Document:

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                                  EXHIBIT 10.2

                           REVOLVING CREDIT AGREEMENT

                            Dated as of June 26, 2000

         This Agreement is between FIRST COMMUNITY BANCORP, a corporation formed
under the laws of the State of California ("BORROWER"), and THE NORTHERN TRUST
COMPANY, an Illinois banking corporation ("LENDER"), with a banking office at 50
South LaSalle Street, Chicago, Illinois 60675.

                                SECTION 1. LOANS

     SECTION 1.1. REVOLVING CREDIT LOANS. Subject to the terms and conditions of
this Agreement, Lender agrees to make loans to Borrower, from time to time from
the date of this Agreement through June 25, 2001 (the "MATURITY DATE"), at such
times and in such amounts, not to exceed FIVE MILLION and NO/100 UNITED STATES
DOLLARS ($5,000,000) (the "COMMITMENT") at any one time outstanding, as Borrower
may request (the "LOAN(S)"). During such period Borrower may borrow, repay and
reborrow hereunder. Each borrowing shall be in the amount of at least $100,000
or the remaining unused amount of the Commitment.

     SECTION 1.2. REVOLVING CREDIT NOTE. The Loans shall be evidenced by a
promissory note (the "Note"), substantially in the form of EXHIBIT A, with
appropriate insertions, dated the date hereof, payable to the order of Lender
and in the original principal amount of the Commitment. Lender may at any time
and from time to time at Lender's sole option attach a schedule (grid) to the
Note and endorse thereon notations with respect to each Loan specifying the date
and principal amount thereof, the Interest Period (as defined below)(if
applicable), the applicable interest rate and rate option, and the date and
amount of each payment of principal and interest made by Borrower with respect
to each such Loan. Lender's endorsements as well as its records relating to the
Loans shall be rebuttably presumptive evidence of the outstanding principal and
interest on the Loans, and, in the event of inconsistency, shall prevail over
any records of Borrower and any written confirmations of the Loans given by
Borrower. The principal of the Note shall be payable on or before the Maturity
Date.

     SECTION 1.3. EXTENSION OF MATURITY DATE. Borrower may request an extension
of the Maturity Date by submitting a request for an extension to Lender (an
"EXTENSION REQUEST") no more than sixty (60) days prior to the current Maturity
Date. The Extension Request must specify the new Maturity Date requested by
Borrower and the date (which must be at least thirty (30) days after the
Extension Request is delivered to Lender) as of which Lender must respond to the
Extension Request (the "EXTENSION DATE"). The new Maturity Date shall be no more
than 364 days after the Maturity Date in effect at the time the Extension
Request is received, including such Maturity Date as one of the days in the
calculation of the days elapsed. If Lender, in its sole discretion, decides to
approve the Extension Request, Lender shall deliver

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its written consent to Borrower no later than the Extension Date. Lender's
failure to deliver a response before the Extension Date shall constitute a
rejection of the Extension Request. If and only if Lender consents to the
Extension Request on or before the Extension Date, the Maturity Date specified
in the Extension Request shall become effective at the expiration of the
existing Maturity Date and Lender shall promptly notify Borrower thereof.

                          SECTION 2. INTEREST AND FEES

     SECTION 2.1. INTEREST RATE. Borrower agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding hereunder at the
following rates per year:

          (a) Before maturity of any Loan, whether by acceleration or otherwise,
     at the option of Borrower, subject to the terms hereof at a rate equal to:

               (i) The "PRIME-BASED RATE," which shall mean the Prime Rate (as
          hereinafter defined) minus seventy-five hundredths of one percent
          (-0.75%) per annum;

               (ii) "LIBOR," which shall mean the sum of (A) that fixed rate of
          interest per year for deposits with Interest Periods of 1, 3 or 6
          months (which Interest Period Borrower shall select subject to the
          terms stated herein) in United States Dollars offered to Lender in or
          through the London interbank market at or about 10:00 A.M., London
          time, two days (during which banks are generally open in both Chicago
          and London) before the rate is to take effect in an amount
          corresponding to the amount of the requested Loan or portion thereof
          and for the London deposit Interest Period requested, DIVIDED BY one
          minus any applicable reserve requirement (expressed as a decimal) on
          Eurodollar deposits of the same amount and Interest Period as
          determined by Lender in its sole discretion, PLUS (B) one and one-half
          percent (+1.50%) per annum; or

               (iii) "FEDERAL FUNDS RATE," which shall mean the sum of (A) the
          weighted average of the rates on overnight Federal funds transactions,
          with members of the Federal Reserve System only, arranged by Federal
          funds brokers, PLUS (B) one and one-half percent (1.50%) per annum.
          The Federal Funds Rate shall be determined by Lender on the basis of
          reports by Federal funds brokers to, and published daily by, the
          Federal Reserve Bank of New York in the Composite Closing Quotations
          for U.S. Government Securities. If such publication is unavailable or
          the Federal Funds Rate is not set forth therein, the Federal Funds
          Rate shall be determined on the basis of any other source reasonably
          selected by Lender. The Federal Funds Rate applicable each day shall
          be the Federal Funds Rate reported as applicable to Federal funds
          transactions on that date. In the case of Saturday, Sunday or a legal
          holiday, the Federal Funds Rate shall be the rate applicable to
          Federal funds transactions on the immediately preceding day for which
          the Federal Funds Rate is reported.

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          (b) After the maturity of any Loan, whether by acceleration or
     otherwise, such Loan shall bear interest until paid at a rate equal to two
     percent (2%) in addition to the rate in effect immediately prior to
     maturity (but not less than the Prime-Based Rate in effect at maturity).

     SECTION 2.2. RATE SELECTION. Borrower shall select and change its selection
of the interest rate as among LIBOR, the Federal Funds Rate and the Prime-Based
Rate, as applicable, to apply to at least $100,000 and in integral multiples of
$100,000 thereafter of any Loan or portion thereof, subject to the requirements
herein stated:

          (a) At the time any Loan is made;

          (b) At the expiration of a particular LIBOR Interest Period selected
     for the outstanding principal balance of any Loan or portion of any Loan
     currently bearing interest at LIBOR; and

          (c) At any time for the outstanding principal balance of any Loan or
     portion thereof currently bearing interest at the Prime-Based Rate or the
     Federal Funds Rate.

     SECTION 2.3. RATE CHANGES AND NOTIFICATIONS.

          (a) LIBOR. If Borrower wishes to borrow funds at LIBOR or Borrower
     wishes to change the rate of interest on any Loan or portion thereof,
     within the limits described above, from any other rate to LIBOR, it shall,
     at or before 12:00 noon, Chicago time, not less than two Banking Days of
     Lender prior to the Banking Day of Lender on which such rate is to take
     effect, give Lender written or telephonic notice thereof, which shall be
     irrevocable. Such notice shall specify the Loan or portion thereof to which
     LIBOR is to apply, and, in addition, the desired LIBOR Interest Period of
     1, 3 or 6 months (but not to exceed the Maturity Date).

          (b) FEDERAL FUNDS RATE OR PRIME-BASED RATE. If Borrower wishes to
     borrow funds at the Federal Funds Rate or the Prime-Based Rate or to change
     the rate of interest on any Loan or any portion thereof, to such rate, it
     shall, at or before 12:00 noon, Chicago time, on the date such borrowing or
     change is to take effect, which shall be a Banking Day of Lender, give
     written or telephonic notice thereof, which shall be irrevocable. Such
     notice shall specify the advance and the desired interest rate option.

          (c) FAILURE TO NOTIFY. If Borrower does not notify Lender at the
     expiration of a selected Interest Period with respect to any principal
     outstanding at LIBOR, then in the absence of such notice Borrower shall be
     deemed to have elected to have such principal accrue interest after the
     respective LIBOR Interest Period at the Prime-Based Rate. If Borrower does
     not notify Lender as to its selection of the interest rate option with
     respect to any new Loan, then in the absence of such notice Borrower shall
     be deemed to have elected to have such initial advance accrue interest at
     the Prime-Based Rate.

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     SECTION 2.4. INTEREST PAYMENT DATES. Accrued interest shall be paid in
respect of each portion of principal to which the Federal Funds Rate or
Prime-Based Rate applies on the last day of each month in each year, beginning
with the first of such dates to occur after the date of the first Loan or
portion thereof, at maturity, and upon payment in full, and to each portion of
principal to which any other interest rate option applies, the end of each
respective Interest Period, every three months, at maturity, and upon payment in
full, whichever is earlier or more frequent. After maturity, interest shall be
payable upon demand.

     SECTION 2.5. ADDITIONAL PROVISIONS WITH RESPECT TO FEDERAL FUNDS RATE AND
LIBOR LOANS.

     The selection by Borrower of the Federal Funds Rate or LIBOR and the
maintenance of the Loans or portions thereof at such rate shall be subject to
the following additional terms and conditions:

          (a) AVAILABILITY OF DEPOSITS AT A DETERMINABLE RATE. If, after
     Borrower has elected to borrow or maintain any Loan or portion thereof at
     the Federal Funds Rate or LIBOR, Lender notifies Borrower that:

               (i) United States dollar deposits in the amount and for the
          maturity requested are not available to Lender (in the case of LIBOR,
          in the London interbank market); or

               (ii) Reasonable means do not exist for Lender to determine the
          Federal Funds Rate or LIBOR for the amount and maturity requested; all
          as determined by Lender in its sole discretion, then the principal
          subject to the Federal Funds Rate or LIBOR shall accrue or shall
          continue to accrue interest at the Prime-Based Rate.

          (b) PROHIBITION OF MAKING, MAINTAINING, OR REPAYMENT OF PRINCIPAL AT
     THE FEDERAL FUNDS RATE OR LIBOR. If any treaty, statute, regulation,
     interpretation thereof, or any directive, guideline, or otherwise by a
     central bank or fiscal authority (whether or not having the force of law)
     shall either prohibit or extend the time at which any principal subject to
     the Federal Funds Rate or LIBOR may be purchased, maintained, or repaid,
     then on and as of the date the prohibition becomes effective, the principal
     subject to that prohibition shall continue at the Prime-Based Rate.

          (c) PAYMENTS OF PRINCIPAL AND INTEREST TO BE INCLUSIVE OF ANY TAXES OR
     COSTS. All payments of principal and interest shall include any taxes and
     costs incurred by Lender resulting from having principal outstanding
     hereunder at the Federal Funds Rate or LIBOR. Without limiting the
     generality of the preceding obligation, illustrations of such taxes and
     costs are:

               (i) Taxes (or the withholding of amounts for taxes) of any nature
          whatsoever including income, excise, and interest equalization taxes
          (other than income taxes imposed by the United States or any state
          thereof on the income of Lender), as

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          well as all levies, imposts, duties, or fees whether now in existence
          or resulting from a change in, or promulgation of, any treaty,
          statute, regulation, interpretation thereof, or any directive,
          guideline, or otherwise, by a central bank or fiscal authority
          (whether or not having the force of law) or a change in the basis of,
          or time of payment of, such taxes and other amounts resulting
          therefrom;

               (ii) Any reserve or special deposit requirements against assets
          or liabilities of, or deposits with or for the account of, Lender with
          respect to principal outstanding at LIBOR including those imposed
          under Regulation D of the Federal Reserve Board or resulting from a
          change in, or the promulgation of, such requirements by treaty,
          statute, regulation, interpretation thereof, or any directive,
          guideline, or otherwise by a central bank or fiscal authority (whether
          or not having the force of law);

               (iii) Any other costs resulting from compliance with treaties,
          statutes, regulations, interpretations, or any directives or
          guidelines, or otherwise by a central bank or fiscal authority
          (whether or not having the force of law), including capital adequacy
          regulations;

               (iv) Any loss (including loss of anticipated profits) or expense
          incurred by reason of the liquidation or re-employment of deposits
          acquired by Lender:

               (A) To make Loans or a portion thereof or maintain principal
          outstanding at the LIBOR or the Federal Funds Rate;

               (B) As the result of a voluntary prepayment at a date other than
          the Interim Maturity Date selected for principal outstanding at LIBOR;

               (C) As the result of a mandatory repayment at a date other than
          that Interim Maturity Date selected for principal outstanding at LIBOR
          as the result of the occurrence of an Event of Default and the
          acceleration of any portion of the indebtedness hereunder; or

               (D) As the result of a prohibition on making, maintaining, or
          repaying principal outstanding at the Federal Funds Rate or LIBOR.

     If Lender incurs any such taxes or costs, Borrower, upon demand in writing
specifying such taxes and costs, shall promptly pay them; save for manifest
error Lender's specification shall be presumptively deemed correct.

     SECTION 2.6. BASIS OF COMPUTATION. Interest shall be computed for the
actual number of days elapsed on the basis of a year consisting of 360 days,
including the date a Loan is made and excluding the date a Loan or any portion
thereof is paid or prepaid.

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     SECTION 2.7. COMMITMENT FEE, REDUCTION OF COMMITMENT. Borrower agrees to
pay Lender a commitment fee (the "COMMITMENT FEE") of twenty-five hundredths of
one percent (0.25%) per year on the average daily unused amount of the
Commitment. The Commitment Fee shall commence to accrue on the date of this
Agreement and shall be paid on the last day of each calendar quarter in each
year, beginning with the first of such dates to occur after the date of this
Agreement, at maturity and upon payment in full. At any time or from time to
time, upon at least ten days' prior written notice, which shall be irrevocable,
Borrower may reduce the Commitment in the amount of at least $100,000 or in
full; provided that Borrower may not reduce the Commitment below an amount equal
to the aggregate outstanding principal amount of all Loans. Upon any such
reduction of any part of the unused Commitment, the Commitment Fee on the part
reduced shall be paid in full as of the date of such reduction.

                      SECTION 3. PAYMENTS AND PREPAYMENTS

     SECTION 3.1. PREPAYMENTS. Borrower may prepay without penalty or premium
any principal bearing interest at the Prime-Based Rate or the Federal Funds
Rate. If Borrower prepays any principal bearing interest at LIBOR in whole or in
part on a date other than the Interim Maturity Date, or if the maturity of any
such LIBOR principal is accelerated, then, to the fullest extent permitted by
law Borrower shall also pay Lender for all losses (including but not limited to
interest rate margin and any other losses of anticipated profits) and expenses
incurred by reason of the liquidation or re-employment of deposits acquired by
Lender to make the Loan or maintain principal outstanding at LIBOR. Upon
Lender's demand in writing specifying such losses and expenses, Borrower shall
promptly pay them; Lender's specification shall be deemed correct in the absence
of manifest error. All Loans or portions thereof made at LIBOR shall be
conclusively deemed to have been funded by or on behalf of Lender (in the London
interbank market) by the purchase of deposits corresponding in amount and
maturity to the amount and Interest Periods selected (or deemed to have been
selected) by Borrower under this Agreement. Any partial repayment or prepayment
shall be in an amount of at least $500,000.

     SECTION 3.2. FUNDS. All payments of principal, interest and the Commitment
Fee shall be made in immediately available funds to Lender at its banking office
indicated above or as otherwise directed by Lender.

                   SECTION 4. REPRESENTATIONS AND WARRANTIES

     To induce Lender to make each of the Loans, Borrower represents and
warrants to Lender that:

     SECTION 4.1. ORGANIZATION. Borrower is existing and in good standing as a
duly qualified and organized bank holding company. Borrower and each Subsidiary
(as hereinafter defined) are existing and in good standing under the laws of
their jurisdiction of formation, and are duly qualified, in good standing and
authorized to do business in each jurisdiction where failure to do so might have
a material adverse impact on the consolidated

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assets, condition or prospects of Borrower. Borrower and each Subsidiary have
the power and authority to own their properties and to carry on their businesses
as now being conducted.

     SECTION 4.2. AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance of this Agreement, the Pledge Agreement, the Note and all related
documents and instruments: (a) are within Borrower's powers; (b) have been
authorized by all necessary corporate action; (c) have received any and all
necessary governmental approvals; and (d) do not and will not contravene or
conflict with any provision of law or charter or by-laws of Borrower or any
agreement affecting Borrower or its property. This Agreement and the Pledge
Agreement are, and the Note when executed and delivered will be, legal, valid
and binding obligations of Borrower, enforceable against Borrower in accordance
with their respective terms.

     SECTION 4.3. FINANCIAL STATEMENTS. Borrower has supplied to Lender copies
of its unaudited pro forma consolidating financial statements as at December 31,
1999. Such statements have been furnished to Lender, have been prepared in
conformity with generally accepted accounting principles applied on a basis
consistent with that of the preceding fiscal year, and fairly present the
financial condition of Borrower and its Subsidiaries as at such dates and the
results of their operations for the respective periods then ended. Since the
date of those financial statements, no material, adverse change in the business,
condition, properties, assets, operations, or prospects of Borrower or its
Subsidiaries has occurred of which Lender has not been advised in writing before
this Agreement was signed. There is no known contingent liability of Borrower or
any Subsidiary which is known to be in an amount in excess of $1,000,000
(excluding loan commitments, letters of credit, and other contingent liabilities
incurred in the ordinary course of the banking business) in excess of insurance
for which the insurer has confirmed coverage in writing which is not reflected
in such financial statements or of which Lender has not been advised in writing
before this Agreement was signed.

     SECTION 4.4. TAXES. Borrower and each Subsidiary have filed or caused to be
filed all federal, state and local tax returns which, to the knowledge of
Borrower or such Subsidiary, are required to be filed, and have paid or have
caused to be paid all taxes as shown on such returns or on any assessment
received by them, to the extent that such taxes have become due (except for
current taxes not delinquent and taxes being contested in good faith and by
appropriate proceedings for which adequate reserves have been provided on the
books of Borrower or the appropriate Subsidiary, and as to which no foreclosure,
sale or similar proceedings have been commenced). Borrower and such Subsidiary
have set up reserves which are adequate for the payment of additional taxes for
years which have not been audited by the respective tax authorities.

     SECTION 4.5. LIENS. None of the assets of Borrower or any Subsidiary are
subject to any mortgage, pledge, title retention lien, or other lien,
encumbrance or security interest except: (a) for current taxes not delinquent or
taxes being contested in good faith and by appropriate proceedings; (b) for
liens arising in the ordinary course of business for sums not due or sums being
contested in good faith and by appropriate proceedings, but not involving any
deposits or loan or portion thereof or borrowed money or the deferred purchase
price of property or services; (c) to the extent specifically shown in the
financial statements referred to in SECTION

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4.3; (d) for liens in favor of Lender or pursuant to the Pledge Agreement; and
(e) liens and security interests securing deposits of public funds, repurchase
agreements, Federal funds purchased, trust assets, advances from a Federal Home
Loan Bank, discount window borrowings from a Federal Reserve Bank and other
similar liens granted in the ordinary course of the banking business.

     SECTION 4.6. ADVERSE CONTRACTS. Neither Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction, nor is it subject to any judgment, decree or order of any
court or governmental body, which may have a material and adverse effect on the
business, assets, liabilities, financial condition, operations or business
prospects of Borrower and its Subsidiaries taken as a whole or on the ability of
Borrower to perform its obligations under this Agreement, the Pledge Agreement
and the Note. Neither Borrower nor any Subsidiary has, nor with reasonable
diligence should have had, knowledge of or notice that it is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any such agreement, instrument, restriction, judgment,
decree or order.

     SECTION 4.7. REGULATION U. Borrower is not engaged principally in, nor is
one of Borrower's important activities, the business of extending credit for the
purpose of purchasing or carrying "margin stock" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereinafter in effect.

     SECTION 4.8. LITIGATION AND CONTINGENT LIABILITIES. No litigation
(including derivative actions), arbitration proceedings or governmental
proceedings are pending or threatened against Borrower which would (singly or in
the aggregate), if adversely determined, have a material and adverse effect on
the financial condition, continued operations or prospects of Borrower or any
Subsidiary, except as and if set forth (including estimates of the dollar
amounts involved) in a schedule furnished by Borrower to Lender before this
Agreement was signed.

     SECTION 4.9. FDIC INSURANCE. The deposits of each Subsidiary Bank of
Borrower are insured by the FDIC and no act has occurred which would adversely
affect the status of such Subsidiary Bank as an FDIC insured bank.

     SECTION 4.10. INVESTIGATIONS. Neither Borrower nor any Subsidiary Bank is
under investigation by, or is operating under the restrictions imposed by or
agreed to in connection with, any regulatory authority, other than routine
examinations by regulatory authorities having jurisdiction over Borrower or such
Subsidiary Bank.

     SECTION 4.11. SUBSIDIARIES. Attached hereto as EXHIBIT C is a correct and
complete list of all Subsidiaries of Borrower.

     SECTION 4.12. BANK HOLDING COMPANY. Borrower has complied in all material
respects with all federal, state and local laws pertaining to bank holding
companies, including without limitation the Bank Holding Company Act of 1956, as
amended, and to the

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best of its knowledge there are no conditions precedent or subsequent to its
engaging in the business of being a registered bank holding company.

     SECTION 4.13. ERISA.

          (a) Borrower and the ERISA Affiliates and the plan administrator of
     each Plan have fulfilled in all material respects their respective
     obligations under ERISA and the Code with respect to such Plan and such
     Plan is currently in material compliance with the applicable provisions of
     ERISA and the Code.

          (b) With respect to each Plan, there has been no (i) "reportable
     event" within the meaning of Section 4043 of ERISA and the regulations
     thereunder which is not subject to the provision for waiver of the 30-day
     notice requirement to the PBGC; (ii) failure to make or properly accrue any
     contribution which is due to any Plan; (iii) action under Section 4041 of
     ERISA to terminate any Pension Plan; (iv) withdrawal from any Pension Plan
     with two or more contributing sponsors or the termination of any such
     Pension Plan resulting in liability pursuant to Section 4063 or 4064 of
     ERISA; (v) institution by PBGC of proceedings to terminate any Pension
     Plan, or the occurrence of any event or condition which might constitute
     grounds under ERISA for the termination of, or the appointment of a trustee
     to administer, any Pension Plan; (vi) the imposition of liability pursuant
     to Sections 4062(e), 4069 or 4212 of ERISA; (vii) complete or partial
     withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any
     Pension Plan which is a Multiemployer Plan that is in reorganization or
     insolvency pursuant to Sections 4241 or 4245 of ERISA, or that it intends
     to terminate or has terminated under Sections 4041A or 4042 of ERISA;
     (viii) prohibited transaction described in Section 406 of ERISA or 4975 of
     the Code which could give rise to the imposition of any material fines,
     penalties, taxes or related charges; (ix) assertion of a claim (other than
     routine claims for benefits) against any Plan (other than a Multiemployer
     Plan) which could reasonably be expected to be successful; (x) receipt from
     the Internal Revenue Service of notice of the failure of any Plan to
     qualify under Section 401(a) of the Code, or the failure of any trust
     forming part of any Plan to fail to qualify for exemption from taxation
     under Section 501(a) of the Code, if applicable; or (xi) imposition of a
     Lien pursuant to Section 401(a)(29) or 412(n) of the Code or Section 302(f)
     of ERISA.

     SECTION 4.14. ENVIRONMENTAL LAWS.

          (a) Borrower and each of its Subsidiaries have obtained all permits,
     licenses and other authorizations which are required under all
     Environmental Laws and are in compliance in all material respects with any
     applicable Environmental Laws.

          (b) On or prior to the date hereof, no notice, demand, request for
     information, citation, summons or order has been issued, no complaint has
     been filed, no penalty has been assessed and no investigation or review is
     pending or threatened by any governmental or other Person with respect to
     any alleged or suspected failure by

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     Borrower or any of its Subsidiaries to comply in any material respect with
     any Environmental Laws.

          (c) There are no material liens arising under or pursuant to any
     Environmental Laws on any of the property owned or leased by Borrower or
     any of its Subsidiaries.

          (d) There are no conditions existing currently or likely to exist
     during the term of this Agreement which would subject Borrower or any of
     its Subsidiaries or any of their property to any material lien, damages,
     penalties, injunctive relief or cleanup costs under any Environmental Laws
     or which require or are likely to require cleanup, removal, remedial action
     or other responses pursuant to Environmental Laws by Borrower and its
     Subsidiaries.

     SECTION 4.15. PLEDGED SHARES. The Pledged Shares (as hereinafter defined)
constitute 100% of the issued and outstanding capital stock of Rancho Santa Fe
National Bank, have been duly authorized and validly issued and are fully paid
and non-assessable. Borrower owns the Pledged Shares free and clear of all other
interests, liens or encumbrances of any nature whatsoever, other than liens in
favor of Lender.

                              SECTION 5. COVENANTS

     Until all obligations of Borrower hereunder, under the Pledge Agreement,
the Note and all other related documents and instruments are paid and fulfilled
in full, Borrower agrees that it shall, and shall cause each Subsidiary to,
comply with the following covenants, unless Lender consents otherwise in
writing:

     SECTION 5.1. EXISTENCE, MERGERS, ETC. Borrower and each Subsidiary shall
preserve and maintain their respective corporate, partnership or joint venture
(as applicable) existence, rights, franchises, licenses and privileges, and will
not liquidate, dissolve, or merge, or consolidate with or into any other entity,
or sell, lease, transfer or otherwise dispose of all or a substantial part of
their assets other than in the ordinary course of business as now conducted,
except that:

          (a) Any Subsidiary may merge or consolidate with or into Borrower or
     any one or more wholly-owned Subsidiaries; and

          (b) Any Subsidiary may sell, lease, transfer or otherwise dispose of
     any of its assets to Borrower or one or more wholly-owned Subsidiaries.

     Borrower and each Subsidiary shall take all steps to become and remain duly
qualified, in good standing and authorized to do business in each jurisdiction
where failure to do so might have a material adverse impact on the consolidated
assets, condition or prospects of Borrower.

     SECTION 5.2. REPORTS, CERTIFICATES AND OTHER INFORMATION. Borrower shall
furnish (or cause to be furnished) to Lender:

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          (a) INTERIM REPORTS. Within forty-five (45) days after the end of each
     quarter of each fiscal year of Borrower, a copy of an unaudited financial
     statement of Borrower and its Subsidiaries prepared on a consolidated basis
     consistent with the consolidating financial statements of Borrower and its
     Subsidiaries referred to in SECTION 4.3 above and prepared in accordance
     with generally accepted accounting principles, signed by an authorized
     officer of Borrower and consisting of at least: (i) a balance sheet as at
     the close of such quarter; and (ii) a statement of earnings and source and
     application of funds for such quarter and for the period from the beginning
     of such fiscal year to the close of such quarter.

          (b) ANNUAL REPORT. Within ninety (90) days after the end of each
     fiscal year of Borrower, a copy of an annual report of Borrower and its
     Subsidiaries prepared on a consolidated basis and in conformity with
     generally accepted accounting principles applied on a basis consistent with
     the consolidating financial statements of Borrower and its Subsidiaries
     referred to in SECTION 4.3 above, duly certified by independent certified
     public accountants of recognized standing satisfactory to Lender,
     accompanied by an opinion without significant qualification.

          (c) CERTIFICATES. Contemporaneously with the furnishing of a copy of
     each annual report and of each quarterly statement provided for in this
     SECTION, a certificate dated the date of such annual report or such
     quarterly statement and signed by either the President, the Chief Financial
     Officer or the Treasurer of Borrower, to the effect that no Event of
     Default or Unmatured Event of Default has occurred and is continuing, or,
     if there is any such event, describing it and the steps, if any, being
     taken to cure it, and containing (except in the case of the certificate
     dated the date of the annual report) a computation of, and showing
     compliance with, any financial ratio or restriction contained in this
     Agreement.

          (d) REPORTS TO SEC AND TO SHAREHOLDERS. Copies of each filing and
     report made by Borrower or any Subsidiary with or to any securities
     exchange or the Securities and Exchange Commission, except in respect of
     any single shareholder, and of each communication from Borrower or any
     Subsidiary to shareholders generally, promptly upon the filing or making
     thereof.

          (e) NOTICE OF DEFAULT, LITIGATION AND ERISA MATTERS. Immediately upon
     learning of the occurrence of any of the following, written notice
     describing the same and the steps being taken by Borrower or any Subsidiary
     affected in respect thereof: (i) the occurrence of an Event of Default or
     an Unmatured Event of Default; (ii) the institution of, or any adverse
     determination in, any litigation, arbitration or governmental proceeding
     which is material to Borrower and its Subsidiaries on a consolidated basis;
     (iii) the occurrence of any event referred to in SECTION 4.13(b); or (iv)
     the issuance of any cease and desist order, memorandum of understanding,
     cancellation of insurance, or proposed disciplinary action from the FDIC or
     other regulatory entity.

                                      -11-

<PAGE>

          (f) OTHER INFORMATION. From time to time such other information,
     financial or otherwise, concerning Borrower or any Subsidiary as Lender may
     reasonably request.

     SECTION 5.3. INSPECTION. At Borrower's expense if an Event of Default or
Unmatured Event of Default has occurred or is continuing, Borrower and each
Subsidiary shall permit Lender and its agents at any time during normal business
hours to inspect their properties and to inspect and make copies of their books
and records.

                      SECTION 5.4. FINANCIAL REQUIREMENTS.

          (a) LEVERAGE RATIO. Borrower and each Subsidiary Bank shall maintain
     at all times a ratio of Tier 1 Capital to average quarterly assets less all
     non-qualified intangible assets of at least five percent (5%), all
     calculated on a consolidated basis.

          (b) TIER 1 CAPITAL RATIO. Borrower and each Subsidiary Bank shall
     maintain at all times a ratio of Tier 1 Capital to risk-weighted assets of
     not less than six percent (6%), all calculated on a consolidated basis.

          (c) RISK-BASED CAPITAL RATIO. Borrower and each Subsidiary Bank shall
     maintain at all times a ratio of Total Capital to risk-weighted assets of
     not less than ten percent (10%).

          (d) NONPERFORMING ASSETS. All assets of all Subsidiary Banks and other
     Subsidiaries classified as "non-performing" (which shall include all loans
     in non-accrual status, more than ninety (90) days past due in principal or
     interest, restructured or renegotiated, or listed as "other restructured"
     or "other real estate owned") on the FDIC or other regulatory agency call
     report shall not exceed at any time three percent (3.0%) of the total loans
     of Borrower and its Subsidiaries on a consolidated basis.

          (e) LOAN LOSS RESERVES RATIO. Each Subsidiary Bank shall maintain at
     all times on a consolidated basis a ratio of loan loss reserves to
     non-performing loans of not less than one hundred percent (100%).

          (f) MINIMUM TANGIBLE NET WORTH. Borrower shall maintain a consolidated
     minimum Tangible Net Worth equal to at least $20,000,000 at all times.

          (g) TOTAL DEBT TO NET WORTH. Borrower's total indebtedness for
     borrowed money (specifically excluding the indebtedness for borrowed money
     of Borrower's Subsidiaries) shall not at any time exceed thirty-five
     percent (35%) of its Tangible Net Worth.

          (h) RETURN ON AVERAGE ASSETS. Borrower's consolidated net income shall
     be at least seventy hundredths of one percent (0.70%) of its average
     assets, calculated on an annualized basis as at the last day of each fiscal
     quarter of Borrower.

                                      -12-
<PAGE>

     SECTION 5.5. INDEBTEDNESS, LIENS AND TAXES. Borrower and each Subsidiary
shall:

          (a) INDEBTEDNESS. Not incur, permit to remain outstanding, assume or
     in any way become committed for indebtedness in respect of borrowed money
     (specifically including but not limited to indebtedness in respect of money
     borrowed from financial institutions, but excluding deposits), except: (i)
     indebtedness incurred hereunder or to Lender; (ii) indebtedness existing on
     the date of this Agreement shown on the financial statements furnished to
     Lender before this Agreement was signed; and (iii) indebtedness of the
     Subsidiary Banks arising in the ordinary course of the banking business of
     the Subsidiary Banks.

          (b) LIENS. Not create, suffer or permit to exist any lien or
     encumbrance of any kind or nature upon any of their assets now or hereafter
     owned or acquired (specifically including but not limited to the capital
     stock of any of the Subsidiary Banks), or acquire or agree to acquire any
     property or assets of any character under any conditional sale agreement or
     other title retention agreement, but this Section shall not be deemed to
     apply to: (i) liens existing on the date of this Agreement of which Lender
     has been advised in writing before this Agreement was signed; (ii) liens of
     landlords, contractors, laborers or suppliers, tax liens, or liens securing
     performance or appeal bonds, or other similar liens or charges arising out
     of Borrower's business, provided that tax liens are removed before related
     taxes become delinquent and other liens are promptly removed, in either
     case unless contested in good faith and by appropriate proceedings, and as
     to which adequate reserves shall have been established and no foreclosure,
     sale or similar proceedings have commenced; (iii) liens in favor of Lender;
     (iv) liens on the assets of any Subsidiary Bank arising in the ordinary
     course of the banking business of such Subsidiary Bank; and (v) liens
     contemplated by SECTION 4.5.

          (c) TAXES. Pay and discharge all taxes, assessments and governmental
     charges or levies imposed upon them, upon their income or profits or upon
     any properties belonging to them, prior to the date on which penalties
     attach thereto, and all lawful claims for labor, materials and supplies
     when due, except that no such tax, assessment, charge, levy or claim need
     be paid which is being contested in good faith by appropriate proceedings
     as to which adequate reserves shall have been established, and no
     foreclosure, sale or similar proceedings have commenced.

          (d) GUARANTIES. Not assume, guarantee, endorse or otherwise become or
     be responsible in any manner (whether by agreement to purchase any
     obligations, stock, assets, goods or services, or to supply or loan any
     funds, assets, goods or services, or otherwise) with respect to the
     obligation of any other Person, except: (i) by the endorsement of
     negotiable instruments for deposit or collection in the ordinary course of
     business, issuance of letters of credit or similar instruments or documents
     in the ordinary course of business; and (ii) except as permitted by this
     Agreement.

                                      -13-
<PAGE>

     SECTION 5.6. INVESTMENTS AND LOANS. Neither Borrower nor any Subsidiary
shall make any loan, advance, extension of credit or capital contribution to, or
purchase or otherwise acquire for a consideration, evidences of indebtedness,
capital stock or other securities of any Person, except that Borrower and any
Subsidiary may:

          (a) purchase or otherwise acquire and own short-term money market
     items;

          (b) invest, by way of purchase of securities or capital contributions,
     in the Subsidiary Banks or any other bank or banks, and upon Borrower's
     purchase or other acquisition of twenty-five percent (25%) or more of the
     stock of any bank, such bank shall thereupon become a "Subsidiary Bank" for
     all purposes under this Agreement;

          (c) invest, by way of loan, advance, extension of credit (whether in
     the form of lease, conditional sales agreement, or otherwise), purchase of
     securities, capital contributions, or otherwise, in Subsidiaries other than
     banks or Subsidiary Banks; and

          (d) invest, by way of purchase of securities or capital contributions,
     in other Persons so long as before and after giving effect thereto no Event
     of Default or Unmatured Event of Default shall have occurred and be
     continuing and the investment is in compliance with Regulation Y of the
     Federal Reserve Board.

     Nothing in this SECTION 5.6 shall prohibit a Subsidiary Bank from making
investments, loans, advances, or other extensions of credit in the ordinary
course of the banking business upon such terms as may at the time be customary
in the banking business.

     SECTION 5.7. CAPITAL STRUCTURE AND DIVIDENDS. Borrower shall not, and shall
not permit any Subsidiary to, (i) purchase or redeem, or obligate itself to
purchase or redeem, any shares of Borrower's capital stock, of any class, issued
and outstanding from time to time, or any partnership, joint venture or other
equity interest in Borrower or any Subsidiary; or (ii) declare or pay any
dividend (other than dividends payable in its own common stock or to Borrower)
or make any other distribution in respect of such shares or interest other than
to Borrower. Except as provided in SECTION 5.1, Borrower shall continue to own,
directly or indirectly, the same (or greater) percentage of the stock and
partnership, joint venture, or other equity interest in each Subsidiary that it
held on the date of this Agreement, and no Subsidiary shall issue any additional
stock or partnership, joint venture or other equity interests, options or
warrants in respect thereof, or securities convertible into such securities or
interests, other than to Borrower.

     SECTION 5.8. MAINTENANCE OF PROPERTIES. Borrower and each Subsidiary shall
maintain, or cause to be maintained, in good repair, working order and
condition, all their properties (whether owned or held under lease), and from
time to time make or cause to be made all needed and appropriate repairs,
renewals, replacements, additions, and improvements thereto, so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.

                                      -14-
<PAGE>

     SECTION 5.9. INSURANCE. Borrower and each Subsidiary shall maintain
insurance in responsible companies in such amounts and against such risks as is
required by law and such other insurance, in such amount and against such
hazards and liabilities, as is customarily maintained by bank holding companies
and banks similarly situated. Each Subsidiary Bank shall have deposits insured
by the FDIC.

     SECTION 5.10. USE OF PROCEEDS.

          (a) GENERAL. The proceeds of the Loans shall be used for general
     corporate purposes. Neither Borrower nor any Subsidiary shall use or permit
     any proceeds of the Loans to be used, either directly or indirectly, for
     the purpose, whether immediate, incidental or ultimate, of "purchasing or
     carrying any margin stock" within the meaning of Regulations U or X of the
     Board of Governors of the Federal Reserve System, as amended from time to
     time. If requested by Lender, Borrower and each Subsidiary will furnish to
     Lender a statement in conformity with the requirements of Federal Reserve
     Form U-1. No part of the proceeds of the Loans will be used for any purpose
     which violates or is inconsistent with the provisions of Regulation U or X
     of the Board of Governors.

          (b) TENDER OFFERS AND GOING PRIVATE. Neither Borrower nor any
     Subsidiary shall use (or permit to be used) any proceeds of the Loans to
     acquire any security in any transaction which is subject to Section 13 or
     14 of the Securities Exchange Act of 1934, as amended, or any regulations
     or rulings thereunder.

     SECTION 5.11. COLLATERAL. Borrower shall execute and deliver to Lender a
pledge agreement dated even date herewith, substantially in the form of EXHIBIT
B, with appropriate insertions (as the same may be amended from time to time,
herein called the "PLEDGE AGREEMENT"), pursuant to which Borrower shall pledge
to Lender all of the issued and outstanding shares of the capital stock owned by
Borrower (herein collectively called the "PLEDGED SHARES") of Rancho Santa Fe
National Bank, located in Rancho Santa Fe, California.

     SECTION 5.12. WELL CAPITALIZED. Each Subsidiary Bank shall at all times be
at least "well capitalized" as defined in the FDIC Improvement Act of 1991 and
any regulations issued thereunder, as such statute or regulation may be amended
or supplemented from time to time.

     SECTION 5.13. COMPLIANCE WITH LAW. Borrower and each Subsidiary shall
comply with all laws and regulations (whether federal, state or local and
whether statutory, administrative, judicial or otherwise) and with every lawful
governmental order or similar actions (whether administrative or judicial),
specifically including but not limited to all requirements of the Bank Holding
Company Act of 1956, as amended, and with the regulations of the Board of
Governors of the Federal Reserve System relating to bank holding companies.

                        SECTION 6. CONDITIONS OF LENDING

     SECTION 6.1. DOCUMENTATION; NO DEFAULT. The obligation of Lender to make
any Loan is subject to the following conditions precedent:

                                      -15-
<PAGE>

          (a) INITIAL DOCUMENTATION. Lender shall have received all of the
     following concurrently with the execution and delivery hereof, each duly
     executed and dated the date hereof or other date satisfactory to Lender, in
     form and substance satisfactory to Lender and its counsel, at the expense
     of Borrower, and in such number of signed counterparts as Lender may
     request (except for the Note, of which only the original shall be signed):

               (i) NOTE. The Note duly executed;

               (ii) PLEDGE AGREEMENT. The Pledge Agreement duly executed,
          together with the Pledged Shares and stock powers, duly executed, in
          blank;

               (iii) RESOLUTION; CERTIFICATE OF INCUMBENCY. A copy of a
          resolution of the Board of Directors of Borrower authorizing the
          execution, delivery and performance of this Agreement, the Note, the
          Pledge Agreement and other documents provided for in this Agreement,
          certified by the secretary or assistant secretary of Borrower,
          together with a certificate of such officer of Borrower, certifying
          the names of the officer(s) of Borrower authorized to sign this
          Agreement, the Pledge Agreement, the Note and any other documents
          provided for in this Agreement, together with a sample of the true
          signature of each such person (Lender may conclusively rely on such
          certificate until formally advised by a like certificate of any
          changes therein);

               (iv) GOVERNING DOCUMENTS. A copy of the articles of incorporation
          and by-laws of Borrower, certified by the secretary or assistant
          secretary of Borrower;

               (v) CERTIFICATE OF NO DEFAULT. A certificate signed by an
          appropriate officer of Borrower to the effect that: (A) no Event of
          Default or Unmatured Event of Default has occurred and is continuing
          or will result from the making of the first Loan; and (B) the
          representations and warranties of Borrower contained herein are true
          and correct as at the date of the first Loan as though made on that
          date;

               (vi) OPINION OF COUNSEL TO BORROWER. An opinion of Knecht &
          Hansen, counsel to Borrower to such effect as Lender may require;

               (vii) GOOD STANDING CERTIFICATE. A good standing certificate from
          Borrower's Federal Reserve Bank;

               (viii) EVIDENCE OF ACQUISITION OF SUBSIDIARY BANKS. Evidence,
          including any government approvals, satisfactory to Lender that
          Borrower was permitted to and has in fact acquired one hundred percent
          (100%) of the stock of each of the Subsidiary Banks on or before the
          date hereof; and

               (ix) MISCELLANEOUS. Such other documents and certificates as
          Lender may reasonably request.

                                      -16-
<PAGE>

          (b) REPRESENTATIONS AND WARRANTIES TRUE. At the date of each Loan,
     Borrower's representations and warranties set forth herein shall be true
     and correct as of such date as though made on such date.

          (c) NO DEFAULT. At the time of each Loan, and immediately after giving
     effect to such Loan, no Event of Default or Unmatured Event of Default
     shall have occurred and be continuing at the time of such Loan, or would
     result from the making of such Loan.

     SECTION 6.2. AUTOMATIC UPDATE OF REPRESENTATIONS AND WARRANTIES AND
NO-DEFAULT CERTIFICATE; CERTIFICATE AT LENDER'S OPTION. The request by Borrower
for any Loan shall be deemed a representation and warranty by Borrower that the
statements in SUBSECTIONS (b) and (c) of SECTION 6.1 are true and correct on and
as at the date of each succeeding Loan, as the case may be. Upon receipt of each
Loan request Lender in its sole discretion shall have the right to request that
Borrower provide to Lender, prior to Lender's funding of the Loan, a certificate
executed by Borrower's President, Treasurer, or Chief Financial Officer to such
effect.

                               SECTION 7. DEFAULT

     SECTION 7.1. EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "EVENT OF DEFAULT":

          (a) failure to pay, when and as due, any principal, interest or other
     amounts payable hereunder or under the Note; provided that, in the case of
     interest only, such failure shall continue for three (3) days after its due
     date;

          (b) any default, event of default, or similar event shall occur or
     continue under any other instrument, document, note or agreement delivered
     to Lender in connection with this Agreement, including without limitation,
     the Pledge Agreement, and any applicable cure period provided therein shall
     have expired; or any such instrument, document, note or agreement shall not
     be, or shall cease to be, enforceable in accordance with its terms;

          (c) there shall occur any default or event of default, or any event or
     condition that might become such with notice or the passage of time or
     both, or any similar event, or any event that requires the prepayment of
     borrowed money or the acceleration of the maturity thereof, under the terms
     of any evidence of indebtedness or other agreement issued or assumed or
     entered into by Borrower or any Subsidiary, or under the terms of any
     indenture, agreement, or instrument under which any such evidence of
     indebtedness or other agreement is issued, assumed, secured, or guaranteed,
     and such event shall continue beyond any applicable period of grace
     provided therein;

          (d) any representation, warranty, schedule, certificate, financial
     statement, report, notice, or other writing furnished by or on behalf of
     Borrower or any Subsidiary to Lender is false or misleading in any material
     respect on the date as of which the facts therein set forth are stated or
     certified;

                                      -17-
<PAGE>

          (e) Any guaranty of or pledge of collateral security for the Loans
     shall be repudiated or become unenforceable or incapable of performance or
     Borrower shall fail to pledge and deliver to Lender any share certificate
     of Rancho Santa Fe National Bank as provided in SECTION 3(c) of the Pledge
     Agreement;

          (f) Borrower or any Subsidiary shall fail to comply with SECTIONS 5.1,
     5.4, 5.5, 5.6, 5.7 and 5.11 hereof; or fail to comply with or perform any
     agreement or covenant of Borrower or any Subsidiary contained herein, which
     failure does not otherwise constitute an Event of Default, and such failure
     shall continue unremedied for thirty (30) days after notice thereof to
     Borrower by Lender;

          (g) an event or condition specified in SECTION 4.13(b) shall occur or
     exist with respect to any Plan or Multiemployer Plan if as a result of such
     event or condition, together with all other such events or conditions,
     Borrower or any ERISA Affiliate shall incur, or, in the opinion of Lender,
     shall be reasonably likely to incur, a liability to a Plan, a Multiemployer
     Plan or the PBGC (or any combination of the foregoing) which is, in the
     determination of Lender, material in relation to the consolidated financial
     condition, business, operations or prospects taken as a whole of Borrower
     and its Subsidiaries;

          (h) any person or entity presently not in control of Borrower on the
     date hereof shall obtain control directly or indirectly of Borrower,
     whether by purchase or gift of stock or assets, by contract, or otherwise;

          (i) any proceeding (judicial or administrative) shall be commenced
     against Borrower or any Subsidiary, or with respect to any assets of
     Borrower or any Subsidiary which shall threaten to have a material and
     adverse effect on the assets, condition or prospects of Borrower or any
     Subsidiary, and which is not dismissed within thirty (30) days after it is
     commenced against Borrower or any Subsidiary; or final judgment(s) and/or
     settlement(s) in an aggregate amount in excess of ONE MILLION UNITED STATES
     DOLLARS ($1,000,000) in excess of insurance for which the insurer has
     confirmed coverage in writing, a copy of which writing has been furnished
     to Lender, shall be entered or agreed to in any suit or action commenced
     against Borrower or any Subsidiary, and which are not satisfied within
     thirty (30) days after they have been entered or agreed to in any suit or
     action commenced against Borrower or any Subsidiary;

          (j) Borrower shall grant or any Person (other than Lender) shall
     obtain a security interest in any collateral for the Loans; Borrower or any
     other Person shall perfect (or attempt to perfect) such a security
     interest; a court shall determine that Lender does not have a first
     priority security interest in any of the collateral for the Loans
     enforceable in accordance with the terms of the related documents; or any
     notice of a federal tax lien against Borrower shall be filed with any
     public recorder and is not satisfied within thirty (30) days from the time
     of such filing;

          (k) There shall be any material loss or depreciation in the value of
     any collateral for the Loans for any reason, or, unless expressly permitted
     by the related documents, all or

                                      -18-
<PAGE>

     any part of any collateral for the Loans or any direct, indirect, legal,
     equitable or beneficial interest therein is assigned, transferred or sold
     without Lender's prior written consent;

          (l) the FDIC or other regulatory entity shall issue or agree to enter
     into a letter agreement, memorandum of understanding, or a cease and desist
     order with or against Borrower or any Subsidiary; or the FDIC or other
     regulatory entity shall issue or enter into an agreement, order, or take
     any similar action with or against Borrower or any Subsidiary materially
     adverse to the business or operation of Borrower or any Subsidiary;

          (m) any bankruptcy, insolvency, reorganization, arrangement,
     readjustment, liquidation, dissolution, or similar proceeding, domestic or
     foreign, is instituted by or against Borrower or any Subsidiary, and in the
     case of an involuntary bankruptcy proceeding, such proceeding is not
     dismissed within sixty (60) days; or Borrower or any Subsidiary shall take
     any steps toward, or to authorize, such a proceeding; or

          (n) Borrower or any Subsidiary shall become insolvent, generally shall
     fail or be unable to pay its debts as they mature, shall admit in writing
     its inability to pay its debts as they mature, shall make a general
     assignment for the benefit of its creditors, shall enter into any
     composition or similar agreement, or shall suspend the transaction of all
     or a substantial portion of its usual business.

     SECTION 7.2. DEFAULT REMEDIES.

          (a) Upon the occurrence and during the continuance of any Event of
     Default specified in SECTION 7.1 (a)-(l), Lender at its option may declare
     the Note (principal, interest and other amounts) and any other amounts owed
     to Lender, including without limitation any accrued but unpaid Commitment
     Fee, immediately due and payable without notice or demand of any kind. Upon
     the occurrence of any Event of Default specified in SECTION 7.1 (m)-(n),
     the Note (principal, interest and other amounts) and any other amounts owed
     to Lender, including without limitation any accrued but unpaid Commitment
     Fee, shall be immediately and automatically due and payable without action
     of any kind on the part of Lender. Upon the occurrence and during the
     continuance of any Event of Default, any obligation of Lender to make any
     Loan shall immediately and automatically terminate without action of any
     kind on the part of Lender, and Lender may exercise any rights and remedies
     under this Agreement, the Pledge Agreement, the Note, any related document
     or instrument, and at law or in equity.

          (b) Lender may, by written notice to Borrower, at any time and from
     time to time, waive any Event of Default or Unmatured Event of Default,
     which shall be for such period and subject to such conditions as shall be
     specified in any such notice. In the case of any such waiver, Lender and
     Borrower shall be restored to their former position and rights hereunder,
     and any Event of Default or Unmatured Event of Default so waived shall be
     deemed to be cured and not continuing; but no such waiver shall extend to
     or impair any subsequent or other Event of Default or Unmatured Event of
     Default. No

                                      -19-
<PAGE>

     failure to exercise, and no delay in exercising, on the part of Lender of
     any right, power or privilege hereunder shall preclude any other or further
     exercise thereof or the exercise of any other right, power or privilege.
     The rights and remedies of Lender herein provided are cumulative and not
     exclusive of any rights or remedies provided by law.

                             SECTION 8. DEFINITIONS

     SECTION 8.1. GENERAL. As used herein:

          (a) The term "BANKING DAY" means a day on which Lender is open at its
     main office for the purpose of conducting a commercial banking business and
     is not authorized to close.

          (b) The term "CODE" shall mean the Internal Revenue Code of 1986, as
     amended form time to time.

          (c) The term "ENVIRONMENTAL LAWS" shall mean all federal, state and
     local laws, including statutes, regulations, ordinances, codes, rules and
     other governmental restrictions and requirements, relating to the discharge
     of air pollutants, water pollutants or process waste water or otherwise
     relating to the environment or hazardous substances or the treatment,
     processing, storage, disposal, release, transport or other handling
     thereof, including, but not limited to, the federal Solid Waste Disposal
     Act, the federal Clean Air Act, the federal Clean Water Act, the federal
     Resource Conservation and Recovery Act, the federal Hazardous Materials
     Transportation Act, the federal Comprehensive Environmental Response,
     Compensation and Liability Act of 1980, the federal Toxic Substances
     Control Act, regulations of the Nuclear Regulatory Agency, and regulations
     of any state department of natural resources or state environmental
     protection agency, in each case as now or at any time hereafter in effect.

          (d) The term "ERISA" shall mean the Employee Retirement Income
     Security Act of 1974, as amended from time to time.

          (e) The term "ERISA AFFILIATE" shall mean any corporation or trade or
     business which is a member of the same controlled group of corporations
     (within the meaning of Section 414(b) of the Code) as Borrower or is under
     common control (within the meaning of Section 414(c) of the Code) with
     Borrower.

          (f) The term "FDIC" means the Federal Deposit Insurance Corporation
     and any successor thereof.

          (g) The term "INTEREST PERIOD" means, with regard to LIBOR Loans, the
     amount of days from the date an interest rate is to be in effect to the
     date such interest period matures according to its terms.

          (h) The term "INTERIM MATURITY DATE" means the last day of any
     Interest Period.

                                      -20-
<PAGE>

          (i) The term "MULTIEMPLOYER PLAN" shall mean a multiemployer plan
     defined as such in Section 3(37) of ERISA to which contributions have been
     made by Borrower or any ERISA Affiliate as a "contributing sponsor" (within
     the meaning of Section 4001(a)(13) of ERISA).

          (j) The term "PBGC" shall mean the Pension Benefit Guaranty
     Corporation or any entity succeeding to any or all of its functions under
     ERISA.

          (k) The term "PENSION PLAN" shall mean any Plan which is a "defined
     benefit plan" within the meaning of Section 3(35) of ERISA.

          (l) The term "PERSON" shall mean any individual, corporation, company,
     limited liability company, voluntary association, partnership, trust,
     estate, unincorporated organization or government (or any agency,
     instrumentality or political subdivision thereof).

          (m) The term "PLAN" shall mean any plan, program or arrangement which
     constitutes an "employee benefit plan" within the meaning of Section 3(3)
     of ERISA.

          (n) The term "PRIME RATE" means that rate of interest announced from
     time to time by Lender called its prime rate, which rate may not at any
     time be the lowest rate charged by Lender. Changes in the rate of interest
     on the Loans resulting from a change in the Prime Rate shall take effect on
     the date set forth in each announcement of a change in the Prime Rate.

          (o) The term "SUBSIDIARY" means any corporation, partnership, joint
     venture, trust, or other legal entity of which Borrower owns directly or
     indirectly twenty-five percent (25%) or more of the outstanding voting
     stock or interest, or of which Borrower has effective control, by contract
     or otherwise. The term Subsidiary includes each Subsidiary Bank unless
     stated otherwise explicitly.

          (p) The term "SUBSIDIARY BANK" means each Subsidiary which is a bank.

          (q) The term "TANGIBLE NET WORTH" means at any date the total
     shareholders' equity (including all classes of capital stock, capital
     surplus, additional paid-in capital, retained earnings, contingencies, and
     capital reserves), MINUS the cost of common stock reacquired by Borrower
     and other capital accounts of Borrower at such date, MINUS goodwill,
     patents, trademarks, service marks, trade names, copyrights, and all
     intangible assets (including without limitation "core-deposit intangibles"
     and unidentifiable intangibles resulting from acquisitions) and all items
     that are treated as intangible assets under generally accepted accounting
     principles or that otherwise fit within the definition of "intangible
     assets" in the instructions for the call report of the FDIC, MINUS
     unrealized gains on "available for sale" securities, PLUS unrealized losses
     on "available for sale" securities.

                                      -21-
<PAGE>

          (r) The term "TIER 1 CAPITAL" means the same as that determined under
     the capital formula currently used by the Federal Reserve Board.

          (s) The term "TOTAL CAPITAL" means the same as that determined under
     the capital formula currently used by the Federal Reserve Board.

          (t) The term "UNMATURED EVENT OF DEFAULT" means an event or condition
     which would become an Event of Default with notice or the passage of time
     or both.

Except as and unless otherwise specifically provided herein, all accounting
terms shall have the meanings given to them by generally accepted accounting
principles and shall be applied and all reports required by this Agreement shall
be prepared, in a manner consistent with the financial statements referred to in
SECTION 4.3 above.

     SECTION 8.2. APPLICABILITY OF SUBSIDIARY REFERENCES. Terms hereof
pertaining to any Subsidiary shall apply only during such times as Borrower has
any Subsidiary.

                    SECTION 9. NO INTEREST OVER LEGAL RATE.

     Borrower does not intend or expect to pay, nor does Lender intend or expect
to charge, accept or collect any interest which, when added to any fee or other
charge upon the principal which may legally be treated as interest, shall be in
excess of the highest lawful rate. If acceleration, prepayment or any other
charges upon the principal or any portion thereof, or any other circumstance,
result in the computation or earning of interest in excess of the highest lawful
rate, then any and all such excess is hereby waived and shall be applied against
the remaining principal balance. Without limiting the generality of the
foregoing, and notwithstanding anything to the contrary contained herein or
otherwise, no deposit of funds shall be required in connection herewith which
will, when deducted from the principal amount outstanding hereunder, cause the
rate of interest hereunder to exceed the highest lawful rate.

                           SECTION 10. PAYMENTS, ETC.

     All payments hereunder shall be made in immediately available funds, and
shall be applied first to accrued interest and then to principal; however, if an
Event of Default occurs, Lender may, in its sole discretion, and in such order
as it may choose, apply any payment to interest, principal and/or lawful charges
and expenses then accrued. Borrower shall receive immediate credit on payments
received during Lender's normal banking hours if made in cash, immediately
available funds, or by debit to available balances in an account at Lender;
otherwise payments shall be credited after clearance through normal banking
channels. Borrower authorizes Lender to charge any account of Borrower
maintained with Lender for any amounts of principal, interest, taxes, duties, or
other charges or amounts due or payable hereunder, with the amount of such
payment subject to availability of collected balances in Lender's discretion;
unless Borrower instructs otherwise, all Loans shall be made in immediately
available funds and shall be credited to an account(s) of Borrower with Lender.
LENDER AT ITS OPTION MAY

                                      -22-
<PAGE>

MAKE LOANS HEREUNDER UPON TELEPHONIC INSTRUCTIONS AND IN SO DOING SHALL BE FULLY
ENTITLED TO RELY SOLELY UPON INSTRUCTIONS, INCLUDING INSTRUCTIONS TO MAKE
TRANSFERS TO THIRD PARTIES, REASONABLY BELIEVED BY LENDER TO HAVE BEEN GIVEN BY
AN AUTHORIZED PERSON, WITHOUT INDEPENDENT INQUIRY OF ANY TYPE. All payments
shall be made without deduction for or on account of any present or future
taxes, duties or other charges levied or imposed on this Agreement, the Pledge
Agreement, the Note, the Loans or the proceeds, Lender or Borrower by any
government or political subdivision thereof. Borrower shall upon request of
Lender pay all such taxes, duties or other charges in addition to principal and
interest, including without limitation all documentary stamp and intangible
taxes, but excluding income taxes based solely on Lender's income.

                              SECTION 11. SETOFF.

     At any time after an Event of Default of Unmatured Event of Default shall
have occurred and be continuing, and without notice of any kind, any account,
deposit or other indebtedness owing by Lender to Borrower, and any securities or
other property of Borrower delivered to or left in the possession of Lender or
its nominee or bailee, may be set off against and applied in payment of any
obligation hereunder, whether due or not.

                              SECTION 12. NOTICES

     All notices, requests and demands to or upon the respective parties hereto
shall be deemed to have been given or made when deposited in the mail, postage
prepaid, addressed if to Lender to its office indicated above (Attention:
Division Head, Correspondent Services Division), and if to Borrower to its
address set forth below, or to such other address as may be hereafter designated
in writing by the respective parties hereto or, as to Borrower, may appear in
Lender's records.

                           SECTION 13. MISCELLANEOUS.

     This Agreement and any document or instrument executed in connection
herewith shall be governed by and construed in accordance with the internal law
of the State of Illinois, and shall be deemed to have been executed in the State
of Illinois. This Agreement may only be amended, supplemented or modified at any
time by written instrument duly executed by Lender and Borrower. Unless the
context requires otherwise, wherever used herein the singular shall include the
plural and vice versa, and the use of one gender shall also denote the other.
Captions herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof; references herein to Sections or
provisions without reference to the document in which they are contained are
references to this Agreement. This Agreement shall bind Borrower, its successors
and assigns, and shall inure to the benefit of Lender, its successors and
assigns, except that Borrower may not transfer or assign any of its rights or
interest hereunder without the prior written consent of Lender. Borrower agrees
to pay upon demand all expenses (including without limitation attorneys' fees,
legal costs and expenses, and time charges of attorneys who may be employees of
Lender, in each case whether in or out of court, in original or

                                      -23-
<PAGE>

appellate proceedings or in bankruptcy) incurred or paid by Lender or any holder
of the Note in connection with (a) the negotiation, preparation, execution and
delivery of this Agreement, the Note, the Pledge Agreement and the other
documents to be delivered hereunder, (b) any amendment, modification or waiver
of any of the terms of this Agreement, the Pledge Agreement or the Note, (c) any
Event of Default or Unmatured Event of Default and any enforcement or collection
proceedings resulting therefrom, and (d) any transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement, the Pledge Agreement, the Note
or any other document referred to herein; provided that the maximum amount of
such expenses to be paid by Borrower under CLAUSE (a) above shall not exceed
THREE THOUSAND FIVE HUNDRED UNITED STATES DOLLARS ($3,500). Except as otherwise
specifically provided herein, Borrower expressly and irrevocably waives
presentment, protest, demand and notice of any kind in connection herewith.

                     SECTION 14. WAIVER OF JURY TRIAL, ETC.

     BORROWER HEREBY IRREVOCABLY AGREES THAT, SUBJECT TO LENDER'S SOLE AND
ABSOLUTE ELECTION, ALL SUITS, ACTIONS OR OTHER PROCEEDINGS WITH RESPECT TO,
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT OR
INSTRUMENT EXECUTED IN CONNECTION HEREWITH SHALL BE SUBJECT TO LITIGATION IN
COURTS HAVING SITUS WITHIN OR JURISDICTION OVER COOK COUNTY, ILLINOIS. BORROWER
HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL
COURT LOCATED IN OR HAVING JURISDICTION OVER SUCH COUNTY, AND HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO REQUEST OR DEMAND TRIAL BY JURY, TO TRANSFER OR
CHANGE THE VENUE OF ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT BY LENDER IN
ACCORDANCE WITH THIS PARAGRAPH, OR TO CLAIM THAT ANY SUCH PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                      -24-
<PAGE>

                                            FIRST COMMUNITY BANCORP

                                            By: _______________________________

                                            Title: ____________________________

                                            Address for notices:

                                            6110 El Tordo
                                            Rancho Santa Fe, California  92067
                                            Attention:_________________________

                                            THE NORTHERN TRUST COMPANY

                                            By: _______________________________

                                            Title: ____________________________

                                      -25-

<PAGE>

                                    EXHIBIT A

                              REVOLVING CREDIT NOTE

$5,000,000                                                     Chicago, Illinois
                                                                   June 26, 2000

     FOR VALUE RECEIVED, on or before the Maturity Date, FIRST COMMUNITY
BANCORP, a corporation formed under the laws of the State of California
("BORROWER"), promises to pay to the order of THE NORTHERN TRUST COMPANY, an
Illinois banking corporation (hereafter, together with any subsequent holder
hereof, called "LENDER"), at its main banking office at 50 South LaSalle Street,
Chicago, Illinois 60675, or at such other place as Lender may direct, the
aggregate unpaid principal balance of each advance (a "LOAN" and collectively
the "LOANS") made by Lender to Borrower hereunder. The total principal amount of
Loans outstanding at any one time hereunder shall not exceed FIVE MILLION UNITED
STATES DOLLARS ($5,000,000).

     Lender is hereby authorized by Borrower at any time and from time to time
at Lender's sole option to attach a schedule (grid) to this Note and to endorse
thereon notations with respect to each Loan specifying the date and principal
amount thereof, and the date and amount of each payment of principal and
interest made by Borrower with respect to each such Loan. Lender's endorsements
as well as its records relating to Loans shall be rebuttably presumptive
evidence of the outstanding principal and interest on the Loans, and, in the
event of inconsistency, shall prevail over any records of Borrower and any
written confirmations of Loans given by Borrower.

     Borrower agrees to pay interest on the unpaid principal amount from time to
time outstanding hereunder on the dates and at the rate or rates as set forth in
the Revolving Credit Agreement (as hereinafter defined).

     Payments of both principal and interest are to be made in immediately
available funds in lawful money of the United States of America.

     This Note evidences indebtedness incurred under a Revolving Credit
Agreement dated as of the date hereof executed by and between Borrower and
Lender (and, if amended, restated or replaced, all amendments, restatements and
replacements thereto or therefor, if any) (the "REVOLVING CREDIT AGREEMENT;"
capitalized terms not otherwise defined herein have the same meaning herein as
in the Revolving Credit Agreement). Reference is hereby made to the Revolving
Credit Agreement for a statement of its terms and provisions, including without
limitation those under which this Note may be paid prior to its due date or have
its due date accelerated.

     Borrower agrees to pay upon demand all expenses (including without
limitation attorneys' fees, legal costs and expenses, and time charges of
attorneys who may be employees of Lender, in each case whether in or out of
court, in original or appellate proceedings or in

<PAGE>

bankruptcy) incurred or paid by Lender or any holder hereof in connection with
the enforcement or preservation of its rights hereunder or under any document or
instrument executed in connection herewith. Borrower expressly and irrevocably
waives presentment, protest, demand and notice of any kind in connection
herewith.

     This Note is secured by the property described in the Pledge Agreement (as
such term is defined in the Revolving Credit Agreement), to which reference is
made for a description of the collateral provided thereby and the rights of
Lender and Borrower in respect of such collateral.

     This Note and any document or instrument executed in connection herewith
shall be governed by and construed in accordance with the internal law of the
State of Illinois, and shall be deemed to have been executed in the State of
Illinois. Unless the context requires otherwise, wherever used herein the
singular shall include the plural and vice versa, and the use of one gender
shall also denote the other. Captions herein are for convenience of reference
only and shall not define or limit any of the terms or provisions hereof;
references herein to Sections or provisions without reference to the document in
which they are contained are references to this Note. This Note shall bind
Borrower, its successors and assigns, and shall inure to the benefit of Lender,
its successors and assigns, except that Borrower may not transfer or assign any
of its rights or interest hereunder without the prior written consent of Lender.

                                            FIRST COMMUNITY BANCORP

                                            By: _______________________________

                                            Title: ____________________________

                                      -2-

<PAGE>

                                    EXHIBIT B

                                PLEDGE AGREEMENT

Please see attached.

<PAGE>

                                    EXHIBIT C

                                  SUBSIDIARIES

                                                                PERCENTAGE OWNED

1.       Rancho Santa Fe National Bank                                100%
         6110 El Tordo, P.O. Box 2388
         Rancho Santa Fe, California  92067

2.       First Community Bank of the Desert                           100%
         74-750 Highway 111
         Indian Wells, California  92210

                                      -2-

<PAGE>

                                PLEDGE AGREEMENT

     PLEDGE AGREEMENT (this "AGREEMENT") dated as of June 26, 2000 between FIRST
COMMUNITY BANCORP (the "PLEDGOR") and THE NORTHERN TRUST COMPANY (the
"PLEDGEE").

     WHEREAS, the Pledgor and the Pledgee have entered into a Revolving Credit
Agreement (as amended, restated, supplemented or modified from time to time, the
"LOAN AGREEMENT") dated as of the date hereof pursuant to which the Pledgee has
agreed to make revolving loans to the Pledgor from time to time, on and subject
to the terms and conditions set forth in the Loan Agreement;

     WHEREAS, pursuant to the Loan Agreement, the Pledgor will execute and
deliver to the Pledgee the "REVOLVING CREDIT NOTE" referred to in the Loan
Agreement (including any amendments thereto or replacements or extensions
thereof, the "NOTE") to further evidence its obligations with respect to loans
made thereunder; and

     WHEREAS, in order to secure the due and punctual payment in full of all
principal, interest and other amounts from time to time payable under the Loan
Agreement and the Note, the Pledgor has agreed to provide security to the
Pledgee as provided herein.

     NOW, THEREFORE, the parties agree as follows:

     1. DEFINITIONS. The following terms used in this Agreement shall have the
following meanings:

     "COLLATERAL" shall mean the Pledged Shares, the Stock Rights, and the
proceeds of each.

     "CREDIT DOCUMENTS" shall mean, collectively, the Loan Agreement and the
Note.

     "DEFAULT" shall mean any "EVENT OF DEFAULT" as defined in the Loan
Agreement.

     "LIABILITIES" shall mean all of the duties, liabilities and obligations of
the Pledgor under the Credit Documents and this Agreement.

     "PLEDGED SHARES" shall mean 100% of the issued and outstanding shares of
capital stock of Rancho Santa Fe National Bank held by the Pledgor or otherwise
held from time to time by Pledgor.

     "STOCK RIGHTS" shall mean any dividend or other distribution (whether in
cash, securities or other property) and any other right or property which the
Pledgor shall receive or shall become entitled to receive for any reason
whatsoever as a result of its being a holder of the Pledged Shares, or with
respect to, in substitution for, or in exchange for, Pledged Shares.

                                      -3-
<PAGE>

     2. GRANT OF SECURITY INTEREST. To secure the payment and performance of the
Liabilities, the Pledgor hereby pledges, hypothecates, assigns, sets over and
delivers to the Pledgee, and grants the Pledgee a security interest in, the
Collateral.

     3. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Pledgor represents,
warrants and covenants that:

            (a) The Pledgor is the lawful owner of the Collateral, free and
clear of all claims, security interests, liens, encumbrances and rights of
others, other than the security interest hereunder, with full right to
deliver, pledge, assign and transfer the Collateral to the Pledgee as
Collateral hereunder and, until all Liabilities have been fully, finally and
irrevocably satisfied and discharged, the Pledgor shall maintain the lien of
this Agreement as a first priority lien on the Collateral and shall not sell
or otherwise dispose of all or any part of the Collateral (except, prior to
the occurrence of a Default, ordinary cash dividends received by the Pledgor)
and shall keep all of the Collateral free of any liens, security interests,
claims, encumbrances and rights of others except those arising hereunder.

            (b) The Pledgor agrees to deliver to the Pledgee from time to
time upon request of the Pledgee such stock powers, financing statements and
other documents, satisfactory in form and substance to the Pledgee, with
respect to the Collateral as the Pledgee may reasonably request.

            (c) The Pledgor shall deliver to the Pledgee the certificate(s)
evidencing any Pledged Shares held or acquired by the Pledgor from time to
time, not later than two Banking Days (as defined in the Loan Agreement)
following the acquisition thereof by the Pledgor, together with stock powers
covering such certificate(s) duly executed in blank by the Pledgor, being the
registered holder of the certificate(s).

            (d) The Pledgor agrees to hold in trust for the Pledgee upon
receipt and immediately thereafter as provided in SECTION 3(c) pledge and
deliver to the Pledgee any stock certificate, instrument or other document
evidencing or constituting Collateral (except, prior to the occurrence of a
Default, ordinary cash dividends paid with respect to the Pledged Shares).

            (e) The Pledgor agrees to pay when due all taxes, assignments and
governmental charges and levies upon the Collateral.

     4. CARE OF COLLATERAL. The Pledgee shall use reasonable care with respect
to the preservation and maintenance of the Collateral; provided that the Pledgee
shall not be liable to the Pledgor for any action taken by it in good faith, nor
shall the Pledgee be responsible for the consequences of any action or failure
to act except to the extent that such action or failure to act is the proximate
result of the gross negligence, lack of good faith or willful misconduct of the
Pledgee, its agents or employees.

                                      -4-
<PAGE>

     5. DIVIDENDS AND VOTING. Prior to the occurrence of a Default, the Pledgor
shall be entitled (i) to receive and retain all ordinary cash dividends in
respect of the Pledged Shares and (ii) to exercise all voting rights in respect
of the Pledged Shares. If any Default occurs and is continuing, all ordinary
cash dividends distributed in respect of the Pledged Shares shall be delivered
to the Pledgee and held as Collateral hereunder.

     6. REMEDIES UPON DEFAULT. In addition to rights granted under other
provisions of this Agreement, upon the occurrence of a Default hereunder the
Pledgee may from time to time exercise any one or more of the following
remedies:

            (a) The Pledgee may exercise, as to all or any part of the
Collateral, any one or more or all of the rights and remedies granted to a
secured party under the Uniform Commercial Code as in effect in the State of
Illinois or otherwise available at law or in equity, to assure that the
Collateral is devoted to the satisfaction of all Liabilities.

            (b) The Pledgee may exercise all voting and corporate rights
respecting the Collateral, including, without limitation, exchange,
subscription or any other rights, privileges or options pertaining to any of
the Pledged Shares and the Stock Rights as if the Pledgee were the absolute
owner thereof.

            (c) (i)   The Pledgee may sell, assign, contract to sell or
otherwise dispose of all or any portion of the Collateral in any commercially
reasonable manner, including by private or public sale at such prices and on
such terms as the Pledgee deems reasonable under the circumstances, for cash
or on credit or for future delivery and without the assumption of any credit
risk. The Pledgee shall give the Pledgor at least fifteen (15) days' written
notice of the time and place of any public sale of the Collateral, or any
portion thereof, or of the time after which any private sale or other
disposition thereof is to be made, it being expressly acknowledged that said
fifteen (15) days' notice, when given as herein provided, constitutes
reasonable notice. The Pledgee may purchase all or any portion of the
Collateral at any sale, and in that event payment of the purchase price may
be made by credit against the Liabilities. Any sale, assignment, contract to
sell or other disposition shall be made free of any right or equity of
redemption in the Pledgor, which right or equity, if any, is hereby released.
The net proceeds of any disposition of the Collateral by the Pledgee, after
deduction of all expenses as in SECTION 7 provided, shall be applied toward
satisfaction of the Liabilities.

                (ii)  The Pledgor hereby agrees that in any sale of any of
the Collateral hereunder, the Pledgee is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised
by counsel is necessary in order to avoid any violation of applicable
securities or other law (including, without limitation, compliance with such
procedures as may restrict the number of prospective bidders and purchasers,
require that such prospective bidders and purchasers have certain
qualifications, and restrict such prospective bidders and purchasers to
persons who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or resale of
such Collateral), or in order to obtain any required approval of the sale or
of the purchaser by any governmental

                                      -5-
<PAGE>

regulatory authority or official, and the Pledgor further agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor shall the Pledgee be liable
nor accountable to the Pledgor for any discount allowed by reason of the fact
that such Collateral is sold in compliance with any such limitation or
restriction.

            (d) To the extent permitted by applicable law and upon any notice
required by law, the Pledgee may (but need not) retain the Collateral in full
satisfaction of the Liabilities.

            (e) Without prior notice to the Pledgor, the Pledgee may transfer
all or any part of the Collateral into the name of the Pledgee or its
nominee. The Pledgee shall give notice to the Pledgor of such transfer after
the completion thereof.

            (f) The Pledgee may, instead of or concurrently with exercising
the power of sale or any other right or remedy herein conferred upon it,
while a Default exists, proceed by a suit or suits at law or in equity to
foreclose the lien on the Collateral or any portion thereof and sell the same
under a judgment or decree of a court or courts of competent jurisdiction.

     7. CERTAIN EXPENSES. In connection with any disposition of the Collateral
as in SECTION 6 provided, the Pledgor shall pay and discharge all expenses, if
any, of retaking, insuring, holding, preparing for sale, selling and the like,
including, without limiting the generality of the foregoing, accounting and
other professional fees and expenses and reasonable attorneys' fees and legal
expenses incurred by the Pledgee in connection with the enforcement of any of
its rights hereunder. Any such expenses may be deducted and retained by the
Pledgee from the proceeds of any disposition of the Collateral.

     8. DEFICIENCY. Notwithstanding that the Pledgee may take or refrain from
taking any right or remedy hereunder or hold the Collateral and regardless of
the value thereof, the Pledgor shall remain liable for the payment in full of
the Liabilities.

     9. INDEMNITY. Subject to applicable law, the Pledgor hereby agrees to
indemnify and hold harmless the Pledgee from and against any loss, cost,
expense, damage, claim or liability incurred by or asserted against the Pledgee
in connection with this Agreement or the Credit Documents or the pledge of the
Collateral pursuant hereto.

     10. PLEDGEE APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby irrevocably
appoints the Pledgee the Pledgor's attorney-in-fact, with power of substitution
and with full authority in the place and stead of the Pledgor and in the name of
the Pledgor or otherwise, from time to time in the Pledgee's discretion, to take
any action and to execute any instrument that the Pledgee deems necessary or
advisable to accomplish the purposes of this Agreement.

     11. NOTICES. Any notice hereunder to the Pledgor or the Pledgee shall be in
writing and shall be given to such party at its address set forth below its name
on the signature page.

                                      -6-
<PAGE>

     12. BINDING AGREEMENT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns,
except that the Pledgor shall not assign this Agreement.

     13. MISCELLANEOUS.

            (a) No Default shall be waived by the Pledgee except in writing
and no waiver by the Pledgee of any Default shall operate as a waiver of any
other or of the same Default at a future occasion. No single or partial
exercise of any right, power or privilege hereunder or under applicable law
shall preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.

            (b) The Section headings used herein are for convenience of
reference only and shall not define or limit the provisions of this Agreement.

            (c) Any modification or amendment of or waiver of rights under
this Agreement shall be binding only if contained in a writing signed by the
parties hereto.

            (d) This Agreement shall be governed by the internal laws (not
the laws of conflict) of the State of Illinois.

            (e) Each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

                                      -7-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                   FIRST COMMUNITY BANCORP

                                   By:_______________________________
                                   Name:
                                   Title:
                                   Address:

                                   Attention:

                                   THE NORTHERN TRUST COMPANY

                                   By:______________________________
                                   Name:      Thomas E. Bernhardt
                                   Title:     Vice-President
                                   Address:   50 South LaSalle Street
                                              Chicago, Illinois  60675
                                   Attention: Correspondent Services Division

                                       -8-<PAGE>

                                  EXHIBIT 10.3

                             FIRST COMMUNITY BANCORP

                           DEFERRED COMPENSATION PLAN

     This First Community Bancorp Deferred Compensation Plan (the "Plan") is
effective for compensation earned on and after June 1, 2000 by all directors of
First Community Bancorp (the "Company") or any subsidiary corporation of the
Company, as defined in Section 424(f) of the Internal Revenue Code of 1986, as
amended ("Subsidiaries"), including but not limited to Rancho Santa Fe National
Bank ("Rancho") and First Community Bank of the Desert, and all full time
officers having the title of Senior Vice President or above (whether or not they
are also directors of the Company or any Subsidiary), collectively referred to
herein as "Eligible Participants." The Plan was approved by the Board of
Directors of the Company, and by a majority of the outstanding shares of the
Company, effective May 31, 2000.

     1. DEFERRAL OF STOCK OR FEES.

            a. From time to time Eligible Participants may, by written
notice, elect to have payment of all or a portion of their salaries, bonuses
or director's fees for the next succeeding calendar year, and/or all or a
portion of any grant of shares of common stock of the Company ("Company
Stock") to the Eligible Participants made on or after such election, deferred
as herein provided. Each such deferral of compensation shall be (and is
hereinafter referred to as) a "Deferred Amount." Each Eligible Participant
who elects to participate in the Plan is referred to herein as a
"Participant". Notwithstanding the foregoing, however, a Participant may not
elect to defer any portion of compensation or Company Stock unless such
Participant's deferrals with respect to such year are in round percentage
increments of 10%.

            b. Any elections with respect to Deferred Amounts of compensation
or Company Stock shall be exercised in writing by the Participant prior to
the latest to occur of the following: (i) the beginning of the calendar year
for which the compensation is to be earned; (ii) such Participant's first day
of service in that year; (iii) the first day of the calendar month next
following the date the Participant first becomes eligible to participate in
the Plan; PROVIDED THAT, an election made after the first day of a calendar
year shall only apply to compensation earned after the date of the election.
Notwithstanding the foregoing, in the case of any Participants who may be
required to file reports of their Company Stock ownership on Form 3 or 4 with
the Securities and Exchange Commission, the election shall be no later than
the date specified in the preceding sentence or, if earlier, six months prior
to the date on which any compensation deferred by the Participant are
invested in Company Stock; and in the case of deferral of grants of Company
Stock, the election shall be made no later than the date specified in the
preceding sentence or, if earlier, the effective date of the grant of the
Company Stock. An election of

                                      -1-
<PAGE>

Deferred Amounts, once made, is irrevocable, except as provided in paragraph
6 hereof. An election of Deferred Amounts, once made, shall continue to be
effective for succeeding calendar years until revoked by the Participant by
written request to the Secretary of the Company prior to the beginning of a
calendar year for which fees would otherwise be deferred.

            c. Deferred Amounts shall be subject to the rules set forth in
this document, and each Participant shall have the right to receive cash
payments on account of previously Deferred Amounts only in the amounts and
under the circumstances hereinafter set forth.

            d. All Eligible Participants shall be eligible to participate in
this Plan. Eligibility shall be determined annually as of the latest
practicable date prior to the commencement of each new calendar year. In the
event a Participant ceases to be eligible for this Plan during the course of
a calendar year, the Participant's eligibility shall nevertheless continue
through the end of that calendar year with respect to fees earned prior to
cessation of service.

     2. ADMINISTRATIVE COMMITTEE. Full power and authority to construe,
interpret, and administer this document, shall be vested in an Administrative
Committee (the "Committee") to be comprised of all members of the Executive
Committee of the Board of Directors of the Company, and chaired by the chief
financial officer of the Company. The Committee shall have full power and
authority to make each determination provided for in this document, and in this
connection, to promulgate such rules and regulations as the Committee considers
necessary or appropriate for the implementation and management of this Plan. All
determinations made by the Committee shall be conclusive upon the Company and
its Subsidiaries, each Eligible Participant and Participant and their respective
designees, heirs and assigns.

     3. DEFERRED COMPENSATION ACCOUNTS. The Company shall establish on its books
a separate account ("Account") for each of its Eligible Participants who becomes
a Participant in this Plan, and each such Account shall be maintained as
follows:

            a. Each Account shall be credited with the Deferred Amounts
elected by the Participant for whom such Account is established as of the
date on which such Deferred Amount would otherwise have been paid to the
Participant.

            b. The value of a Participant's Account is to be measured by the
value of and income from Company Stock, in which all Deferred Amount shall be
deemed to be invested, however such value is merely a measuring device to
determine the payments to be made to each Participant hereunder. Each
Participant, and each other recipient of a Participant's Deferred Amounts
pursuant to paragraph 7, shall be and remain an unsecured general creditor of
the Company with respect to any payments due and owing to such Participant
hereunder. If the Company should from time to time, in its discretion,
actually purchase the investments deemed to have been made for Participant's
Account, through the trust described in paragraph 4, such

                                      -2-
<PAGE>

investments shall be solely for such trust's own account, and the Participants
shall have no right, title or interest therein.

            c. At the time a Participant makes his or her first election
described in paragraph 1.b., the Participant may also consent to have
Deferred Amounts contributed to the trust described in paragraph 4, and to
have the Participant's Account adjusted as provided in paragraph 4 from the
date as of which it is established. Any such consent, if granted, shall be
irrevocable as to the Participant, and shall apply to all of the
Participant's Deferred Amounts. Any consent given pursuant to this paragraph
3.c. shall in no way obligate the Company to make contributions to the trust
described in paragraph 4, such contributions being in the Company's
discretion as provided in paragraph 4.

     4. TRUST.

     The Company may establish a trust (of the type commonly known as a "rabbi
trust") to aid in the accumulation of assets for payment of Deferred Amounts. In
the event that such a trust is established ("Trust") the amounts credited to the
Directors' Participant's Accounts shall be adjusted as follows:

            a. The Company may, in its discretion, contribute to the Trust an
amount equal to the balance credited to the Account of each Participant
(other than Participants who have not made the election described in
paragraph 3.c.) who remains an Eligible Participant on the date of such
contribution. Thereafter, the Company may, in its discretion, contribute to
the Trust an amount equal to the Deferred Amounts of the Participants within
five business days after the Deferred Amount would otherwise be paid to the
Participant. The assets of the Trust shall be invested in Company Stock,
subject to the Company's right to substitute assets of equal value as
provided in the Trust. The terms of the Trust shall be consistent with the
terms of this Plan. The Trustee shall be a corporate trustee independent of
the Company and shall conform to the provisions of the "model trust," as
described in Rev. Proc. 92-64. Nothing herein shall be construed as requiring
the Company to make any contributions to the Trust. To the extent such
contributions are actually made, the Trust's assets shall remain subject to
the claims of the Company's general creditors in the event of its insolvency.

            b. The Trust shall provide for separate accounts in the name of
each Participant who has elected a Deferred Amount. Except as provided in
paragraph 4.d., from and after the date as of which such accounts are
established, the balances in the Accounts established for Participants
pursuant to this Plan shall be equal to the balances credited to such
separate accounts. Each such separate account shall then be adjusted as
follows:

                   (i) Contributions made by the Company to the trust on
behalf of such Participant, and all dividends or other distributions made
with respect to property allocated to such separate account, shall be
credited to such separate account and invested in Company Stock.

                                      -3-
<PAGE>

                   (ii) Each Participant's separate account shall be
increased by the amount of any increase in the fair market value, as
determined by the Trustee, of any assets allocated to such separate account,
and shall be decreased by any decrease in the fair market value of such
assets, as determined by the Trustee.

                   (iii) Each Participant's separate account shall be reduced
by any distributions made to the Participant from the Trust which are
chargeable to such separate account.

            c. A Participant's separate account shall continue during any
period of distribution subsequent to the Participant's termination of service
on the board to be invested in Company Stock.

            d. The adjustments described in this paragraph 4 shall only be
made to a Participant's Account to the extent that the Company has made
contributions to the Trust pursuant to this paragraph 4. If for any reason
such contributions have not been made then, and only to that extent, the
Participant's Account shall be adjusted as provided in paragraph 3.b.

     5. PAYMENT OF DEFERRED AMOUNTS.

            a. At the next regularly scheduled meeting of the Committee
following the earlier of (a) the January 31 following the election made upon
a Participant's commencement of participation in the Plan, unless prior to
such date the Participant elects to continue deferral until the next
following January 31, or (b) the date of a Participant's termination of
status as an Eligible Participant, the Committee shall direct the Trustee to
commence distribution of the amounts credited to such Participant's Account.
Commencing within the 30-day period following the Committee's direction, the
balance credited to the Participant's Account shall be paid in one lump sum
or in annual installments over the period directed by the Participant in an
election made upon the Participant's commencement of participation in the
Plan.

            b. The first payment under paragraph 5.a. shall be paid on a date
selected by the Committee which is no later than 30 days after the date on
which the Committee's direction as to the form and timing of distributions is
made. Succeeding installments (if any) shall be paid on January 31 of each
calendar year following the calendar year in which the first payment was made.

            c. Each payment shall be made in cash or in kind as the
Committee, in its discretion, shall determine, and each annual installment
payment shall have a value equal to the amount credited to Participant's
Account as of the first day of the calendar month in which the installment is
paid multiplied by a fraction, the numerator of which is one and the
denominator of which is the number of installments remaining to be paid,
including the current installment.

                                      -4-
<PAGE>

            d. For purposes of this section, a Participant's status as an
Eligible Participant is considered to terminate as of the Participant's last
date of service as an Eligible Participant.

            e. In the event installment payments commence and any
installments are unpaid at the time of Participant's death, the payments
shall be made at the times and in such amounts as if Participant were living
to the persons specified in paragraph 7.a.

            f. Notwithstanding any other provision of this Section 5 or any
payment schedule directed by a Participant pursuant to this Section 5 and
regardless of whether payments have commenced under this Section 5, in the
event that the Internal Revenue Service should finally determine that part or
all of the value of a Participant's Deferred Amounts or Plan Account which
have not actually been distributed to the Participant, or that part or all of
a related Trust Account which has not actually been distributed to the
Participant, is nevertheless required to be included in the Participant's
gross income for federal and/or state income tax purposes, then the Deferred
Amounts or the Account or the part thereof that was determined to be
includible in gross income shall be distributed to the Participant in a lump
sum as soon as practicable after such determination without any action or
approval by the Committee. A "final determination" of the Internal Revenue
Service for purposes of this paragraph 5.f is a determination in writing by
said Service ordering the payment of additional tax, reporting of additional
gross income or otherwise requiring Plan amounts to be included in gross
income, which is not appealable or which the Participant does not appeal
within the time prescribed for appeals.

     6. EMERGENCY PAYMENTS.

     In the event of an "unforeseeable emergency" as determined hereafter, the
Committee may determine the amounts payable under paragraph 5 hereof and pay all
or a part of such amounts without regard to the payment dates provided in
paragraph 5 to the extent the Committee determines that such action is necessary
in light of immediate and heavy needs of the Participant (or his or her
beneficiary) occasioned by severe financial hardship. For the purposes of this
paragraph 6, an "unforeseeable emergency" is a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or beneficiary, or of a dependent (as defined in Section 152(a) of
the Internal Revenue Code of 1986, as amended) of the Participant or
beneficiary, loss of the Participant's or beneficiary's property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant or beneficiary.
Payments shall not be made pursuant to this paragraph 6 to the extent that such
hardship is or may be relieved: (a) through reimbursement or compensation by
insurance or otherwise, (b) by liquidation of the Participant's or beneficiary's
assets, to the extent the liquidation of such assets would not itself cause
severe financial hardship, or (c) by cessation of the Participant's deferrals
under the Plan. Such action shall be taken only if the Participant (or
Participant's legal representatives or successors) signs an application
describing fully the circumstances which are deemed to justify the payment,
together with an

                                      -5-
<PAGE>

estimate of the amounts necessary to prevent such hardship, which application
shall be approved by the Committee after making such inquiries as the Committee
deems necessary or appropriate.

     7. METHOD OF PAYMENTS.

            a. In the event of a Participant's death, payments shall be made
to the persons (including a trustee or trustees) named in the last written
instrument signed by the Participant and received by the Committee prior to
the Participant's death, or if the Participant fails to so name any person,
the amounts shall be paid to the Participant's estate or the appropriate
distributee thereof. The Committee, the Bank, and the Trustee shall be fully
protected in making any payments due hereunder in accordance with what the
Committee believes to be such last written instrument received by it.

            b. Payments due to a legally incompetent person may be made in
such of the following ways as the Committee shall determine:

                   (i)   directly to such incompetent person,

                   (ii)  to the legal representative of such incompetent person,
or

                   (iii) to some near relative of the incompetent person to
be used for the latter's benefit.

            c. Except as otherwise provided in paragraphs 7.a. and b., all
payments to persons entitled to benefits hereunder shall be made to such
persons in person or upon their personal receipt or endorsement, and shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors of
the Participant or the Participant's beneficiary.

            d. All payments to persons entitled to benefits hereunder shall
be made out of the general assets, and shall be the sole obligations, of the
Company, except to the extent that such payments are made out of the trust
described in paragraph 4. The Plan is a mere promise to pay benefits in the
future and it is the intention of the parties that it be "unfunded" for tax
purposes (and for the purposes of Title I of the Employee Retirement Income
Security Act of 1974 ("ERISA")).

     8. CLAIMS PROCEDURES.

            a. If a claim for benefits made by any person (the "Applicant")
is denied, the Committee shall furnish to the Applicant within 90 days after
its receipt of such claim (or within 180 days after such receipt if special
circumstances require an extension of time) a written notice which: (i)
specifies the reasons for the denial, (ii) refers to the pertinent provisions
of the Plan on which the denial is based, (iii) describes any additional
material or information

                                      -6-
<PAGE>

necessary for the perfection of the claim and explains why such material or
information is necessary, and (iv) explains the claim review procedures.

            b. Upon the written request of the Applicant submitted within 60
days after his receipt of such written notice, the Committee shall afford the
Applicant a full and fair review of the decision denying the claim and, if so
requested: (i) permit the Applicant to review any documents which are
pertinent to the claim, (ii) permit the Applicant to submit to the Committee
issues and comments in writing, and (iii) afford the Applicant an opportunity
to meet with a quorum of the Committee as a part of the review procedure.

            c. Within 60 days after its receipt of a request for review (or
within 120 days after such receipt if special circumstances, such as the need
to hold a hearing, require an extension of time) the Committee shall notify
the Applicant in writing of its decision and the reasons for its decision and
shall refer the Applicant to the provisions of the Plan which form the basis
for its decision.

     9. MISCELLANEOUS.

            a. Except as limited by paragraph 7.c. and except that a
Participant shall have a continuing power to designate a new recipient in the
event of Participant's death at any time prior to such death without the
consent or approval of any person theretofore named as Participant's
recipient by an instrument meeting the requirements of paragraph 7.a., this
document shall be binding upon and inure to the benefit of the Company,
Participant, their legal representatives, successors and assigns, and all
persons entitled to benefits hereunder.

            b. Any notice given in connection with this document shall be in
writing and shall be delivered in person or by registered mail, return
receipt requested. Any notice given by registered mail shall be deemed to
have been given upon the date of delivery indicated on the registered mail
return receipt, if correctly addressed.

            c. Nothing in this document shall interfere with the rights of
any Participant to participate or share in any profit sharing or pension plan
which is now in force or which may at some future time become a recognized
plan of the Company or its Subsidiaries.

            d. Nothing in this document shall be construed as an employment
agreement nor as in any way impairing the right of the Company or its
Subsidiaries, or their respective boards, committees or shareholders, to
terminate the services of the Participant, to refuse to renominate or reelect
such person as a director, or to enforce the duly adopted retirement policies
of the Company or its Subsidiaries.

                                      -7-
<PAGE>

     10. RULE 16b-3; STOCKHOLDER APPROVAL.

     This Plan is intended to qualify for the exemption from short swing profits
liability under Section 16(b) of the Securities Exchange Act of 1934 provided by
Rule 16b-3 of the Securities and Exchange Commission.

     11. REGISTRATION.

     The Company may, in its discretion, register the shares of Company Stock
subject to this Plan and any other applicable provisions of State or Federal
law, and may enter into a listing agreement for such shares with Nasdaq, if such
actions are deemed necessary or advisable by the Company in order to provide
Participants with freely marketable shares. However, nothing herein shall be
deemed to require any such registration or listing.

     12. TERMINATION OR AMENDMENT. The Board of Directors of the Company may, in
its discretion, terminate or amend this Plan from time to time, provided,
however, that no such termination or amendment shall (without the Participant's
consent) alter any Participant's right to payments of amounts previously
credited to such Participant's Account or delay the time or times at which a
Participant is entitled to receive payments with respect to his or her Deferred
Amounts.

                                      -8-

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