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                                                                    EXHIBIT 10.5


                                 AMENDMENT NO. 1
                                       TO
                     EXECUTIVE SALARY CONTINUATION AGREEMENT


        This Amendment No. 1 to the Executive Salary Continuation Agreement
("Amended Agreement") is made and entered into as of this 16th day of July, 1998
by and between The Bank of Hemet, a California banking corporation (the
"Employer") and James B. Jaqua, an individual residing in the State of
California (hereinafter referred to as "Executive").

                            RECITALS AND UNDERTAKINGS

        A.     WHEREAS, the Executive is an employee of the Employer and is
serving as its President and Chief Executive Officer;

        B.     WHEREAS, the Executive's experience and knowledge of the affairs
of the Employer and the banking industry are extensive and valuable;

        C.     WHEREAS, the Employer has provided Executive with certain salary
continuation benefits as set forth in the Salary Continuation Agreement
("Original Agreement") between Employer and Executive dated March 22, 1995; and

        D.     WHEREAS, Executive has further shown his value to the Employer
since the date of the Original Agreement, it is deemed to be in the best
interests of the Employer to amend this agreement to provide that no "golden
parachute" payments will be made.

        NOW, THEREFORE, the parties hereto agree to amend the Original Agreement
as follows:

               1.     A new Section 12A is added to the Original Agreement and
        shall read in the entirety as follows:

                      12A. NO PAYMENT OF BENEFITS RESULTING IN GOLDEN PARACHUTE
               TAXES UNDER SECTION 280G OF THE CODE. No payment shall be made to
               Executive pursuant to this Agreement to the extent that such
               payment when aggregated with all other payments considered for
               purposes of calculating a parachute payment results in an excess
               parachute payment as defined under Section 280G of the Code.
               Furthermore to the extent that the Internal Revenue Service or
               other applicable governmental taxing authority determines that
               there has been an "excess parachute payment" and a notice of
               deficiency or similar notice has been issued, then the Employer
               or its successor agrees to pay all expenses associated with
               professional fees (legal and tax accounting) in connection with
               the protest,


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               challenge, and defense of any such notice and the appeal of any
               decision on such matter. The Employer or its successor agrees not
               to settle the matter short of the appellate level without the
               written consent of the Executive. In the event that the Internal
               Revenue Service or other applicable governmental taxing authority
               ultimately determines that, in fact, there has been an "excess
               parachute payment" by the Employer, then the amount necessary to
               reduce the total payments such that there would be no "excess
               parachute payment" would be immediately and retroactively
               characterized as a loan from the Employer or its successor to
               Executive with interest at a rate equal to the ten year Treasury
               Bond (or if the Employer or its successor is a bank subject to
               Regulation O then the loan shall be at substantially the same
               terms as credit underwriting procedures that are not less
               stringent than, those prevailing at the time the loan would have
               been made for comparable transactions of the Employer or its
               successor and shall be subject to the other conditions of
               Regulation O). The loan shall be subject to repayment at the
               demand of the Employer or its successor.

               2.     Except as amended hereby, the provisions of the Original
        Agreement remain in full force and effect and the enforceability thereof
        is not affected by this Amended Agreement.

        IN WITNESS WHEREOF, the parties to this Amended Agreement have duly
executed this Amended Agreement as of the day and year first above written.

                                        THE BANK OF HEMET


By: /s/ John J. McDonough, Chairman
    --------------------------------

                                        JAMES B. JAQUA


By: /s/ James B. Jaqua, President and Chief Executive Officer
    ---------------------------------------------------------


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