UNITED STATES 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, 1997
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 approximately $36,906,441 as of February 28,1998.  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, which resulted from a recent trade.

1,979,171 Shares of Common Stock were outstanding at February 28, 1998.

             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 18, 1998.



ORANGE NATIONAL BANCORP

1997 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 8.	Financial Statements and Supplementary Data					                      27

Item 9.	Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosures		                                               27


PART III
                                
Item 10.	Directors and Executive Officers of the Registrant					              28

Item 11.	Executive Compensation							                                        28

Item 12.	Security Ownership of Certain Beneficial Owners and Management				   28

Item 13.	Certain Relationships and Related Transactions					                  28


PART IV

Item 14.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K			 	29

			Signatures						                                                          	30
  
			Index to Exhibits						                                                   	32


PART I

ITEM 1. BUSINESS


General

		Orange National Bancorp ("Bancorp" or "Company") was organized and 
incorporated under the laws of the State of California on July 28, 1986 to 
become a bank holding company.  The Company acquired all the outstanding capital
stock of Orange National Bank ("Bank") at the direction of the Board of 
Directors of the Bank.  The Company commenced operations as a bank holding 
company within the meaning 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 Bank of San Francisco ("FRB").  
The Bank was organized and chartered as a national banking association on 
October 31, 1979 and opened for business on the same 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 Bancorp'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 Bancorp is engaged in the ownership of one commercial bank.  The Bancorp 
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 Bancorp or its subsidiary.  Neither the 
Bancorp nor its subsidiary operate outside the United States nor derive revenues
from customers located outside of the United States.  The Bancorp was involved 
in mortgage banking operations from 1992 through 1994.  There were no gains or 
losses on the disposal of this operation. 

		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.  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 gain on
sales of loans.  These sources comprised 66.6%, 15.4% and 6.7%, respectively, of
the Bank's total income for 1997.  Other sources of income include fees on 
deposit accounts and other customer services.


Distribution of Assets, Liabilities, and Stockholders' Equity

		The following schedule presents the average balances of the Bancorp'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:

							          	                1997             1996             1995
                    								Dollars	Percent	  Dollars	Percent	 Dollars	Percent
                     								 		          (dollars in thousands)

Assets
Cash and due from banks	  	$ 23,212  10.5%   $ 20,415 	9.4%  	$ 19,679	  9.5%
Securities				              	26,134  11.8	     44,937	 20.7	    43,073	 20.8
Federal funds sold	         	29,362  13.3    		29,725	 13.7	   	20,372 	 9.9
Loans	                   			131,077 	59.4    	109,802  50.7	  	114,820 	55.4
Less allowance for
 credit losses             		(1,488) (0.7)	   	(1,487) (0.7)	  	(1,601) (0.7)
	 Net loans		             		129,589	 58.7	   	108,315 	50.0  		113,219 	54.7
Premises and equipment, net	 	5,187  	2.4	     	5,382	  2.5    		5,483  	2.7
Other assets			         	     7,193   3.3       7,998	  3.7		    5,101	  2.4

Total			               				$220,677	100.0%	  $216,772	100.0%	 $206,927	100.0%


Liabilities and
 stockholders' equity
Liabilities
	Deposits:
		Noninterest-bearing
   demand                		$ 76,444 	34.6%  	$ 67,662 	31.2%  	$ 64,372	31.1%
		Money market demand
   and NOW                  	91,931 	41.7    	101,562 	46.9     	99,182	47.9
		Savings	                			11,485  	5.2     	12,420  	5.7     	13,474 	6.5
		Time                					  19,423	  8.8      15,969   7.4   	  12,511  6.1

		Total deposits          		199,283 	90.3    	197,613 	91.2    	189,539	91.6

	Other liabilities	      	    1,793   0.8 	     1,381   0.6  	    1,286  0.6

		Total liabilities       		201,076 	91.1    	198,994 	91.8    	190,825	92.2

Stockholders' equity:
	Common stock               		7,770  	3.5      	7,594  	3.5	      7,109 	3.4
	Retained earnings	       	  11,831   5.4  	   10,184	  4.7  	    8,993  4.4

	Total stockholders' equity	 19,601   8.9   	  17,778   8.2   	  16,102  7.8

Total		               					$220,677	100.0%  	$216,772	100.0%  	$206,927	100.0%


Interest Income Rates

		Average interest-earning assets, their yields and amounts earned by category 
are set forth 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.
											                              1997	      1996	     1995
                               												(dollars in thousands)
Securities:
	Average outstanding	              				$26,134   	$44,937   	$43,073
	Average yield	                      					6.02%     	5.85%     	5.74%
	Amount of interest earned         					$1,573    	$2,627    	$2,471
Federal funds sold:
	Average outstanding	              				$29,362   	$29,725   	$20,372
	Average yield	                      					5.44%     	5.23%	     5,63%
	Amount of interest earned	         				$1,598    	$1,555    	$1,146
Net loans:
	Average outstanding	             				$129,589	  $108,315  	$113,219
	Average yield	                     					10.56%    	10,81%    	11.44%
	Amount of interest and fees earned				$13,686   	$11,712   	$12,954
Total earning assets:
	Average outstanding		             			$185,085  	$182,977  	$176,664
	Average yield				                      		9.11%     	8.69%     	9.38%
	Amount of interest earned				        	$16,857   	$15,894   	$16,571


Interest Expense Rates

		The following table sets forth the Bancorp'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:
								                          			    1997	      1996	     1995
                              												(dollars in thousands)
NOW and money market (1):
	Average outstanding		              			$91,931  	$101,562   	$99,182
	Average rate paid				                   	2.34%	     2.47%	     2.34%
	Amount of interest paid or accrued			 	$2,154    	$2,510    	$2,325
Savings:
	Average outstanding		              			$11,485   	$12,420	   $13,474
	Average rate paid			                   		2.02%	     2.00%     	1.98%
	Amount of interest paid or accrued			   	$232      	$249      	$267
Time:
	Average outstanding              					$19,423   	$15,969   	$12,511
	Average rate paid	                   				4.98%     	4.76%     	4.39%
	Amount of interest paid or accrued			   	$967      	$760      	$549
Total interest-bearing liabilities:
	Average outstanding	             				$122,839  	$129,951	  $125,167
	Average rate paid				                   	2.73%	     2.71%     	2.51%
	Amount of interest paid or accrued				 $3,353    	$3,519    	$3,141

Net yield on interest-earning assets					 7.30%     	6.76%     	7.60%
 
(1) NOW and money markets include only interest-bearing transaction accounts.
Rate/Volume Analysis of Net Interest Income


		The following table sets forth the cause and amounts of change in interest 
earned and paid for the years ended December 31:  
  
			         	               1997 over 1996 (1)        1996 over 1995 (1)
	                   						Volume  	Rate   	Total   	Volume  	Rate    	Total
                  									           	(dollars in thousands)

Increase (decrease) in:
Interest income:
Investment securities	  	$(1,099)	$  45 	$(1,054)   	$107	 $   49  	$   156
Federal funds sold	         	(19)   	62      	43     	527   	(118)     	409
Net loans	             				2,300  	(326)  	1,974    	(561)  	(681)  	(1,242)

Total		             					$ 1,182 	$(219)	  $ 963   	$  73	  $(750) 	$  (677)

Interest expense:
Money market deposits    		$(238)	$(118)	  $(356)  	$  56   	$129     	$185
Savings deposits		          	(19)    	2     	(17)    	(21)     	3	      (18)
Time deposits				            164	    43	     207	     152	     59      	211

Total		              					$  (93)	$ (73)  	$(166)   	$187   	$191	     $378

Net interest income	     	$1,275 	$(146)  	$1,129  	$(114) 	$(941) 	$(1,055)


(1) The variance not solely due to rate or volume is allocated to the rate 
variances.  Nonaccrual loans have been included in this analysis.  Loan fees 
of $1.1 million, $1.0 million and $1.1 million for 1997, 1996, and 1995, 
respectively, have been included in this analysis.  The Company does not 
have tax-exempt income bonds or notes in its securities portfolio.


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 or variable rate bonds or notes.  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:

							     	                   1997              1996             1995
                  								Amortized	Market Amortized Market	Amortized	Market
	  							                  Cost(1)  Value  Cost(1)   Value	 Cost(1)   Value
                       										       (dollars in thousands)

Mortgage-backed securities		 $9,037	$8,972 	$10,937	$10,844 	$12,479	$12,421


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

		The available-for-sale securities as of December 31 are as follows:

							     	                   1997              1996               1995
                								Amortized 	Market	Amortized 	Market 	Amortized 	Market
						                	 	Cost (2)	  Value 	Cost (2)  	Value	  Cost (2)  	Value
                       										       (dollars in thousands)

U.S. Treasury securities and
  obligations of other U.S.
  Government agencies and
  Corporations				         $8,992 	$8,976	 $28,992	 $28,899 	$24,984 	$24,914
Mortgage-backed securities   		-      	-       	-       	-    	2,018   	1,994
Other		               					   170 	   170	     174	     174	     174	     174

Total	               						$9,162 	$9,146 	$29,166 	$29,073 	$27,176 	$27,082


(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.

		On December 29, 1995 the Company reassessed the appropriateness of the 
classification of all securities in accordance with the issuance of Financial 
Accounting Standards Board Guide to Implementation of Statement No. 115 on 
Accounting for Certain Investments in Debt and Equity Securities.  As a result, 
the Company transferred debt securities at their fair value of $4,995,483 on 
December 29, 1995 previously classified as held-to-maturity into available-for-
sale securities and recorded an unrealized holding loss of $3,827.


Maturity of Securities
  
		The following table summarizes the maturities of the Company's securities 
and their weighted average yield as of December 31, 1997:
                                   								  			Carrying	 Market  	Average
                                     					 						Amount 	Value(1) 	Yield(2)
                                       												(dollars in thousands)

Mortgage-backed securities (3)					              $9,037   	$8,972  	5.47%

U.S. Treasury Securities and
obligations of U.S. Government
Agencies and corporations:
	Due within one year					                         1,000      	993  	4.73%
	Due after one year but within five years				     3,996    	3,991  	6.47%
	Due after five years but within ten years				    1,000    	1,001  	6.27%
	Due after ten years					                         2,996    	2,991  	6.76%
Other		                                								     170 	     170	  6.00%

Total								                                 		$18,199	  $18,118  	5.91%


(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.


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 58.8%, 33.1%, and 
7.9%, respectively, of the Bank's loan portfolio as of December 31, 1997.  The 
Bank's 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.  
Commercial real estate loans are originated for terms of up to 25 years.

		Variable interest rate loans comprise 72% of the loan portfolio as of 
December 31, 1997.

		The Bank had standby letters of credit of $0.3 million and commitments to 
extend credit of $25.1 million as of December 31, 1997.  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 $3.9 million with unfunded
unsecured commitments of $6.0 million as of December 31, 1997.  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

Loan Portfolio Composition

		The composition of the Bank's loan portfolio (all domestic) as of December 
31 is presented in the following table:


                      									      1997	    1996     1995     1994     1993
                                   											(dollars in thousands)
Dollars
Real estate
	Commercial	                   			$ 78,534	$ 64,611	$ 61,891	$ 61,881 	$65,052
	Construction	                      			118   	1,412     	242   	2,286   	3,473
	Held for sale		                      		-       	-       	-       	-    	2,050
Commercial and industrial		        	44,301  	44,766  	41,361  	40,976  	34,376
Loans to individuals			             10,586  	10,256  	10,343   	9,384  	10,127
Other			                   					       122	     152    1,207      177      858

Total	                      							133,661 	121,197 	115,044 	114,704 	115,936

Unearned net loan fees and premiums	 	(891)   	(837)	   (807)   	(536)	   (742)
Allowance for credit losses	    		  (1,581)	 (1,369)  (1,513)  (1,465)  (1,524)

Total, net	                  					$131,189	$118,991	$112,724	$112,703	$113,670


Unsecured loans, included
 in table above                   		$3,910  	$2,836	  $4,753	  $3,743	  $4,236


Percentages
Real estate
	Commercial	                      			58.8%	   53.3%	   53.8%   	53.9%	   56.1%
	Construction	                     			0.1     	1.2     	0.2	     2.0     	3.0
	Held for sale                    				0.0     	0.0     	0.0     	0.0     	1.8
Commercial and industrial	         		33.1    	36.9    	36.0    	35.7    	29.6
Loans to individuals	               		7.9     	8.5     	9.1     	8.2     	8.8
Other	                     							    0.1	     0.1 	    1.0 	    0.2	     0.7

Total		                       						100.0%  	100.0%  	100.0%  	100.0%	  100.0%


Loan Maturities and Sensitivity to Changes in Interest Rates

		The following table sets forth the maturities of the Bank's loan portfolio 
by category as of December 31, 1997.  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 rates generally fluctuate with changes in the prime interest rate.  The
table excludes unearned net loan fees and premiums of $891,000.


                                											 After
							                               			  one but
									                    Within one  within five    After
          					       					    year (1) 	   years    	five years   Total
											                              (dollars in thousands)

Real estate
	Commercial              					$  72,992    	$3,913  	$  1,629   	$ 78,534
	Construction				                  	118 	       -         	-         	118
Commercial and industrial	     		22,373     	2,682    	19,246     	44,301
Loans to individuals			          	5,716     	1,157     	3,713     	10,586
Other	                							       122 	       -          -  	       122

                     										$101,321    	$7,752   	$24,588   	$133,661


	Distribution between fixed and floating interest rates after one year:

Fixed interest rates				                   	$7,404   	$24,588    	$31,992
Floating interest rates		               			    348	        -  	       348

                                 											$7,752	   $24,588    	$32,340


 (1)	Demand loans and overdrafts are shown as "within one year" with scheduled 
repayments reported in the periods in which the final payments are due.


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.

		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 sets forth 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:


                           									      1997	  1996   1995   1994   1993
                                    											(dollars in thousands)

Loans on non-accrual basis			            $2,447	$2,464	$3,055	$3,163	$2,744
Loans past due 90 days or more and
 still accruing interest			                 660     	7    	33   	158    	46
Troubled debt restructuring,
 not included above		                        -      -      -      -      -

Total		               					             	$3,107	$2,471	$3,088	$3,321	$2,790


		If all such loans had been current in accordance with their original terms 
during the year ended December 31, 1997, the gross interest income would have 
been approximately $325,000.  The amount of interest income included in earnings
on these nonaccrual loans was $125,000 in 1997.

		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, 
1997, 1996, 1995, 1994 and 1993.

		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:


                     			 					       1997     1996     1995     1994     1993
                                   											(dollars in thousands)

Average gross loans	             		$131,077	$109,802	$114,820	$114,718	$118,774

Total gross loans at end of period	$133,661 $120,360	$114,237	$114,168	$115,194


Allowance for loan losses:
Balance, beginning of period		      	$1,369	  $1,513   $1,465  	$1,524  	$1,425

Charge-offs:
	Commercial and industrial		            	14     	252     	302     	459     	232
	Real estate construction		             	-       	-       	-       	-       	30
	Commercial real estate		               	44     	125      	70      	25      	76
	Installment                  					       8	      10	      16	       4	      27

                           									     66	     387  	   388  	   488	     365
Recoveries:
	Commercial and industrial	           		122      	30      	63     	129      	67
	Leases			                            			-       	-       	45      	-	       -
	Commercial real estate			                9       	8       	8      	-	       -
	Installment	                  				       7	      -        -	        2	       3

                            									   138	      38	     116	     131	      70

Net charge-offs (recoveries)			         (72)    	349     	272     	357     	295

Additions charged to operations			      140	     205	     320  	   298  	   394

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

Net charge-offs (recoveries) during
 the period to average gross loans
 outstanding during year           		(0.05%)  	0.32%   	0.24%   	0.31%   	0.25%


		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:


                          									 1997 	 1996  	 1995  	 1994  	 1993
                               											(dollars in thousands)

Commercial and industrial	     		 $  298 	$  343 	$  831 	$  744 	$  550
Real estate - construction		         	-       	9      	3    	124     	75
Real estate - mortgage	          		1,265    	959    	594    	468    	837
Installment						                     18     	58     	62	    108     	40
Other			                 					        -	      -       23	     21	     22

       					                  				$1,581 	$1,369 	$1,513 	$1,465 	$1,524


		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 $93.2 million, interest-bearing NOW and money market accounts
of $91.3 million, time deposits for individuals and corporations of $22.7 
million, and savings of $11.6 million as of December 31, 1997.

		The Company had interest-bearing deposits of 57.4% and 60.8% of total 
deposits as of December 31, 1997 and 1996, 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 does not have 
any brokered deposits.  The Bank has a deposit concentration from five customers
of $28,095,000 as of December 31, 1997.  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:


                              										MMDA	                     		 Total
          				 			          		Demand 	and NOW 	 Savings	     Time	  Deposits
                              											(dollars in thousands)

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%

1995
Average balance	          			$64,372  	$99,182  	$13,474  	$12,511  	$189,539
Percent of total	           			34.0%    	52.3%     	7.1%     	6.6%    	100.0%
Average interest rate paid	   		0.0%     	2.3%     	2.0%     	4.4%      	1.7%


		The following table indicates the amount and maturity of the Bank's time 
certificates of deposit over $100,000 as of December 31, 1997:


                                     										Balance		Percent of Total
                                      										(dollars in thousands)

Less than three months			                     	$ 9,500   	  	78.6%
Three months through six months				              1,226   	  	10.1
Six months through twelve months			               	866      		7.2
Over twelve months				                             495		      4.1

                                     										$12,087		    100.0%


Return on Equity and Assets

		The following table indicates the key financial ratios of the Bank for the
years ended December 31:

                                           										    1997   1996   1995
Profitability ratios:

	Rate of return on average total assets			               1.45%	 1.02% 	1.22%

	Rate of return on average stockholders' equity			      16.32%	12.38%	15.68%

Capital ratios:

	Cash dividend payment ratio to net earnings		         	25.73%	32.60%	19.23%

	Average stockholders' equity to average total assets	 	 8.88%	 8.20% 	7.78%


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.  In addition, recently enacted 
legislation will increase the competition the Bank faces from savings and loan 
associations, and credit unions for the deposit and loan business of 
individuals.  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.


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, 1997.

		During 1991, Congress passed the Federal Deposit Insurance Corporation 
Improvement Act of 1991("FDICIA"), which focused primarily on tightening the 
supervision of banks and thrifts and recapitalizing the Bank Insurance Fund 
("BIF").  Among other things, FDICIA requires federal bank regulatory 
authorities to take "prompt corrective action" with respect to inadequately 
capitalized banks.  FDICIA established five tiers of capital management ranging 
from "well capitalized" to "critically undercapitalized."  If a bank does not 
meet any of the minimum capital requirements set by its regulators, FDICIA 
requires certain responses, such as that the bank submit a plan, guaranteed by 
its holding company, to restore its capital to adequate levels.  The Company has
a policy to maintain capital ratios above the "well capitalized" levels.

		As deposits of the Bank are insured by the BIF as administered by the FDIC, 
the Bank is subject to FDIC insurance assessments.  For purposes of determining 
insurance premium assessments, the FDIC places each insured bank in one of nine 
risk categories base on its level of capital and other relevant information 
(such as supervisory evaluations).  Assessment rates for deposit premiums 
currently range from zero to 0.27 percent, depending on the assessment category 
into which the insured institution is placed.

		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.

		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 Commissioner of the California Department of 
Financial Institutions (the "Commissioner") to close a bank, if the Commissioner
finds that the bank's tangible shareholders' equity is less than the greater of 
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 provided for a one time assessment, paid on November 30, 1996, of 
approximately 65 basis points per $100 of deposits of SAIF insured deposits 
including SAIF insured deposits that 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 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.

		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 Commissioner 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 Commissioner.

		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, which 
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.

		On December 17, 1993, the Resolution Trust Corporation Completion Act (the 
"RTCCA") was enacted.  The RTCCA provides additional funding for failed savings 
associations under the jurisdiction of the Resolution Trust Corporation.  In 
addition to providing such funding, the RTCCA, among other things, makes it more
difficult for the federal banking agencies to obtain prejudgment injunctive 
relief against depository institutions and parties affiliated with such 
institutions, extends the moratorium on depository institutions converting from 
SAIF insurance to BIF insurance or vice versa, and prohibits the Federal Deposit
Insurance Corporation (the "FDIC") from using any deposit insurance funds to 
benefit the shareholders of a failed or failing depository institution.

		The Omnibus Budget Reconciliation Act of 1993 (the "Budget Act"), which was 
signed into law on August 10, 1993, contains numerous tax and other provisions 
which may affect financial institutions and their businesses.  The Budget Act 
contains a provision that establishes a priority for depositors, or the FDIC as 
subrogee thereof, in the event of a liquidation or other resolution of an 
insured depository institution for which a receiver is appointed after August 
10, 1993.  In addition, under the existing cross-guarantee provisions of federal
banking law, the FDIC has the power to estimate the cost of the failure of an 
insured depository institution and assess a charge against any financial 
institution affiliated with the failed institution.

		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.


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 Company's 1995 federal income tax return is currently under examination 
by the Internal Revenue Service.  Although the examination has not yet 
concluded, it is not expected to result in a material adjustment to the tax 
return nor a material adverse affect on the financial statements.


Employees

		The Bank had 112 full-time and 9 part-time employees, including 43 principal 
officers as of February 28, 1998.  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 Bancorp'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, 1997 
are detailed below.  None of the leases contain any unusual terms and all are 
"net" or "triple net" leases.

                        									Expiration	Square	Monthly	Renewal     	Book
 Office Location         		          Date	   Feet  Rental  Options      Value

Branches
77 Plaza Square, Orange            	04/30/03	 9,443	$4,110	4 @ 5 yrs.	$  704,258
1800 West Katella Avenue, Orange(1) 12/31/07	 5,266	 8,057	2 @ 5 yrs.        	-
7510 East Chapman Avenue, Orange	  	11/30/04	 3,300	10,278	2 @ 5 yrs.   	135,043
800 Glenneyre, Laguna Beach			      08/31/07	 5,894	 9,933	1 @ 5 yrs.	   168,805
25255 Cabot Road, Laguna Hills			   01/01/04 	6,737 	7,544	3 @ 5 yrs.	   235,581

Administration
2117 West Orangewood Avenue, Orange	08/31/98  5,260 	5,733		-
115 North Glassell Street, Orange			12/31/00 	3,200	 1,742	1 @ 5 yrs.	    32,920
1249 East Katella Avenue, Orange(2) 01/06/03 13,845 11,429	2 @ 5 yrs.	        -

                                                        										 			$1,276,607


(1)	Estimated cost of $250,000 for branch leasehold improvements all incurred in
    1998.
(2)	Estimated cost of $140,000 for office leasehold improvements all incurred in
    1998.



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 Bancorp is or may become a party, 
which may have a materially adverse effect upon the Bank, the Bancorp or their 
property.   However, in the normal course of business, the Bank, or the Bancorp 
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 Bancorp.


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

		On February 13, 1996, Orange National Bancorp shares of common stock 
commenced trading on the National Association of Securities Dealers Automated 
Quotation (NASDAQ), under the 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 bid prices for 
the Company's common stock since the first quarter of 1995.


                                   1997            1996           1995

	Calendar Quarter		           High	     Low    High     Low	  High 	  Low

		1st quarter	            		$15.125 	$13.125 	$12.50 	$10.50	 $5.95 	$4.75
  
 	2nd quarter             			18.000  	13.750	  15.00  	11.75  	7.15  	5.45

		3rd quarter             			21.125  	17.500  	14.50  	13.25  	9.50  	6.35
  
		4th quarter	             		24.250  	19.750  	13.75  	12.75 	10.50  	9.25

		Market quotations prior to February 13, 1996 reflect inter-dealer prices, 
without retail markup, markdown, or commission and may not necessarily represent
actual transactions.


History of Cash and Stock Dividends and Stock Splits
  
		The Company has a history of paying cash dividends to its stockholders.  The 
following table summarizes the cash dividend history of the Company:


									                   Dividends Paid   
				Year				 Per Share	      Total

				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


		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.

		On January 21, 1998, the Company declared a $0.35 per share dividend on its 
common stock consisting of a quarterly dividend of $0.10 per share and a special
dividend of $0.25 per share.

		The Company had approximately 457 stockholders of record as of February 28, 
1998.


Transfer Agent and Registrar
  
		CHASEMELLON Shareholder Services
		400 South Hope Street, Fourth Floor
		Los Angeles, California 90071



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, 1997 and 
1996 and for the three years in the period ended December 31, 1997 and the 
report thereon of McGladrey & Pullen, LLP are included with Item 14 of this Form
10-K.

									                  1997	     1996      1995      1994      1993
             										(dollars in thousands, except for per share amounts)

Financial condition 

Total assets			        		$242,279 	$218,845 	$207,928 	$206,510	 $193,290

Loans (net)	         					131,189  	118,991  	112,724	  112,703  	113,670

Deposits	            					218,792  	198,364  	188,991  	190,406  	177,571

Stockholders' equity	    		21,586   	18,956   	17,262   	14,782   	14,543


Results of operations

Interest income		       		$16,857  	$15,894  	$16,571  	$13,908  	$12,416

Net interest income		     	13,504   	12,375	   13,430   	11,400    	9,792

Provisions for possible
 credit losses	             		140      	205      	320      	298      	394
  
Other income	           				3,707    	2,713    	2,781    	2,612    	2,279

Other expense	         				11,776   	11,547   	12,187   	11,962   	11,744

Income from
 continuing operations		   	5,295    	3,336    	3,703    	1,060      	457

Loss from
 discontinued operations    			-        	-	        -	      (225)    	(258)

Net earnings		           			3,198    	2,201    	2,524      	835      	199


Basic earnings per share		 	$1.63    	$1.13    	$1.30    	$0.43    	$0.10

Cash dividends per share	  		0.42     	0.37     	0.25     	0.05       	-  

Weighted average number
 of common shares
 outstanding (in thousands)	1,961    	1,944	    1,932    	1,931    	1,931


		Earnings per share from continuing operations in 1994 and 1993 were $.58 and 
$.25, respectively.  Earnings per share prior to 1995 are restated to reflect 5%
stock dividends in 1995


ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
				RESULTS OF OPERATIONS

		This filing contains forward-looking statements, which involve risks and 
uncertainties.  The Company's actual future results may differ significantly 
from the results discussed in the forward-looking statements.  Factors that 
might cause a difference include, but are not limited to, loan demand, deposit 
withdrawals, interest rates, particularly the spread between loan rates and 
deposit rates, the effect of the Southern California economy and real estate 
values, and other general business risks.


Financial Condition

		The Company experienced continued asset growth in 1997.  Total assets were 
$242.3 million as of December 31, 1997, an increase of $23.5 million or 10.7% 
from the $218.8 million as of December 31, 1996.  Total assets increased $10.9 
million or 5.3% in 1996.

		Total interest-earning assets were $200.0 million as of December 31, 1997, 
an increase of $15.3 million or 8.3% from the $184.7 million as of December 31, 
1996.  Total interest-earning assets increased $15.5 million or 9.1% in 1996.  
The Company continues to focus its efforts on originating quality loans.  Much 
of the increase in the loan portfolio was funded from the sales and maturities 
of investment securities and to a lesser extent by the increase in deposits.
 
 		The investment securities portfolio was $18.2 million as of December 31, 
1997, a decrease of $21.8 million or 54.6% from the $40.0 million as of December
31, 1996.  The investment securities portfolio increased $0.4 million or 1.1% in
1996.  The decrease in 1997 resulted from the sale and maturity of investment 
securities.  The Company did not purchase investment securities in 1997 due to 
the flat yield curve.  Thus funds that in the past might have been used to 
purchase investment securities were kept in federal funds sold.  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 held-to-maturity and U.S. Treasury 
and Agency securities are classified as available-for-sale.  The market values 
increased slightly in 1997 resulting from a slight decrease in short-term and 
long-term interest rates.

		The loan portfolio was $131.2 million as of December 31, 1997, an increase 
of $12.2 million or 10.3% from the $119.0 million as of December 31, 1996.  The 
loan portfolio increased $6.3 million or 5.6% in 1996.  The increase in 1997 
resulted from increased 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 $218.8 million as of December 31, 1997, an increase of 
$20.4 million or 10.3% from the $198.4 million as of December 31, 1996.  Total 
deposits increased $9.4 million or 5.0% in 1996.  Deposit increases between 
years reflect general increases in balances maintained by large depositors.


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 60.0% at both December 31, 1997 and 1996.  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 44.5% and 30.8% as of December 31, 1997
and 1996, respectively.  The increase of the liquid asset ratio resulted from 
the increase in federal funds sold and cash due from banks.  Cash was invested 
in federal funds sold in lieu of purchases of longer term investment securities 
due to the flat yield curve.

		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 $28.1 million as of December 31, 1997.

		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 $12.4 
million as of December 31, 1997.  Liquidity needs can 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 $3.0 million.  The Company has yet to use these 
facilities.  The Company is currently negotiating with an additional borrowing 
source.

		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, 1997.

                                                                    To Be Well
                                                                   Capitalized
                											                               For      Under Prompt
                                       											      Capital     Corrective
									                           	                   Adequacy      Action
   		                                 						Actual	     Purposes    Provisions
                                 								Amount	Ratio	Amount	Ratio	Amount	Ratio
									                                        	(dollars in thousands)
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%

December 31, 1996
Total capital (to risk-weighted assets)	$19,937	13.3%	$11,993	8.0%	$14,991	10.0%
Tier I capital (to risk-weighted assets)	18,568	12.4%	  5,996	4.0%  	8,995	 6.0%
Tier I capital (to average assets)	     	18,568 	8.3%	  8,907	4.0% 	11,134 	5.0%

		Management believes that the Bank is properly and adequately capitalized, as 
evidenced by these ratios as of December 31, 1997.  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.


Results of Operations

		Total interest income was $16.9 million in 1997, an increase of $1.0 million 
or 6.1% from the $15.9 million in 1996.   Total interest income in 1996 
decreased $0.7 million or 4.1% from the $16.6 million in 1995.  The average 
interest-earning assets were $185.1 million in 1997, an increase of $2.1 
million, or 1.2% from the $183.0 million in 1996.  The average interest-earning 
assets  in 1996 increased $6.3 million or 3.6% from the $176.7 million in 1995.
The average yield increased in 1997 by 0.4% over 1996 and decreased in 1996 by 
0.7% from 1995.  The increase in interest income in 1997 resulted from a larger 
average interest-earning assets and a generally higher short-term interest rate 
environment.  A lower general interest rate environment existed in 1996.

		Interest income on loans was $13.7 million in 1997, an increase of $2.0 
million or 16.9% from the $11.7 million in 1996.  Total interest income on loans
in 1996 decreased $1.2 million or 9.6% from the $13.0 million in 1995.  The 
increase in 1997 resulted from the increase in the average loan portfolio during
1997 in spite of lower long-term interest rates as compared to 1996.  The 
average loan portfolio was $129.6 million in 1997, an increase of $21.3 million 
or 19.6% from the $108.3 million in 1996.  The yield on the loan portfolio was 
10.6% in 1997, a decrease of 0.2% from the 10.8% in 1996.  The average loan 
portfolio in 1996 decreased $4.9 million or 4.3% from the $113.2 million in 
1995.  The increase in the average loan portfolio resulted from increased loan 
demand during 1997 over 1996.  The yield on loans changes with the movements in 
the prime rate as approximately 72% of the loan portfolio are based on variable 
rates.

		Interest income on securities was $1.6 million in 1997, a decrease of $1.0 
million or 40.1% from the $2.6 million in 1996.  Interest income on securities 
in 1996 increased $0.1 million or 6.3% from the $2.5 million in 1995.  The 
decrease in interest income on securities in 1997 resulted from the decrease in 
the average investment securities portfolio.  The average balance of securities 
was $26.1 million in 1997, a decrease of $18.8 million or 41.8% from the $44.9 
million in 1996.  The yield on securities was 6.0% in 1997, an increase of 0.2% 
from the 5.8% in 1996.  The increase in interest income from securities in 1996 
resulted from the slight increase in the average balance of securities and 
slightly higher yields.  The average balance of securities in 1996 increased 
$1.9 million or 4.3% from the $43.1 million in 1995.  The yield on securities 
increased 0.1% in 1996 from 1995.

		Interest income on federal funds sold remained constant at $1.6 million in 
1997 and 1996.  Interest income on federal funds sold in 1996 increased $0.4 
million or 35.7% from the $1.1 million in 1995.  The interest income on federal 
funds sold remaining constant resulted from a decrease in the average balance of
federal funds sold and offset by a slight yield increase 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.  The increase in 
1996 was due to increased average balances from 1995.  The average balance in 
federal funds sold in 1996 increased by $9.4 million or 45.9% from the $20.4 
million in 1995.

		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 decrease resulted from a decrease in 
interest-bearing deposits in spite of a very slight increase in deposit rates.  
The average interest-bearing deposits were $122.8 million in 1997, a decrease of
$7.2 million or 5.5% from the $130.0 million in 1996.  The average rate paid on 
such deposits was 2.7% in 1997, an increase of 0.02% in 1997.  Interest was $3.5
million in 1996, an increase of $0.4 million or 12.0% from the $3.1 million in 
1995.  The 1996 increase resulted from an increase in the average rate paid and 
the average interest-bearing deposits.  The rate increase in 1996 was 0.20% over
the 2.5% in 1995.  The average interest-bearing deposits in 1996 increased $4.8 
million or 3.8% from the $125.2 million in 1995.

		The provision for credit losses was $140,000, $205,000 and $320,000 in 1997, 
1996 and 1995, respectively.  The decreased provision in 1997 from 1996 and 1995
reflect a higher quality loan portfolio resulting from an improved local economy
in Orange County.  The Company also experienced increased recoveries in 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 1998 is promising.  However, assurance cannot be made as to
its realization 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 $3.7 million in 1997, an increase of $1.0 million or 36.6% 
from the $2.7 million in 1996.  The 1997 increase resulted from increased gains 
on the sale of SBA loans and increased service charges on deposits.  Other 
income in 1996 decreased $0.1 million or 2.4% from the $2.8 million in 1995.  
The 1996 decrease resulted from a decline in gains on loan sales in 1996 as 
compared to 1995.

		Other expenses were $11.8 million in 1997, an increase of $0.3 million or 
2.0% from the $11.5 million in 1996.  Other expenses in 1996 decreased $0.7 
million or 5.3% from the $12.2 million in 1995.  The 1996 decrease resulted from
lower FDIC insurance costs and lower other real estate owned expenses.

		Provision for income taxes was $2.1 million in 1997, an increase of $1.0 
million or 84.6% from the $1.1 million in 1996.  The 1997 increase results from 
the Company income tax provision computed at the full tax rate on higher pretax 
earnings, without a reduction of the valuation allowance on the deferred tax 
asset.  The pretax earnings were $5.3 million in 1997, an increase of $2.0 
million or 58.7% from the $3.3 million in 1996.  A reduction of the valuation 
allowance on the deferred tax asset lowered the fully taxable amount $0.2 
million in 1996.  The provision for income taxes in 1996 decreased $0.1 million 
or 3.7% from the $1.2 million in 1995.  The decrease in 1996 resulted from lower
pretax earnings and a smaller reduction of the Company's valuation allowance on 
the deferred tax asset.  The deferred tax asset valuation reduction in 1996 
decreased $0.3 million from the $0.5 million in 1995.  In 1996 and 1995, 
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 and 1995.  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 $3.2 million in 1997, an increase $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 and gains on sales of loans of $0.8 million, and
offset by increases in taxes of $1.0 million.  The decrease in 1996 resulted 
from decreased interest income of $1.0 million, increase interest expense of 
$0.4 million and offset by reductions in other expenses of $0.7 million.   While
management is optimistic about the future, the effects of current economic 
conditions on the collectibility of loans cannot be predicted with absolute 
certainty and its effects on future profitability cannot be determined.


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.
 
		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 9 of Notes to Consolidated 
Financial Statements.


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, 1997:

                                            												After one
									                       Due within  Due within 	but within   	After
								                      		0-3 months	 4-12 months	five years	five years
                              											     (dollars in thousands)

Interest-earning assets (1)		   	$147,999    	$ 3,152    	$25,034  	 $23,821
Interest-bearing liabilities			  	118,397     	 6,035  	    1,191         -

Repricing gap			              			  29,602     	(2,883)    	23,843   	 23,821

Cumulative repricing gap	    			 $ 29,602    	$26,719    	$50,562   	$74,383

Cumulative gap as a percent of
 earning assets	                 		14.8%      	13.4%      	25.3%     	37.2%


(1)	Includes collateralized mortgage obligations in the one-year to five-year 
maturities based on the average expected lives.


		The Company had available-for-sale securities of $9.1 million recorded at 
market value as of December 31, 1997.  The available-for-sale securities consist
of medium-term government agency notes.  The Company also had held-to-maturity 
securities of $9.0 million recorded at amortized cost as of December 31, 1997. 
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 $148.0 million of interest-earning assets and $102.9 million 
of interest-bearing demand and savings deposits as of December 31, 1997 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 $1.0 million.


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 Company is currently conducting a comprehensive review of its computer, 
including third-party vendors, and environmental systems to identify the systems
that could be affected by the "Year 2000" issue and is developing an 
implementation and monitoring plan to resolve the issue.  The Year 2000 is the 
result of computer programs being written using two digits (rather than four) to
define the applicable year.  Any of the vendor programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year 
2000.  This could result in a major system failure or miscalculations.  The 
Company presently believes that, with modifications to existing vendor software 
and upgrading to new software packages, the Year 2000 problem will not pose 
significant operational problems for the Company's computer systems as so 
modified and converted.  The Company also believes the costs of these 
modifications and upgrading will not have a material adverse impact on its 
results of operations.  However, if such modifications and upgrades are not 
completed timely, the Year 2000 may have a material impact on the operations of 
the Company.


Effect of FASB Statements

		During 1997, the Company adopted Statement of Financial Accounting Standards 
No. 128, "Earnings Per Share" ("SFAS 128"), which supersedes APB Opinion No. 15.
SFAS 128 requires the presentation of earnings per share by all entities that 
have common stock or potential common stock, such as options, warrants and 
convertible securities outstanding that trade in a public market.  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 Company initially 
adopted SFAS 128 for its annual and interim periods ended December 31, 1997.  
The reported earnings per share for 1996 and 1995 have been restated to conform 
to SFAS 128.  The weighted-average shares outstanding used to compute dilutive 
earnings per share included incremental shares from options of 38,365; 7,658; 
and 9,674 for the years ended December 31, 1997, 1996 and 1995, respectively.

		In June 1997, FASB issued Statement of Financial Accounting Standards No. 
130, "Reporting Comprehensive Income" ("SFAS 130").  SFAS 130 requires an entity
to include a statement of comprehensive income in its full set of general-
purpose financial statements.  Comprehensive income consists of the net earnings
or loss of the entity plus or minus the change in equity of the entity during 
the period from transactions, other events, and circumstances resulting from 
non-owner sources.  SFAS 130 is effective for years beginning after December 15,
1997 and will require statements of comprehensive income for earlier years to be
presented for comparative purposes.

		In June 1997, FASB issued Statement of Financial Accounting Standards No. 
131, "Disclosures About Segments of an Enterprise and Related Information"
("SFAS 131").  SFAS 131 requires a publicly-held entity to disclose financial 
and descriptive information about all of its operating segments.  SFAS 131 will 
require disclosure of net earnings or loss, certain specific revenue and expense
items, and assets for each segment presented and disclosure of a reconciliation 
of this information with the corresponding amounts recognized in the financial 
statements of the entity.  SFAS 131 will also require disclosure of other 
pertinent segment information, including the products and services provided by 
its operating segments and the method by which the operating segments were 
determined.  SFAS 131 is effective for years beginning after December 15, 1997 
and will require comparative information of earlier years presented to be 
restated.  The Company has not determined if the adoption of SFAS 131 will 
require it to report segment information.

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


ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

		The consolidated financial statements of the Company follow on pages 
F-1 to F-24.  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.


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, 1997 and 1996		         F-2

				Consolidated statements of earnings for the three years ended
    December 31, 1997     		                                        							F-3

				Consolidated statements of stockholders' equity for the three years 
    ended December 31, 1997		                                         					F-4

				Consolidated statements of cash flows for the three years ended
    December 31, 1997		                                             							F-5

				Notes to consolidated financial statements			                 	F-6 to F-24



				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 39 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, 1997.

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 18, 1998
		 Kenneth J. Cosgrove, President
		 and Chief Executive Officer



By:		/s/ ROBERT W. CREIGHTON		    	         Date:    MARCH 18, 1998
		 Robert W. Creighton, Secretary
		 and Chief Financial Officer



By:		/s/ JERRO M. OTSUKI                 			Date:    	MARCH 18, 1998
		 Jerro M. Otsuki, Vice President
		 and Controller









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 18, 1998	
		 Michael W. Abdalla				                   Date
		 Director


			/s/ MICHAEL J. CHRISTIANSON				          MARCH 18, 1998	
		 Michael J. Christianson			               Date
		 Director					


			/s/ KENNETH J. COSGROVE				              MARCH 18, 1998	
		 Kenneth J. Cosgrove				                  Date
		 Director


			/s/ ROBERT W. CREIGHTON				              MARCH 18, 1998	
		 Robert W. Creighton				                  Date
		 Director


			/s/ CHARLES R. FOUGLER	              			 MARCH 18, 1998	
		 Charles R. Foulger				                   Date
		 Director


			/s/ GERALD R. HOLTE	                 			 MARCH 18, 1998	
		 Gerald R. Holte				                      Date
		 Director


			/s/ JAMES E. MAHONEY	                			 MARCH 18, 1998	
		 James E. Mahoney				                     Date
		 Director


			/s/ WAYNE F. MILLER				                  MARCH 18, 1998	
		 Wayne F. Miller				                      Date
		 Director


			/s/ SAN E. VACCARO					                  MARCH 18, 1998	
		 San E. Vaccaro				                       Date
		 Director
         

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.
	10.6	Lease of Bank premises located at 1800 West Katella Avenue, Orange, 
California.
	10.7	Lease of Bank premises located at 7510 East Chapman Avenue, Orange, 
California.
	10.8	Lease of Bank premises located at 800 Glenneyre, Laguna Beach, 
California.
	10.9	Lease of Bank premises located at 25255 Cabot Road, Laguna Hills, 
California.
	10.10	Lease of Bank premises located at 1249 East Katella Avenue, Orange, 
California.
	10.11	Deferred fee agreement of the Bank with Kenneth J. Cosgrove.
	10.12	Deferred fee agreement of the Bank with Robert W. Creighton.
	10.13	Deferred fee agreement of the Bank with Charles R. Fougler.
	10.14	Deferred fee agreement of the Bank with San E. Vaccaro.
	10.15	Deferred fee agreement of the Bank with James E. Mahoney.
	10.16	Deferred fee agreement of the Bank with Gerald R. Holte.
	10.17	Salary continuation agreement of the Bank with Kenneth J. Cosgrove.
	10.18	Salary continuation agreement of the Bank with Robert W. Creighton.
	10.19	Deferred compensation agreement of the Bank with Kenneth J. Cosgrove.
	10.20	Employment contract of the Bank with Kenneth J. Cosgrove.
	10.21	Employment contract of the Bank with Robert W. Creighton.
	10.22	Employment contract of the Bank with Frank A. DelGiorgio.

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

 23		Consent of Independent Accountants, page 40.

	27		Financial Data Schedule.

EXHIBIT 23.1


CONSENT OF INDEPENDENT ACCOUNTANTS


To The Board of Directors
Orange National Bancorp
Orange, California



		We hereby consent to the incorporation by reference in the Registration 
Statement on Forms S-8, dated August 20, 1993, and January 22, 1998, of Orange 
National Bancorp of our report dated January 16, 1998, appearing in Item 8 in 
this Annual Report on Form 10-K.

 
 
 

McGLADREY & PULLEN, LLP



Anaheim, California
March 18, 1998





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, 1997 and 1996, and the related 
consolidated statements of earnings, stockholders' equity and cash flows for 
each of the three years in the period ended December 31, 1997.  These financial 
statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements based on 
our 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, 1997 and 1996, and the results of 
their operations and their cash flows for each of the three years in the period 
ended December 31, 1997, in conformity with generally accepted accounting 
principles.

As described more fully in Note 1 to the consolidated financial statements, the 
Company changed its definition of cash and cash equivalents during the year 
ended December 31, 1997.



McGLADREY & PULLEN, LLP



Anaheim, California
January 16, 1998



ORANGE NATIONAL BANCORP
CONSOLIDATED BALANCE SHEETS
December 31, 1997 and 1996



                                    										       1997	        1996
                     										                   (dollars in thousands)

Assets
Cash and cash equivalents (Note 2):			           	$ 81,147   	$  46,436 
Securities (Note 3): 
	Held-to-maturity securities (fair value
  of $8,972 in 1997
		and $10,844 in 1996)			                           	9,037      	10,937
 	Available-for-sale securities 	 		                	9,146      	29,073
Loans, net of allowance for credit losses
 of $1,581 in 1997
	and $1,369 in 1996 (Notes 4, 5 and 12) 	 		      	131,189	     118,991
Premises and equipment, net (Note 6) 				            5,057       	5,213 
Other real estate owned, net (Note 5) 	 			            126       	2,446 
Accrued interest receivable 	 		                      	985       	1,352 
Cash value of life insurance 	                    			4,808       	3,717 
Other assets  (Note 8)	                      			       784	         680

  									                                      	$242,279	    $218,845


Liabilities 	 	 	 	 
Deposits (Note 7) 	 	                         	 	 $218,792    	$198,364
Accrued interest payable and other liabilities 			   1,901   	    1,525

			Total liabilities			                           	220,693     	199,889  

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 1,970,046 in 1997
  and 1,952,671 in 1996                           			7,864       	7,676 
	Retained earnings  			                            	13,778      	11,403
	Unrealized (loss) on available-for-sale
  securities, net (Note 3)                    		       (56)	       (123)

			Total stockholders' equity 	 			                 21,586    	  18,956

                                        										$242,279    	$218,845











See Notes to Consolidated Financial Statements.
ORANGE NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF EARNINGS
Years Ended December 31, 1997, 1996 and 1995



					                                				     1997	     1996	     1995
     									                        (in thousands, except per share data)

Interest Income
	Loans				                                		$13,686  	$11,712  	$12,954
	Securities		                              			1,573    	2,627    	2,471
	Federal funds sold                      			  1,598  	  1,555	    1,146

			Total interest income                  			16,857	   15,894   	16,571

Interest Expense, deposits 	              		  3,353  	  3,519	    3,141

			Net interest income                    			13,504   	12,375   	13,430

Provision for Credit Losses (Note 5) 			        140	      205	      320

			Net interest income after
    provision for credit losses            		13,364   	12,170   	13,110

Other Income (Note 9)		                      	3,707	    2,713    	2,781

Other Expenses (Notes 9 and 10)		           	11,776   	11,547   	12,188

			Earnings before income taxes		            	5,295    	3,336    	3,703

Provision for Income Taxes (Note 8) 			       2,097  	  1,135  	  1,179

			Net earnings (Note 11)	               		 $ 3,198  	$ 2,201  	$ 2,524






Basic earnings per share	               		  $  1.63 	 $  1.13  	$  1.31

Weighted average number of common shares
 outstanding (in thousands)		                 1,961  	  1,944  	  1,932


Diluted earnings per share			               $  1.60  	$  1.13  	$  1.30

Weighted average number of common shares
 and diluted potential
 common shares (in thousands)		               2,000  	  1,951	    1,941






See Notes to Consolidated Financial Statements.
ORANGE NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 1997, 1996 and 1995



                                               										Unrealized
                                               										Gain (Loss)
                                                										Available-
							               	          Common Stock  	Retained  	For-Sale
                  							        Shares	Amount 	Earnings  Securities   Total
                                       (in thousands, except share data)

Balance, December 31, 1994      	1,839 	$6,848 	 $8,514	    $(580) 	  $14,782

Net earnings		                     	-      	-    	2,524       	-       	2,524
Cash dividend paid ($.25 per share) -      	-     	(474)      	-        	(474)
Stock dividend paid (5% per share)	 92    	644    	(644)      	-          	-
Exercise of stock options	           3     	18      	-        	-          	18 
Net change in unrealized (loss)
	on available-for-sale
	securities (Note 3) 	              -       - 	      -       	411	        411

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 
Net change in unrealized gain
	(loss) on available-for-sale
	securities (Note 3) 	              -       -        -      	  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 
Net change in unrealized gain
	(loss) on available-for-sale
	securities (Note 3) 	              - 	     -        -      	  67	         67

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













See Notes to Consolidated Financial Statements.
ORANGE NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1997, 1996 and 1995



                                        									     1997	    1996     1995
                  		                                  (dollars in thousands)

Cash Flows from Operating Activities
	Net earnings				                                  $  3,198  $ 2,201  $ 2,524 
	Adjustments to reconcile net earnings to net cash
		provided by operating activities:
		Depreciation and amortization 		                     	504     	537    	 535  
		Provision for credit losses 		                       	140     	205     	320
		Deferred income taxes (benefits) 		                 	(111)	    (78)   	(309)  
		(Gain) on sale of loans 		                        	(1,374)   	(560)  	 (755) 
		Provision for losses on other real estate owned		      11     	160     	304
		Proceeds from loan sales 		                       	19,264   	5,984   	5,429
		Origination of loans held for sale 		            	(17,890) 	(5,424) 	(4,674)  
		(Increase) decrease in other assets 			               374    	(615)    	287
		Gain on cash value of life insurance		              	(219)   	(183)    	(23)
		Increase in other liabilities 			                     376	     435	     399

			Net cash provided by operating activities 		       4,273    2,662    4,037

Cash Flows from Investing Activities
	Proceeds from maturities of
  held-to-maturity securities	                       	1,909   	1,542  	 4,400
	Purchase of available-for-sale securities	            		-  	(38,482) (16,884)  
	Proceeds from sales and maturities of
  available-for-sale securities                     	19,986  	36,565  	14,748
	Net increase in loans made to customers 		        	(11,460) 	(7,274) 	(3,262)  
	Purchase of life insurance policies		                	(872)     	-   	(3,515) 
	Proceeds from sale of other real estate owned		      1,431   	1,396     	841
	Purchases of bank premises and equipment 	      	     (349)    (223)    (675)

			Net cash provided by (used in)
    investing activities 	                        	  10,645	  (6,476)  (4,347)

Cash Flows from Financing Activities
	Net increase (decrease) in deposits 		             	20,428   	9,372	  (1,414)
	Proceeds from exercise of stock options			             188     	166      	18
	Dividends paid			                                     (823)	   (718)    (474)

			Net cash provided by (used in)
  	 financing activities                        	 	  19,793	   8,820	  (1,870)

			Increase (decrease) in cash and cash equivalents 	34,711   	5,006 	 (2,180)

Cash and cash equivalents at beginning of year		     46,436	  41,430	  43,610

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






See Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.  Certain amounts in prior years' financial statements have been 
reclassified to conform to the current presentation.

	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

		In prior years, the Company had included cash on hand, cash due from banks 
and time deposits in its definition of cash and cash equivalents for purposes of
balance sheet presentation and reporting the statement of cash flows.  During 
the year ended December 31, 1997, the Company changed its definition of cash and
cash equivalents to also include federal funds sold.  This change in definition 
was made to report the statement of cash flows on a basis consistent with the 
Company's cash management policy.  As required by generally accepted accounting 
principles, the prior year's balance sheet and statements of cash flows have 
been restated to conform to the new definition of cash and cash equivalents.  In
those prior statements, federal funds sold were reported separately in the 
balance sheet and in the investing activities in the statements 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 increases or decreases in stockholders' equity.  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.

	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 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 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 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 book 
value 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.

		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, 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"), as of January 1, 1996. 
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" 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

		During 1997, the Company adopted Statement of Financial Accounting Standards 
No. 128, "Earnings Per Share" ("SFAS 128"), which supersedes APB Opinion No. 15.
SFAS 128 requires the presentation of earnings per share by all entities that 
have common stock or potential common stock, such as options, warrants and 
convertible securities outstanding that trade in a public market.  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 Company initially 
adopted SFAS 128 for its annual and interim periods ended December 31, 1997.  
The reported earnings per share for 1996 and 1995 have been restated to conform 
to SFAS 128.  The weighted-average shares outstanding used to compute dilutive 
earnings per share included incremental shares from options of 38,365; 7,658; 
and 9,674 for the years ended December 31, 1997, 1996 and 1995, respectively.

	Current accounting developments

		In June 1997, FASB issued Statement of Financial Accounting Standards No. 
130, "Reporting Comprehensive Income" ("SFAS 130").  SFAS 130 requires an entity
to include a statement of comprehensive income in its full set of general-
purpose financial statements.  Comprehensive income consists of the net earnings
or loss of the entity plus or minus the change in equity of the entity during 
the period from transactions, other events, and circumstances resulting from 
non-owner sources.  SFAS 130 is effective for years beginning after December 15,
1997 and will require statements of comprehensive income for earlier years to be
presented for comparative purposes.

		In June 1997, FASB issued Statement of Financial Accounting Standards No. 
131, "Disclosures About Segments of an Enterprise and Related Information"
("SFAS 131").  SFAS 131 requires a publicly-held entity to disclose financial 
and descriptive information about all of its operating segments.  SFAS 131 will 
require disclosure of net earnings or loss, certain specific revenue and expense
items, and assets for each segment presented and disclosure of a reconciliation 
of this information with the corresponding amounts recognized in the financial 
statements of the entity.  SFAS 131 will also require disclosure of other 
pertinent segment information, including the products and services provided by 
its operating segments and the method by which the operating segments were 
determined.  SFAS 131 is effective for years beginning after December 15, 1997 
and will require comparative information of earlier years presented to be 
restated.  The Company has not determined if the adoption of SFAS 131 will 
require it to report segment information.


Note 2.	Cash and cash equivalents

		Cash and cash equivalents consisted of the following as of December 31:


										                                          1997	     1996
                 										                    (dollars in thousands)

	Cash on hand			                               		 $ 1,827  	$ 1,330
	Cash due from banks		                           		27,820   	18,206
	Time deposits			                                    		-       	100
	Federal funds sold			                            	51,500   	26,800

								                                        		$81,147  	$46,436


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

		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 $4,973,000 and $6,962,000 as of December 31, 1997, respectively.


Note 3.	Securities

		Carrying amounts and fair values of held-to-maturity securities are 
summarized as follows as of December 31:

								                       Amortized 	Unrealized 	Unrealized   	Fair
              								            Cost	     Gains	      Losses	    Values
               									                  (dollars in thousands)

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

					1996
	Mortgage-backed securities		   $10,937  	$     -      	$(93)    	$10,844


		Held-to-maturity securities pledged as collateral on public deposits and 
treasury, tax and loan payments had a carrying amount of $5,748,000 and 
$4,004,000 at December 31, 1997 and 1996, respectively.


		Carrying amounts and fair values of available-for-sale securities are 
summarized as follows as of December 31:

                       								Amortized	 Unrealized 	Unrealized  	Fair
								                          Cost	      Gains      Losses	   Values
               									                  (dollars in thousands)

					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

					1996
	U.S. Treasury securities
  and obligations
		of other U.S. Government
		corporations and agencies 	  	$28,992      	$44	      $(137)  	$28,899
	Other		                   				     174	       -  	        -   	     174

                        								$29,166      	$44      	$(137)  	$29,073


		The amortized cost and fair value of investment securities by contractual 
maturities as of December 31, 1997 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, these securities are not included  in the following maturity summary:


                                      Held-to-Maturity   Available-for-Sale
                               							Amortized 	Fair    	Amortized 	Fair
                        								        Cost   	Value       Cost   	Value
                  									                   (dollars in thousands)

	Due in one year or less		             $   -   	$   -    	$1,000  	$  993
	Due after one year through five years		   -       	-     	3,996   	3,991
	Due in six years through ten years		      -       	-     	1,000   	1,001
	Due after ten years		                     -       	-     	2,996   	2,991
	Mortgage-backed securities		           9,037   	8,972       	-       	-  
	Other			                         			      -        -    	   170  	   170
 
	                               					 	$9,037  	$8,972   	$9,162  	$9,146


		Available-for-sale securities of $14,002,000, $20,999,000 and $14,847,000 
were sold resulting in gross realized (losses) of $(9,000), $(24,000), and 
($20,000) in 1997, 1996 and 1995, respectively.


Note 4.	Loans

		The Company's loan portfolio consisted of the following as of December 31:

                                       										       1997	      1996
                        										                  (dollars in thousands)
	Real estate loans					
		Construction				                                   $    118  	$  1,412
		Commercial		                                     		  78,534  	  64,611

                                             										78,652    	66,023

	Commercial and industrial loans              			     	44,301    	44,766
	Loans to individuals			                              	10,586    	10,256
	Other								                                            122	       152
										                                            133,661   	121,197
	Deduct					
		Unearned net loan fees and premiums			                	(891)     	(837)
		Allowance for credit losses				                      (1,581)	   (1,369)

									                                           	$131,189	  $118,991


	Impaired loans

		Information about impaired loans is as follows as of and for the years ended 
December 31:

                                              										   1997	    1996
                      										                     (dollars in thousands)

	Impaired loans requiring
  a related allowance	for credit losses	                 	$1,067  	$  905
	Impaired loans not requiring
  a related allowance for credit losses	                 	   249	     180

					Total impaired loans			                             	$1,316  	$1,085

	Related allowance for loan losses				                    $  278	  $  268

	Average balance (based on month-end balances)			         $1,201  	$1,472

	Interest income recognized			                           	$  125  	$  140


		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 $2,447,000 and $2,464,000 as of December 
31, 1997 and 1996, respectively.  Interest income that would have been earned on
such nonaccrual loans had such loans performed according to their loan terms 
would have been $325,000, $492,000 and $205,000 (earnings per share effect of 
$0.17, $0.25 and $0.11) in 1997, 1996 and 1995, 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.

	Loans serviced

		The Company services loans for others totaling $64,764,000 and $53,374,000 
as of December 31, 1997 and 1996, 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 59% of total loans as of December 31, 1997.  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:


                                   			 						   1997	   1996    1995
                              										       (dollars in thousands)

	Balance, beginning			                         $1,369	 $1,513 	$1,465
		Provision for credit losses			                  140    	205    	320
		Recoveries of amounts charged off			            138     	38    	115
		Amounts charged off			                          (66)	  (387)	  (387)

	Balance, ending		                            	$1,581	 $1,369	 $1,513


		Activity of the reserve for other	real estate owned is as follows:


                                          									1997  	1996 	 1995
                                										       (dollars in thousands)

	Balance, beginning                           		  	$252  	$301	 $  32
		Provision for losses on other real estate owned	  	11	   160   	303
		Disposal of other real estate owned		           	(246) 	(209)  	(34)

	Balance, ending		                                	$ 17  	$252  	$301


Note 6.	Premises and Equipment, net

		Premises and equipment are summarized as follows as of December 31:


                                            										   1997	    1996
										                                          (dollars in thousands)

	Land						                                           		$1,100  	$1,100
	Buildings and leasehold improvements				                4,531   	4,472
	Furniture and equipment				                             3,449   	3,242

                                               										9,080   	8,814
	Less accumulated depreciation and amortization			       4,023   	3,601

     									                                         	$5,057  	$5,213


Note 7.	Deposits

		Deposits are summarized as follows as of December 31:


                                            										   1997	      1996
                       										                     (dollars in thousands)

	Noninterest-bearing demand 	                      			 $ 93,169  	$ 77,829
	Interest-bearing: 
		Demand			 		                                          	91,282    	92,176
		Savings			 	                                         		11,622    	10,935 
		Time certificates of deposit of $100,000 or more		    	12,087     	8,809 
		Other time	                                      				  10,632	     8,615

			Total deposits		                                  		$218,792  	$198,364


		Substantially all certificates of deposit mature within one year as of 
December 31, 1997.  The Company had five customers with an aggregate deposit of
$28,095,000 as of December 31, 1997.


Note 8.	Income Taxes

		The cumulative tax effects of the primary temporary differences are shown in 
the following table:

                                              						 				  1997  	  1996
										                                             (dollars in thousands)
	Deferred tax assets				
		Credit loss allowances				                              $  407	  $  316
		Deferred compensation accruals			                         	278     	215
		Interest accruals				                                       95      	90
		Acquired net operating loss carryforward			                 85      	85
		Unrealized loss on available-for-sale securities			         38      	88
		Other real estate allowance			                              	7     	105
		State income taxes				                                     204   	  136

				Total deferred tax assets			                          	1,114   	1,035

	Deferred tax liability, premises and equipment			           696   	  678

				Net deferred tax assets				                           $  418	  $  357


		The Company did not record a valuation allowance on deferred tax assets in 
excess of deferred tax liabilities at December 31, 1997 and 1996, as management 
believes that the net deferred tax assets, as of December 31, 1997 and 1996, are
more likely than not to be realized.

		The provision for income taxes consisted of the following:


                                       									   1997	    1996	    1995
                                  										       (dollars in thousands)

	Current tax expense		                           	$2,208  	$1,213  	$1,488
	Deferred tax (benefit)			                          (111)	    (78)  	 (309)

                                         									$2,097  	$1,135  	$1,179


		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:


                                         			 						   1997	    1996	   1995
                                    										        (dollars in thousands)

	Computed "expected" tax expense 			                 $1,853  	$1,168  	$1,296
	Increase (decrease) in income taxes resulting from:
		State income taxes, net of federal tax benefit		      397     	249     	278
		Change in valuation allowance		                       	-  	   (165)   	(483)
		Cash value of life insurance		                       	(97)    	(85)     	-  
		Other		                                        				   (56)	    (32)	     88

                  								                           $2,097  	$1,135  	$1,179


Note 9.	Other income and expense

		Other income consisted of the following:
									   1997	   1996	   1995
										        (dollars in thousands)

	Service charges on deposit accounts		           	$1,262   	$1,169   	$1,113
	Fees for other customer services 		                	593      	616      	667
	Gain on sale of loans 			                         1,374      	560      	755
	Increase in cash value of life insurance			         219      	183       	-
	Other	 (Note 3)			                                  259   	   185   	   246

                                         									$3,707   	$2,713	   $2,781
		Other expense consisted of the following:

	Salaries, wages and employee benefits 		        	$6,259   	$6,098   	$6,251
	Occupancy expense (Note 10) 		                   	1,134    	1,153    	1,104
	Data processing expense (Note 10)			                888      	928    	1,070
	Furniture and equipment expense 			                 704      	633      	707
	Promotion expense 			                               459      	429      	468
	Legal and professional services 	                 		518      	627      	507
	Insurance 				                                     	241      	182      	428
	Stationery and supplies 			                         216      	249      	279
	Telephone and postage 	                           		405      	383      	374
	Other real estate owned (Note 5) 			                 94      	217      	425
	Other		                                   					     858	      648	      575

                                        									$11,776  	$11,547  	$12,188


Note 10.	Commitments, Contingencies and Subsequent Event

	Litigation

		In the normal course of business, the Company is involved in 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.

		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:

                                        									     1997      1996
                      									                   (dollars in thousands)

	Commitments to extend credit			                    	$25,087  	$26,451
	Standby letters of credit				                           347  	  1,907

								                                           		$25,434  	$28,358


	Commitments to extend credit

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

	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, 1997.


	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:

							                                               			Amount
                                  										      (dollars in thousands)

			1998						                                            $  680
			1999					                                               	634
			2000					                                               	636
			2001					                                               	617
			2002					                                               	643
		Thereafter	                                         				1,583

                                               										$4,793


		Rent expense under these leases and other month-to-month leases for the 
years ended December 31, 1997, 1996 and 1995, was $824,000, $790,000 and 
$771,000, respectively.

	Data processing commitment

		In March 1995, the Company contracted with a data processing center to 
provide computer services through March 2001.  The Company is subject to a 
penalty in the amount of 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, 1997, 1996 and 1995 was $888,000, $927,000 and 
$500,000, respectively.

	Subsequent event

		In January 1998, the Company declared a $0.35 per share dividend to 
stockholders of record as of the close of business on February 11, 1998, payable
on March 2, 1998.


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:

                                     									     1997 	     1996	     1995

	Under option, beginning of year			                48,500   	62,600   	47,500
		Granted				                                    	176,500    	5,000   	21,000
		Canceled		                                         		-        	-    	(5,500)
		Effect of 5% stock dividend		                       	-        	-     	2,100
		Exercised			                                   	(17,375) 	(19,100)  	(2,500)

	Under option, end of year			                     207,625   	48,500   	62,600


	Options exercisable, end of year		              	174,775   	48,500   	62,600
	Available to grant, end of year		               	360,756  	123,006  	128,006
	Weighted average price under
  option, end of year	                            	$16.25	    $6.32	    $5.89
	Weighted average price of options
  exercisable, end of year	                       	$16.12    	$6.32    	$5.89
	Weighted average price of options
  granted, during the year	                       	$17.96    	$9.92    	$6.17
	Weighted average price of options
  exercised, during the year                       	$5.87    	$8.67    	$7.23
	Weighted average price of options
  cancelled, during the year	                       $  -     	$  -     	$6.07


		Additional option information by Plan at December 31, 1997 is as follows:

                                                         											Weighted
                                                         											Average
								                                                         			Exercise
	      							       Price Range         	Outstanding  	Exercisable	 Price

	1993 Plan			    	$  5.78 - $ 6.29          	26,125       	21,442    	$5.94
	1993 Plan				    $  9.92 - $13.75	          10,500        	3,333   	$11.93
	1997 Plan				    $ 17.72 - $23.50  	       171,000      	160,000   	$18.10


		The Company applies APB Opinion No. 25, Accounting for Stock Issued to 
Employees, and related Interpretations in accounting for its plans.  
Accordingly, no compensation cost has been recognized.  The Company has not 
issued any options to nonemployees.  Had compensation cost for the Company's 
stock option plan been determined based on the fair value at the grant dates for
awards under this plan consistent with the method of SFAS 123, the Company's net
earnings and earnings per share would have been reduced to the pro forma amounts
indicated below:


                                   									   1997	    1996 	   1995
								  	                  (dollars in thousands, except per share data)

	Net earnings		             	As reported      $3,198  	$2,201  	$2,524
                             Pro forma        	2,691   	2,195   	2,516

	Basic earnings per share	  	As reported      	$1.63   	$1.13   	$1.31
                   								  Pro forma         	1.37    	1.12    	1.31

	Diluted earnings per share		As reported      	$1.60   	$1.13   	$1.30
	                     							Pro forma         	1.35    	1.12    	1.30


		The pro forma compensation cost was estimated for the fair value of the 
stock options granted using the Black-Scholes model.  The assumptions used in 
the model by year are in the following table:


                         									            1997	        1996	      1995

Expected volatility			                     15% to 20%  	12% to 15%    	20%

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

Expected lives in years		                     	4           	4           4

Risk-free interest rates		                   	5.5%        	5.4%  	5.4% to 7.9%

Weighted average fair value
 per share of stock options granted	        	$4.69	       $2.13      	$1.51


	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 to the Plan of $102,000, $102,000 and $97,000 for 1997, 1996 and 1995, 
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:


                                              										   1997	    1996
                        										                    (dollars in thousands)

	Balance, beginning				                                   $2,906  	$2,832

		New loans			                                             		774   	2,977
		Repayments				                                          (1,201) 	(2,903)

	Balance, ending				                                      $2,479	  $2,906


		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, 1997.


		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:


                                            											             To Be Well
                                                                    Capitalized
											                                           For Capital  Under Prompt
									                                               Adequacy	   Corrective
                   							                 Actual  	   Purposes     Provisions
                                   		 			Amount	Ratio	Amount	Ratio	Amount	Ratio
                                    									     (dollars in thousands)

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%

As of December 31, 1996:
Total Capital (to Risk Weighted Assets) $19,937 13.3%	$11,993	8.0%	$14,991	10.0%
Tier I Capital (to Risk Weighted Assets) 18,568 12.4%   5,996	4.0%	  8,995 	6.0%
Tier I Capital (to Average Assets)      	18,568 	8.3%  	8,907	4.0%	 11,134 	5.0%

		The Company's capital amounts and ratios are substantially the same as the 
amounts presented above.


Note 14.	Consolidated Statements of Cash Flows


                                      			 						   1997 	   1996	   1995
                                 										        (dollars in thousands)
	Supplemental Cash Flow Information
		Cash payments for
			Interest		                                   		$3,318  	$3,573  	$3,035
			Income taxes		                                	$2,113  	$1,100  	$2,005

		Non-cash investing activities
			Loans originated by the Company to finance
			the sale of other real estate owned		         	$1,023    	$100	    $273
			Loans foreclosed on by the Company		             $145    	$902  	$3,194


Note 15.	Fair Values of Financial Instruments

		The fair values of the Company's financial instruments are as follows:

							                                      1997                1996
                               								Carrying   	Fair   	Carrying   	Fair
                              								  Amount	    Value    Amount	    Value
									                                      (dollars in thousands)
	Financial Assets
		Cash and cash equivalents	         	 $ 81,147 	$ 81,147 	$ 46,436 	$ 46,436
		Securities		                          	18,183   	18,118   	40,011   	39,918
		Loans, net	                         		131,189  	130,711  	118,991  	119,051
		Accrued interest receivable		             985      	985    	1,352    	1,352
	Financial Liabilities, deposits	      	218,792	  218,700	  198,364  	198,382


		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, 1997 or 1996.  The estimated fair value amounts for 1997 and 1996 
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 the security.



	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, 1997 and 1996, variable rate loans comprised 
approximately 72% and 80%, 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, 
1997 and 1996 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.


Note 16.	Parent Company Only Condensed Statements

Condensed Balance Sheets


                                             										    1997	     1996
						                        				                    (dollars in thousands)
	Assets							
		Cash					                                          		 $    482	  $   333
		Investment in subsidiary			                            	20,926   	18,445
		Other assets				                                           178 	     178

                                               										$21,586  	$18,956

	Stockholders' Equity				                                $21,586	  $18,956


                                        			 						   1997	    1996 	   1995
                                   										         (dollars in thousands)
Condensed Statements of Earnings

	Operating income, dividends from subsidiary		      $  823	  $  718	  $  474
		Expenses, professional fees			                       (39)	    (40)	    (16)
			Earnings before equity in undistributed earnings
			  of subsidiary			                                  784     	678     	458
	Equity in undistributed earnings of subsidiary		    2,414   	1,523   	2,066

			Net earnings		                                  	$3,198  	$2,201  	$2,524


Condensed Statements of Cash Flows

	Cash Flows from Operating Activities					
		Net earnings		                                   	$3,198  	$2,201	  $2,524
		Adjustments to reconcile net earnings to net cash 				
			provided by operating activities:					
			Equity in undistributed earnings of subsidiary	 	(2,414) 	(1,523) 	(2,066)

						Net cash provided by operating activities		      784	     678	     458

	Cash Flows from Financing Activities
		Proceeds from exercise of stock options		            188	     166      	18
		Dividends paid			                                   (823) 	  (718) 	  (474)

						Net cash (used in) financing activities		       (635) 	  (552) 	  (456)

						Increase in cash and cash equivalents		          149	     126	       2

	Cash and cash equivalents
		Beginning				                                        333 	    207	     205

		Ending		                                      			 $  482	  $  333	  $  207
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