    	$60    	$(66)    	$40,649

					1997
	U.S. Treasury securities
  and obligations
		of other U.S. Government
		corporations and agencies        		$8,992    	$11    	$(27)     	$8,976
	Other		                        				    170   	  -   	    -      	    170

                             								$9,162    	$11    	$(27)     	$9,146
</TABLE>

		The amortized cost and fair value of investment securities by 
contractual maturities as of December 31, 1998 are shown below.  
Maturities may differ from contractual maturities in mortgage-backed 
securities because the mortgages underlying the securities may be 
called or prepaid without any penalties.  Therefore, maturity dates for 
these securities are not included  in the following maturity summary:
<TABLE>
<CAPTION>
                                 Held-to-Maturity       Available-for-Sale
                        								Amortized    	Fair     	Amortized    	Fair
                 								         Cost	      Value	       Cost      	Value
               									                   (dollars in thousands)
<S>                             <C>         <C>         <C>         <C>
	Due in one year or less      		$    -  	   $    -     	$ 9,003    	$ 9,000
	Due after one year
  through five years	               	-          	-       	5,500      	5,512
	Mortgage-backed securities	    	17,640     	17,691     	25,241     	25,226
	Other		                 				        -  	        -    	     911   	     911
 
                        								$17,640    	$17,691    	$40,655    	$40,649
</TABLE>

		Available-for-sale securities of $14,002,000 and $20,999,000 were 
sold resulting in gross realized (losses) of $(9,000) and $(24,000) in 
1997 and 1996, respectively.  The Company did not sell available-for-
sale securities in 1998.




<PAGE>
Note 4.	Loans

		The Company's loan portfolio consisted of the following as of 
December 31:
<TABLE>
<CAPTION>
                                    										       1998	        1997
										                                         (dollars in thousands)
<S>                                                <C>          <C>
	Real estate loans					
		Construction	                                 			$  5,074    	$    118
		Commercial	                                   			  86,049	      78,534

                                           										91,123      	78,652

	Commercial and industrial loans              	   			40,217	      44,301
	Loans to individuals			                            	11,180      	10,586
	Other	                                   							       241	         122
									                                          	142,761	     133,661

	Deduct					
		Unearned net loan fees and premiums	            			(1,097)       	(891)
		Allowance for credit losses				                    (1,524)  	   (1,581)

							                                         			$140,140    	$131,189

</TABLE>
	Impaired loans

		Information about impaired loans is as follows as of and for the 
years ended December 31:
<TABLE>
<CAPTION>
                                             										   1998	      1997
										                                            (dollars in thousands)
<S>                                                      <C>        <C>
	Impaired loans requiring a related allowance
 	for credit losses                                   	 	$  877    	$1,067
	Impaired loans not requiring a related allowance
 	for credit losses		                                       554	       249

					Total impaired loans	                            			$1,431    	$1,316

	Related allowance for loan losses			                   	$  224	    $  278

	Average balance (based on month-end balances)		        	$1,644    	$1,201

	Interest income recognized		                          		$  161	    $  125
</TABLE>

		The Company is not committed to lend additional funds to debtors 
whose loans have been modified due to impairment.

		The Company had nonaccrual loans of $1,631,000 and $2,447,000 as of 
December 31, 1998 and 1997, respectively.  Interest income that would 
have been earned on such nonaccrual loans had such loans performed 
according to their loan terms would have been $382,000, $325,000, and 
$492,000 (earnings per share effect of $0.19, $0.17, and $0.25) in 
1998, 1997 and 1996, respectively.  Management estimates that certain 
nonaccrual loans, which are not classified as impaired, will ultimately 
be collected in full in accordance with the original terms.
<PAGE>
	Loans serviced

		The Company services loans for others totaling $57,875,000 and 
$64,764,000 as of December 31, 1998 and 1997, respectively, which are 
not included in the accompanying consolidated balance sheets.

	Loan concentration

		The Company grants commercial, residential and consumer loans to 
customers, substantially all of whom are middle-market businesses or 
residents.  The Company's business is concentrated primarily in Orange 
County, California, and its loan portfolio includes a significant 
credit exposure to the real estate industry and local economy of this 
area.  Real estate loans accounted for approximately 64% of total loans 
as of December 31, 1998.  Substantially all of these loans are secured 
by first liens with an initial loan to value ratio of generally less 
than 75%.


Note 5.	Allowance for Credit Losses and Reserve for Other Real Estate 
Owned

		Activity of the allowance for credit losses is as follows:
<TABLE>
<CAPTION>
                                			 						   1998	      1997 	     1996
										                                     (dollars in thousands)
<S>                                         <C>        <C>        <C>
	Balance, beginning		                      	$1,581    	$1,369    	$1,513
		Provision for credit losses		               	100       	140       	205
		Recoveries of amounts charged off		          	42       	138        	38
		Amounts charged off	                    		  (199)  	    (66)   	  (387)

	Balance, ending	                         		$1,524    	$1,581    	$1,369
</TABLE>

		Activity of the reserve for other 	real estate owned is as follows:
<TABLE>
<CAPTION>
                                    									1998       	1997     	 1996
                             										       (dollars in thousands)
<S>                                         <C>          <C>        <C>
 	Balance, beginning	                     		$   17      	$252      	$301
		Provision for losses on
   other real estate owned	                    	-         	11       	160
		Disposal of other real estate owned			       (17)     	(246)     	(209)

	Balance, ending	                         		$   -       	$ 17      	$252
</TABLE>







<PAGE>
Note 6.	Premises and Equipment, net

		Premises and equipment are summarized as follows as of December 31:
<TABLE>
<CAPTION>
                                           										   1998   	   1997
										                                           (dollars in thousands)
<S>                                                    <C>        <C>
	Land	                                          							$1,100	    $1,100
	Buildings and leasehold improvements			               	4,982     	4,531
	Furniture and equipment		                            		3,904     	3,449

                                              										9,986	     9,080
	Less accumulated depreciation and amortization		      	4,548     	4,023

                                             										$5,438    	$5,057
</TABLE>

Note 7.	Deposits

		Deposits are summarized as follows as of December 31:
<TABLE>
<CAPTION>
                                          										   1998	        1997
										                                           (dollars in thousands)
<S>                                                  <C>          <C>
	Noninterest-bearing demand                    		 		 $ 99,875	    $ 93,169
	Interest-bearing: 
		Demand		                                       	 			113,895	      91,282
		Savings	                                       		 			13,266      	11,622 
		Time certificates of deposit of $100,000 or more			  19,092      	12,087 
		Other time					                                      14,206	      10,632

			Total deposits			                                	$260,334	    $218,792
</TABLE>

		Substantially all certificates of deposit as of December 31, 1998 
mature within one year.  The Company had five customers with an 
aggregate deposit of  $43,048,000 as of December 31, 1998.












<PAGE>
Note 8.	Income Taxes

		The cumulative tax effects of the primary temporary differences are 
summarized as follows as of December 31:
<TABLE>
<CAPTION>
                                            						 				  1998	     1997
										                                           (dollars in thousands)
<S>                                                     <C>       <C>
	Deferred tax assets:				
		Credit loss allowances			                            	$  386	   $  407
		Deferred compensation accruals			                       	346      	278
		Interest accruals		                                     		24       	95
		Acquired net operating loss carryforward			               80       	85
		Unrealized loss on available-for-sale securities		       	18       	38
		Other real estate allowance		                           		-         	7
		State income taxes				                                   187	      204

				Total deferred tax assets			                        	1,041    	1,114

	Deferred tax liability, premises and equipment			         731	      696

				Net deferred tax assets		                         		$  310   	$  418
</TABLE>

		The Company did not record a valuation allowance on deferred tax 
assets in excess of deferred tax liabilities at December 31, 1998 and 
1997, as management believes that the net deferred tax assets, as of 
December 31, 1998 and 1997, are more likely than not to be realized.

		The provision for income taxes consisted of the following:
<TABLE>
<CAPTION>
                                 									   1998   	   1997   	   1996
                              										       (dollars in thousands)
<S>                                         <C>        <C>        <C>
	Current tax expense		                     	$2,059    	$2,208    	$1,213
	Deferred tax expense (benefit)			              88    	  (111)	      (78)

                                   									$2,147	    $2,097    	$1,135
</TABLE>
		The income tax provision differs from the amount of income tax 
determined by applying the U.S. federal income tax rate to pretax 
income as follows:
<TABLE>
<CAPTION>
                                  			 						   1998  	    1997	      1996
                                										        (dollars in thousands)
<S>                                           <C>        <C>        <C>
	Computed "expected" tax expense           			$1,917    	$1,853    	$1,168
	Increase (decrease) in
  income taxes resulting from:
		State income taxes, net of
   federal tax benefit	                         	378       	397       	249
		Change in valuation allowance		                	-         	-       	(165)
		Cash value of life insurance		                	(82)      	(97)      	(85)
		Other		                                				    (66)	      (56)	      (32)

                                     									$2,147    	$2,097    	$1,135
</TABLE>
<PAGE>
Note 9.	Other income and expense

		Other income consisted of the following:
<TABLE>
<CAPTION>
                                    									   1998	      1997	      1996
                                 									        (dollars in thousands)
<S>                                            <C>        <C>        <C>
	Service charges on deposit accounts		        	$1,194    	$1,262    	$1,169
	Fees for other customer services 		             	367       	593       	616
	Gain on sale of loans                         			654     	1,374       	560
	Increase in cash value of life insurance		      	254       	219       	183
	Other	 (Note 3)			                               314	       259    	   185

                                      									$2,783    	$3,707    	$2,713
</TABLE>
		Other expense consisted of the following:
<TABLE>
<CAPTION>
                                 									   1998	       1997    	   1996
                              										        (dollars in thousands)
<S>                                        <C>         <C>         <C>
	Salaries, wages and employee benefits 			 $ 6,138	    $ 6,259     $ 6,098
	Occupancy expense (Note 10) 		             	1,330      	1,134      	1,153
	Data processing expense (Note 10)		          	977        	888        	928
	Furniture and equipment expense 		           	754        	704        	633
	Promotion expense 		                         	485        	459        	429
	Legal and professional services            			603	        518        	627
	Insurance                                					260        	241        	182
	Stationery and supplies 		                   	266        	216        	249
	Telephone and postage 	                     		405        	405        	383
	Other real estate owned (Note 5) 		           	17         	94        	217
	Other		                             					     922	        858	        648

                                  									$12,157	    $11,776    	$11,547
</TABLE>

Note 10.	Commitments, Contingencies and Subsequent Event

	Litigation

		In the normal course of business, the Company is involved with 
various legal proceedings.  In the opinion of management, any liability 
resulting from such proceedings would not have a material adverse 
effect on the consolidated financial statements.

	Financial instruments with off-balance sheet risk

		The Company is party to financial instruments with off-balance sheet 
risk in the normal course of business to meet the financing needs of 
its customers.  These financial instruments include commitments to 
extend credit and standby letters of credit.  They involve, to varying 
degrees, elements of credit risk in addition to the amounts recognized 
on the consolidated balance sheets.  Such financial instruments are 
recorded on the consolidated balance sheet upon funding.
<PAGE>
		The Company's exposure to credit loss in the event of nonperformance 
by the other parties to the financial instrument for these commitments 
is represented by the contractual amounts of those instruments.  The 
Company uses the same credit policies in making commitments and 
conditional obligations as it does for on-balance sheet instruments. 

		The Company's exposure to off-balance sheet risk as of December 31 
is summarized as follows:
<TABLE>
<CAPTION>
                                   										     1998	       1997
										                                     (dollars in thousands)
<S>                                              <C>         <C>
	Commitments to extend credit		                		$23,928	    $25,087
	Standby letters of credit				                       472	        347

                                       										$24,400	    $25,434
</TABLE>
	Commitments to extend credit

		Commitments to extend credit are agreements to lend to a customer 
provided that all conditions established in the contract have been met.  
Commitments generally have fixed expiration dates or other termination 
clauses and may require payment of a fee.  Since many of the 
commitments are expected to expire without being drawn upon, the total 
commitment amounts do not necessarily represent future cash 
requirements.  The Company evaluates each customer's creditworthiness 
on a case-by-case basis.  If deemed necessary upon extension of credit, 
the amount of collateral obtained is based on management's credit 
evaluation of the counterparty.  Collateral held varies, but may 
include accounts receivable, inventory, property and equipment, and 
income-producing commercial properties.  The Company had undisbursed 
loan funds of $19,006,000 and $20,516,000 as of December 31, 1998 and 
1997, respectively.

	Standby letters of credit

		Standby letters of credit are conditional commitments issued by the 
Company to guarantee the performance of a customer to a third party.  
Those guarantees are primarily issued to support public and private 
borrowing arrangements.  The credit risk involved in issuing letters of 
credit is essentially the same as that involved in extending loan 
facilities to customers.  Collateral held varies as specified above and 
is required in instances that the Company deems necessary.  
Substantially all of the standby letters of credit were collateralized 
at December 31, 1998.

	Lease commitments

		The Company leases certain branch facilities and equipment from 
nonaffiliates under operating leases expiring at various dates through 
December 2007.  The following is a schedule of future minimum rental 
payments under these leases:
<TABLE>
<CAPTION>
									                        	Amount
           										      (dollars in thousands)
<S>                               <C>
			1999	                     					$  688
			2000					                        	697
			2001	                        					704
			2002	                        					718
			2003	                        					612
		Thereafter	                  				1,684

                        										$5,103
</TABLE>
<PAGE>
		Rent expense under these leases and other month-to-month leases for 
the years ended December 31, 1998, 1997 and 1996, was $915,000, 
$824,000 and $790,000, respectively.

	Data processing commitment

		The Company has an existing contract with a data processing center 
to provide computer services through March 2001.  The Company is 
subject to a penalty amount equal to 25% of the amounts that would have 
been paid to the center for the remainder of the contract term, should 
the Company terminate the contract prior to the expiration date.  The 
expense under this contract for the years ended December 31, 1998, 1997 
and 1996 was $977,000, $888,000 and $927,000, respectively.

	Subsequent event

		In January 1999, the Company declared a $0.15 per share dividend to 
stockholders of record as of the close of business on February 11, 
1999, payable on March 1, 1999.


Note 11.	Employee Benefit Plans

	Stock Option Plans

		The Company maintains two compensatory incentive stock option plans 
in which options to purchase shares of the Company's common stock are 
granted at the Board of Directors' discretion to directors, certain 
management and other key personnel.  The 1993 and 1997 Plans are 
authorized to grant a maximum of 193,106 shares and 414,250 shares of 
the Company's common stock, respectively.  Purchase prices associated 
with the options are based on the fair market value of the Company's 
stock at the time the option is granted.  The options, if not 
exercised, will expire 5 to 10 years from the date they were granted.  
Other pertinent information relating to the Plans follow:
<TABLE>
<CAPTION>
                                									     1998  	     1997	      1996
<S>                                         <C>         <C>        <C>
	Under option, beginning of year			         207,625     	48,500    	62,600
		Granted				                               	45,900    	176,500     	5,000
		Exercised		                             		(26,742)   	(17,375)  	(19,100)

	Under option, end of year		               	226,783	    207,625    	48,500


	Options exercisable, end of year        			200,967    	174,775    	48,500
	Available to grant, end of year			         314,856    	360,756   	123,006
	Weighted average price under option,
  end of year                              		$19.69     	$16.25     	$6.32
	Weighted average price of options
  exercisable, end of year                 		$19.31     	$16.12     	$6.32
	Weighted average price of options
  granted, during the year	                 	$27.50     	$17.96     	$9.92
	Weighted average price of options
  exercised, during the year                 	$6.43      	$5.87     	$8.67
</TABLE>




<PAGE>
		Additional option information by Plan at December 31, 1998 is as 
follows:
<TABLE>
<CAPTION>
                                                       											Weighted
                                                        											Average
							                                                       				Exercise
        								       Price Range    	Outstanding	Exercisable	     Price
<S>                 <C>                  <C>          <C>          <C>
	1993 Plan	               			$ 5.79       	1,050          	-      	$ 5.79
	1993 Plan			      	$ 9.92 - $13.75       	8,833       	7,000     	$11.58
	1997 Plan      				$17.72 - $23.50     	171,000     	162,667     	$18.10
	1997 Plan		      		$24.12 - $29.00	      45,900	      31,300     	$27.50

					                                				226,783     	200,967
</TABLE>

		The Company applies APB No. 25 and related Interpretations in 
accounting for its Plans.  Accordingly, no compensation cost has been 
recognized.  The Company has not issued any options to nonemployees.  
The Company's reported and pro forma net earnings and earnings per 
share are presented below.  The pro forma amounts deduct the estimated 
compensation cost for the Company's stock option Plan based on the fair 
value at the grant dates for awards under this Plan and with the 
provisions of SFAS 123:
<TABLE>
<CAPTION>
                                   									   1998	      1997	      1996
								  	                  (dollars in thousands, except per share data)
<S>                                           <C>        <C>        <C>
	Net earnings		             	As reported      $3,330    	$3,198    	$2,201
                     								Pro forma        	3,165     	2,691     	2,195

	Basic earnings per share	  	As reported      	$1.67	     $1.63     	$1.13
                     								Pro forma         	1.59      	1.37      	1.12

	Diluted earnings per share		As reported      	$1.64     	$1.60     	$1.13
                     								Pro forma         	1.55      	1.35      	1.12

</TABLE>
		The pro forma compensation cost for the fair value of the stock 
options granted was estimated using the Black-Scholes model.  The 
assumptions used in the model by year are as follows:
<TABLE>
<CAPTION>
                 									            1998	         1997	         1996
<S>                                <C>           <C>           <C>
Expected volatility		             	12% to 31%   	15% to 20%	   12% to 15%

Dividends as a percentage
 of stock price	                       		2.6%	         1.8%	         2.8%

Expected lives in years		                 	4            	4            	4

Risk-free interest rates			              4.5%	         5.5%         	5.4%

Weighted average fair value
 per share of stock options granted  		$4.65        	$4.69        	$2.13
</TABLE>
<PAGE>
	Salary deferral 401(k) plan

		The Company has a salary deferral 401(k) plan for all employees who 
have completed one year of service.  The Bank contributed discretionary 
matching funds of $102,000 to the Plan in 1998, 1997 and 1996, 
respectively.

	Contingency contract

		The Company has contingency contracts with its Chief Executive 
Officer and Chief Financial Officer.  The contract provides for a 
monthly payment of $13,000 over 179 months in the event that the 
Company experiences a merger, acquisition, or other act wherein they 
are not retained in similar positions with the surviving Company.


Note 12.	Loans and Other Transactions with Related Parties

		Stockholders of the Company, and officers and directors, including 
their families and companies of whom they are principal owners, are 
considered to be related parties.  These related parties were loan 
customers of, and had other transactions with, the Company in the 
ordinary course of business.  In management's opinion, these loans and 
transactions were on the same terms as those for comparable loans and 
transactions with nonrelated parties.  The activity in such loans is as 
follows:
<TABLE>
<CAPTION>
                                         										   1998	      1997
										                                        (dollars in thousands)
<S>                                                  <C>        <C>
	Balance, beginning	                              			$2,479	    $2,906

		New loans			                                        		850       	774
		Repayments	                                    			 (1,126)   	(1,201)

	Balance, ending			                                 	$2,203    	$2,479

</TABLE>
		None of these loans are classified, past due, nonaccrual, or 
restructured to provide a reduction or deferral of interest or 
principal because of deterioration in the financial position of the 
borrower.


Note 13.	Regulatory Capital Requirements

		The subsidiary Bank is subject to various regulatory capital 
requirements administered by the federal banking agencies.  Failure to 
meet minimum capital requirements can initiate certain mandatory, and 
possibly additional discretionary, actions by regulators that, if 
undertaken, could have a direct material effect on the Bank's financial 
statements.  Under capital adequacy guidelines and the regulatory 
framework for prompt corrective action, the Bank must meet specific 
capital guidelines that involve qualitative measures of the Bank's 
assets, liabilities, and certain off-balance sheet items as calculated 
under regulatory accounting practices.  The Bank's capital amounts and 
classification are also subject to qualitative judgments by the 
regulators about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital 
adequacy require the Bank to maintain minimum amounts and ratios (set 
forth in the table below) of total and Tier I capital (as defined in 
the regulations) to risk-weighted assets (as defined), and of Tier I 
capital to average assets (as defined).  Management believes that the 
Bank meets all capital adequacy requirements to which it is subject as 
of December 31, 1998.


<PAGE>
		As of June 30, 1997, the most recent notification from the Office of 
the Comptroller of the Currency categorized the Bank as well 
capitalized under the regulatory framework for prompt corrective 
action. To be categorized as well capitalized the Bank must maintain 
minimum total risk-based, Tier I risk-based, Tier I leverage ratios as 
set forth in the table.  There are no conditions or events occurring 
since that management believes have changed the institution's category.  
The Bank's actual capital amounts and ratios are presented in the 
following table:
<TABLE>
<CAPTION>
											                                                     To Be Well
											                                                  Capitalized Under
                        									             For Capital	   Prompt Corrective
          							                 Actual   Adequacy Purposes Action Provisions
                       							Amount 	Ratio  	Amount	Ratio  	 Amount 	Ratio
                          									     (dollars in thousands)
<S>                          <C>      <C>    <C>      <C>    <C>      <C>
	As of December 31, 1998:
		Total Capital
   (to Risk Weighted Assets)	$24,484 	13.7%	 $14,314 	8.0% 	 $17,893	 10.0%
		Tier I Capital
   (to Risk Weighted Assets) 	22,960 	12.8%   	7,157 	4.0%  	 10,736  	6.0%
		Tier I Capital
   (to Average Assets)	       22,960  	8.4%  	10,942 	4.0%  	 13,678  	5.0%

	As of December 31, 1997:
		Total Capital
   (to Risk Weighted Assets)	$22,563 	13.9% 	$12,962 	8.0%	  $16,202 	10.0%
		Tier I Capital
   (to Risk Weighted Assets) 	20,982 	13.0%   	6,481 	4.0%    	9,721  	6.0%
		Tier I Capital
   (to Average Assets)       	20,982  	9.0%   	9,368 	4.0%   	11,710  	5.0%
</TABLE>
		The Company's capital amounts and ratios are substantially the same 
as the amounts presented above.


Note 14.	Consolidated Statements of Cash Flows Information
<TABLE>
<CAPTION>
                                   			 						   1998  	   1997	     1996
                               										        (dollars in thousands)
<S>                                            <C>       <C>       <C>
	Supplemental Cash Flow Information
		Cash payments for
			Interest	                                			$4,142   	$3,318   	$3,573
			Income taxes			                             $2,484	   $2,113   	$1,100

		Non-cash investing activities
			Loans originated by the Company to finance
			the sale of other real estate owned		   	   $   -    	$1,023   	$  100
			Loans foreclosed on by the Company		        $   32   	$  145   	$  902
</TABLE>











<PAGE>
Note 15.	Fair Values of Financial Instruments

		The fair values of the Company's financial instruments are as 
follows as of December 31:
<TABLE>
<CAPTION>
							                                 1998                   1997
                         								Carrying    	Fair    	Carrying    	Fair
                        								  Amount	     Value 	   Amount	     Value
                 									                 (dollars in thousands)
<S>                              <C>        <C>        <C>        <C>
	Financial Assets
		Cash and cash equivalents	    	$ 74,931  	$ 74,931  	$ 81,147  	$ 81,147
		Securities	                    		58,289    	58,340	    18,183    	18,118
		Loans, net		                   	140,140   	141,453   	131,189   	130,711
		Accrued interest receivable	     	1,212     	1,212       	985       	985
	Financial Liabilities, deposits		260,334   	260,222 	  218,792 	  218,700
</TABLE>

		Management uses its best judgment in estimating the fair value of 
the Company's financial instruments; however, there are inherent 
weaknesses in any estimation technique.  Therefore, for substantially 
all financial instruments, the fair value estimates presented herein 
are not necessarily indicative of the amounts the Company could have 
realized in a sales transaction at either December 31, 1998 or 1997.  
The estimated fair value amounts for 1998 and 1997 have been measured 
as of their respective year ends, and have not been reevaluated or 
updated for purposes of these consolidated financial statements 
subsequent to those respective dates.  As such, the estimated fair 
values of these financial instruments subsequent to the respective 
reporting dates may be different than the amounts reported at each 
year-end.

		The information in this Note should not be interpreted as an 
estimate of the fair value of the entire Company since a fair value 
calculation is only required for a limited portion of the Company's 
assets and liabilities.  This disclosure of fair value amounts does not 
include the fair values of any intangibles, including core deposit 
intangibles or mortgage servicing rights.  Due to the wide range of 
valuation techniques, assumptions used and the degree of subjectivity 
used in making the estimate, comparisons between the Company's 
disclosures and those of other banks may not be meaningful.

		The Company used the following methods and assumptions in estimating 
the fair value of its financial instruments:

	Cash and cash equivalents

		The carrying amounts for cash held, due from banks, interest bearing 
deposits and federal funds sold approximate their fair values.

	Securities

		Fair values for securities are based on quoted market prices when 
available.  For certain mortgage-backed securities, the Company 
utilizes a broker to determine fair value. This broker obtains 
estimates of fair value from up to three pricing services that estimate 
fair value through a mapping process to other mortgage pools adjusted 
for interest rate, maturity, etc.  There is no guarantee that the 
prices obtained for these methods can be realized upon ultimate sale of 
such securities.


<PAGE>
	Loans

		The carrying values of variable-rate loans that reprice frequently 
and that have not experienced significant changes in credit risk 
approximate their fair values.  At December 31, 1998 and 1997, variable 
rate loans comprised approximately 64% and 72%, respectively, of the 
loan portfolio.  Fair values for all other loans are estimated based on 
discounted cash flows, using interest rates currently being offered for 
loans with similar terms to borrowers with similar credit quality.  
Prepayments prior to the repricing date are not expected to be 
significant.  Loans are expected to be held-to-maturity and any 
unrealized gains or losses are not expected to be realized.

	Off-balance sheet instruments

		Fair values for off-balance sheet instruments (guarantees, letters 
of credit and lending commitments) are based on quoted fees currently 
charged to enter into similar agreements, taking into account the 
remaining terms of the agreements and the counterparties' credit 
standing.

	Deposit liabilities

		Fair values for savings and demand deposits equal their carrying 
amounts.  The carrying amounts for variable-rate money market accounts 
approximate their fair values.  Fair values for fixed-rate certificates 
of deposit are estimated using a discounted cash flow calculation that 
applies interest rates currently being offered on certificates to a 
schedule of aggregate expected monthly maturities on time deposits.  
Early withdrawals of fixed-rate certificates of deposit are not 
expected to be significant.

	Accrued interest receivable and payable

		The fair values of both accrued interest receivable and payable 
approximate their carrying amounts.

	Commitments

		The estimated fair value of fee income on letters of credit at 
December 31, 1998 and 1997 is insignificant. 

	Interest rate risk

		The Company assumes interest rate risk (the risk that general 
interest rate levels will change) as a result of its normal operations.  
As a result, fair value of the Company's financial instruments will 
change when interest rate levels change and that change may be either 
favorable or unfavorable to the Company.  Management attempts to match 
maturities of assets and liabilities to the extent believed necessary 
to minimize interest rate risk.  However, borrowers with fixed rate 
obligations are less likely to prepay in a rising rate environment and 
more likely to prepay in a falling rate environment.  Conversely, 
depositors who are receiving fixed rates are more likely to withdraw 
funds before maturity in a rising rate environment and less likely to 
do so in a falling rate environment.  Management monitors rates and 
maturities of assets and liabilities and attempts to minimize interest 
rate risk by adjusting terms of new loans and deposits and by investing 
in securities with terms that mitigate the Company's overall interest 
rate risk.






<PAGE>
Note 16.	Parent Company Only Condensed Statements

Condensed Balance Sheets
<TABLE>
<CAPTION>
                                        										    1998   	    1997
										                                        (dollars in thousands)
<S>                                                 <C>         <C>
	Assets							
		Cash						                                       	$   616    	$   482
		Investment in subsidiary			                       	22,929     	20,926
		Other assets		                                 		     178   	     178

                                          										$23,723    	$21,586

	Stockholders' Equity	                           			$23,723    	$21,586
</TABLE>
<TABLE>
<CAPTION>
                                  			 						   1998   	   1997   	   1996
										                                       (dollars in thousands)
Condensed Statements of Earnings
 and Comprehensive Income
<S>                                           <C>        <C>        <C>
	Operating income, dividends from subsidiary		$1,390    	$  823    	$  718
	Expenses, professional fees              			    (38)	      (39)	      (40)

			Earnings before equity
    in undistributed earnings
		  of subsidiary		                           	1,352       	784       	678
	Equity in undistributed
  earnings of subsidiary                     		1,978     	2,414	     1,523

			Net earnings                             			3,330     	3,198     	2,201

	Other comprehensive income from subsidiary		     25	        67	        46

			Comprehensive income		                    	$3,355    	$3,265    	$2,247










Condensed Statements of Cash Flows

	Cash Flows from Operating Activities
 	Net earnings	                             		$3,330    	$3,198    	$2,201
		Adjustments to reconcile net earnings
   to net cash	provided by
   operating activities:					
			Equity in undistributed
    earnings of subsidiary	                  	(1,978)   	(2,414)   	(1,523)

						Net cash provided by
       operating activities	                 	 1,352	       784	       678

	Cash Flows from Financing Activities
		Proceeds from exercise of stock options	      	172       	188       	166
		Dividends paid			                           (1,390)   	  (823)   	  (718)

						Net cash (used in)
       financing activities		                 (1,218)	     (635)   	  (552)

						Increase in cash and cash equivalents		    134	       149	       126

	Cash and cash equivalents
		Beginning		                              		    482   	    333	       207

		Ending		                                 			$  616    	$  482    	$  333



</TABLE>