FIRSTPLUS FINANCIAL GROUP INC, S-4/A, 1997-07-03

FIRSTPLUS FINANCIAL GROUP INC
S-4/A, 1997-07-03
PERSONAL CREDIT INSTITUTIONS

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<PAGE>

As filed with the Securities and Exchange Commission on July 3, 1997
Registration No. 333-25715

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------------------

AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------------------
FIRSTPLUS FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)

NEVADA 6141 75-2561085
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Identification No.)
Classification No.)

1600 VICEROY, 8TH FLOOR
DALLAS, TEXAS 75235
(214) 599-6000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

RONALD M BENDALIN
GENERAL COUNSEL
1600 VICEROY, 8TH FLOOR
DALLAS, TEXAS 75235
(214) 599-6400

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

COPIES TO:

RONALD J. FRAPPIER KEITH T. HOLMES
JENKENS & GILCHRIST, KING, PURTICH, HOLMES,
A PROFESSIONAL CORPORATION PATERNO & BERLINER
1445 ROSS AVENUE, SUITE 3200 2121 AVENUE OF THE STARS, 22ND FLOOR
DALLAS, TEXAS 75202 LOS ANGELES, CALIFORNIA 90067
(214) 855-4500 (310) 282-8932

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement and the
satisfaction or waiver of all other conditions to the merger of Western
Interstate Acquisition, Inc. ("WIA") with and into Western Interstate Bancorp
("WIB") pursuant to the Agreement and Plan of Merger dated February 19, 1997
among the Registrant, WIA and WIB, described in the enclosed Proxy
Statement/Prospectus.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box [ ].

----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.

<PAGE>

WESTERN INTERSTATE BANCORP
18302 IRVINE BOULEVARD
SUITE 300
TUSTIN, CALIFORNIA 92780

_______, 1997

TO THE SHAREHOLDERS OF
WESTERN INTERSTATE BANCORP:

You are cordially invited to attend a Special Meeting of Shareholders (the
"WIB Meeting") of Western Interstate Bancorp ("WIB") to be held on August 7,
1997 at 12:00 noon (Tustin, California time) at the offices of Citizens Thrift &
Loan Association, 18302 Irvine Boulevard, Suite 300, Tustin, California 92780.

At the WIB Meeting, you will be asked to consider and vote upon a proposal
to approve and adopt an Agreement and Plan of Merger (the "Merger Agreement"),
dated as of February 19, 1997, as amended, by and among WIB, FIRSTPLUS Financial
Group, Inc., formerly known as RAC Financial Group, Inc. ("FPFG"), and Western
Interstate Acquisition, Inc. ("WIA"), a direct wholly owned subsidiary of FPFG,
pursuant to which WIA will be merged with and into WIB, with WIB becoming a
direct wholly owned subsidiary of FPFG (the "Merger"). A copy of the Merger
Agreement is attached to the accompanying Proxy Statement/Prospectus as
Appendix A.

At the effective time of the Merger (the "Effective Time"), each share of
common stock, no par value, of WIB (the "WIB Common Shares"), other than shares
held by WIB dissenting shareholders, will be converted into the right to receive
such fraction of a share of voting common stock, $.01 par value, of FPFG (the
"FPFG Common Stock") as is equal to (i) the "FPFG Share Number" divided by
(ii)(A) the number of WIB Common Shares outstanding as of the Effective Time
plus (B) the number of WIB Common Shares issuable upon exercise of all
outstanding stock options of WIB as of the Effective Time (the "Conversion
Ratio"). No scrip or fractional shares of FPFG Common Stock will be issued in
the Merger, but rather the total number of shares to be received by each WIB
shareholder will be rounded up to the next whole number of shares.

As of June 25, 1997, the closing price of the FPFG Common Stock on the
Nasdaq National Market was $33.75 per share, there were 1,211,156 WIB Common
Shares outstanding and there were stock options outstanding exercisable for
197,136 WIB Common Shares. WIB does not anticipate issuing any additional WIB
Common Shares or any additional stock options exercisable for WIB Common Shares
prior to the Effective Time.

Enclosed are a Notice of Special Meeting of Shareholders and a Proxy
Statement/Prospectus which describes the Merger and the background to the
transaction. You are urged to read all of these materials carefully. The Board
of Directors of WIB has fixed the close of business on June 15, 1997 as the
record date for the WIB Meeting. Accordingly, only shareholders of record on
that date will be entitled to notice of, and to vote at, the WIB Meeting or any
adjournments or postponements thereof. The affirmative vote of the holders of a
majority of the WIB Common Shares outstanding and entitled to vote is necessary
to approve and adopt the Merger Agreement.

THE BOARD OF DIRECTORS OF WIB HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT
AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" APPROVAL AND ADOPTION OF
THE MERGER AGREEMENT.

BECAUSE OF THE SIGNIFICANCE OF THE PROPOSED MERGER TO WIB, YOUR
PARTICIPATION IN THE WIB MEETING, IN PERSON OR BY PROXY, IS ESPECIALLY
IMPORTANT. AN ABSTENTION OR FAILURE TO VOTE AT THE WIB MEETING OR FAILURE TO
SUBMIT A PROXY WILL HAVE THE SAME EFFECT AS A VOTE "AGAINST" THE MERGER
AGREEMENT. ACCORDINGLY, PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY
IN THE POSTAGE-PAID ENVELOPE THAT HAS BEEN PROVIDED TO YOU FOR YOUR CONVENIENCE.
IF YOU ATTEND THE WIB MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU
HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.

The Board and I urge you to vote "FOR" the Merger Agreement and each of the
transactions contemplated thereby.

Thank you, and we look forward to seeing you at the meeting.

Sincerely,

James T. Capretz
Chairman of the Board

Tustin, California
____________ __, 1997

<PAGE>

WESTERN INTERSTATE BANCORP
18302 IRVINE BOULEVARD
SUITE 300
TUSTIN, CALIFORNIA 92780
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 7, 1997

TO THE SHAREHOLDERS OF
WESTERN INTERSTATE BANCORP:

You are cordially invited to attend a Special Meeting of Shareholders (the "WIB
Meeting") of Western Interstate Bancorp ("WIB") to be held at the offices of
Citizens Thrift & Loan Association, 18302 Irvine Boulevard, Tustin, California
92780, at 12:00 noon (Tustin, California time) on August 7, 1997, for the
following purposes:

1. To consider and vote upon a proposal to approve an Agreement and Plan
of Merger (the "Merger Agreement"), dated as of February 19, 1997, as
amended, by and among WIB, FIRSTPLUS Financial Group, Inc., a Nevada
corporation that was formerly named RAC Financial Group, Inc.
("FPFG"), and Western Interstate Acquisition, Inc., a Nevada
corporation and a direct wholly owned subsidiary of FPFG ("WIA"),
pursuant to which WIA will be merged with and into WIB, with WIB
becoming a direct wholly owned subsidiary of FPFG, upon the terms and
subject to the conditions set forth in the Merger Agreement, as more
fully described in the accompanying Proxy Statement/Prospectus. A
copy of the Merger Agreement is attached as Appendix A to the
accompanying Proxy Statement/Prospectus.

2. To consider and vote on a proposal to give authority to the proxies
named in the form of proxy accompanying the Proxy Statement/Prospectus
to adjourn the WIB Meeting in order to permit further solicitation of
proxies.

3. To transact such other business as may properly be brought before the
WIB Meeting or any adjournment(s) thereof.

Holders of record of shares of WIB common stock, no par value per share
("WIB Common Shares"), at the close of business on June 15, 1997 (the "Record
Date") will be entitled to notice of, and to vote at, the meeting or any
adjournment(s) thereof.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" APPROVAL AND ADOPTION OF THE
MERGER AGREEMENT.

By order of the Board of Directors,

Dr. James E. Rich,
Secretary

Tustin, California
_______________, 1997

WHETHER OR NOT YOU PLAN TO ATTEND THE WIB MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE WIB MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE
PREVIOUSLY RETURNED YOUR PROXY CARD.

<PAGE>

SUBJECT TO COMPLETION, DATED JULY 3, 1997

WESTERN INTERSTATE BANCORP
PROXY STATEMENT
For a Special Meeting of Shareholders
------------------------
FIRSTPLUS FINANCIAL GROUP, INC.
PROSPECTUS
FOR 1,243,134
SHARES OF COMMON STOCK

This Proxy Statement/Prospectus is being furnished to holders of the shares
of common stock, no par value per share ("WIB Common Shares"), of Western
Interstate Bancorp, a California corporation ("WIB"), in connection with the
solicitation of proxies by WIB's Board of Directors (the "WIB Board") for use at
the Special Meeting of Shareholders of WIB (the "WIB Meeting") to be held on
August 7, 1997, at the offices of Citizens Thrift & Loan Association
("Citizens"), 18302 Irvine Boulevard, Tustin, California 92780, at 12:00 noon
(Tustin, California time) and any adjournments thereof.

The shareholders of WIB will be asked to consider and vote upon a proposal
to approve an Agreement and Plan of Merger (the "Merger Agreement"), dated as of
February 19, 1997, as amended, providing for the merger (the "Merger") of
Western Interstate Acquisition, Inc. ("WIA"), a Nevada corporation and a wholly
owned subsidiary of FIRSTPLUS Financial Group, Inc., a Nevada corporation that
was formerly named RAC Financial Group, Inc. ("FPFG"), with and into WIB, with
WIB continuing as the surviving corporation (the "Surviving Corporation") and
becoming a wholly owned subsidiary of FPFG.

This Proxy Statement/Prospectus also constitutes a prospectus of FPFG
included as part of a registration statement on Form S-4 (No. 333-25715) filed
with the Securities and Exchange Commission (the "Commission") with respect to
the shares of voting common stock, par value $.01 per share, of FPFG ("FPFG
Common Stock") to be issued to shareholders of WIB pursuant to the terms of the
Merger Agreement, as more fully described in this Proxy Statement/Prospectus and
the Merger Agreement. The Merger Agreement is attached hereto as Appendix A.
Under the terms of the Merger Agreement, (i) WIA will be merged with and into
WIB, (ii) WIB will become a direct wholly owned subsidiary of FPFG, and (iii)
each outstanding WIB Common Share, other than shares held by dissenting
shareholders of WIB, will be converted into the right to receive such fraction
of a share of FPFG Common Stock as is equal to (A) the "FPFG Share Number"
divided by (B) the number of WIB Common Shares outstanding as of the Effective
Time plus the number of WIB Common Shares issuable upon exercise of all
outstanding stock options of WIB as of the Effective Time (the "Conversion
Ratio"). No scrip or fractional shares of FPFG Common Stock will be issued in
the Merger, but rather the total number of shares to be received by each WIB
shareholder will be rounded up to the next whole number of Shares. The shares
of FPFG Common Stock to be issued to WIB shareholders in connection with the
Merger are referred to herein sometimes as the "Merger Consideration."

The term "FPFG Share Number" means the number determined by dividing (i)
$24,862,674 by (ii) the average closing price per share of the FPFG Common
Stock on the Nasdaq National Market for the ten trading days prior to the
date that is two calendar days prior to closing (the "Closing" and the date
of such Closing being referred to herein as the "Closing Date") of the Merger
(such average being referred to herein as the "FMV of the FPFG Common
Stock"). Had the Closing occurred on June 25, 1997, the FPFG Share Number
would have been 756,279, which equals (i) $24,862,674 divided by (ii) the
average of the closing prices for the FPFG Common Stock on the Nasdaq
National Market for June 9, 1997 through June 20, 1997. As of June 25, 1997,
there were 1,211,156 WIB Common Shares outstanding and stock options
outstanding exercisable for 197,136 WIB Common Shares. Therefore, assuming
no holders of WIB Common Shares exercise dissenter's rights, the Conversion
Ratio would have been .5370 had the Closing occurred on June 25, 1997. This
Conversion Ratio makes the pro forma equivalent per share value of each WIB
Common Share approximately $18.12 as of June 25, 1997. See "Summary--Market
Price Data." WIB shareholders are reminded, however, that they will not
know with certainty at the time they vote the number of shares of FPFG Common
Stock they will receive in the Merger and that the actual value of the Merger
Consideration and the number of shares of FPFG Common Stock that actually
will be issued to WIB shareholders may differ from the example above, given
that the actual value and number of shares to be issued will not be
determined until two days prior to Closing.

IN EVALUATING THE MERGER, WIB SHAREHOLDERS SHOULD CAREFULLY CONSIDER THE
FACTORS DESCRIBED UNDER "RISK FACTORS" BEGINNING ON PAGE 13 OF THIS PROXY
STATEMENT/PROSPECTUS.

FPFG Common Stock is traded on the Nasdaq National Market under the symbol
"FPFG." The closing sales price of shares of FPFG Common Stock was $33.50 on
February 19, 1997 (the last trading day prior to the public announcement of the
Merger) and $33.75 on June 25, 1997. There is no established public market for
WIB Common Shares.

THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, BY ANY OTHER GOVERNMENTAL AGENCY,
OR OTHERWISE.

<PAGE>

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This Proxy Statement/Prospectus, the foregoing Notice of Special Meeting of
Shareholders (the "Notice of Special Meeting") and the accompanying form of
proxy are first being mailed to the shareholders of WIB on or about ________,
1997.

THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS _____________ ___, 1997.

<PAGE>

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY FPFG, WIA, OR WIB. THIS PROXY
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, ANY SECURITY OTHER THAN THE SECURITIES COVERED BY THIS PROXY
STATEMENT/PROSPECTUS, OR THE SOLICITATION OF A PROXY TO OR FROM ANY PERSON IN
ANY JURISDICTION WHERE IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION OF AN
OFFER OR PROXY SOLICITATION. NEITHER THE DELIVERY OF THIS PROXY
STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE INFORMATION ABOUT FPFG, WIA, OR WIB CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS SINCE THE DATE HEREOF.

AVAILABLE INFORMATION

FPFG is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, accordingly, files
reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information filed with the Commission are
available for inspection and copying at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located
at the Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and at Seven World Trade Center, New York, New York 10048.
Copies of such documents may also be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, such materials and other information
concerning FPFG can be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.

FPFG has filed with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"), a Registration Statement on Form S-4 (together
with all amendments, schedules and exhibits thereto, the "Registration
Statement") with respect to the shares of FPFG Common Stock issuable in
connection with the Merger. This Proxy Statement/Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. The Registration Statement, including any amendments, schedules,
and exhibits thereto, is available for inspection and copying as set forth
above. Statements contained in this Proxy Statement/Prospectus as to the
contents of any contract or other document are not necessarily complete, and in
each instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference.

The Commission maintains a World Wide Web site that contains reports, proxy
and information statements, and other information filed electronically with the
Commission. The address of the site is http://www.sec.gov.

NOTE ON FORWARD-LOOKING INFORMATION

CERTAIN INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS
CONSTITUTES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, WHICH CAN BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "EXPECT," "ANTICIPATE,"
"ESTIMATE," OR "CONTINUE" OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR
COMPARABLE TERMINOLOGY. THE STATEMENTS IN "RISK FACTORS" CONTAINED IN THIS
PROXY STATEMENT/PROSPECTUS CONSTITUTE CAUTIONARY STATEMENTS IDENTIFYING
IMPORTANT FACTORS, INCLUDING CERTAIN RISKS AND UNCERTAINTIES, WITH RESPECT TO
SUCH FORWARD-LOOKING STATEMENTS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS.

(i)
<PAGE>

INFORMATION INCORPORATED BY REFERENCE

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF ANY SUCH DOCUMENTS,
OTHER THAN EXHIBITS THERETO, ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS
DELIVERED UPON WRITTEN OR ORAL REQUEST TO THE FOLLOWING:

FIRSTPLUS Financial Group, Inc.
1600 Viceroy, 8th Floor
Dallas, Texas 75235
Attention: Ronald M Bendalin, Esq.
Phone: (214) 599-6400
Fax: (214) 599-7575

IN ORDER TO ENSURE TIMELY DELIVERY OF SUCH DOCUMENTS, A REQUEST MUST BE
RECEIVED NO LATER THAN JULY 31, 1997. SUCH DOCUMENTS WILL BE SENT TO THE
REQUESTING PARTY BY FIRST CLASS MAIL OR OTHER EQUALLY PROMPT MEANS WITHIN ONE
BUSINESS DAY OF RECEIPT OF SUCH REQUEST.

The following FPFG documents are incorporated by reference herein:

(1) FPFG's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996, filed with the Commission;

(2) FPFG's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1996 and March 31, 1997, each filed with the Commission;

(3) FPFG's Current Report on Form 8-K, dated December 19, 1996, filed
with the Commission; and

(4) Description of the FPFG Common Stock set forth in the
Registration Statement on Form 8-A, dated January 15, 1996, including any
amendment or report filed for the purpose of updating such description.

All documents filed with the Commission by FPFG pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of effectiveness
of the Registration Statement of which this Proxy Statement/Prospectus forms a
part and prior to the date of the WIB Meeting are incorporated herein by
reference and such documents will be deemed to be a part hereof from the date of
filing of such documents. Any statement contained in this Proxy Statement/
Prospectus or in a document incorporated or deemed to be incorporated by
reference herein will be deemed to be modified or superseded for purposes of
this Proxy Statement/Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded will not be deemed, except as so modified or
superseded, to constitute a part of this Proxy Statement/Prospectus.

(ii)
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TABLE OF CONTENTS
Page
----

SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Meeting; Vote Required. . . . . . . . . . . . . . . . . . . . . . 2
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Conversion of Shares; Conversion Ratio. . . . . . . . . . . . . . . . 3
Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Recommendation of the Board of Directors of WIB . . . . . . . . . . . 3
Opinion of WIB's Financial Advisor. . . . . . . . . . . . . . . . . . 3
The Merger Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 3
Conditions to the Merger; Termination of the Merger Agreement . . . . 4
Fees, Expenses and Other Payments . . . . . . . . . . . . . . . . . . 4
Interests of Certain Persons in the Merger. . . . . . . . . . . . . . 4
Exchange of Stock Certificates. . . . . . . . . . . . . . . . . . . . 5
Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Operations After the Merger . . . . . . . . . . . . . . . . . . . . . 5
Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . 5
Accounting Treatment. . . . . . . . . . . . . . . . . . . . . . . . . 6
Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Market Price Data . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Selected Historical and Pro Forma Per Share Data. . . . . . . . . . . 7
Selected Consolidated Financial Data. . . . . . . . . . . . . . . . . 8

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . .13
Sensitivity to Interest Rates . . . . . . . . . . . . . . . . . . . .14
Credit Risk Associated with Borrowers . . . . . . . . . . . . . . . .14
Credit Risk Associated with High LTV Loans. . . . . . . . . . . . . .15
Excess Servicing Receivable Risks . . . . . . . . . . . . . . . . . .15
Impact of Recent Accounting Pronouncements. . . . . . . . . . . . . .16
Ability of FPFG to Continue Growth Strategy; Possible Adverse
Consequences From Recent Growth . . . . . . . . . . . . . . . .16
Consolidation of Operations of Acquisitions . . . . . . . . . . . . .17
Concentration of Operations in California . . . . . . . . . . . . . .17
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Concentration of Correspondent Lenders. . . . . . . . . . . . . . . .18
Limited Operating History . . . . . . . . . . . . . . . . . . . . . .18
Delinquencies; Right to Terminate Servicing; Negative Impact
on Cash Flow. . . . . . . . . . . . . . . . . . . . . . . . . .18
Dependence on Title I Program . . . . . . . . . . . . . . . . . . . .19
Impact of Regulation and Litigation . . . . . . . . . . . . . . . . .19
Concentration of Voting Control in Management . . . . . . . . . . . .20
Dependence on Key Personnel . . . . . . . . . . . . . . . . . . . . .20
Events of Default Under Certain Financing Facilities. . . . . . . . .20
Effect of Certain Antitakeover Provisions . . . . . . . . . . . . . .20
Securities Trading; Possible Volatility of Prices . . . . . . . . . .20

THE WIB MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Purpose of the Meeting. . . . . . . . . . . . . . . . . . . . . . . .21
Voting Rights of WIB Shareholders . . . . . . . . . . . . . . . . . .21
Solicitation and Revocation of Proxies; Quorum. . . . . . . . . . . .22

THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

(iii)
<PAGE>

Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Conversion of Shares; Conversion Ratio. . . . . . . . . . . . . . . .23
Background of and Reasons for the Merger. . . . . . . . . . . . . . .24
Recommendation of the WIB Board . . . . . . . . . . . . . . . . . . .26
Opinion of WIB's Financial Advisor. . . . . . . . . . . . . . . . . .27
The Merger Agreement. . . . . . . . . . . . . . . . . . . . . . . . .31
Interests of Certain Persons in the Merger. . . . . . . . . . . . . .34
Exchange of Stock Certificates. . . . . . . . . . . . . . . . . . . .37
Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . .37
Management After the Merger . . . . . . . . . . . . . . . . . . . . .37
Governmental and Regulatory Approvals . . . . . . . . . . . . . . . .37
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . .38
Accounting Treatment. . . . . . . . . . . . . . . . . . . . . . . . .39
Consequences Under Federal Securities Laws. . . . . . . . . . . . . .39
Resale of FPFG Common Stock . . . . . . . . . . . . . . . . . . . . .40
Dissenting Shareholders' Rights . . . . . . . . . . . . . . . . . . .40

PRICE RANGES OF STOCK AND DIVIDEND POLICY. . . . . . . . . . . . . . . . . .42

SELECTED FINANCIAL DATA OF WIB . . . . . . . . . . . . . . . . . . . . . . .44

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION . . . . . . . .46

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF WIB. . . . . . . . . . . . . . . . . . .54
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . .54
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . .55
Asset/Liability Management. . . . . . . . . . . . . . . . . . . . . .58
Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . .60
Impact of Inflation and Changing Prices . . . . . . . . . . . . . . .62
Effect of Recent Accounting Standards . . . . . . . . . . . . . . . .62

BUSINESS OF WIB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
Market Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
Lending Activities. . . . . . . . . . . . . . . . . . . . . . . . . .64
Originations, Purchases, Sales and Servicing of Loans . . . . . . . .67
Non-Performing Assets and Classified Assets . . . . . . . . . . . . .68
Investment Activities . . . . . . . . . . . . . . . . . . . . . . . .72
Sources of Funds. . . . . . . . . . . . . . . . . . . . . . . . . . .73
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76
Supervision and Regulation. . . . . . . . . . . . . . . . . . . . . .76

MANAGEMENT OF WIB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
Directors and Executive Officers. . . . . . . . . . . . . . . . . . .77
Director Compensation . . . . . . . . . . . . . . . . . . . . . . . .77
Meetings and Committees of the WIB Board. . . . . . . . . . . . . . .78
Executive Officers of WIB . . . . . . . . . . . . . . . . . . . . . .78
Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . .79
Certain Relationships and Related Party Transactions. . . . . . . . .79

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF WIB. . . .80

COMPARISON OF SHAREHOLDER RIGHTS . . . . . . . . . . . . . . . . . . . . . .81
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81
Shareholder Meetings. . . . . . . . . . . . . . . . . . . . . . . . .81
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
Amendments to Articles of Incorporation and Bylaws. . . . . . . . . .82

(iv)
<PAGE>

Certain Antitakeover Provisions . . . . . . . . . . . . . . . . . . .82

OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83

LEGAL AND TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . .83

EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83

INDEX TO FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . F-1

APPENDIX A AGREEMENT AND PLAN OF MERGER, AS AMENDED

APPENDIX B OPINION OF CARPENTER & COMPANY

APPENDIX C CALIFORNIA CORPORATIONS CODE, CHAPTER 13

(v)
<PAGE>

SUMMARY

THE FOLLOWING IS A SUMMARY OF CERTAIN SIGNIFICANT MATTERS DISCUSSED
ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS. THIS
SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROXY
STATEMENT/PROSPECTUS AND THE APPENDICES HERETO. SHAREHOLDERS ARE URGED TO READ
THIS ENTIRE PROXY STATEMENT/PROSPECTUS, INCLUDING THE APPENDICES HERETO. EXCEPT
AS OTHERWISE NOTED HEREIN, ALL INFORMATION APPEARING ELSEWHERE OR INCORPORATED
BY REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS RELATING TO FPFG'S CAPITAL STOCK
HAS BEEN ADJUSTED TO REFLECT SPLITS ON THE FPFG COMMON STOCK OF 67-FOR-ONE AND
TWO-FOR-ONE IN JULY 1995 AND NOVEMBER 1996, RESPECTIVELY. UNLESS THE CONTEXT
INDICATES OTHERWISE, ALL REFERENCES TO FPFG'S ORIGINATION OF STRATEGIC LOANS
INCLUDES BULK PURCHASES OF LOANS ("BULK LOANS").

THE PARTIES

FPFG. FIRSTPLUS Financial Group, Inc. is a specialized consumer finance
company that originates, purchases, services and sells consumer finance
receivables, substantially all of which are debt consolidation or home
improvement loans secured primarily by second liens on real property. FPFG
offers uninsured home improvement and uninsured debt consolidation loans
("Conventional Loans") and to a lesser extent partially insured Title I home
improvement loans ("Title I Loans"). Title I Loans are insured, subject to
certain exceptions, for 90% of the principal balance and certain interest costs
under the Title I credit insurance program (the "Title I Program") administered
by the Department of Housing and Urban Development ("HUD") of the Federal
Housing Administration (the "FHA"). FPFG sells substantially all of its
Conventional Loans and Title I Loans that meet its securitization parameters
(collectively, FPFG's "strategic loans") primarily through its securitization
program and retains rights to service these loans.

FPFG relies principally on the creditworthiness of the borrower for
repayment of Conventional Loans. FPFG's borrowers typically have limited access
to consumer financing for a variety of reasons, primarily insufficient home
equity values. FPFG uses its own credit evaluation criteria to classify its
applicants as "A+" through "D" credits. FPFG currently makes loans only to
borrowers it classifies as "C+" or better for Conventional Loans and "C" or
better for Title I Loans. FPFG's credit evaluation criteria include, as a
significant component, the credit evaluation scoring methodology developed by
Fair, Isaac and Company ("FICO"), a consulting firm specializing in creating
default-predictive models through scoring mechanisms.

FPFG's principal origination channel is its network of regional independent
correspondent lenders. Correspondent lenders tend to be commercial banks,
thrifts or finance companies that do not have the infrastructure to hold and
service portfolios of Conventional and Title I Loans. FPFG's correspondent
lenders originate Conventional and Title I Loans using FPFG's underwriting
criteria and sell these loans to FPFG. During fiscal 1995 and 1996 and the
first six months of fiscal 1997, FPFG originated loans through correspondent
lenders ("Correspondent Loans") of $81.9 million, $1.0 billion and $1.3 billion,
respectively, representing 68.5%, 93.9% and 85.1%, respectively, of FPFG's
originations of strategic loans during such periods (excluding Bulk Loans).

In early 1996, FPFG expanded its efforts to originate loans directly to
qualified homeowners ("Direct Loans"). FPFG originates Direct Loans through
television, radio and direct mail advertising campaigns and referrals from
independent home improvement contractors. FPFG is pursuing a strategy to
increase its Direct Loan originations because FPFG believes that Direct Loans
should prove to be more profitable and allow FPFG to have better control over
the quality and size of FPFG's production.

FPFG sells substantially all of the Conventional Loans and Title I Loans it
originates and purchases through its securitization program and generally
retains rights to service such loans. FPFG earns servicing fees on a monthly
basis ranging from 0.75% to 1.00% on the loans it services in the various
securitization pools. At March 31, 1997, the principal amount of strategic loans
serviced by the Company (the "Serviced Loan Portfolio") was $2.7 billion. The
Serviced Loan Portfolio includes strategic loans held for sale and strategic
loans that have been securitized and are serviced by FPFG (including
$60.1 million of loans subserviced by a third party).

FPFG is a Nevada corporation that was formed in October 1994 to combine the
operations of SFA: State Financial Acceptance Corporation ("SFA"), a home
improvement lender formed in January 1990, and FIRSTPLUS Financial, Inc.,
formerly Remodelers National Funding Corporation ("FIRSTPLUS Financial"), an
approved Title I home improvement lender formed in April 1986 (the
"Combination"). FPFG's principal offices are located at 1600 Viceroy, 8th
Floor, Dallas, Texas 75235, and its telephone number is (214) 599-6400.

<PAGE>

WIB. WIB is a financial institution holding company organized in 1979
under the laws of the State of California for the primary purpose of holding all
of the outstanding shares of Citizens Thrift & Loan Association, a California
industrial loan company ("Citizens"). WIB's only significant asset is the
capital stock of Citizens. WIB also owns Citizens Group, Inc., which acts as a
trustee on deeds of trust securing Citizens' real estate loans. Citizens is a
California licensed industrial loan company that commenced business in 1980 and
is supervised and regulated by the California Department of Corporations ("DOC")
and the Federal Deposit Insurance Corporation ("FDIC"). The deposits of
Citizens are insured by the FDIC up to applicable limits. Citizens services its
customers through five full service branch offices located in the California
cities of Anaheim Hills, Citrus Heights, Concord, Irvine, and San Clemente. It
also operates additional loan production offices in Tustin, California, Las
Vegas, Nevada, Phoenix, Arizona, Kansas City, Missouri and Seattle, Washington.

In recent years, Citizens has focused its lending activities primarily in
the origination for sale of junior lien loans secured by one- to four-family
residential homes located in its market areas. Although Citizens has originated
commercial and multi-family real estate loans in its market area, continued
originations of such loans is expected to be limited. In December 1996,
Citizens sold substantially all of its commercial loan portfolio of
$9.7 million. Citizens offers "thrift" deposit accounts having a wide range of
interest rates and terms, which consist of passbook accounts and term
certificates of deposit. Citizens does not offer traditional banking services,
such as checking accounts or safe deposit boxes.

The executive offices of both WIB and Citizens are located at 18302 Irvine
Boulevard, Suite 300, Tustin, California 92780, and its telephone number at that
address is (714) 573-7500.

WIA. WIA is a Nevada corporation and a wholly owned subsidiary of FPFG
organized solely for the purpose of facilitating the Merger. Upon consummation
of the Merger and the transactions associated therewith, WIA will merge with WIB
and WIB will continue as the Surviving Corporation and a wholly owned subsidiary
of FPFG. The mailing address of WIA's principal executive offices is 1600
Viceroy, 8th Floor, Dallas, Texas 75235, and its telephone number is
(214) 630-6006.

THE MEETING; VOTE REQUIRED

The WIB Meeting will be held on August 7, 1997 at 12:00 noon (Tustin,
California time) at the offices of Citizens, 18302 Irvine Boulevard, Tustin,
California. At the WIB Meeting, shareholders of WIB will be asked to consider
and vote upon a proposal to approve the Merger Agreement. The affirmative vote
of a majority of the outstanding WIB Common Shares entitled to vote is required
to approve the Merger Agreement. Holders of record of WIB Common Shares as of
the close of business on June 15, 1997 will be entitled to cast one vote for
each WIB Common Share held as of such date. At such date, there were 1,211,156
WIB Common Shares outstanding and entitled to vote. THE WIB BOARD UNANIMOUSLY
RECOMMENDS A VOTE "FOR" THE MERGER AGREEMENT.

As of June 25, 1997, the directors of WIB, the executive officers of WIB
and their affiliates, in the aggregate, held or had the right to vote 386,688
WIB Common Shares or approximately 31.9% of the outstanding WIB Common Shares.
Such persons have indicated to WIB that they presently intend to vote in favor
of the Merger Agreement.

RISK FACTORS

WIB shareholders should carefully consider certain risk factors in
evaluating the Merger. See "Risk Factors."

THE MERGER

Shareholders of WIB will vote on the Merger Agreement. No approval of the
stockholders of FPFG is required to consummate the Merger. Upon consummation of
the Merger, WIA will merge with and into WIB, with WIB becoming a direct wholly
owned subsidiary of FPFG. WIB will continue its corporate existence under the
laws of the State of California. See "The Merger."

EFFECTIVE TIME

Following the satisfaction or waiver of all conditions contained in the
Merger Agreement, the Merger will be consummated on the date and time of filing
of a Certificate of Approval of Merger with the Secretary of State of the State
of California and Articles of Merger with the Secretary of State of the State of
Nevada (the "Effective Time"). See "The Merger--Effective Time."

2
<PAGE>

CONVERSION OF SHARES; CONVERSION RATIO

Pursuant to the provisions of the Merger Agreement, each issued and
outstanding WIB Common Share, other than shares held by dissenting shareholders
of WIB, will be converted into the right to receive such fraction of a share of
FPFG Common Stock as is equal to (i) the FPFG Share Number divided by (ii) the
number of WIB Common Shares outstanding as of the Effective Time plus the number
of WIB Common Shares issuable upon exercise of all outstanding stock options of
WIB as of the Effective Time (the "Existing Stock Rights"). No scrip or
fractional shares of FPFG Common Stock will be issued in the Merger, but rather
the total number of shares to be received by each WIB Shareholder will be
rounded up to the next whole number of shares.

Set forth below is a table that provides certain information with respect
to the formula determining the Merger Consideration, assuming no shareholders of
WIB dissent to the Merger. FPFG believes the prices specified under "Assumed
FMV of FPFG Common Stock on the Closing Date" represent a reasonable range of
prices that WIB shareholders might anticipate for the FMV of FPFG Common Stock
as of the Closing Date, although there can be no assurance to that effect since
the actual FMV of FPFG Common Stock will be based upon market prices of the FPFG
Common Stock during a future period dependent on the Closing Date. The calendar
date of the Closing Date has not yet been determined. See "Risk
Factors--Securities Trading; Possible Volatility of Prices."

ASSUMED TOTAL NUMBER OF
FMV OF FPFG FPFG SHARES OF FPFG
COMMON STOCK SHARE CONVERSION COMMON STOCK
ON CLOSING DATE NUMBER RATIO ISSUED
--------------- ------ ---------- ---------------

$ 27.00 920,840 .6539 791,939
30.00 828,756 .5885 712,745
33.00 753,415 .5350 647,950

STOCK OPTIONS

The Merger Agreement provides that from and after the Effective Time each
outstanding Existing Stock Right will be converted into the right to purchase
(each a "New Option") the number of shares of FPFG Common Stock equal to the
product (rounded up to the next whole share) of (i) the number of WIB Common
Shares covered by such Existing Stock Right immediately prior to the Effective
Time multiplied by (ii) the Conversion Ratio. See "The Merger--Conversion of
Shares; Conversion Ratio." The exercise price per share of such New Options
shall be equal to the quotient obtained by dividing (i) the per share exercise
price for the WIB Common Shares subject to such Existing Stock Right immediately
prior to the Effective Time by (ii) the Conversion Ratio. As of June 25, 1997,
options to purchase 197,136 WIB Common Shares were outstanding, which were
"in-the-money" (i.e., the amount by which the value of the WIB Common Stock
exceeds the exercise price) by an aggregate of approximately $2,901,314.

RECOMMENDATION OF THE BOARD OF DIRECTORS OF WIB

The WIB Board has unanimously approved the Merger Agreement. The WIB Board
has also determined that the terms of the proposed Merger are fair to and in the
best interests of WIB's shareholders and unanimously recommends that WIB's
shareholders vote "for" the Merger Agreement. See "The Merger-- Background of
and Reasons for the Merger."

OPINION OF WIB'S FINANCIAL ADVISOR

Seapower Carpenter Capital, Inc., d/b/a Carpenter & Company ("Carpenter"),
has rendered its opinion to the WIB Board that the consideration to be received
by WIB shareholders pursuant to the Merger is fair to the WIB shareholders from
a financial point of view. See "The Merger--Opinion of WIB's Financial Advisor"
and Appendix B.

THE MERGER AGREEMENT

The Merger Agreement sets forth the principal terms by which the Merger
will be consummated, and the rights of holders of WIB Common Shares to receive
FPFG Common Stock pursuant to the Merger. The Merger Agreement contains
representations, warranties and agreements of the parties, and provides specific
conditions to the consummation

3
<PAGE>

of the Merger and terms under which the Merger may be terminated or abandoned.
See "The Merger--The Merger Agreement."

CONDITIONS TO THE MERGER; TERMINATION OF THE MERGER AGREEMENT

Consummation of the Merger is subject to certain conditions, including
(i) the approval of the Merger Agreement by the affirmative vote of the holders
of a majority of the WIB Common Shares entitled to vote thereon; (ii) the
effectiveness of the Registration Statement of which this Proxy Statement/
Prospectus forms a part; (iii) approval of the Merger by certain federal and
state regulatory authorities; (iv) receipt by WIB of an opinion of KPMG Peat
Marwick LLP as to the tax-free nature of the Merger for federal income tax
purposes; (v) receipt by FPFG of a letter from Ernst & Young LLP to the effect
that the Merger will qualify for "pooling-of-interests" accounting; (vi) the
listing, subject to notice of issuance, on the Nasdaq National Market of the
FPFG Common Stock to be issued in the Merger; (vii) the absence of any
injunction or legal restraint prohibiting consummation of the Merger; and
(viii) certain other customary closing conditions. There can be no assurance as
to when and if the conditions will be satisfied (or, where permissible, waived)
or that the Merger will be consummated, although FPFG has received the approval
of the federal and state regulatory authorities with respect to the Merger. The
conditions specified in (i), (ii), (iii), (vi), (vii) and (viii) above are not
waivable by either WIB or FPFG. See "The Merger--The Merger
Agreement--Conditions to the Merger," "-- Governmental and Regulatory Approvals"
and "--Listing."

The Merger Agreement is subject to termination by one or more parties at
any time prior to the Effective Time upon the occurrence of certain events,
which include failure of the WIB shareholders to approve the Merger, a breach of
representations, warranties or covenants specified in the Merger Agreement by
any party (if not cured within a specified cure period), and the failure of
certain other conditions specified in "The Merger--The Merger
Agreement--Conditions to the Merger." See "The Merger--The Merger
Agreement--Amendment of Merger Agreement," "--Extension; Waiver" and
"--Termination."

FEES, EXPENSES AND OTHER PAYMENTS

Under certain circumstances, upon termination of the Merger Agreement, WIB
is required to pay FPFG's expenses and costs in connection with the preparation,
execution and performance of the Merger Agreement and, in addition, to pay FPFG
a termination fee (the "Termination Fee") of $1,500,000. See "The Merger--The
Merger Agreement--Fees; Expenses; Termination Fee."

Under certain circumstances, upon termination of the Merger Agreement, FPFG
is required to pay WIB's expenses and costs in connection with the preparation,
execution and performance of the Merger Agreement. See "The Merger--The Merger
Agreement--Fees; Expenses; Termination Fee."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

Certain members of WIB's management and the WIB Board may be deemed to have
certain interests in the Merger that are in addition to their interests
generally as shareholders of WIB. At June 25, 1997, eight directors and
executive officers of WIB held or had the right to vote, in the aggregate,
386,688 shares, or 31.9% of the outstanding WIB Common Shares. Such shares have
an aggregate value of approximately $6,826,783.

Michael W. McGuire, President of WIB and the President and Chief Executive
Officer of Citizens, will enter into an amendment to his existing employment
agreement (the "McGuire Employment Agreement"), effective as of the Effective
Time. Such amendment provides for a minimum base salary to Mr. McGuire of
$225,000 (compared to $185,000 presently), a minimum bonus to Mr. McGuire of
$185,000 following the end of each FPFG fiscal year during the term of the
McGuire Employment Agreement, and a grant of an option to Mr. McGuire to
purchase 50,000 shares of FPFG Common Stock at the lesser of $28.50 or the price
at which shares of FPFG are issued in connection with the Merger ($32.875 per
share assuming the Closing Date had been June 25, 1997). Such options would
have been "in-the-money" by approximately $262,500 assuming an exercise price of
$28.50. Marie A. Reich, Executive Vice President and Chief Financial officer of
Citizens, is party to an agreement, dated March 4, 1996, providing for the
payment to her of one year's salary at the rate in effect at the time of her
termination in the event that her employment is terminated within one year
following a merger, sale or acquisition of Citizens. The Merger will constitute
a merger, sale or acquisition of Citizens within the meaning of such agreement
with Ms. Reich. Other than benefits that may become payable under Ms. Reich's
agreement (which are currently valued at approximately $88,000) and the McGuire
Employment Agreement, as so amended, no executive officer of WIB or Citizens
shall be entitled to any special compensation or severance pay as a result of
completion of the Merger.

4
<PAGE>

Each director of WIB other than Mr. McGuire will enter into an agreement
(the "Director Agreements") pursuant to which such person will agree not to
compete with FPFG for a period of two years following the Effective Time. In
consideration of such agreement, FPFG has agreed to pay each such director
$22,500 on the Closing Date and $22,500 on the first anniversary of the Closing
Date.

All persons who are employees of WIB or its subsidiaries immediately prior
to the Effective Time shall continue as employees following the Effective Time.
FPFG has agreed that any employee benefit plans of FPFG under which employees of
WIB shall be covered following the Effective Time shall give appropriate credit
to such employees for services completed prior to the Effective Time under the
existing employee benefit plans of WIB.

The WIB Board was aware of these interests and considered them, among other
matters, in approving the Merger Agreement and the transactions contemplated
thereby. See "The Merger--Interests of Certain Persons in the Merger" and "--
Management After the Merger."

EXCHANGE OF STOCK CERTIFICATES

As of the Effective Time of the Merger, each WIB shareholder whose WIB
Common Shares are converted in the Merger into FPFG Common Stock will be
entitled to receive, upon surrender of certificate(s) formerly representing WIB
Common Shares, certificates representing the FPFG Common Stock to which such
holder is entitled in respect of the conversion of such shares. Instructions
with regard to the surrender of certificates, together with a letter of
transmittal to be used for this purpose, will be forwarded to the former WIB
shareholders by Chase Mellon Services, Inc., as exchange agent (the "Exchange
Agent"), as promptly as possible following the Effective Time. Each shareholder
should only surrender such certificates with an accompanying letter of
transmittal. See "The Merger--Exchange of Stock Certificates."

FRACTIONAL SHARES

No fractional shares of FPFG Common Stock will be issued as a result of the
Merger. The total number of shares to be received by each WIB shareholder
converted in the Merger will be rounded up to the next whole number of shares.
See "The Merger--Fractional Shares."

OPERATIONS AFTER THE MERGER

As a result of the Merger, WIA will be merged with and into WIB, and FPFG
will own all of the outstanding shares of WIB. Accordingly, after the Merger,
FPFG will own the business of WIB and WIB will be a wholly owned subsidiary of
FPFG. FPFG, as owner of all the capital stock of WIB following the Effective
Time, will appoint all of the directors of the Surviving Corporation. Until
otherwise changed by the WIB Board, the current executive officers of WIB will
remain executive officers of the Surviving Corporation. See "The
Merger--Management After the Merger."

REGULATORY MATTERS

Under applicable regulatory laws, the Merger must be approved by the FDIC,
as insurer of WIB's deposits, and by the DOC, as primary regulator of WIB. Such
approvals have been obtained. See "The Merger--Governmental and Regulatory
Approvals."

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

It is intended that the Merger will be treated as a tax-free
"reorganization," within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"). Accordingly, for federal income tax
purposes, (i) no gain or loss will be recognized by either WIB or FPFG as a
result of the Merger and (ii) in general, holders of WIB Common Shares will not
recognize gain or loss to the extent that they receive FPFG Common Stock in
exchange for WIB Common Shares. WIB shareholders who receive cash in exchange
for their WIB Common Shares (i.e., dissenters) will generally be required to
recognize taxable income as a result of the Merger. WIB will receive, as of
the Effective Date, an opinion from KPMG Peat Marwick LLP, tax advisor to WIB,
to the effect that the Merger will be treated as a tax-free "reorganization"
under Section 368(a) of the Code. Consummation of the Merger is conditioned
upon receipt by WIB of such an opinion confirming the tax treatment of the
Merger. See "The Merger--Certain Federal Income Tax Considerations."

5
<PAGE>

ACCOUNTING TREATMENT

The Merger is intended to be accounted for as a "pooling-of-interests"
under generally accepted accounting principles. Consummation of the Merger is
subject to the condition that FPFG receive an opinion from Ernst & Young LLP
that the Merger will qualify for "pooling-of-interests" accounting treatment.
See "The Merger--Accounting Treatment."

DISSENTERS' RIGHTS

Holders of WIB Common Shares will have dissenters' rights of appraisal in
connection with the Merger. The CCC provides specific procedures that must be
followed by a WIB shareholder who desires to dissent from the Merger and receive
payment of fair market value for his or her shares. A summary of the
procedures that must be followed is contained in "The Merger--Dissenting
Shareholders' Rights." The entire text of Chapter 13 of the CCC, governing
dissenters' rights for California corporations, is attached hereto as Appendix
C. See "The Merger--Dissenting Shareholders' Rights."

COMPARISON OF SHAREHOLDER RIGHTS

As a result of the Merger, shareholders of WIB will become stockholders of
FPFG, whose rights will be governed by the Amended and Restated Articles of
Incorporation of FPFG, as amended (the "FPFG Articles"), the Amended and
Restated Bylaws of FPFG, as amended (the "FPFG Bylaws") and the Nevada General
Corporation Law (the "NGCL"). There are certain differences between the rights
of holders of WIB Common Shares and holders of FPFG Common Stock. For example,
the FPFG Articles provide that shareholders may propose business at annual
meetings only upon compliance with specified procedures. The FPFG Articles also
provide certain procedures that an FPFG stockholder must follow to nominate
directors. Neither the Articles of Incorporation of WIB (the "WIB Articles"),
the Bylaws of WIB (the "WIB Bylaws") nor the California Corporations Code (the
"CCC") provide for similar procedures or requirements.

The FPFG Bylaws provide that the holders of not less than 50% of all shares
entitled to vote may call a special meeting of stockholders, while the WIB
Bylaws require only 10% of the voting power to call a special meeting of
shareholders. FPFG is also subject to provisions of the NGCL that prohibit a
publicly-held Nevada corporation from engaging in a broad range of business
combinations with a person who, together with affiliates and associates, owns
10% or more of the corporation's outstanding voting shares for three years after
the person became an interested stockholder, unless the business combination is
approved in prescribed manner. See "Comparison of Shareholder Rights."

MARKET PRICE DATA

FPFG completed its initial public offering on February 2, 1996. FPFG
Common Stock is traded on the Nasdaq National Market under the symbol "FPFG."
There is currently no established market for the WIB Common Shares.

The table below sets forth the high and low prices for shares of FPFG
Common Stock, for the calendar periods indicated:

High Low
---- ---
1996 (beginning February 2, 1996). $30.75 $ 8.75
1997 (through June 25, 1997)...... $36.75 $20.50

The following table sets forth the closing price of the FPFG Common Stock
and the equivalent per share price of WIB Common Shares giving effect to the
Merger on February 19, 1997 (the last trading day prior to the public
announcement of the proposed Merger) and June 25, 1997 (the latest practicable
trading day before the printing of this Proxy Statement/Prospectus):

Closing Sales Price
----------------------------
Pro Forma
FPFG Equivalent
Common Stock Per Share(1)
------------ ------------

Market value per share:
February 19, 1997 $33.50 $18.75

June 25, 1997 $33.75 $18.12
- -------------

6
<PAGE>

(1) Equivalent market value per WIB Common Share represents the closing sales
price of the FPFG Common Stock, as reported in THE WALL STREET JOURNAL, on
each specified date, multiplied by the assumed Conversion Ratio, which has
been calculated assuming that the Merger closed on February 19, 1997
(assumed Conversion Ratio of .5598) and June 25, 1997 (assumed Conversion
Ratio of .5370), respectively.

Shareholders are advised to obtain current market quotations for the FPFG
Common Stock. No assurance can be given as to the market price of the FPFG
Common Stock at the Effective Time, or of the FPFG Common Stock after the
Effective Time. Because the market price of the FPFG Common Stock is subject to
fluctuation, the value of the FPFG Common Stock that holders of WIB Common
Shares will receive in the Merger may increase or decrease prior to and
following the Merger.

SELECTED HISTORICAL AND PRO FORMA PER SHARE DATA

The unaudited information set forth in the following tables reflects
certain comparative per common share data related to income per share and book
value per share (i) on a historical basis for FPFG; (ii) on a pro forma combined
basis per share of FPFG Common Stock assuming consummation of the Merger; and
(iii) on an equivalent pro forma basis per WIB Common Share assuming
consummation of the Merger.

The information shown below should be read in conjunction with the
consolidated historical financial statements of FPFG and WIB, including the
respective notes thereto, included or incorporated by reference in this Proxy
Statement/Prospectus. The pro forma financial information below is presented
for comparative purposes only and is not necessarily indicative of the combined
financial position or results of operations that would have been realized had
the acquisitions been consummated during the periods or as of the dates for
which such pro forma financial information is presented.

YEAR ENDED SEPTEMBER 30, SIX MONTHS ENDED MARCH 31,
------------------------------------- ----------------------------
1994 1995 1996 1996 1997
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
FPFG COMMON STOCK
Earnings per share-primary(1):
Historical . . . . . . . . . . . . $ 0.31 $ 0.28 $ 1.35 $ 0.48 $ 1.51
Pro forma(2) . . . . . . . . . . . 0.33 0.30 1.39 0.48 1.53
Book value per share-end of period:
Historical . . . . . . . . . . . . $ 0.39 $ 0.65 $ 3.51 $ 2.65 $ 8.86
Pro forma(3) . . . . . . . . . . . 1.06 1.11 3.81 2.92 9.00
Cash dividends paid:
Historical . . . . . . . . . . . . $ - $ - $ - $ - $ -
Pro forma. . . . . . . . . . . . . 0.01 - - - -
</TABLE>

YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------- ----------------------------
1994 1995 1996 1996 1997
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
WIB COMMON SHARES
Earnings per share-primary(1):
Historical . . . . . . . . . . . . $ 0.34 $ 0.57 $ 1.98 $ 0.35 $ 0.82
Equivalent pro forma(4). . . . . . 0.18 0.16 0.75 0.14 0.46
Book value per share-end of period:
Historical . . . . . . . . . . . . $ 7.01 $ 7.62 $ 9.71 $ 7.89 $ 10.68
Equivalent pro forma(4). . . . . . 0.57 0.60 2.05 1.57 4.83
Cash dividends paid:
Historical . . . . . . . . . . . . $ 0.095 $ - $ 0.10 $ 0.10 $ -
Equivalent pro forma(4). . . . . . 0.01 - - - -
</TABLE>

- ---------------

(1) Earnings per share were calculated using income from continuing operations.
In calculating pro forma earnings per share, no adjustments to the pro
forma amounts have been made to reflect potential expense reductions or
revenue enhancements which may result from the Merger.
(2) Gives effect to the Merger as if it had occurred at the beginning of each
period presented.
(3) Gives effect to the Merger as if it had occurred at the end of the period.
(4) The equivalent pro forma computations assume that for each WIB Common Share
outstanding WIB shareholders would receive .5370 shares of FPFG Common
Stock.

7
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The following tables set forth certain historical financial data for each
of FPFG and WIB as of and for each of the periods indicated. The following data
should be read in conjunction with "Selected Financial Data of WIB" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of WIB" contained elsewhere in this Proxy Statement/Prospectus and
the selected financial data and management's discussion and analysis of
financial condition and results of operations of FPFG incorporated by reference
herein.

8
<PAGE>

FIRSTPLUS FINANCIAL GROUP, INC.

<TABLE>
<CAPTION>
FOR THE SIX MONTHS
YEAR ENDED SEPTEMBER 30, ENDED MARCH 31,
--------------------------------------------------- ------------------------
1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Revenues:
Gain on sale of loans, net of
costs but before provision for
possible credit losses ................. $17,115 $27,671 $ 29,113 $158,639 $48,493 $224,167
Provision for possible credit losses
on loans sold .......................... -- -- (3,907) (53,271) (9,527) (91,627)
---------- ---------- ---------- ---------- ---------- ----------
Net gain on sale of loans(1) ........ 17,115 27,671 25,206 105,368 38,966 132,540
Interest income .......................... 145 1,845 2,860 25,727 4,057 53,480
Servicing income ......................... -- 72 1,049 4,008 1,634 6,344
Other income ............................. 54 252 873 9,683 3,082 15,511
---------- ---------- ---------- ---------- ---------- ----------
Total revenues ...................... 17,314 29,840 29,988 144,786 47,739 207,875
Expenses:
Other .................................... 9,925 24,560 19,733 83,232 26,878 111,900
Provision for possible credit losses on
loans held for sale, interest only shares,
and excess servicing receivable............ 0 125 513 6,373 2,977 18,264
---------- ---------- ---------- ---------- ---------- ----------

Total expenses ................................ 9,925 24,685 20,246 89,605 29,855 130,164
---------- ---------- ---------- ---------- ---------- ----------

Income before income taxes .................... 7,389 5,155 9,742 55,181 17,884 77,711
Provision for income taxes .................... -- -- (3,903) (20,969) (6,800) (29,530)
---------- ---------- ---------- ---------- ---------- ----------
Net income .................................... $ 7,389 $ 5,155 $ 5,839 $ 34,212 $11,084 $ 48,181
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------

PER SHARE DATA:
Net income per share of FPFG Common Stock(2):
Primary .................................. $ 0.47 $ 0.31 $ 0.28 $ 1.35 $ 0.48 $ 1.51
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------

Fully diluted ............................ $ 0.47 $ 0.31 $ 0.28 $ 1.31 $ 0.48 $ 1.35
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------

Weighted average common and common equivalent
shares outstanding:
Primary .................................. 15,596,874 16,276,874 20,296,874 25,358,162 22,791,000 31,947,323
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------

Fully diluted ............................ 15,596,874 16,276,874 20,296,874 26,353,526 22,791,000 37,154,860
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30,
-----------------------------
1994 1995 1996 MARCH 31, 1997
-------- -------- -------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Loans held for sale, net .............................. $ 6,105 $19,435 $430,812 $987,775
Interest only strips and Excess Servicing Receivable .. -- 29,744 187,230 418,661
Allowance for possible credit losses on loans sold .... -- (3,907) (54,257) (148,078)
Total assets .......................................... 12,141 57,434 656,127 1,469,206
Warehouse financing facilities ........................ 4,995 18,530 354,481 894,368
Warehouse Lender Term Line ............................ -- 9,249 57,465 117,020
Subordinated notes payable to affiliates .............. -- 8.003 7,003 7,002
Convertible Notes(3) .................................. -- -- 100,000 69,920
Total liabilities ..................................... 7,821 45,700 561,558 1,161,568
Stockholders' equity .................................. 4,321 11,734 94,569 307,638
</TABLE>

_______________

(1) FPFG's net gain on sale of loans ("Net gain on sale"), with respect to
securitizations, is equal to the present value of FPFG's portion of the
expected future excess cash flow to be received on the loans sold through
securitization transactions, in excess of securitization costs and net
premiums paid, net of sharing, and net of FPFG's provision for possible
credit losses on loans sold.

9
<PAGE>

(2) Net income per share of Common Stock is computed by dividing net income,
less accrued and unpaid dividends on preferred stock (the balance of which
was redeemed in connection with FPFG's initial public offering in February
1996), by the weighted average common and common equivalent shares
outstanding.

(3) The presentation of FPFG's 7.25% Convertible Subordinated Notes due 2003
issued in August 1996 (the "Convertible Notes") does not reflect discounts
and commissions incurred in connection with the sale thereof.

<PAGE>

WESTERN INTERSTATE BANCORP
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------
1992 1993 1994 1995 1996
-------- -------- -------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income. . . . . . . . . . . . . . $12,825 $13,150 $13,883 $13,067 $10,877
Total interest expense . . . . . . . . . . . . 5,468 4,547 4,725 6,752 6,347
-------- ------- -------- 4,530
Net interest income. . . . . . . . . . . . . 7,357 8,603 9,158 6,315 155
Provision for loan losses. . . . . . . . . . . . 555 2,300 2,887 3,158 -------
-------- -------- --------- -------
Net interest income after provision for 4,375
loan losses . . . . . . . . . . . . . . . . . 6,802 6,303 6,271 3,157
1,374
Non-interest income: 9,341
Servicing fee income . . . . . . . . . . . . . 913 1,211 1,409 1,174 100
Gain on sales of loans . . . . . . . . . . . . 1,033 982 1,724 6,215 -------
Other non-interest income. . . . . . . . . 88 70 156 74 10,815
-------- -------- --------- ------- 10,451
Total non-interest income. . . . . . . . . . . . 2,034 2,263 3,289 7,463 -------
Total non-interest expense . . . . . . . . . . . 6,399 7,704 8,899 9,399
-------- -------- --------- ------- 4,739
Income before provision for income taxes . . . . 2,437 862 661 1,221 1,964
Provision for income taxes . . . . . . . . . . . 1,011 386 274 499 -------
-------- -------- --------- -------
Income before cumulative effect
of accounting change . . . . . . . . . . . . . 1,426 476 387 722 2,775
Cumulative effect of accounting change . . - 133 - - -
------- -------- --------- ------- -------
Net income . . . . . . . . . . . . . . . . . . . $ 1,426 $ 609 $ 387 $ 722 $ 2,775
-------- -------- --------- ------- -------
-------- -------- --------- ------- -------

<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1996 1997
-------- --------
<S> <C> <C>
INCOME STATEMENT DATA:
Total interest income. . . . . . . . . . . . 2,520 $ 2,464
Total interest expense . . . . . . . . . . 1,651 1,395
Net interest income. . . . . . . . . . . 869 1,069
Provision for loan losses. . . . . . . . . . 102 125
-------- ----------
Net interest income after provision for
loan losses . . . . . . . . . . . . . . . 767 944
Non-interest income:
Servicing fee income . . . . . . . . . . . 360 340
Gain on sales of loans . . . . . . . . . . 1,759 3,520
Other non-interest income. . . . . . . . 8 32
---------- ----------
Total non-interest income. . . . . . . . . . 2,127 3,892
Total non-interest expense . . . . . . . . . 2,159 2,841
---------- ----------

Income before provision for income taxes . . 735 1,995
Provision for income taxes . . . . . . . . . 310 838
---------- ----------

Income before cumulative effect
of accounting change . . . . . . . . . . . 425 1,157
Cumulative effect of accounting change - -
---------- ----------
Net income . . . . . . . . . . . . . . . . $ 425 $ 1,157
---------- ----------
---------- ----------

</TABLE>

AT DECEMBER 31,
------------------------------------------------------------------ AT
1992 1993 1994 1995 1996 MARCH 31, 1997
--------- --------- --------- ---------- --------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets . . . . . . . . . . . . . . . . $104,773 $110,843 $119,184 $127,785 $124,548 $ 112,136
Loans receivable, net. . . . . . . . . . . . 77,373 87,578 97,421 21,135 10,505 9,220
Loans held for sale. . . . . . . . . . . . . 8,094 4,556 6,537 18,960 30,107 27,766
Cash and cash equivalents. . . . . . . . . . 7,664 7,087 3,177 22,083 12,298 17,728
Mortgage-backed securities . . . . . . . . 998 3,497 55,428 14,010 13,032
Investment securities. . . . . . . . . . . . 3,006 4,996 2,003 5,052 52,982 39,943
Deposits . . . . . . . . . . . . . . . . . . 94,046 99,784 107,671 113,808 106,902 94,106
Total borrowings . . . . . . . . . . . . . . 1,634 1,472 1,837 1,736 1,723 1,355
Stockholders' equity . . . . . . . . . . . . 6,981 7,799 8,126 9,245 11,761 12,934

</TABLE>

11
<PAGE>

AT OR FOR YEAR ENDED DECEMBER 31,
-------------------------------------------------------------

1992 1993 1994 1995 1996
------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
SELECTED FINANCIAL RATIOS AND OTHER DATA(1):
Performance Ratios
Return on assets (ratio of net income to
average total assets). . . . . . . . . . . . . . . . . 1.42% .57% .34% .57% 2.23%
Interest rate spread information:
Average during period. . . . . . . . . . . . . . . . . 6.98 8.03 7.76 4.66 3.31
Net interest margin(2) . . . . . . . . . . . . . . . . . . 7.51 8.33 8.10 5.03 3.78
Ratio of non-interest expense to average total assets. . . 6.36 7.23 7.75 7.37 8.41
Return of stockholders' equity (ratio of net income
to average equity) . . . . . . . . . . . . . . . . . . 22.50 8.09 4.78 8.40 27.47

Asset Quality Ratios:
Non-performing assets to total assets at end of
period(3). . . . . . . . . . . . . . . . . . . . . . . 3.44 3.45 3.98 .67 .55
Allowance for loan losses to non-performing loans. . . . . 28.78 47.75 76.56 286.07 531.30
Allowance for loan losses to total loans . . . . . . . . . 1.04 1.79 3.16 5.05 3.23
Net charge-offs to average loans . . . . . . . . . . . . . .47 1.64 1.15 6.23 2.06

Capital Ratios:
Stockholders' equity to total assets . . . . . . . . . . . 6.66 7.04 6.82 7.23 9.44
Average stockholders' equity to average assets . . . . . . 6.30 7.07 7.05 6.74 8.13
Ratio of average interest-earning assets to average
interest-bearing liabilities. . . . . . . . . . . . . 1.09% 1.07% 1.08% 1.07% 1.09%

Per Share Data:
Net income per WIB Common Share:
Primary. . . . . . . . . . . . . . . . . . . . . . . $1.33 $ .55 $ .34 $ .57 $1.98
Fully-diluted. . . . . . . . . . . . . . . . . . . . 1.33 .55 .34 .57 1.98
Cash dividends per share . . . . . . . . . . . . . . . . 0.95 .095 .095 - .10
Dividend payout ratio (ratio of dividends declared
per share to net income per share) . . . . . . . . . . 7.01% 17.95% 28.48% - 4.37%
Book value per share . . . . . . . . . . . . . . . . . . $6.38 $6.82 $7.01 $7.62 $9.71
Number of shares outstanding . . . . . . . . . . . . . . 1,093,674 1,143,174 1,159,174 1,212,543 1,211.156

- --------------------------------

AT OR FOR THREE MONTHS
ENDED MARCH 31,
------------------------
1996 1997
--------- ---------
<S> <C> <C>
SELECTED FINANCIAL RATIOS AND OTHER DATA(1):

Performance Ratios
Return on assets (ratio of net income to
average total assets). . . . . . . . . . . . . . . . . 1.34% 3.91%
Interest rate spread information:
Average during period. . . . . . . . . . . . . . . . . 2.34 3.30
Net interest margin(2) . . . . . . . . . . . . . . . . . . 2.83 3.82
Ratio of non-interest expense to average total assets. . . 6.81 9.60
Return of stockholders' equity (ratio of net income
to average equity) . . . . . . . . . . . . . . . . . . 8.07 37.48

Asset Quality Ratios:
Non-performing assets to total assets at end of
period(3). . . . . . . . . . . . . . . . . . . . . . . 1.11 .59
Allowance for loan losses to non-performing loans. . . . . 158.17 644.91
Allowance for loan losses to total loans . . . . . . . . . 5.46 3.53
Net charge-offs to average loans . . . . . . . . . . . . . .30 .28

Capital Ratios:
Stockholders' equity to total assets . . . . . . . . . . . 7.60 11.53
Average stockholders' equity to average assets . . . . . . 7.41 10.43
Ratio of average interest-earning assets to average
interest-bearing liabilities. . . . . . . . . . . . . 1.09% 1.10%

Per Share Data:
Net income per WIB Common Share:
Primary. . . . . . . . . . . . . . . . . . . . . . . $ .35 $ .82
Fully-diluted. . . . . . . . . . . . . . . . . . . . .35 .82
Cash dividends per share . . . . . . . . . . . . . . . . .10 -
Dividend payout ratio (ratio of dividends declared
per share to net income per share) . . . . . . . . . . 3.50% -
Book value per share . . . . . . . . . . . . . . . . . . $ 7.89 $10.68
Number of shares outstanding . . . . . . . . . . . . . . 1,212,543 1,211,156

</TABLE>
- --------------------------------

(1) Averages are computed using end of month balances.
(2) Net interest income divided by average interest-earning assets.
(3) Non-performing assets consist of nonaccruing loans past-due
90 or more days and real estate owned.

<PAGE>

RISK FACTORS

THE FOLLOWING ARE CERTAIN RISK FACTORS OR INVESTMENT CONSIDERATIONS THAT
SHOULD BE CAREFULLY CONSIDERED IN EVALUATING THE MERGER, IN ADDITION TO THE
RISKS AND OTHER INFORMATION DESCRIBED ELSEWHERE OR INCORPORATED BY REFERENCE IN
THIS PROXY STATEMENT/PROSPECTUS.

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY. As a result of FPFG's increasing volume of loan originations and
purchases, and its expanding securitization activities, FPFG has operated, and
expects to continue to operate, on a negative operating cash flow basis, which
is expected to increase as the volume of FPFG's loan purchases and originations
increases and its securitization program grows. FPFG's primary operating cash
requirements include the funding of (i) loan originations and loan purchases,
(ii) reserve accounts, overcollateralization requirements, fees and expenses
incurred in connection with its securitization program, (iii) tax payments due
on FPFG's taxable net income, (iv) television, radio and direct mail advertising
and other marketing expenses, and (v) administrative and other operating
expenses.

There can be no assurance that, as FPFG's existing lending arrangements
mature, FPFG will have access to the financing necessary for its operations and
its growth plans or that FPFG will have access to the financing necessary for
its operations and its growth plans or that such financing will be available to
FPFG on favorable terms. To the extent FPFG is unable to renew existing
warehouse facilities or arrange additional or new warehouse lines of credit,
FPFG may have to curtail loan origination and purchasing activities, which could
have a material adverse effect on FPFG's results of operations and financial
condition.

NEED FOR ADDITIONAL FINANCING. FPFG requires substantial capital to fund
its operations. Consequently, FPFG's operations and its ability to grow are
affected by the availability of financing and the terms thereof. Based on the
rate of growth of FPFG's originations in the recent past, FPFG anticipates that
it will need to arrange additional warehouse lines of credit or other financing
sources in the foreseeable future in order to maintain its historical growth
rates. FPFG is currently negotiating for increased and/or new warehouse
facilities; however, FPFG has no commitments for such increased and/or
additional financings, and there can be no assurance that FPFG will be
successful in consummating such financing transactions in the future or on terms
FPFG would consider to be favorable. If FPFG is unable to arrange new warehouse
lines of credit or other financing sources, FPFG may have to curtail its loan
origination and purchasing activities, which could have a material adverse
effect on FPFG's results of operations and financial condition.

DEPENDENCE ON SECURITIZATION TRANSACTIONS. Since the beginning of fiscal
1995, FPFG has utilized a securitization program that involves the periodic
pooling and sale of its strategic loans. The securitization proceeds have
historically been used to repay borrowings under warehouse facilities, thereby
making such warehouse facilities available to finance the origination and
purchase of additional strategic loans. There can be no assurance that, as
FPFG's volume of loans originated or purchased increases and other new products
available for securitization increases, FPFG will be able to securitize its loan
production efficiently. In addition, the securitization market for many types
of assets is relatively undeveloped and may be more susceptible to market
fluctuations or other adverse changes than more developed capital markets.
Securitization transactions may be affected by a number of factors, some of
which are beyond FPFG's control, including, among other things, conditions in
the securities markets in general, conditions in the asset-backed
securitizations market and the conformity of loan pools to rating agency
requirements and to the extent that monoline insurance is used, the requirements
of such insurers. Adverse changes in the secondary market could impair FPFG's
ability to originate, purchase and sell loans on a favorable or timely basis.
In addition, FPFG's securitizations typically utilize credit enhancements in the
form of financial guaranty insurance policies in order to achieve better credit
ratings. Failure to obtain acceptable rating agency ratings or insurance
company credit enhancements could decrease the efficiency or affect the timing
of future securitizations. FPFG intends to continue public or private
securitizations of its loan pools on a quarterly basis. Any delay in the sale
of a loan pool beyond a quarter-end would substantially reduce and may eliminate
FPFG's gain on sale of loans, net (the "Gain on Sale"), in the given quarter and
would likely result in losses for such quarter being reported by FPFG. If FPFG
were unable to securitize loans due to changes in the secondary market or the
unavailability of credit enhancements, FPFG's growth would be materially
impaired and FPFG's results of operations and financial condition would be
materially adversely affected.

13
<PAGE>

RISKS ASSOCIATED WITH LOANS HELD FOR SALE. In order to increase its
interest income and, therefore, reduce the amount of cash used in FPFG's
operating activities, in the third quarter of fiscal 1996 FPFG began to
implement a strategy of maintaining a significant quantity of loans on its
balance sheet as "loans held for sale, net." During fiscal 1994 and 1995, loans
were held an average of one month before their sale. In fiscal 1996, this
average holding period increased to two months. FPFG expects this holding
period to increase to 180 days during fiscal 1997, and it could exceed one year
thereafter.

The interest rate on loans originated and purchased by FPFG are fixed at
the time FPFG issues a loan commitment. In addition, the interest rates on
FPFG's loans are fixed, and FPFG's loan financing facilities all bear floating
interest rates. See "--Sensitivity to Interest Rates." Accordingly, FPFG's
strategy to increase the dollar amount of loans held for sale and the length of
time such loans are held will significantly increase FPFG's exposure to interest
rate fluctuations and the risks that such fluctuations will result in greater
interest expense under warehouse facilities and reduced Gain on Sale resulting
from a reduced spread between the interest rates charged to borrowers and the
interest rate paid to investors in securitizations. Moreover, in order to
manage this increased risk, FPFG will have to increase its hedging activities,
and there can be no assurance that such hedging activities will be successful in
managing the risk or will not themselves have a material adverse effect on
FPFG's financial condition or results of operations. Further, because FPFG's
warehouse facilities bear interest at variable rates, FPFG has a need for
medium- to long-term, fixed rate financing. As a result, there can be no
assurance that this strategy will not have a material adverse effect on FPFG's
financial condition or results of operations.

SENSITIVITY TO INTEREST RATES

FPFG's profitability may be directly affected by fluctuations in interest
rates. While FPFG monitors interest rates and employs a strategy designed to
hedge some of the risks associated with changes in interest rates, no assurance
can be given that FPFG's results of operations and financial condition will not
be adversely affected during periods of fluctuations in interest rates. FPFG's
interest rate hedging strategy currently includes purchasing put contracts on
treasury securities, selling short treasury securities and maintaining a
pre-funding strategy with respect to its securitizations. Since the interest
rates on FPFG's indebtedness used to fund and acquire loans are variable and the
rates charged on loans FPFG originates and purchases are fixed, increases in the
interest rates after loans are originated and prior to their sale could have a
material adverse effect on FPFG's results of operations and financial condition.
In addition, increases in interest rates prior to sale of the loans may reduce
the Gain on Sale earned by FPFG. The ultimate sale of FPFG's loans will fix the
spread between the interest rates paid by borrowers and the interest rates paid
to investors in securitization transactions (the "Excess Servicing Spread") with
respect to such loans, although increases in interest rates may narrow the
potential spread that existed at the time the loans were originated or purchased
by FPFG. A significant, sustained rise in interest rates could curtail FPFG's
growth opportunities by decreasing the demand for loans at such rates and
increasing market pressure to reduce origination fees or servicing spreads.
FPFG has begun to implement a strategy of maintaining a significant quantity of
loans on its balance sheet, thus increasing the length of time that loans are
held for sale and materially increasing its interest rate risk.

FPFG's investment in the Excess Servicing Receivable (as defined in
"--Excess Servicing Receivable Risks") is also sensitive to interest rates. A
decrease in interest rates could cause an increase in the rate at which
outstanding loans are prepaid, thereby reducing the period of time during which
FPFG receives the Excess Servicing Spread and other servicing income with
respect to such prepaid loans, thereby possibly resulting in accelerated
amortization of the Excess Servicing Receivable. Although an increase in
interest rates may decrease prepayments, such increase may not offset the higher
interest costs of financing the Excess Servicing Receivable. See "--Excess
Servicing Receivable Risks."

CREDIT RISK ASSOCIATED WITH BORROWERS

Many of FPFG's borrowers are consumers who have limited access to consumer
financing for a variety of reasons, including insufficient home equity value
and, in the case of Title I borrowers, unfavorable past credit experience. FPFG
is subject to various risks associated with these borrowers, including, but not
limited to, the risk that borrowers will not satisfy their debt service
payments, including payments of interest and principal, and that the realizable
value of the property securing such loans will not be sufficient to repay the
borrower's obligation to FPFG. The risks associated with FPFG's business
increase during an economic downturn or recession. Such periods may be
accompanied by decreased demand for consumer credit and declining real estate
values. Any material decline in real estate values reduces

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<PAGE>

the ability of borrowers to use home equity to support borrowings and increases
the loan-to-value ratios of FPFG's existing loans, thereby weakening collateral
values and foreclosures and the frequency and severity of losses generally
increase during economic downturns or recessions. Because FPFG lends to
borrowers who may be credit-impaired, the actual rates of delinquencies,
foreclosures and losses on such loans could be higher under adverse economic
conditions than those currently experienced in the consumer finance industry in
general. While FPFG is experiencing declining delinquency rates on its Serviced
Loan Portfolio as a whole, delinquency rates have followed historical trends on
a pool-by-pool basis, which trends assume increased rates of delinquencies over
time. However, there can be no assurance that delinquency rates will not
increase beyond historical trends. In addition, in an economic downturn or
recession, FPFG's servicing costs will increase. Any sustained period of such
increased losses could have a material adverse effect on FPFG's results of
operations and financial condition.

CREDIT RISK ASSOCIATED WITH HIGH LTV LOANS

Although FPFG's strategic loans are typically secured by real estate,
because of the relatively high loan-to-value ratio ("LTV") of most of FPFG's
loans, in most cases the collateral of such loans will not be sufficient to
cover the principal amount of the loans in the event of default. FPFG relies
principally on the creditworthiness of the borrower and to a lesser extent on
the underlying collateral for repayment of FPFG's Conventional Loans, and FHA
co-insurance with respect to Title I Loans. Consequently, many of FPFG's loans
equal or exceed the value of the mortgaged properties, in some instances
involving LTVs of up to 125%. With respect to many of FPFG's loans, LTV
determinations are based upon the borrowers' representations as to the value of
the underlying property; accordingly, there can be no assurance that such
represented values accurately reflect prevailing market prices. With respect to
any default, FPFG currently evaluates the cost effectiveness of foreclosing on
the collateral. To the extent that borrowers with high LTVs default on their
loan obligations, FPFG is less likely to use foreclosure as a means to mitigate
its losses. Under these circumstances, losses would be applied to FPFG's
allowances for possible credit losses on loans sold and held for sale, except to
the extent that Title I Program insurance is available. Such absorption, if in
excess of FPFG's allowance for such losses, could have a material adverse effect
on FPFG's financial condition and results of operations, if such losses required
FPFG to record additional provisions for losses on loans sold.

EXCESS SERVICING RECEIVABLE RISKS

ILLIQUIDITY OF THE EXCESS SERVICING RECEIVABLE. When FPFG's loans are
pooled and sold in securitization transactions, FPFG recognizes Gain on Sale,
which constitutes a substantial majority of FPFG's revenues. FPFG records an
asset corresponding to its Gain on Sale (the "Excess Servicing Receivable") on
its balance sheet in an initial amount equal to the present value of the Excess
Servicing Spread it expects to collect over the life of the securitized loans
sold. FPFG is not aware of an active market for this kind of receivable, and no
assurance can be given that the receivable could in fact be sold at its stated
value on the balance sheet, if at all.

In addition, the Gain on Sale is recognized in the period during which
loans are sold, while cash payments are received by FPFG pursuant to its pooling
and servicing agreements and servicing fees are paid to FPFG by the
securitization trustees over the lives of the securitized loans. This
difference in the timing of cash flows could cause a cash shortfall, which may
have a material adverse effect on FPFG's financial condition and results of
operations.

EXCESS SERVICING RECEIVABLE MAY BE OVERSTATED; PROVISION FOR CREDIT LOSSES
MAY BE UNDERSTATED. The calculation of Gain on Sale and the valuation of the
Excess Servicing Receivable are based on certain management estimates relating
to the appropriate discount rate and anticipated average lives of the loans
sold. In order to determine the present value of this excess cash flow, FPFG
currently applies an estimated market discount rate of between 10% and 11% to
the expected pro forma gross cash flow calculated utilizing the weighted average
maturity of the securitized loans, and currently applies a risk free discount
rate of 6.5% to the anticipated losses attendant to this pro forma cash flow
stream. Accordingly, the overall effective discount rate utilized on the cash
flows, net of expected credit losses, is approximately 12.5%. Although FPFG
records the Excess Servicing Receivable and the related reserve on a gross
basis, for purposes of evaluation and comparison, FPFG calculates an average net
discount rate for the net Excess Servicing Receivable. This is calculated by
subtracting the present value of the anticipated losses attributable to loans
being securitized and sold from the present value of the expected stream of
payments to derive the present value of the net Excess Servicing Receivable.
FPFG then determines the average discount rate that equates the expected
payments, net of expected losses, to the value of the Excess Servicing
Receivable, which, with respect to its most recent securitization,

15
<PAGE>

is approximately 12.5%. To estimate the anticipated average lives of the loans
sold in securitization transactions, management estimates prepayment, default
and interest rates on a pool-by-pool basis. If actual experience varies from
management estimates at the time loans are sold, FPFG may be required to write
down the remaining Excess Servicing Receivable through a charge to earnings in
the period of adjustment.

Prepayment rates and default rates may be affected by a variety of economic
and other factors, including prevailing interest rates and the availability of
alternative financing, most of which are not within FPFG's control. A decrease
in prevailing interest rates could cause prepayments to increase, thereby
requiring a writedown of the Excess Servicing Receivable. Even if actual
prepayment rates occur more slowly and default rates are lower than management's
original estimates, the Excess Servicing Receivable would not increase.

Furthermore, management's estimates of prepayment rates and default rates
are based, in part, on the historical performance of FPFG's Title I Loans. FPFG
is originating an increasing proportion of Conventional Loans, while historical
performance data is based primarily on Title I Loans. In addition, a
significant portion of FPFG's securitized loans sold were very recently
originated or were acquired in bulk purchases. No assurance can be given that
these loans, as with any new loan, will perform in the future in accordance with
FPFG's historical experience. In addition, when FPFG introduces new loan
products it may have little or no historical experience on which it can base its
estimates, and thus its estimates may be less reliable. During the fiscal year
ended September 30, 1996, FPFG increased its provision for credit losses, $2.5
million of which was taken because the default rate for a pool of Bulk Loans
included in FPFG's 1995-2 securitization exceeded the estimates made at the time
of the securitization and the adjustment was in conformity with FPFG's current
estimation methodology. There can be no assurance that FPFG will not be
required in the future to write down its Excess Servicing Receivable in excess
of its provision for credit losses. Any such writedown could have a material
adverse effect on FPFG's financial condition and results of operations.

FINANCING OF THE EXCESS SERVICING RECEIVABLE. FPFG retains significant
amounts of Excess Servicing Receivable on its balance sheet. FPFG currently
does not hedge this asset. FPFG finances its Excess Servicing Receivable with
term-line borrowings under various term lines of credit with lenders
(collectively, the "Term Lines"). Borrowings under the Term Lines bear interest
at floating rates. FPFG, however, cannot reprice its Excess Servicing
Receivable on its balance sheet, which has an expected average life of four to
six years. Therefore, FPFG remains at risk that its financing sources may
increase the interest rates they charge FPFG.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

In June 1996, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 125 ("FASB 125"), "Accounting
for Transfer and Servicing of Financial Assets and Extinguishment of
Liabilities." FASB 125 addresses the accounting for all types of securitization
transactions, securities lending and repurchase agreements, collateralized
borrowing arrangements and other transactions involving the transfer of
financial assets. FASB 125 distinguishes transfers of financial assets that are
sales from transfers that are secured borrowings. FASB 125 is generally
effective for transactions that occur after December 31, 1996, and it is to be
applied prospectively. FASB 125 requires FPFG to allocate the total cost of
mortgage loans sold to the mortgage loans sold (servicing released), retained
certificates and servicing rights based on their relative fair values. FPFG
will be required to assess the retained certificates and servicing rights for
impairment based upon the fair value of those rights. FPFG adopted FASB 125
during the quarter ended March 31, 1997. As a result of the adoption of FASB
125, FPFG's earnings were decreased by $556,000 after tax over the earnings that
would have been recorded utilizing FPFG's previous accounting method.
Additionally, under FASB 115, the Company deferred $7.2 million of its gain on
sale of loans, which was recorded as a separate component of equity, net of tax.
FASB 125 also required certain reclassifications on FPFG's balance sheet and
income statement. On the balance sheet, the Excess Servicing Receivable has
been reclassified as an "available for sale" investment security and renamed as
Interest Only Strip ("I/O Strip"), with the allowance for losses on loans sold
reclassified from liabilities to a contra asset to the I/O Strip. In the income
statement, the provision for losses on loans sold is now shown as a reduction of
the gain on sale of loans.

ABILITY OF FPFG TO CONTINUE GROWTH STRATEGY; POSSIBLE ADVERSE CONSEQUENCES FROM
RECENT GROWTH

FPFG's ability to continue its growth strategy depends on its ability to
increase the volume of loans it originates and purchases while successfully
managing its growth. This volume increase is, in part, dependent on FPFG's
ability

16
<PAGE>

to procure, maintain and manage its increasingly larger warehouse facilities and
lines of credit. In addition to FPFG's financing needs, its ability to increase
its volume of loans will depend on, among other factors, its ability to (i)
offer attractive products to prospective borrowers, (ii) attract and retain
qualified underwriting, servicing and other personnel, (iii) market its products
successfully, especially its new Direct Loan products, (iv) establish new
relationships and maintain existing relationships with independent correspondent
lenders in states where FPFG is currently active and in additional states and
(v) build national brand name recognition. In addition, FPFG has recently begun
to focus resources on the small loan consumer finance industry. There can be no
assurance that FPFG will successfully enter or compete in this highly
competitive segment of the consumer finance industry.

In light of FPFG's rapid growth, the historical performance of FPFG's
operations, including its underwriting and servicing operations, which were
principally related to origination of Title I Loans, may be of limited relevance
in predicting future performance with respect to Conventional Loans, especially
debt consolidation loans or personal consumer loans. Any credit or other
problems associated with the large number of loans originated in the recent past
may not become apparent until sometime in the future. Consequently, FPFG's
historical results of operations may be of limited relevance to an investor
seeking to predict FPFG's future performance. In addition, purchases of Bulk
Loans require FPFG to rely to a certain extent on the underwriting practices of
the seller of the Bulk Loans. Although FPFG has its own review process when
purchasing Bulk Loans, FPFG occasionally must rely upon the underwriting
standards of the originator, which standards may not be as rigorous as FPFG's.

FPFG's ability to successfully manage its growth as it pursues its growth
strategy will be dependent upon, among other things, its ability to (i) maintain
appropriate procedures, policies and systems to ensure that FPFG's loans have an
acceptable level of credit risk and loss, (ii) satisfy its need for additional
short-term and long-term financing, (iii) manage the costs associated with
expanding its infrastructure, including systems, personnel and facilities, and
(iv) continue operating in competitive, economic, regulatory and judicial
environments that are conducive to FPFG's business activities. FPFG's
requirement for additional operating procedures, personnel and facilities is
expected to continue over the near term. FPFG is absorbing the effects of the
implementation of new computer hardware and software to manage its business
operations, and it plans to continue to procure hardware and software that
require additional corresponding investments in training and education. FPFG's
significant growth has placed substantial new and increased pressures on FPFG's
personnel. There can be no assurance that the addition of new operating
procedures, personnel and facilities together with FPFG's enhanced information
systems, will be sufficient to enable it to meet its current operating needs.
Changes in FPFG's ability to obtain or maintain any or all of these factors or
to successfully manage its growth strategy could have a material adverse effect
on FPFG's operations, profitability and growth.

CONSOLIDATION OF OPERATIONS OF ACQUISITIONS

Since November 1995, FPFG has made numerous acquisitions and intends to
acquire additional companies in the consumer finance industry. FPFG must
successfully integrate the management, marketing, products and systems
associated with its acquisitions if FPFG is to make current or prospective
acquisitions financially successful. In addition, FPFG's strategy of acquiring
personal consumer loan companies involves introducing FPFG's strategic loan
products, which are very different from the type of loans such companies now
originate, into this origination channel. Acquisitions may produce excess costs
and may become significant distractions to management if they are not timely
integrated. There can be no assurance that future acquisition opportunities
will become available, that such future acquisitions can be accomplished on
favorable terms or that such acquisitions, if any, will result in profitable
operations in the future or can be integrated successfully with FPFG's existing
business.

CONCENTRATION OF OPERATIONS IN CALIFORNIA

Approximately 51.9% of the loans in the Serviced Loan Portfolio at
March 31, 1997 were secured by subordinate liens on residential properties
located in California. Consequently, FPFG's results of operations and financial
condition are dependent upon general trends in the California economy and its
residential real estate market. California has experienced an economic slowdown
or recession over the last several years, which has been accompanied by a
sustained decline in the California real estate market. Such a decline may
adversely affect the values of properties securing FPFG's loans, such that the
principal balances of such loans, together with any primary financing on the
mortgaged properties, may further increase LTVs, making FPFG's ability to recoup
losses in the event of a borrower's default extremely unlikely. In addition,
California historically has been vulnerable to certain risks of natural
disasters,

<PAGE>

such as earthquakes and erosion-caused mudslides, which are not typically
covered by the standard hazard insurance policies maintained by borrowers.
Uninsured disasters may adversely impact borrower's ability to repay loans made
by FPFG, which could have a material adverse effect on FPFG's results of
operations and financial condition.

COMPETITION

The consumer finance market is highly competitive and fragmented. FPFG
competes with a number of finance companies that provide financing to
individuals who may not qualify for traditional financing. To a lesser extent,
FPFG competes, or will compete, with commercial banks, savings and loan
associations, credit unions, insurance companies and captive finance arms of
major manufacturing companies that currently tend to apply more traditional
lending criteria. In addition, in recent months, several companies have
announced loan programs that will compete directly with FPFG's loan products,
particularly its Conventional Loans. Many of these competitors or potential
competitors are substantially larger and have significantly greater capital and
other resources than FPFG. In fiscal 1995 and 1996 and the first six months of
fiscal 1997, approximately 68.5%, 93.9% and 85.1%, respectively, of FPFG's loans
originated (excluding Bulk Loans) were Correspondent Loans, which are expected
to remain a significant part of FPFG's loan production program. As a purchaser
of Correspondent Loans, FPFG is exposed to fluctuations in the volume and price
of Correspondent Loans resulting from competition from other purchasers of such
loans, market conditions and other factors. In addition, the Federal National
Mortgage Association ("Fannie Mae") has purchased and is expected to continue to
purchase significant volumes of Title I Loans on a whole-loan basis. Purchases
by Fannie Mae could be made from sources from which FPFG also purchases loans.
To the extent that purchasers of loans, such as Fannie Mae, enter or increase
their purchasing activities in the markets in which FPFG purchases loans,
competitive pressures may decrease the availability of loans or increase the
price FPFG would have to pay for such loans, a phenomenon that has occurred with
respect to Title I Loans. In addition, increases in the number of companies
seeking to originate loans tends to lower the rates of interest FPFG can charge
borrowers, thereby reducing the potential value of subsequently earned Gains on
Sales of loans. To the extent that any of these lenders or Fannie Mae
significantly expand their activities in FPFG's market, or to the extent that
new competitors enter the market, FPFG's results of operations and financial
condition could be materially adversely affected.

CONCENTRATION OF CORRESPONDENT LENDERS

Approximately 79.8%, 48.6% and 44.7% of the loans purchased from
correspondent lenders by FPFG during fiscal 1995 and 1996 and the first six
months of fiscal 1997, respectively, were originated through FPFG's ten largest
independent correspondent lenders. Approximately 50% of the loans purchased
from correspondent lenders during fiscal 1995 were originated through two
independent correspondent lenders. FPFG believes that it is possible for its
dependence on a small number of independent correspondent lenders to continue
for the foreseeable future as FPFG focuses extensively on originating Direct
Loans. Correspondent lenders are not contractually bound to sell loans to FPFG,
and, therefore, are able to sell their loans to others or to undertake
securitization programs of their own. To the extent that FPFG is no longer able
to purchase or originate loans from these significant independent correspondent
lenders, this could have a material adverse effect on FPFG's results of
operations and financial condition.

LIMITED OPERATING HISTORY

FPFG was formed in 1994 to combine the operations of FIRSTPLUS Financial
and SFAC. The Combination involved the integration of the operations of two
companies that previously operated independently. Consequently, FPFG has a
limited operating history under its new corporate structure upon which
prospective investors may base an evaluation of its performance.

DELINQUENCIES; RIGHT TO TERMINATE SERVICING; NEGATIVE IMPACT ON CASH FLOW

On March 31, 1997, approximately 64.4% (by dollar volume) of the
Serviced Loan Portfolio consisted of loans securitized by FPFG and sold to
grantor or owner trusts. FPFG's form of pooling and servicing agreement with
each of these trusts provides that the trustee of the related trust may
terminate FPFG's servicing rights if certain delinquency or loss standards
are not met. As of March 31, 1997, none of the pools of securitized loans
exceeded the foregoing delinquency standards and no servicing rights had been
terminated. However, there can be no assurance that delinquency rates with
respect to FPFG-sponsored securitized loan pools will not exceed this rate in
the future and, if exceeded, that

<PAGE>

servicing rights will not be terminated, which would have a material adverse
effect on FPFG's result of operations and financial condition.

FPFG's cash flow can also be adversely impacted by high delinquency and
default rates in its grantor and owner trusts. Generally, provisions in the
pooling and servicing agreement have the effect of requiring the
overcollateralization account, which is funded primarily by the excess servicing
on the loans held in the trust, to be increased up to approximately two and
on-half times the level otherwise required when the delinquency and the default
rates exceed various specified limits. The reserve account was fully funded as
of March 31, 1997.

DEPENDENCE ON TITLE I PROGRAM

A portion of FPFG's business is dependent on the continuation of the
Title I Program, which is federally funded. The Title I Program provides that
qualifying loans are eligible for FHA insurance, although such insurance is
limited. From time to time, legislation has been introduced in both houses of
the Congress that would, among other things, abolish the Department of Housing
and Urban Development ("HUD"), reduce federal spending for housing and community
development activities and eliminate the Title I Program. No assurance can be
given that the Title I Program will continue in existence or that HUD will
continue to receive sufficient funding for the operation of the Title I Program.
Discontinuation of or a significant reduction in the Title I Program or FPFG's
authority to originate or purchase loans under the Title I Program could have a
material adverse effect on FPFG's results of operations and financial condition.

IMPACT OF REGULATION AND LITIGATION

FPFG's business is subject to regulation and licensing under various
federal, state and local statutes and regulations requiring, among other things,
the licensing of lenders, adequate disclosure of loan terms and limitations on
the terms and interest rates of consumer loans, collection policies, creditor
remedies and other trade practices. An adverse change in these laws or
regulations could have an adverse effect on FPFG by, among other things,
limiting the interest and fee income FPFG may generate on existing and
additional loans, limiting the states in which FPFG may operate or restricting
FPFG's ability to realize on the collateral securing its loans.

Members of Congress and government officials have from time to time
suggested the elimination of the mortgage interest deduction for federal income
tax purposes, either entirely or in part, based on borrower income, type of loan
or principal amount. Because many of FPFG's loans are made to borrowers for the
purpose of consolidating consumer debt or financing other consumer needs, the
competitive advantages of tax deductible interest, when compared with
alternative sources of financing, could be eliminated or seriously impaired by
such government action. Accordingly, the reduction or elimination of these tax
benefits could have a material adverse effect on the demand for loans of the
kind offered by FPFG, which could have a material adverse effect on FPFG's
results of operations and financial condition.

Industry participants are frequently named as defendants in litigation
involving alleged violations of federal and state consumer lending laws and
regulations, or other similar laws and regulations, as a result of the
consumer-oriented nature of the industry in which FPFG operates and
uncertainties with respect to the application of various laws and regulations in
certain circumstances. If a significant judgment were rendered against FPFG in
connection with any litigation, it could have a material adverse effect on
FPFG's financial condition and results of operations.

FPFG's loans under the Title I Program are eligible for FHA insurance. The
FHA insures 90% of such loans and certain interest costs, provided that FPFG has
not depleted its loss reserve account established with the FHA and the loans
were properly originated according to FHA regulations. The amount of insurance
coverage in a lender's FHA loss reserve account is equal to 10% of the original
principal amount of all Title I Loans originated and the amount of the reserves
for purchased loans reported for insurance coverage by the lender, less the
amount of all insurance claims approved for payment in connection with losses on
such loans and other adjustments. If at any time claims exceed the loss reserve
balance, the remaining Title I Loans will be uninsured. In addition, the
Title I Program sets loan origination guidelines that must be satisfied by the
lender in connection with the origination of Title I Loans in order for the FHA
to insure those loans. FPFG's failure to comply with such requirements could
result in denial of payment by the FHA. There can be no assurance that losses
will not exceed FPFG's loss reserve account or that FPFG will not be adversely
affected by such defaults. FPFG's Conventional Loans are not insured.

<PAGE>

CONCENTRATION OF VOTING CONTROL IN MANAGEMENT

At March 31, 1997, Daniel T. Phillips, FPFG's President, Chief Executive
Officer and Chairman of the Board, and Eric C. Green, FPFG's Chief Financial
Officer, beneficially own or otherwise control an aggregate of approximately
14.2% and 1.7%, respectively, of the outstanding voting FPFG Common Stock.
Therefore, Messrs. Phillips and Green are able to exercise significant influence
with respect to the election of the entire Board of Directors of FPFG (the "FPFG
Board") and all matters submitted to FPFG stockholders. Messrs. Phillips and
Green are also able to significantly influence the direction and future
operations of FPFG, including decisions regarding the issuance of additional
shares of FPFG Common Stock and other securities. In addition, as long as
Messrs. Phillips and Green beneficially own or otherwise control a significant
block of issued and outstanding FPFG Common Stock, it will be difficult for
third parties to obtain control of FPFG through purchases of FPFG Common Stock
not beneficially owned or otherwise controlled by Messrs. Phillips and Green.

DEPENDENCE ON KEY PERSONNEL

FPFG is dependent upon the continued services of Daniel T. Phillips or
Eric C. Green and certain of FPFG's other key employees. While FPFG believes
that it could find replacements for its executive officers and key employees,
the loss of their services could have an adverse effect on FPFG's operations.
Each of FPFG's executive officers has entered into an employment agreement with
FPFG.

EVENTS OF DEFAULT UNDER CERTAIN FINANCING FACILITIES

The loss of the services of Daniel T. Phillips as Chief Executive Officer
of FPFG would constitute an event of default under one of FPFG's credit
facilities, which in turn would result in defaults under other indebtedness.
Mr. Phillips has entered into an employment agreement with FPFG.

EFFECT OF CERTAIN ANTITAKEOVER PROVISIONS

Certain provisions of the FPFG Articles, and the FPFG Bylaws, the Nevada
General Corporation Law (the "NGCL") and the Indenture for the outstanding 7.25%
Convertible Subordinated Notes due 2003 of FPFG (the "Convertible Notes") could
delay or frustrate the removal of incumbent directors and could make difficult a
merger, tender offer or proxy contest involving FPFG, even if such events could
be viewed as beneficial by FPFG's stockholders. For example, the FPFG Articles
deny the right of stockholders to amend the FPFG Bylaws and require advance
notice of stockholder proposals and nominations of directors. FPFG is also
subject to provisions of the NGCL that prohibit a publicly-held Nevada
corporation from engaging in a broad range of business combinations with a
person who, together with affiliates and associates, owns 10% or more of the
corporation's outstanding voting shares (an "interested stockholder") for three
years after the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. In addition, the Indenture for
the Convertible Notes provides that in the event of a "change of control" (as
defined therein) holders of the Convertible Notes have the right to require that
FPFG repurchase the Convertible Notes in whole or in part.

SECURITIES TRADING; POSSIBLE VOLATILITY OF PRICES

The FPFG Common Stock is quoted on the Nasdaq National Market. The market
price for shares of FPFG Common Stock may be significantly affected by such
factors as quarter-to-quarter variations in FPFG's results of operations, news
announcements or changes in general market or industry conditions.

<PAGE>

THE WIB MEETING

GENERAL

This Proxy Statement/Prospectus is being furnished to holders of WIB Common
Shares in connection with the solicitation of proxies by the WIB Board for use
at the WIB Meeting to be held on August 7, 1997, at the offices of Citizens,
18302 Irvine Boulevard, Tustin, California at 12:00 noon (Tustin, California
time) and any adjournments thereof.

This Proxy Statement/Prospectus, the Notice of Special Meeting and the
accompanying form of proxy are first being mailed to shareholders of WIB on or
about _____________, 1997.

PURPOSE OF THE MEETING

At the WIB Meeting, shareholders of WIB will be asked to consider and vote
upon a proposal to approve the Merger Agreement, providing for the Merger of WIA
with and into WIB. From and after the Effective Time, WIB will continue as the
Surviving Corporation and will be a wholly owned subsidiary of FPFG. As a
result of the Merger, each outstanding WIB Common Share, other than shares held
by dissenting shareholders of WIB, will be converted into the right to receive
shares of FPFG Common Stock in the manner described in "The Merger--Conversion
of Shares; Conversion." None of the currently outstanding shares of FPFG Common
Stock will be converted or otherwise changed as a result of the Merger.
Approval of the Merger Agreement by WIB shareholders at the WIB Meeting is among
the conditions to the consummation of the Merger under the terms of the Merger
Agreement.

THE WIB BOARD RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE MERGER AGREEMENT.

VOTING RIGHTS OF WIB SHAREHOLDERS

The WIB Board has fixed June 15, 1997 as the Record Date for the
determination of WIB shareholders entitled to notice of and to vote at the WIB
Meeting. Accordingly, only holders of record of WIB Common Shares at the close
of business on the Record Date will be entitled to vote at the WIB Meeting. At
the close of business on the Record Date, there were outstanding 1,211,156 WIB
Common Shares, each of which is entitled to one vote on each matter properly
submitted to a vote at the WIB Meeting. The affirmative vote of a majority of
the outstanding WIB Common Shares entitled to vote is required to approve the
Merger Agreement.

All proxies will be voted in accordance with the directions of the WIB
shareholder executing such proxy and, to the extent no directions are given,
will be voted "for" approval of the Merger Agreement. Abstentions may be
specified on the proposal to approve the Merger Agreement. Such abstentions
will be considered present and entitled to vote at the WIB Meeting but will not
be counted as votes cast in the affirmative. Abstentions on the proposal to
approve the Merger Agreement will have the effect of a negative vote because
this proposal requires the approval of a majority of the outstanding shares
entitled to vote.

WIB believes that brokers that hold WIB Common Shares in "street" name for
customers do not have the authority to vote those shares with respect to the
approval of the Merger Agreement if they have not received instructions from the
beneficial owner. A failure by brokers to receive instructions from the
beneficial owner to vote those shares will have the same effect as a vote
against the proposal to approve the Merger Agreement. WIB shareholders whose
shares are not registered in their name will need appropriate documentation from
the recordholder to vote personally at the WIB Meeting.

As of the close of business on the Record Date, the directors and executive
officers of WIB held or had the right to vote in the aggregate approximately
31.9% of the outstanding WIB Common Shares, and have advised WIB that they
presently intend to vote their shares in favor of the Merger Agreement.

Each shareholder can vote personally or by proxy; a person acting as a
proxy need not be a shareholder.

<PAGE>

SOLICITATION AND REVOCATION OF PROXIES; QUORUM

The WIB Board is making the solicitation of proxies from its shareholders
under this Proxy Statement/Prospectus. All shares represented by properly
executed proxies will be voted in accordance with the directions on the proxies,
unless such proxies are revoked prior to the vote. FORMS OF PROXY CONTAINING NO
INSTRUCTIONS REGARDING ANY PARTICULAR MATTER SPECIFIED THEREIN WILL BE VOTED FOR
THE APPROVAL OF THE MERGER AND THE PROXIES APPOINTED IN THE PROXY WILL USE THEIR
DISCRETION AS TO ALL OTHER MATTERS PROPERLY BROUGHT BEFORE THE MEETING. The WIB
Board is not aware of matters other than those specified in the Notice of
Special Meeting which may properly come before the meeting of its shareholders.
If any other matters are properly presented for action at the WIB Meeting, it is
intended that the named proxies will vote in accordance with their best judgment
on such matters. WIB will bear the cost of solicitation of proxies for the WIB
Meeting. In addition to the use of the mails, proxies may be solicited by
telephone by directors and officers and employees of WIB and their respective
subsidiaries who will not be specially compensated for such services. Brokerage
houses, custodians, nominees and fiduciaries will be requested to forward the
proxy soliciting materials to the beneficial owners of WIB Common Shares held of
record by such persons, and WIB will reimburse them for their charges and
expenses.

Each holder of record of WIB Common Shares on the Record Date will be
entitled to one vote for each share of stock registered in his or her name on
each matter presented to a vote at the WIB Meeting. The presence, in person or
by proxy, of a majority of the outstanding shares of WIB Common Shares entitled
to vote is necessary to constitute a quorum of the shareholders A shareholder
of WIB who executes and returns a proxy has the power to revoke it at any time
before it is voted. The giving of a proxy does not affect a shareholder's
right to attend and vote in person at the WIB Meeting. A shareholder's presence
at a meeting, however, will not in itself revoke the shareholder's proxy. WIB
Common Shares which are present or represented by proxy at the WIB Meeting will
be counted for quorum purposes regardless of whether the holder of the shares or
proxy fails to vote on the Merger Agreement or whether a broker with
discretionary authority fails to exercise its discretionary voting authority.
In addition to any other manner provided by law, a WIB shareholder giving a
proxy pursuant to this solicitation may revoke such proxy by delivering a
written revocation to the Secretary of WIB at 18302 Irvine Boulevard, Suite 300,
Tustin, California 92780. No revocation by written notice, however, will be
effective unless and until such notice is received by the Secretary of WIB prior
to the date of the WIB Meeting or by the inspector of election at the WIB
Meeting prior to the closing of the polls.

<PAGE>

THE MERGER

THE FOLLOWING IS A SUMMARY OF THE MATERIAL ASPECTS OF THE MERGER. THIS
SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE MERGER AGREEMENT, A COPY OF WHICH IS ATTACHED TO THIS PROXY
STATEMENT/PROSPECTUS AS APPENDIX A AND IS INCORPORATED HEREIN BY REFERENCE. WIB
SHAREHOLDERS ARE URGED TO READ THE MERGER AGREEMENT CAREFULLY.

GENERAL

At the Effective Time, WIA, a wholly-owned subsidiary of FPFG, will be
merged with and into WIB, with WIB being the Surviving Corporation in the
Merger. Following the Merger, WIB will be a wholly-owned subsidiary of FPFG.
Except with respect to shares as to which dissenters' rights have been
exercised, if the Merger Agreement is approved and the Merger becomes effective,
each WIB Common Share outstanding immediately prior to the Effective Time will
be automatically converted into and exchange for the right to receive shares of
FPFG Common Stock based on the Conversion Ratio. See "--Conversion of Shares;
Conversion." Following the Effective Time, FPFG will be the sole shareholder of
WIB. Shares of FPFG Common Stock issued and outstanding immediately before the
Effective Time will remain issued and outstanding immediately after the
Effective Time.

EFFECTIVE TIME

WIB and WIA anticipate filing a Certificate of Approval of Merger with the
Secretary of State of the State of California and Articles of Merger with the
Secretary of State of the State of Nevada, as promptly as possible after the
adoption of the matters to be considered at the WIB Meeting and the satisfaction
or waiver of the conditions contained in the Merger Agreement. See "The
Merger--The Merger Agreement--Conditions to the Merger." The Merger will be
consummated, and the Effective Time will occur, on the date and time of such
filings.

CONVERSION OF SHARES; CONVERSION RATIO

The Merger Agreement provides that, upon the Effective Time of the Merger,
each issued and outstanding WIB Common Share, other than shares held by WIB
shareholders who dissent to the Merger, will be converted into the right to
receive shares of FPFG Common Stock. The number of shares of FPFG Common Stock
to be received by each WIB shareholder is determined by dividing the "FPFG
Share Number" by the sum of the number of WIB Common Shares outstanding plus the
number of WIB Common Shares issuable upon the exercise of all Existing Stock
Rights as of the Effective Time (the "Conversion Ratio"). No fractional shares
will be issued, but rather any resulting fractional share will be rounded up to
the next whole number. The "FPFG Share Number" is the number determined by
dividing (i) $24,862,674 by (ii) the average closing price per share of the FPFG
Common Stock on the Nasdaq National Market as reported in THE WALL STREET
JOURNAL for the ten trading days prior to the date that is two calendar days
prior to the Closing of the Merger (the "FMV of the FPFG Common Stock").

Assuming no WIB shareholders dissent from the Merger and assuming a FMV of
the FPFG Common Stock of $32.875 per share (i.e., the FMV of the FPFG Common
Stock had the Closing Date been June 25, 1997), WIB shareholders would have been
entitled to receive an aggregate of approximately 650,413 shares of FPFG Common
Stock at the Effective Time. WIA's common stock outstanding immediately prior
to the Effective Time shall be converted into one share of common stock of WIB
as the Surviving Corporation. The shares of FPFG Common Stock outstanding
immediately prior to the Effective Time will not be changed as a result of the
Merger. All such shares of FPFG Common Stock will remain issued and
outstanding.

Based upon the same assumptions specified in the previous paragraph,
holders of FPFG Common Stock prior to the Effective Time of the Merger, in the
aggregate, will own approximately 97.9% of the outstanding FPFG Common Stock
after giving effect to the Merger, and holders of WIB Common Shares prior to the
Effective Time of the Merger, in the aggregate, will own approximately 2.1% of
the outstanding FPFG Common Stock after giving effect to the Merger.

23
<PAGE>

BACKGROUND OF AND REASONS FOR THE MERGER

The decision to pursue a potential sale of WIB grew out of developments
respecting WIB in 1995 and 1996. In the fall of 1994 WIB, filed a registration
statement with the SEC in connection with its plan to raise $7,000,000 to
$10,000,000 through an initial public offering of WIB Common Shares. WIB
planned to use the offering proceeds to support and expand its portfolio lending
business. In January 1995, these efforts were terminated due to unfavorable
market conditions. WIB thereafter retained Carpenter in January 1995 to explore
the possibility of privately placing shares to obtain additional capital or, if
appropriate, to sell WIB.

In February 1995, the Board of Directors of Citizens, upon the
recommendation of management, determined that Citizens' portfolio of
wholly-owned Title I Loans should be sold in order to reduce Citizens' level of
participation in the Title I Program, including liabilities associated with the
reserves required to be maintained with HUD respecting such loans. In April
1995, Michael W. McGuire, President and Chief Executive Officer of Citizens, was
contacted by a representative of FPFG expressing FPFG's interest in purchasing
the portfolio. The WIB Board and management were satisfied with the pricing of
the transaction and the ability to retain subservicing responsibilities for the
loans to be sold following their securitization by FPFG. The sale of $86.7
million of Title I Loans to FPFG was completed in June 1995. The sale, together
with an increased emphasis on originating loans for sale through mortgage
banking activities, reduced WIB's current capital needs significantly. As a
result, the interest of WIB in raising additional capital diminished.

During the course of the negotiation and closing of the loan sale
transaction, FPFG and WIB explored ways in which the two companies could work
together more closely in the future. Citizens desired to offer a home equity
loan product with an LTV exceeding 100% of the value of the home securing the
loan and desired to find a purchaser for that product. Working together, FPFG
and Citizens established underwriting and pricing criteria for this loan
program, and in July 1995 Citizens began producing this loan as a complement to
its existing Title I Loan business.

From July 1995 to April 1996, Citizens sold this product to FPFG
exclusively. In April 1996, Citizens began selling this product to other
investors as well. During this period, the new home equity loan products of
Citizens became the primary loan offered by Citizens. In addition to the $86.7
million in Title I Loans sold to FPFG in June 1995, during the second half of
1995 Citizens sold FPFG another $1.6 million in Title I Loans and $21.0 million
in home equity loans, amounting to approximately 45% of Citizens' total loan
production for such period. During 1996, Citizens sold FPFG $61.2 million in
loans, representing 46% of Citizens' loan production. During the first quarter
of 1997, approximately $24.9 million in loans have been sold to FPFG,
representing 63.8% of loan production. Citizens believes that the terms of such
sales have been favorable to Citizens and generally competitive with the terms
available in the secondary market for the product sold to FPFG.

In November 1995, Mr. McGuire met with Daniel T. Phillips, Chairman of the
Board and Chief Executive Officer of FPFG, Eric C. Green, Executive Vice
President and Chief Financial Officer of FPFG, and a representative of Bear,
Stearns & Co. Inc. ("Bear Stearns"), FPFG's investment banker, in Dallas, Texas,
at which time the possible benefits of a closer alliance between the two
companies were discussed. FPFG elected not to pursue an investment in WIB or
Citizens at that time because FPFG was in the process of completing its initial
public offering, which closed in February 1996, and believed that further
consideration of an investment in a regulated financial institution or holding
company should be deferred.

In January 1996, the WIB Board asked Carpenter to negotiate with parties
who had expressed an interest in acquiring or investing in WIB or Citizens. In
connection with these discussions, Carpenter prepared an information package
respecting WIB to be made available to potential investors and contacted other
potential acquirors. Mr. McGuire advised Mr. Phillips and Mr. Green to contact
Carpenter if they were interested in further review of WIB as a possible
acquisition target. While FPFG obtained a copy of the information package in
March 1996, at that time serious discussions between the parties did not occur.

During the period from March 1996 to November 1996, WIB responded to
various indications of interest from potential acquirors and engaged in
extensive negotiations with one party for a sale of WIB for a combination of
cash and stock. This party proposed to acquire 45% of the outstanding shares
of WIB for cash equal to 1.65 times the December 31, 1996 adjusted book value
per share of the WIB Common Shares, and 55% of the outstanding shares for
shares of the parent company of the acquiror exchanged on a
book-value-for-book-value basis. The WIB Board declined

24
<PAGE>

to proceed with this transaction because of concerns relating to the lack of
a current market for the shares to be received, the level of goodwill on the
books of the acquiror, the historical earnings of the acquiror, and price
reductions requested by the acquiror. The WIB Board believes the terms
offered by FPFG, including price, are superior to those offered by the other
party. The negotiations with such party were terminated in November 1996
prior to receipt of FPFG's initial offer.

During the week of November 18, 1996, Mr. McGuire again met in Dallas with
Mr. Green, Mr. Phillips and a representative of Bear Stearns. At that meeting,
FPFG expressed its interest in discussing the possibility of an acquisition of
WIB or Citizens by FPFG. FPFG indicated that its interest had increased in
acquiring a financial institution, like Citizens, that was not regulated as a
bank holding company under federal law. On November 25, 1996, a confidentiality
agreement was executed by FPFG and thereafter materials concerning WIB and its
business were forwarded to FPFG for its review. On December 3, 1996, FPFG
presented a letter to WIB indicating its interest in acquiring WIB in a
transaction to be accounted for as a pooling of interests and with the
shareholders of WIB to receive FPFG Common Stock in an amount equivalent to two
times the book value per share of the WIB Common Shares at December 31, 1996, on
a fully diluted basis.

During December 1996 and January 1997, the parties continued discussions
over the material terms of the acquisition, including price, and WIB's desire
not to enter into a letter of intent but to proceed with the negotiation and
execution of a definitive agreement subject to no due diligence contingencies on
the part of FPFG. Representatives of FPFG advised WIB that it would not have
the personnel available to complete due diligence prior to the first week of
February, in light of commitments related to FPFG's pending public offering of
FPFG Common Stock (which closed during the last week of January 1997). The due
diligence of both parties was concluded in early February and WIB received a
substantially final version of the agreement on or about February 12, 1997, for
consideration by the WIB Board.

On the afternoon of February 13, 1997, WIB received a letter from another
mortgage banking firm expressing an interest in a possible acquisition of
Citizens at a cash price of 1.75 times the book value per share of Citizens as
of the end of the quarter preceding the quarter in which the closing of the
transaction would occur, plus a contingent payment of $7.8 million if 1998
originations by Citizens exceeded $180 million and pre-tax profits exceeded
$5.6 million, and a contingent payment of $11.1 million if 1999 originations by
Citizens exceeded $212 million and pre-tax profits exceeded $6.6 million. The
letter of intent was subject to a number of other significant contingencies,
including a comprehensive due diligence review of Citizens. On February 14,
1997, James T. Capretz, Chairman of the Board of WIB, wrote to the President of
the potential buyer and advised him that Carpenter would be responding to him
shortly on behalf of WIB. That afternoon, Carpenter spoke with the investment
banker for the potential buyer concerning the proposed transaction, and advised
him that WIB was close to concluding a transaction with another interested party
and that any due diligence contingencies to a proposed transaction by his client
would have to be satisfied very quickly for such a transaction to proceed.

Later that day, the WIB Board held a telephonic meeting to consider the new
proposal. During the meeting, representatives of Carpenter presented
information respecting the potential buyer, its financial resources and the
value of the offer. Mr. McGuire and Carpenter also expressed their opinion that
it was unlikely that the loan volume and net profit conditions to the contingent
payments set forth in the offer could be satisfied by Citizens. The WIB Board
then authorized Carpenter to respond to the offer. Carpenter attempted to
contact the investment banker for the interested party and the President of the
party by telephone, but was unable to reach them. At the request of the WIB
Board, Carpenter then sent a letter dated February 14, 1997 to the interested
party and its investment banker indicating that a final non-contingent offer for
all of the shares of WIB (as opposed to Citizens), with no contingencies other
than shareholder and regulatory approval, a cash purchase price of $20.00 per
share for the WIB Common Shares and a $2 million cash deposit, would be
considered if presented by 5:00 p.m. on Monday, February 17 and that WIB would
make its books and records available for inspection over the weekend of
February 15 and February 16. No immediate response was received to this letter.
On Saturday, February 15, Carpenter and the Chairman of the Board of WIB spoke
with the investment banker and discussed the position of the WIB Board. On
Monday, February 17, Carpenter spoke with the President of the bidder, who was
noncommittal as to his company's continued level of interest. No further
communications were received from the bidder following such conversation. On
February 19, 1997, a telephone meeting of the WIB Board was held to consider the
Merger and Merger Agreement presented by FPFG.

<PAGE>

The WIB Board determined not to proceed with the competing proposal because
the offer was subject to a due diligence contingency, there were substantial
future loan volume and earnings contingencies affecting the amount of
consideration to be received, and there were uncertainties respecting the
financial capacity of the acquiror to raise the cash necessary to complete the
transaction. The WIB Board was also influenced by the acquiror's failure to
respond to WIB's counter-offer, the advanced stage of negotiations with FPFG,
the lack of substantial contingencies to the FPFG offer and the risk of losing
the FPFG transaction should negotiations with the third party not be
successfully concluded.

At the February 19, 1997 meeting, following the WIB Board's consideration
of all relevant factors and discussion with Carpenter, during which the WIB
Board asked questions related to Carpenter's presentations and oral opinion
concluding the Merger Consideration offered by FPFG, was, as of such date, fair,
from a financial point of view, to the WIB shareholders, the WIB Board approved
the Merger Agreement and authorized its execution, and recommended approval of
the agreement by the WIB shareholders. The Merger Agreement was then executed
and a press release was issued announcing the proposed Merger on the morning of
February 20, 1997.

RECOMMENDATION OF THE WIB BOARD

The WIB Board believes the Merger is in the best interests of WIB's
shareholders and has unanimously approved the Merger Agreement and the
transactions contemplated thereby. THE BOARD OF DIRECTORS OF WIB UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS OF WIB VOTE "FOR" ADOPTION AND APPROVAL OF THE
MERGER AGREEMENT.

The terms of the proposed Merger are the result of arms-length negotiations
between representatives of WIB and representatives of FPFG, culminating in the
signing of the Merger Agreement on February 19, 1997. In arriving at its
decision to approve and recommend the terms of the Merger Agreement, the WIB
Board considered a number of factors, including, but not limited to, the
following:

1. WIB's business, results of operations, financial condition and future
prospects, including historical and projected earnings, return on
equity and return on assets, liquidity, and growth and margins in
its mortgage banking activities. WIB also considered the premium
offered by FPFG in relation to the earnings, book value and deposits
of WIB as compared to premiums paid in other acquisitions of other
federally insured financial institutions. See "--Opinion of WIB's
Financial Advisor" for a more expanded discussion of these items.

2. FPFG's business, results of operation, financial condition and future
prospects, and the value of the shares of FPFG Common Stock to be
acquired by the shareholders of WIB. Specifically, the WIB Board
reviewed growth in lending volume and profits of FPFG, and the
relationship of the price of the FPFG Common Stock to both earnings
and the earnings multiples at which shares of other finance and
mortgage companies trade.

3. Carpenter's presentation to the WIB Board and the opinion of
Carpenter, WIB's financial advisor, that the Merger consideration
was, as of the date of such opinion, fair from a financial point of
view to the holders of WIB Common Shares. See "--Opinion of WIB's
Financial Advisor" and Appendix B.

4. The review by the WIB Board with its legal and financial advisors of
the provisions of the proposed Merger Agreement.

5. The belief of the WIB Board that the terms of the Merger were
attractive in that they would allow WIB shareholders to receive shares
of FPFG Common Stock listed on the Nasdaq National Market, which are
substantially more liquid than the WIB Common Shares, and that receipt
of such shares would generally allow WIB shareholders to defer payment
of taxes on the disposition of their WIB Common Shares until sale of
their shares of FPFG Common Stock received in the Merger. See
"--Certain Federal Income Tax Considerations."

6. The general economic and competitive conditions of the market in which
WIB operates and trends in the consolidation of financial institutions
in the market, including the relative advantages enjoyed by
26

<PAGE>
larger institutions with more products, larger advertising budgets,
greater access to capital markets and other advantages attendant to
greater size and capitalization.

7. Exploring other indications of interest from other potential
acquirors, which, after careful analysis by the WIB Board, were
determined to be less advantageous to the shareholders of WIB than the
Merger. See "Background of and Reasons for the Merger."

8. The absence of financing contingencies in connection with the FPFG
offer.

9. WIB's substantial experience with FPFG and its loan products and the
positive impact of the business done with FPFG on WIB's results. FPFG
is by far WIB's largest customer, having purchased 46% and 64%,
respectively, of WIB's total loan production in 1996 and 1997.

In particular, the WIB Board considered the FPFG proposal in light of other
opportunities presented to WIB in 1995 and 1996, including the undertaking of a
public offering, a private placement to a strategic investor or other sales
proposals. The proposals received for both private and public offerings were at
prices substantially below the price offered by FPFG and presented concerns that
the shares of existing investors would have limited or no additional liquidity.
In addition, the redirection of WIB's business to mortgage banking from
portfolio lending had reduced WIB's capital requirements and left the company
with excess capital and liquidity, leaving sale of WIB to a larger company a
more attractive option. The acquisition proposals received from other
interested parties were, in turn, at prices generally below the price offered by
FPFG, or presented other risks, such as availability of financing or
contingencies that were not acceptable to the WIB Board. See "Background of and
Reasons for the Merger."

The FPFG Common Stock held by WIB's shareholders following the Merger,
while presenting risks to WIB's shareholders, would only represent approximately
two percent (2%) of total shares outstanding. The WIB Board believes that the
market for FPFG shares is sufficiently broad to permit WIB's shareholders to
dispose of such shares should they desire to do so. By taking stock, WIB's
investors may elect when to recognize any taxes from disposition of the shares.
Although the FPFG Common Stock carries certain risks, including the need of FPFG
for additional financing, dependence of FPFG on an active market for securitized
loans, interest rate risk, credit risk, Title I lending and a high level of
exposure to the California marketplace, these risks were perceived by the WIB
Board to be similar to the risks inherent in WIB's business. See "Risk
Factors."

The WIB Board recognizes that completion of the Merger will remove the
opportunity of WIB to grow independently and to perhaps ultimately achieve a
higher valuation based on its own business, whether through a future public
offering, a sale of WIB to a buyer at a higher price or otherwise. No assurance
can be given that FPFG will continue to experience the earnings growth of recent
periods, or that the FPFG Common Stock will prove to be a superior investment to
the WIB Common Shares. However, in the judgment of the WIB Board such potential
disadvantages and risks are outweighed by the potential benefits described
above.

In reaching its determination to approve and recommend the Merger, the WIB
Board did not assign any relative or specific weights to the foregoing factors,
and individual directors may have given different weights to different factors.

Certain members of the WIB Board have interests in the Merger in addition
to their interests as shareholders generally, including certain stock options
held by members of the WIB Board that will be converted into stock options to
acquire shares of FPFG Common Stock as a result of the Merger, and certain
payments to be received by the members of the WIB Board (other than Mr. McGuire)
under the Director Agreements. See "--Interests of Certain Persons in the
Merger."

OPINION OF WIB'S FINANCIAL ADVISOR

Pursuant to an engagement letter dated January 3, 1997 (the "Engagement
Letter"), WIB engaged Carpenter to provide a fairness opinion and other
financial advisory services with respect to the transaction. Carpenter is an
investment banking firm specializing in California financial institutions,
and, as part of its investment banking activities, is regularly engaged in
the valuation of businesses and their securities in connection with merger
transactions and other types of acquisitions, underwritings, private
placements and valuations for corporate and other purposes. WIB selected
Carpenter to render the opinion on the basis of its experience and expertise
in transactions similar to the Merger and its

<PAGE>

reputation in the banking and investment communities. No limitations
were imposed by WIB on Carpenter with respect to the investigations made or
procedures followed in rendering its opinion.

At a meeting of the WIB Board on February 19, 1997, Carpenter delivered its
oral opinion that the consideration to be received by the holders of WIB Common
Shares pursuant to the Merger was fair to such shareholders from a financial
point of view, as of the date of such opinion. Carpenter's oral opinion was
subsequently confirmed in writing as of such date.

THE FULL TEXT OF CARPENTER'S WRITTEN OPINION TO THE WIB BOARD, DATED
MARCH 26, 1997, WHICH SETS FORTH THE ASSUMPTIONS MADE, MATTERS CONSIDERED, AND
LIMITATIONS OF THE REVIEW, BY CARPENTER, IS ATTACHED HERETO AS APPENDIX B AND IS
INCORPORATED HEREIN BY REFERENCE. THE FOLLOWING SUMMARY OF CARPENTER'S OPINION
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION, WHICH
SHOULD BE READ CAREFULLY AND IN ITS ENTIRETY. IN FURNISHING SUCH OPINION,
CARPENTER DOES NOT ADMIT THAT IT IS AN EXPERT WITH RESPECT TO THE REGISTRATION
STATEMENT OF WHICH THIS PROXY STATEMENT/PROSPECTUS IS A PART WITHIN THE MEANING
OF THE TERM "EXPERTS" AS USED IN THE SECURITIES ACT AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER. NOR DOES CARPENTER ADMIT THAT ITS OPINION
CONSTITUTES A REPORT OR VALUATION WITHIN THE MEANING OF SECTION 11 OF THE
SECURITIES ACT. CARPENTER'S OPINION IS DIRECTED TO THE WIB BOARD, COVERS ONLY
THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED BY HOLDERS OF WIB COMMON SHARES
FROM A FINANCIAL POINT OF VIEW AS OF THE DATE OF THE OPINION AND DOES NOT
CONSTITUTE A RECOMMENDATION TO ANY HOLDER OF WIB COMMON SHARES AS TO HOW SUCH
SHAREHOLDER SHOULD VOTE AT WIB MEETING.

In connection with its opinion, Carpenter, among other things: (i) reviewed
certain publicly available financial and other data with respect to WIB and
FPFG, including the consolidated financial statements for recent years and
interim periods to December 31, 1996 and certain other relevant financial and
operating data relating to WIB and FPFG made available to Carpenter from
published sources and from the internal records of WIB; (ii) reviewed the Merger
Agreement; (iii) reviewed certain publicly available information concerning the
trading of, and the trading market for, WIB Common Shares and FPFG Common Stock;
(iv) compared WIB and FPFG from a financial point of view with certain other
companies in the financial services industry which Carpenter deemed to be
relevant; (v) considered the financial terms, to the extent publicly available,
of selected recent business combinations of companies in the banking industry
which Carpenter deemed to be comparable, in whole or in part, to the Merger;
(vi) compared to the Merger the financial and other terms of recent business
combinations proposals made to WIB by other companies in 1996; (vii) reviewed
and discussed with representative of the management of WIB certain information
of a business and financial nature regarding WIB, furnished to Carpenter by
them; (viii) made inquiries regarding and discussed the Merger and the Merger
Agreement and other matters related thereto with WIB's counsel; and (ix)
performed such other analyses and examinations as Carpenter deemed appropriate.

In connection with its review, Carpenter did not assume any obligation
independently to verify the foregoing information and relied on such information
being accurate and complete in all material respects. Carpenter also assumed
that there were no material changes in WIB's or FPFG's assets, financial
condition, results of operations, business or prospects since the respective
dates of their last financial statements made available to it. Carpenter relied
on advice of counsel to WIB as to all legal matters with respect to WIB, the
Merger and the Merger Agreement. WIB acknowledged that Carpenter did not
discuss with WIB's independent accountants any financial reporting matters with
respect to WIB, the Merger or the Merger Agreement. WIB informed Carpenter, and
Carpenter assumed, that the Merger would be accounted for as a pooling of
interests under generally accepted accounting principles. Carpenter assumed
that the Merger would be consummated in a manner that complies in all respects
with the applicable provisions of the Securities Act, the Exchange Act and all
other applicable federal and state statutes, rules and regulations.

Carpenter assumed that the allowance for loan losses for each of WIB and
FPFG are in the aggregate adequate to cover such losses. In addition,
Carpenter did not assume responsibility for reviewing any individual credit
files, or making an independent evaluation, appraisal or physical inspection of
any of the assets or liabilities (contingent or otherwise) of WIB or FPFG, nor
was Carpenter furnished with any such appraisals. Finally, Carpenter's opinion
was based on economic, monetary and market and other conditions as in effect on,
and the information made available to Carpenter as of the date of the opinion.
Accordingly, although subsequent developments may affect Carpenter's opinion, it
has not assumed any obligation to update, revise or reaffirm such opinion.

Set forth below is a summary of Carpenter's analysis in connection with its
opinion that is complete in all material respects.

<PAGE>

ANALYSIS OF SELECTED MERGER TRANSACTIONS. Carpenter reviewed public
transactions involving acquisitions of thrift and loan companies since January
1, 1992. Because the number of publicly reported acquisitions of thrift and
loans consisted of a small number of transactions, Carpenter also reviewed the
consideration paid in recently announced transactions whereby certain banks of
various sizes were acquired. Specifically, Carpenter reviewed five transactions
involving the acquisition of thrift and loans since 1992 and two transactions
involving the acquisition of thrift and loan companies in 1996, 101 transactions
involving acquisitions of banks based in California announced since January 1,
1992 (the "California Bank Acquisitions"), and 58 acquisitions of banks based in
California with total assets of less than $200 million since the same date (the
"Small Bank Acquisitions"). Carpenter further analyzed 16 transactions in 1996
involving California banks under $200 million (the "1996 Small Bank
Acquisitions"). For each institution acquired or to be acquired in such
transactions, Carpenter analyzed data illustrating, among other things, the
ratio of the premium (i.e., purchase price in excess of tangible book value) to
core deposits, purchase price to tangible book value and purchase price to last
12 months' ("LTM") earnings.

The two thrift and loan company transactions during 1996 considered were
the acquisition of California Thrift and Loan by Bayview Federal Bank (the "CTL
Acquisition") and the acquisition of Town and Country Finance by Capital Corp of
the West (the "Town and Country Acquisition"). Both transactions took place in
1996. The figures for the CTL Acquisition and the Town and Country Acquisition
produced, respectively: (i) percentage of premium to core deposits of 6.1% and
9.4%; (ii) multiple of purchase price to tangible book value of 130% and 157%;
and (iii) multiple of purchase price to LTM earnings of 11.4x and 9.1x. The
figures for the California Bank Acquisitions, Small Bank Acquisitions, and 1996
Small Acquisitions produced, respectively: (i) median percentage of premium to
core deposits of 6.3%, 6.2%, and 7.5%; (ii) median multiple of purchase price to
tangible book value of 163.1%, 147.4% and 168.6%; and (iii) median multiple of
purchase price to LTM earnings of 17.5x, 19.4x and 15.4x. In view of the wide
range of WIB earnings over the last several years, in addition to considering
the price as a multiple of WIB's LTM earnings, Carpenter also reviewed the
price as a multiple to the average of earnings for each of those years, a
normalized annual earnings rate of $1,294,783. In comparison, based upon an
assumed purchase price of $17.65 for each WIB Common Shares, Carpenter
determined that the consideration to be received by the holders of WIB Common
Shares in the Merger represented a percentage of premium to core deposits of
11.6%, a multiple of price to tangible book value of 200.0%, a multiple of price
to WIB's year end 1996 earnings of 9.0x, and a multiple of price to WIB's
normalized three-year earnings of 19.2x.

No other company or transaction used in the above analysis, as a
comparison, is identical to WIB or the Merger. Accordingly, an analysis of the
results of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the companies and other factors that could affect the public
trading value and the announced acquisition prices of the companies to which WIB
and the Merger are being compared.

CONTRIBUTION ANALYSIS. Carpenter analyzed the contribution of each of WIB
and FPFG to, among other things, total tangible common equity, assets, LTM net
income, and gross loans of the pro forma combined companies. For purposes of
this analysis, because the growth of FPFG made utilization of FPFG LTM earnings
in the combination analysis inappropriate, the income attributed to FPFG was
based upon an annualization of its December 31, 1996 quarter. Similarly, the
FPFG balance sheet utilized was for the period ending January 31, 1997, which
gave effect to FPFG's recent stock offering. For WIB, the balance sheet for the
period ending December 31, 1996 was used, and the income statement for the
calendar year 1996 and the normalized average for the three years ending
December 31, 1996 (as calculated above) were both used for comparative purposes.
This analysis showed, among other things, that based on pro forma combined
balance sheets for WIB and FPFG as defined above, WIB would have contributed
4.1% of shareholders' equity, 8.1% of assets, and 4.5% of loans. Pro forma
income statements as defined above indicated that WIB would have contributed
3.6% of the net income of the pro forma combined companies based on 1996
earnings by WIB, and 1.7% of combined pro forma earnings giving effect to a
three-year average for WIB earnings. Based upon analysis assuming a FMV of the
FPFG Common Stock of $32.00 and, therefore, a Conversion Ratio in the Merger of
.5517 a share of FPFG Common Stock for each WIB Common Shares, holders of WIB
Common Shares would own approximately 1.9% of the combined companies based on
fully diluted shares outstanding on the date of the opinion.

REVIEW OF FPFG AND WIB. Carpenter analyzed the financial results of both
FPFG and WIB for the period from 1994 through 1996 as reported by both
companies in their respective annual reports and public filings.
Specifically, Carpenter reviewed total assets, shareholder equity, net
income, and return on assets and return on equity. Assets of FPFG grew from
$61,341,000 at September 30, 1995 to $1,469,206,000 at March 31, 1997.
Shareholder equity of FPFG grew from $11,734,000 at September 30, 1995 to
$94,569,000 at September 30, 1996 and $307,638,000 at March 31, 1997. Net
income of FPFG for the fiscal year ending September 30, 1995 was $5,839,000,
for the fiscal year ending

<PAGE>

September 30, 1996 was $34,212,000, and for the six months ending March 31, 1997
was $48,181,000. Return on assets and return on equity of FPFG for each of the
fiscal years ending September 30, 1995, September 30, 1996 and annualized return
on equity for the six months ending March 31, 1997 were respectively 15.9% and
72.7%, 8.9% and 64.4%, and 8.8% and 47.9%. Total assets of WIB at the end of
each of the fiscal year ending December 31, 1994, December 31, 1995, and
December 31, 1996 were $119,184,000, $127,785,000, and $124,548,000,
respectively. Shareholders' equity of WIB at the end of each of the fiscal
years ending December 31, 1994, December 31, 1995, and December 31, 1996 was
$8,126,000, $9,245,000, and $11,761,000, respectively. Net income of WIB for
each of the fiscal years ending December 31, 1994, December 31, 1995, and
December 31, 1996 was $387,000, $722,000, and $2,775,000, respectively. Return
on assets and return on equity of WIB for each of the fiscal years ending
December 31, 1994, December 31, 1995, and December 31, 1996, were 0.34% and
4.78%, 0.57% and 8.40%, and 2.23% and 27.47%, respectively.

TRADING ACTIVITY AND PRICES. Carpenter reviewed the trading activity and
sales prices in the common stock of both WIB and FPFG. FPFG Common Stock has
been quoted on the Nasdaq National Market since FPFG's initial public offering
in February 1996. As of March 31, 1997, there were 31,912,159 shares of FPFG
Voting Common Stock outstanding, and 2,798,967 shares of non-voting common
stock. Sales prices for the FPFG Common Stock in calendar year 1996 ranged from
a low of $17.50 to a high of $30.75 per share. In the quarter ending March 31,
1997, sales prices for the FPFG Common Stock varied from a low of $20.50 to a
high of $36.75. Trading volumes in calendar 1996 averaged 186,075 shares traded
per day. Daily trading volumes in the first quarter of 1997 averaged 502,879
shares. WIB Common Shares are not listed on a national exchange or quoted on
any system of the Nasdaq Stock Market and are traded only sporadically. At
June 15, 1997, there were 1,211,156 WIB Common Shares issued and
outstanding. Management of WIB is aware of Carpenter sales of approximately
56,239 WIB Common Shares in 1996 at prices ranging from $5.00 to $6.25 per
share, and one sale during the first quarter of 1997 at $7.25 per share.

The summary set forth above does not purport to be a complete description
of the presentation by Carpenter to the WIB Board or of the analysis performed
by Carpenter. The preparation of a fairness opinion is not necessarily
susceptible to partial analysis or summary description. Carpenter believes that
its analyses and the summary set forth above must be considered as a whole and
that selecting a portion of its analyses and factors, without considering all
analyses and factors, would create an incomplete view of the process underlying
the analyses set forth in its presentation to the WIB Board. The range of
valuations resulting from any particular analysis described above should not be
taken to be Carpenter's view of the actual value of WIB or the combined
companies.

In performing its analyses, Carpenter made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of WIB or FPFG. Material
among those assumptions were that of a reasonable stable economic and interest
rate environment, no changes in the regulatory and statutory regime governing
the business of both FPFG and WIB sufficient to materially impact their results,
and continued secondary financial market liquidity for the products of both FPFG
and WIB. The analyses performed by Carpenter are not necessarily indicative of
actual values or actual future results, which may be significantly more or less
favorable than suggested by such analyses. Such analyses were prepared solely
as part of Carpenter's analysis of the fairness of the consideration to be
received by the holders of WIB Common Shares in the Merger and were provided to
the WIB Board in connection with the delivery of Carpenter's opinion. The
analyses do not purport to be appraisals or to reflect the prices at which a
company might actually be sold or the prices at which any securities may trade
at the present time or any time in the future. The forecasts utilized by
Carpenter in certain of its analyses are based on numerous variables and
assumptions which are inherently unpredictable and must be considered not
certain of occurrence as projected. Accordingly, actual results could vary
significantly from those contemplated in such forecasts.

Pursuant to the Engagement Letter, WIB will pay Carpenter a transaction fee
in connection with the Merger, a substantial portion of which is contingent upon
the consummation of the Merger. Under the terms of the Engagement Letter, WIB
will pay Carpenter a transaction fee equal to 1% of the aggregate purchase price
paid in the transaction, less $50,000 previously paid to Carpenter. WIB has
also agreed to reimburse Carpenter for its reasonable out-of-pocket expenses.
WIB has agreed to indemnify Carpenter, its affiliates, and their respective
partners, directors, officers, agents, consultants, employees and other
controlling persons against certain liabilities.

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<PAGE>

THE MERGER AGREEMENT

REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains
representations and warranties by WIB relating to, among other things, (a)
proper organization of WIB, proper organization of its subsidiaries and similar
corporate matters; (b) the capital structures of WIB and each of its
subsidiaries; (c) the authorization, performance and enforceability of the
Merger Agreement; (d) the absence of violations of WIB's governing instruments
and applicable laws and agreements; (e) governmental authorizations required to
effect the Merger; (f) the absence of claims and litigation against WIB and its
subsidiaries; (g) compliance by WIB and its subsidiaries with applicable laws;
(h) absence of material adverse changes on WIB; (i) compliance by WIB and its
subsidiaries with applicable environmental laws and regulations; (j) WIB Board
recommendations; (k) intellectual property rights and other intangible personal
property; (l) disclosures in the Merger Agreement by WIB not being misleading;
(m) preparation by WIB of audited financial statements in accordance with
generally accepted accounting principles ("GAAP") for the periods covered; (n)
the absence of undisclosed liabilities by WIB; (o) WIB's taxes and tax matters;
(p) WIB's loan practices; (q) WIB's interests in real property; (r) WIB's
material contracts and the absence of any breach of or default under any such
contract; (s) WIB's employee benefit plans; (t) WIB's insurance; and (u) WIB's
compensation of its officers, directors, and employees.

The Merger Agreement also contains representations and warranties by FPFG
relating to, among other things, (a) proper organization of FPFG; (b) the
authorization, performance and enforceability of the Merger Agreement; (c) the
compliance in all material respects with applicable requirements of the Exchange
Act of certain filings made by FPFG with the Commission; (d) the absence of a
litigation except as described in such documents filed with the Commission; and
(e) governmental authorizations required to effect the Merger.

CONDUCT OF BUSINESS PRIOR TO THE MERGER. WIB has agreed that, prior to the
Merger, it and its subsidiaries will conduct their operations only in the
ordinary course of business, except as contemplated by the Merger Agreement. WIB
has agreed that, prior to the Merger, WIB will and will cause each of its
subsidiaries to (i) extend credit in accordance with existing lending policies,
except that neither the WIB nor any subsidiary shall, without the prior written
consent of FPFG (A) make any extensions of credit aggregating in excess of
$200,000 to a person or entity that is not a borrower as of the date of the
execution of the Merger Agreement (except for loans which CIT Group/Consumer
Finance, Inc. has committed to purchase prior to their approval by Citizens) or
(B) engage in any loan transaction or series of contemporaneous loan
transactions involving an aggregate of more than $200,000 with any borrower who
has aggregate extensions of credit in excess of $200,000 as of the date of the
consummation of the Merger; (ii) not authorize or incur any long-term debt;
(iii) not mortgage, pledge or subject to lien or other encumbrance any of its
properties, except in the ordinary course of business; (iv) not enter into any
material agreement, contract or commitment in excess of $50,000 except banking
transactions and treasury investments in debt securities in the ordinary course
of business; (v) not make any investments except investments made in the
ordinary course of business, in accordance with past practice; (vi) not amend or
terminate any employee benefit plan except as required by law; (vii) not make
any contributions to any employee benefit plan except as required by the terms
of such plan in effect as of the date of the Merger Agreement; (viii) not
declare, set aside, make or pay any dividend or other distribution with respect
to WIB's capital stock; (ix) not redeem, purchase or otherwise acquire, directly
or indirectly, any of the capital stock of WIB; (x) not increase the
compensation of any officers, directors or executive employees, except pursuant
to existing compensation plans and practices (including bonus plans); (xi) not
sell or otherwise dispose of any shares of the capital stock of any subsidiary;
(xii) not sell or dispose of any of its assets or properties other than in the
ordinary course of business; (xiii) not issue any equity interests in WIB other
than pursuant to the exercise of Existing Stock Rights; (xiv) not issue or
create any warrants, obligations, subscriptions, options, convertible
securities, or other commitments under which any additional equity interests in
WIB's or a subsidiary's capital stock may be authorized, issued or transferred
from treasury; or (xv) not amend or otherwise change its articles of
incorporation; and (xvi) not acquire any capital stock or other equity
securities or acquisition of any equity or ownership interest in any bank,
corporation, partnership or other entity, except (A) through settlement of
indebtedness, foreclosure, or the exercise of creditors' remedies or (B) in a
fiduciary capacity, the ownership of which does not expose it to any liability
from the business, operations or liabilities of such person.

CERTAIN COVENANTS OF WIB AND FPFG. Each of FPFG and WIB have agreed to:
(i) except as required by law, consult with the other party prior to making any
press release or other public announcement regarding the Merger and any matters
contained in the Merger Agreement; (ii) use reasonable, good faith efforts to
take all necessary actions or cause to be done all things necessary to
consummate the transactions contemplated by the Merger Agreement as soon as
practicable including seeking or making all required filings, orders, consents
or authorizations required under applicable law or consents from any
governmental bodies or parties to any material contracts and to refrain from any
action that would materially impair the likelihood of the consummation of the
transaction contemplated by the Merger Agreement

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<PAGE>

or take any action that may materially and adversely affect the obtaining of any
consent, waiver, authorization or approval; (iii) not take any actions which
could prevent the Merger from qualifying for "pooling-of-interests" accounting
treatment or to be treated as a tax-free "reorganization" for Federal income tax
purposes; (iv) cooperate and use all reasonable efforts to defend against any
claim, action, suit, investigation or other proceeding; (v) promptly notify the
other of the occurrence of any event that renders any of the representations or
warranties of such party set forth in the Merger Agreement materially
inaccurate, the awareness of such party that any representation or warranty of
such party set forth in the Merger Agreement was not accurate in all material
respects when made or the failure of such party to comply with or accomplish
any of the covenants or agreements of such party set forth in the Merger
Agreement in any material respect.

ADDITIONAL COVENANTS OF WIB: WIB has also agreed to (i) continue in force
its and each subsidiary's existing insurance policies or replace them with new
policies providing substantially the same coverage and rates; (ii) maintain in
full force and effect all permits, licenses and authorizations which are
material to the condition (financial and otherwise) of assets, liabilities,
properties, business and results of operations of WIB and its subsidiaries;
(iii) cause Michael W. McGuire to enter into an amendment to the McGuire
Employment Agreement, effective as of the Effective Time; (iv) cause the
directors of WIB and its subsidiaries to execute and deliver to FPFG his or her
resignation from all directorships with WIB and its subsidiaries, effective as
of the Effective Time (the "Resignations"); and (v) cause each of WIB's
non-employee directors (other than Mr. McGuire) to execute and deliver to FPFG
the Director Agreements.

ADDITIONAL COVENANTS OF FPFG. FPFG has also agreed, among other things,
that it will (i) file an application with the Nasdaq National Market to list the
shares of FPFG Common Stock to be issued pursuant to the Merger and shall use
its best efforts to cause such application to be approved prior to the Closing
Date and to comply in all material respects with the requirements of the Nasdaq
National Market; (ii) prepare and file with the SEC as soon as practicable the
Registration Statement; and (iii) take any action required to be taken under
applicable "blue sky" or state securities laws in connection with the issuance
of the FPFG Common Stock pursuant to the Merger.

NO SOLICITATION BY WIB. During the term of the Merger Agreement, WIB has
agreed that it will not, and shall cause WIB's officers, directors and
affiliates and Carpenter not to, take any action that could impede or adversely
effect the likelihood of the consummation of the transactions contemplated by
the Merger Agreement, or otherwise directly or indirectly make, solicit,
initiate, participate in or otherwise encourage the submission of any proposal
or offer from any person (including, without limitation, any of the managers,
officers, or employees of WIB or any of its subsidiaries) relating to any
liquidation, dissolution, recapitalization, reorganization, merger,
consolidation or the acquisition of all or a material portion of the assets of,
or any equity interest in, WIB or any of its subsidiaries or any other similar
transaction or business combination involving WIB or any of its subsidiaries
(an "Alternative Transaction"), other than the Merger and shall not, and shall
cause WIB's officers, directors and affiliates and Carpenter not to, directly
or indirectly, participate in any negotiations or discussions regarding, or
furnish any information with respect to, or otherwise cooperate in any way in
connection with, or assist or participate in, facilitate or encourage, any
effort or attempt to effect or seek to effect, any Alternative Transaction with
or involving any person other than FPFG or an affiliate of FPFG; PROVIDED,
HOWEVER, that the actions prohibited above shall be subject to any action taken
by the WIB Board in the exercise of its good faith judgment as to its fiduciary
duties to the shareholders of WIB, which judgment is based upon the advice of
independent counsel that a failure of the WIB Board to take such action might
reasonably constitute a breach of its fiduciary duties to the shareholders of
WIB.

CONDITIONS TO THE MERGER. Consummation of the Merger is subject to certain
conditions, including: (a) the approval of the Merger Agreement by the
affirmative vote of the holders of a majority of the WIB Common Shares entitled
to vote thereon; (b) the effectiveness of the Registration Statement of which
this Proxy Statement/Prospectus forms a part; (c) the Registration Statement not
being subject to any stop order, and no action, suit, proceeding or
investigation by the Commission to suspend the effectiveness of the Registration
Statement having been initiated and be continuing, or having been threatened or
be unresolved; (d) approval of the Merger by the FDIC and the DOC; (e) receipt
by WIB of an opinion of KPMG Peat Marwick LLP dated as of the Effective Time as
to the tax-free nature of the Merger for Federal income tax purposes; (f)
receipt by FPFG of a letter from Ernst & Young LLP to the effect that the Merger
will qualify for "pooling-of-interests" accounting treatment; (g) the absence of
any injunction law, order, writ, or decree of any governmental body of competent
jurisdiction, legal restraint or instituted or threatened legal proceeding
prohibiting consummation of the Merger; (h) receipt by FPFG of duly executed
copies of the agreements from holders of Existing Stock Rights agreeing to the
treatment of their options as described in the Merger Agreement; (i) holders of
no more than 9.9% of the outstanding WIB Common Shares shall have elected to
exercise appraisal rights pursuant to the CCC; and (j) certain other customary
closing conditions. There can be no assurance as to when and if the conditions
to

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consummation of the Merger will be satisfied (or, where permissible, waived) or
that the Merger will be consummated, although the FDIC and DOC have approved the
Merger. The conditions specified in (a), (b), (c), (d), and (g) may not be
waived by either WIB or FPFG. See "--Listing," "--Interests of Certain Persons
in the Merger" and "--Governmental and "Regulatory Approvals."

AMENDMENT OF MERGER AGREEMENT. The Merger Agreement may be amended by the
parties thereto, pursuant to action taken by their respective boards of
directors or pursuant to authority delegated by their respective boards of
directors, at any time before or after approval of the Merger Agreement by WIB's
shareholders; PROVIDED HOWEVER that, after the Merger Agreement is approved by
WIB's shareholders, pursuant to the CCC, no amendment can be made to the Merger
Agreement that changes in a manner materially adverse to WIB's shareholders the
consideration to be received by WIB's shareholders in the Merger.

EXTENSION; WAIVER. Prior to the Effective Time, FPFG and WIB, may, to the
extent legally allowed (i) extend the time for the performance of any of the
obligations or other acts required of the other party contained in the Merger
Agreement or (ii) waive compliance by the other party of any of its agreements
or conditions contained in the Merger Agreement.

TERMINATION. The Merger Agreement may be terminated by FPFG or WIB any
time prior to the Effective Time if (i) any of the conditions precedent to such
party's obligation to close stated in the Merger Agreement have not been
fulfilled or waived by the scheduled Closing Date; (ii) the Closing shall not
have taken place by September 30, 1997; PROVIDED, HOWEVER, that neither party
shall be entitled to so terminate the Merger Agreement if such party is in
material breach of the Merger Agreement at such time; (iii) at the WIB Meeting
(including any adjournments thereof), the Merger Agreement and the Merger shall
fail to be approved and adopted by WIB's shareholders in accordance with the CCC
and the WIB Articles.

FPFG may terminate the Merger Agreement if (i) the WIB Meeting has not been
held and the Merger approved by WIB's shareholders by August 15, 1997, unless
delayed by circumstances beyond the reasonable control of WIB; (ii) the WIB
Board fails to recommend prior to the WIB Meeting or withdraws, modifies or
changes its recommendations of the Merger Agreement or the Merger (other than
pursuant to a termination of the Merger Agreement as otherwise permitted under
the Merger Agreement) in a manner adverse to FPFG or shall have resolved to do
any of the foregoing; (iii) if the WIB Board shall have recommended to the
shareholders of WIB an Alternative Transaction or shall have resolved to do so;
(iv) a tender offer or exchange offer for 20% or more of the outstanding shares
of WIB is commenced, and the WIB Board recommends that shareholders tender their
shares in such tender or exchange offer; or (v) any person shall have acquired
after the date of the Merger Agreement beneficial ownership or the right to
acquire beneficial ownership of, or any "group" (as such term is defined under
Section 13(d)(3) of the Exchange Act and the rules and regulations promulgated
thereunder) shall have been formed which beneficially owns, or has the right to
acquire beneficial ownership of, more than 20% of the then outstanding shares of
WIB or shares representing 20% or more of the outstanding voting power of WIB.
FPFG may also terminate the Merger Agreement if there has been any
misrepresentation or breach of or failure to satisfy timely on the part of WIB
of any condition or any warranty, representation or agreement contained in the
Merger Agreement, if such breach or failure is not cured within ten days after
receipt of notice from FPFG. Notwithstanding the foregoing, FPFG shall not be
entitled to terminate the Merger Agreement by reason of (a) any
misrepresentation or breach of, or failure to cure any misrepresentation or
breach of, any warranty or representation made by WIB or (b) any breach of, or
failure to comply with, any covenant or agreement of WIB contained in the Merger
Agreement, if WIB has provided FPFG with written notice of such breach or
failure prior to the Closing, has used its best efforts to cure such breach or
failure promptly and in any event within any cure period provided under the
Merger Agreement and FPFG has not elected to terminate the Merger Agreement
within 15 days of the later to occur of (A) receipt by FPFG of notice of such
breach or failure and (B) the end of any applicable cure period respecting such
breach or failure;

WIB may terminate the Merger Agreement if WIB, based upon the fiduciary
obligation of the WIB Board under applicable law, after taking into account in
good faith the advice of independent counsel with respect thereto, enters into
an Alternative Transaction. WIB also may terminate the Merger Agreement if
there has been any misrepresentation or breach of or failure to satisfy timely
on the part of FPFG of any condition or any warranty, representation or
agreement contained in the Merger Agreement, if such breach or failure is not
cured within ten days after receipt of notice from WIB. Notwithstanding the
foregoing, WIB shall not be entitled to terminate the Merger Agreement by reason
of (a) any misrepresentation or breach of, or failure to cure any
misrepresentation or breach of, any warranty or representation made by FPFG or
(b) any breach of, or failure to comply with, any covenant or agreement of FPFG
contained in the Merger

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Agreement, if FPFG has provided WIB with written notice of such breach or
failure prior to the Closing, has used its best efforts to cure such breach or
failure promptly and in any event within any cure period provided under the
Merger Agreement and WIB has not elected to terminate the Merger Agreement
within 15 days of the later to occur of (A) receipt by WIB of notice of such
breach or failure and (B) the end of any applicable cure period respecting such
breach or failure.

FEES; EXPENSES; TERMINATION FEE. Except as described below, all fees and
expenses incurred by the parties shall be borne solely and entirely by the party
that incurred such expenses.

WIB shall pay to FPFG, in same day funds, the aggregate amount of all
expenses incurred by FPFG and its affiliates in connection with the Merger
Agreement and the transactions contemplated therein (including fees and expenses
of counsel, accountants and financial advisors, the "FPFG Expense
Reimbursement") if any of the following events shall have occurred and there
shall be no material breach of the Merger Agreement continuing by FPFG: FPFG
shall have terminated the Merger Agreement in accordance with the terms of
Section 9.1(a), Section 9.1(d), Section 9.1(e), Section 9.1(f) or Section 9.1(g)
of the Merger Agreement. Notwithstanding the foregoing, the FPFG Expense
Reimbursement shall be payable by WIB upon a termination by FPFG pursuant to
Section 9.1(a) of the Merger Agreement only if FPFG terminates due to a breach
of the Merger Agreement by WIB of a representation, warranty or covenant of WIB
in the Merger Agreement or a covenant of WIB in the Merger Agreement, or due to
a failure of the conditions to consummation set forth in Section 8.3, Section
8.4, Section 8.7, Section 8.11, Section 8.12, Section 8.13, Section 8.14,
Section 8.15, Section 8.16 or Section 8.17 of the Merger Agreement. Please see
the referenced sections of the Merger Agreement, which is attached hereto as
Appendix A, for a complete description of the contents of such sections.

FPFG shall pay to WIB, in same day funds, the aggregate amount of all
expenses incurred by WIB and its affiliates in connection with the Merger
Agreement and the transactions contemplated therein (including fees and expenses
of counsel, accountants and financial advisors incurred by WIB, the "WIB Expense
Reimbursement") if any of the following events shall have occurred and there
shall be no material breach of the Merger Agreement continuing by WIB. WIB
shall have terminated the Merger Agreement due to the failure of FPFG to receive
approval of the Merger from the FDIC or the DOC on or before September 30, 1997
or in accordance with Section 9.1(b) of the Merger Agreement. Notwithstanding
the foregoing, the WIB Expense Reimbursement shall be payable by FPFG upon a
termination by WIB pursuant to Section 9.1(b) only if WIB terminates due to a
breach of the Merger Agreement by FPFG of a representation, warranty or covenant
of FPFG contained in the Merger Agreement, or due to a failure of the conditions
to consummation set forth in Section 7.3, Section 7.4 or Section 7.6 of the
Merger Agreement. Please see the referenced sections of the Merger Agreement,
which is attached hereto as Appendix A, for a complete description of the
contents of such sections.

In addition to the FPFG Expense Reimbursement, WIB shall pay to FPFG, in
same day funds, a Termination Fee of $1,500,000 upon demand, if: (i) the
Merger Agreement shall have been terminated; (ii) there shall be no material
breach of the Merger Agreement by FPFG continuing at the time of such
termination; (iii) (A) WIB shall have willfully breached the representations,
warranties, covenants or conditions contained in the Merger Agreement or the
other agreements executed in connection therewith, or (B) such termination was
by FPFG pursuant to Section 9.1(d), Section 9.1(f), or Section 9.1(g), or (C)
such termination was by WIB pursuant to Section 9.1(e) or due to a failure of
the condition to consummation set forth in Section 7.11; and (iv) WIB shall have
entered into an agreement with respect to an Alternative Transaction on or prior
to June 1, 1998, the WIB shareholders shall fail to approve the Merger and shall
approve an Alternative Transaction on or prior to June 1, 1998, or, on or prior
to June 1, 1998, WIB shareholders shall receive a proposal for an Alternative
Transaction and such proposal shall result in a party unaffiliated with WIB
acquiring a majority of the voting power of WIB. Please see the referenced
sections of the Merger Agreement, which is attached hereto as Appendix A, for a
complete description of the contents of such sections.

LISTING. The Merger Agreement provides that FPFG will use its best efforts
to cause the FPFG Common Stock to be issued in the Merger to be approved for
quotation on the Nasdaq National Market prior to the Effective Time. Such
listing is also a condition precedent to consummation of the Merger. FPFG
anticipates that it will file a listing application with the Nasdaq National
Market relating to the issuance by FPFG of the Merger Consideration prior to the
WIB Meeting.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

In considering the recommendation of the WIB Board with respect to the
Merger, shareholders should be aware that certain directors, officers and
employees of WIB have interests in the consummation of the Merger, as described

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below. The WIB Board was aware of these interests, and considered them, among
other matters, in approving the Merger Agreement and the transactions
contemplated thereby.

INTERESTS AS SHAREHOLDERS. At June 25, 1997, eight directors and executive
officers of WIB held or had the right to vote, in the aggregate, 386,688 shares,
or 31.9%, of the outstanding WIB Common Shares entitled to vote at the WIB
Meeting. Such shares had a total value of approximately $6,826,783.

STOCK OPTION PLANS. WIB utilizes stock options and other stock-related
incentive programs in order to attract and retain personnel. It currently
maintains a non-qualified 1982 Stock Option Plan (the "1982 Stock Option Plan")
and a 1994 Stock Option and Incentive Plan (the "1994 Stock Option Plan"). At
June 25, 1997, a total of 197,136 shares were the subject of awards under such
plans, of which 195,711 were held by the directors and executive officers of WIB
as a group. Such options were "in-the-money" by approximately $2,901,314. See
"Security Ownership of Certain Beneficial Owners and Management of WIB." These
plans are intended to provide added incentive to directors, officers and key
employees. All options pursuant to such plans granted are at an exercise price
of at least the fair market value of WIB Common Shares on the date of grant. No
options have been granted to executive officers or directors since 1992. All
outstanding stock options provide for an immediate acceleration of the vesting
period upon certain events constituting a change in control. The Merger will
constitute a change in control for purposes of all options.

Under the Merger Agreement, each holder of an Existing Stock Right shall
enter into an agreement under which such Existing Stock Right shall be
substituted for a non-qualified stock option to be granted under FPFG's stock
option plan. The New Options shall have vesting terms and conditions matching
those contained in the Existing Stock Rights, provided that the periodic vesting
schedules set forth in the Existing Stock Rights shall be accelerated as a
result of the Merger so as to make such options immediately exercisable, and all
holders of the New Options shall have a period of not less than one year
following termination of their employment or other service with WIB or Citizens
in which to exercise the New Options. Each New Option will evidence the right
to purchase the number of shares of FPFG Common Stock equal to the product
(rounded up or down to the next whole share) of (i) the number of shares of WIB
Common Shares covered by the Existing Stock Right immediately prior to the
Effective Time multiplied by (ii) the Conversion Ratio. The exercise price
shall also be proportionately adjusted. The delivery of executed agreements
from the holders of Existing Stock Rights, agreeing to such treatment, is a
condition precedent to consummation of the Merger.

EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN. On December 29, 1994, the WIB
Board adopted the Western Interstate Bancorp Employee Stock Ownership and
Savings Plan (the "KSOP") which amended and restated the prior Employee Stock
Ownership Plan dated as of January 1, 1988, and amended as of January 1, 1994,
and the Citizens Thrift & Loan Association Profit Sharing and Employees' Savings
Plan of January 1, 1986, amended and restated as of January 1, 1987. The KSOP
encompasses both an employee stock ownership plan (the "ESOP"), under which
contributions by WIB and Citizens are used to purchase WIB Common Shares, and a
deferred compensation element under Section 401(k) of the Internal Revenue Code,
under which participants may defer current compensation and invest the deferred
compensation as provided in the plan (the "Savings Plan").

The WIB Board determines contributions to the ESOP in the form of either
WIB Common Shares or cash, which must be used within a reasonable period after
the date of contribution primarily to purchase WIB Common Shares. Under the
Savings Plan, participants may reduce their salary by up to a maximum of 15% a
year, subject to an annual limit ($9,500 for 1996). Subject to certain
limitations, WIB may also make contributions to the salary reduction accounts of
the participants. While all employee contributions are immediately invested,
contributions by WIB to the ESOP vest 100% after five years and contributions to
the Savings Plan vest 20% after three years, 40% after four years and 100% after
five years.

No contributions to the KSOP were made by the WIB Board for 1996 and 1995.
A contribution of $370,594 was made in 1994. The KSOP acquired 7,866 and 52,000
shares of WIB Common Shares during 1996 and 1995, respectively. At June 15,
1997, the KSOP owned 267,212 shares, representing 22.1% of the total outstanding
WIB Common Shares. In connection with the Merger, participants in the KSOP will
be entitled to vote the shares allocated to their accounts. Of the 267,212
shares held in the KSOP, an aggregate of 67,637 shares are held in the accounts
of Michael W. McGuire, Marie A. Reich, Gus Mendoza and Javier S. Llanes,
principal executive officers of Citizens, representing 25.3% of the total shares
held by the KSOP. The KSOP participants shall have the right to vote all shares
allocated to their accounts at the WIB Meeting with respect to the Merger.

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FPFG and WIB have approved the termination of the ESOP in connection with
the Merger. Upon such termination, all assets held by the ESOP, including
shares of FPFG Common Stock, will be distributed to the ESOP beneficiaries. The
Savings Plan is not being terminated.

CURRENT AND POST-MERGER EMPLOYMENT OF MICHAEL W. MCGUIRE. Effective
January 1, 1996, the WIB Board entered into the McGuire Employment Agreement
with Michael W. McGuire to serve as President of WIB and President and Chief
Executive Officer of Citizens for a term of five years. The McGuire Employment
Agreement provides for a base salary of $185,000 in 1996, subject to annual
review by the WIB Board, provided that such base salary shall not be reduced
below $166,500. In addition, the McGuire Employment Agreement provides for a
bonus based upon a formula tied to the return on average equity and return on
average assets of WIB, which bonus is capped at the amount of Mr. McGuire's base
salary. For 1996, Mr. McGuire was awarded a bonus of $185,000 based on the
return of average assets of WIB exceeding 1.25% and the return on average equity
exceeding 15%. This bonus was paid in 1997.

The McGuire Employment Agreement also provides for participation in
retirement and employee benefit plans, the provision of a disability insurance
policy providing benefits of not less than $5,500 per month in the event of
disability, and a split-dollar whole-life insurance policy in the amount of
$250,000, as well as vacation and other customary benefits.

In addition, the McGuire Employment Agreement provides for the payment of a
lump sum severance benefit of twice the amount of Mr. McGuire's annual salary at
the rate then in effect if his employment is involuntarily terminated other than
for cause within 180 days following a change in control of WIB or Citizens. The
Merger will constitute a change of control within the meaning of the Employment
Agreement. Mr. McGuire will also receive medical and dental insurance benefits
at the employer's expense for the two years following such termination. For
purposes of the Agreement, involuntary termination shall include a resignation
by Mr. McGuire following (i) a change in his principal workplace to a location
outside a 35-mile radius from Citizens' current headquarters, (ii) his demotion,
(iii) a material reduction in the number or seniority of other personnel
reporting to him, or a material reduction in the frequency with which, or in the
nature of the matters with respect to which, such persons report to him, other
than as part of an employee-wide reduction in staff, (iv) any material reduction
or adverse change in the salary, perquisites, benefits, contingent benefits or
vacation time which have been provided to him other than as otherwise permitted
under the McGuire Employment Agreement, or as part of an overall program applied
uniformly and with equitable effect to all members of senior management, and (v)
a permanent increase in his required hours of work or workload.

As a condition to the obligation of FPFG to complete the Merger, Mr.
McGuire shall enter into an amendment to his McGuire Employment Agreement with
FPFG and Citizens under which (i) Mr. McGuire's minimum base salary shall be
increased to $225,000, effective upon the Effective Time, and (ii) Mr. McGuire
shall receive a minimum bonus of $185,000 within 30 days following the end of
each fiscal year of FPFG during the term of the McGuire Employment Agreement, a
portion of which bonus for the current year shall be paid within 90 days of the
completion of the Merger, based upon the bonus Mr. McGuire would have been
entitled to receive under his existing contract had the period commencing
January 1, 1997 and ending with the effective date of the Merger constituted an
entire fiscal year. Accordingly, Mr. McGuire's minimum compensation for the
first year following the Merger and each remaining year during the term of the
McGuire Employment Agreement shall be $410,000, consisting of $225,000 in salary
and $185,000 in bonus.

The amendment to the McGuire Employment Agreement also provides for the
granting to Mr. McGuire of an option to purchase 50,000 shares of FPFG Common
Stock for a price equal to the lesser of $28.50 per share or the price at which
shares of FPFG will be issued in connection with the Merger. At June 25, 1997,
the closing price on the Nasdaq National Market for the FPFG Common Stock was
$33.75 (putting Mr. McGuire's options "in-the-money" by approximately $262,500
had the Closing Date been June 25, 1997). The option shall be 1/3 vested on the
completion of the Merger, with an additional 1/3 vesting on the first
anniversary and on the second anniversary thereafter. Such option is in
addition to the New Options that Mr. McGuire will receive upon the exchange of
his Existing Stock Rights. See "--Stock Option Plans."

SEVERANCE AGREEMENT. Marie A. Reich, Executive Vice President and Chief
Financial Officer of Citizens, is a party to an agreement, dated March 4, 1996,
providing for the payment to her of one year's salary, presently $88,000, at the
rate in effect at the time of her termination in the event that her employment
is terminated within one year following a merger, sale or acquisition of
Citizens. The Merger will constitute a merger, sale or acquisition of Citizens
within the meaning of such agreement.

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POST-MERGER COMPENSATION AND BENEFITS. All persons who are employees of
WIB or its subsidiaries immediately prior to the Effective Time shall continue
as employees following the Effective Time. FPFG has agreed that any employee
benefit plans of FPFG under which employees of WIB shall be covered following
the Effective Time shall give appropriate credit to such employees for services
completed prior to the Effective Time under the existing employee benefit plans
of WIB.

DIRECTORS AGREEMENTS. As a condition to FPFG's obligation to complete the
Merger, each of the directors of WIB, other than Michael W. McGuire, has agreed
to execute and deliver the Directors Agreements effective as of the Effective
Time, under which they shall agree not to compete with FPFG or its affiliates in
the California cities of Anaheim, Irvine and Tustin for a period of two years
following the Effective Time. Under the Directors Agreements, each of the
directors shall be paid the sum of $45,000, with one-half of such amount being
payable on the Closing Date and one-half being payable on the first anniversary
of the Closing Date.

EXCHANGE OF STOCK CERTIFICATES

As of the Effective Time, each certificate formerly representing WIB Common
Shares, other than shares held by dissenting shareholders of WIB, shall be
deemed for all purposes to evidence ownership of the right to receive the FPFG
Common Stock issuable pursuant to the Merger Agreement until surrendered to the
Exchange Agent.

As soon as practicable after the Effective Time, the Exchange Agent will
mail to each record holder, as of the Effective Time, of an outstanding
certificate or certificates that immediately prior to the Effective Time
represented outstanding WIB Common Shares, a form of letter of transmittal (that
shall specify that delivery shall be effected, and risk of loss and title to the
certificates shall pass, only upon proper delivery of the certificates to the
Exchange Agent) and instructions for use in effecting the surrender of the
certificates. Upon surrender to the Exchange Agent of such certificates,
together with such letter of transmittal duly executed, each holder of such
certificates formerly representing shares of WIB's capital stock shall be
entitled to receive in exchange therefor a certificate representing such
holder's PRO RATA portion of the Merger Consideration, and such certificates
formerly representing WIB Common Shares shall then be canceled. Until so
surrendered, each certificate (other than certificates for dissenting shares)
which prior to the Merger represented WIB Common Shares shall be deemed, for all
purposes, and without any further act or deed on the part of the holder thereof,
to evidence ownership of the whole number of shares of FPFG Common Stock which
the holder thereof would be entitled to receive upon its surrender to the
Exchange Agent; PROVIDED, HOWEVER, that no dividends with respect to said shares
of FPFG Common Stock shall be paid until such holder shall surrender such
certificate, at which time there shall be paid to the record holder of the
certificates issued in the exchange therefor the amount of the dividends,
without interest, which have theretofore become payable with respect to the
shares of FPFG Common Stock represented thereby.

SHAREHOLDERS OF WIB SHOULD NOT SEND WIB STOCK CERTIFICATES TO THE EXCHANGE
AGENT UNTIL THEY RECEIVE A LETTER OF TRANSMITTAL.

FRACTIONAL SHARES

No fractional shares of FPFG Common Stock will be issued as a result of the
Merger. The total number of shares to be received by each shareholder pursuant
to the Merger shall be rounded up to the next whole number of shares.

MANAGEMENT AFTER THE MERGER

As a result of the Merger, WIA will be merged with and into WIB, and FPFG
will own all of the outstanding shares of WIB. Accordingly, after the Merger,
FPFG will own the business of WIB and WIB will be a wholly owned subsidiary of
FPFG. FPFG will appoint all of the directors of the Surviving Corporation.
Until otherwise changed by the WIB Board, the current executive officers of WIB
will remain executive officers of the Surviving Corporation.

GOVERNMENTAL AND REGULATORY APPROVALS

FPFG and WIB are aware of no governmental or regulatory approvals required
for the consummation of the Merger, other than compliance with Federal and
applicable state securities and corporate law, compliance with FDIC and DOC
requirements, and compliance with the Nasdaq National Market listing
requirements. FPFG and WIB have made application with the FDIC and the DOC for
approval of the Merger and FPFG anticipates filing a listing application with

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respect to the Merger Consideration prior to the WIB Meeting. In addition, the
FDIC and DOC have approved the Merger; however, no assurance can be given that
the other necessary regulatory approvals will be obtained or as to the timing or
conditions of such approvals.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following discussion summarizes the material Federal income tax
consequences of the Merger. It is intended to provide only a summary and does
not include a complete analysis of all the potential federal income tax
consequences or consequences that may vary with or are contingent upon the
individual circumstances of particular WIB shareholders such as financial
institutions, broker-dealers, life insurance companies, tax-exempt
organizations, investment companies, foreign taxpayers, and other special status
taxpayers. This discussion does not address any aspects of state, local, or
foreign tax laws or any federal tax laws other than those pertaining to income
tax. WIB shareholders who are individuals should be aware that the federal
income tax rate on long-term capital gains of individuals is significantly lower
than the tax rate that may apply to ordinary income or short-term capital gains
of individuals, and that the amount of long-term capital gain, short-term
capital gain or ordinary income that may be realized by a particular WIB
shareholder as a result of the Merger may vary depending on a shareholders'
particular circumstances. Each WIB shareholder is advised to consult his or her
own tax advisor concerning the specific tax consequences of the Merger to such
shareholder.

No ruling has been requested from the Internal Revenue Service (the
"Service") with respect to any of the matters discussed in this summary.

It is a condition to the obligation of WIB to consummate the Merger that
WIB receive an opinion from KPMG Peat Marwick LLP, tax advisors for WIB, at the
Effective Time, concluding that the Merger qualifies as a tax-free
reorganization within the meaning of Section 368(a) of the Code. WIB
shareholders should be aware that the opinion of the tax advisors represents the
best judgment of such advisors, but is not binding on the Service or the courts.
A draft of the opinion expected to be issued at the Effective Time has been
filed as an exhibit to the Registration Statement of which this Proxy
Statement/Prospectus is a part. WIB will resolicit shareholders prior to
proceeding with the Merger if the opinion from KPMG Peat Marwick LLP cannot be
issued and the material federal income tax consequences are materially different
than as described in this Proxy Statement/Prospectus.

The following summary is based upon the continued accuracy of the
representations made by WIB and FPFG with respect to the Merger, including
representations regarding the transfer of assets and intended actions of WIB and
certain WIB shareholders following the Merger. If any of these representations
is inaccurate, the tax consequences of the Merger could differ from those
described in this summary.

The treatment of the Merger as a tax-free "reorganization" will depend
upon, among other things, whether the shareholders of WIB maintain a sufficient
continuity of stock ownership interest in FPFG after the Merger. Prior to its
adoption of its current policy that it will not issue "comfort rulings"
regarding certain corporate reorganizations, the Service took the position for
purposes of issuing advance rulings under Section 368(a) of the Code that the
shareholders of an acquired corporation (such as WIB) had to maintain a
continuing equity ownership interest in the acquiring corporation (such as FPFG)
equal to at least 50% of the value of their equity ownership interest in the
acquired corporation. The case law standard is less stringent than the
Service's advance rulings standard, which expressly did not define the lower
limits of "continuity of interest" as a matter of substantive law. This summary
relies on the continuity of shareholder interest standard under the decided
cases rather than the Service's advance rulings standard. It is anticipated
that the Merger will satisfy the continuity of shareholders interest requirement
as reflected in the case law, but it is possible that post-merger sales,
exchanges or other transactions affecting FPFG Common Stock undertaken by the
former WIB shareholders could disqualify the Merger as a tax-free
"reorganization" within the meaning of Section 368(a) of the Code. In that
case, the Merger would constitute a fully taxable transaction for WIB and its
shareholders and FPFG would succeed to WIB's tax liability (if any) resulting
from the Merger.

Subject to the assumptions discussed above, the federal income tax
consequences of the Merger to a shareholder of WIB are as follows:

RECEIPT OF FPFG COMMON STOCK IN EXCHANGE FOR WIB COMMON SHARES. A
shareholder of WIB who receives shares of FPFG Common Stock in exchange for all
the shares of WIB will recognize no gain or loss as a result of the Merger. The
basis of the FPFG Common Stock received by that shareholder will be the same as
the basis of the shares of the WIB Common Shares exchanged therefor, and the
holding period of those shares of FPFG Common Stock will

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include the holding period of the WIB Common Shares surrendered in the exchange,
provided the latter shares were held by the shareholder as a capital asset at
the Effective Time.

OTHER CONSIDERATIONS APPLICABLE TO SHAREHOLDERS OF WIB. Shareholders of
WIB will be required to provide their social security numbers or their taxpayer
identification number or, in some circumstances, certain other information to
the Exchange Agent in order to avoid the "backup withholding" requirements that
might otherwise apply under the Code. If a WIB shareholder is subject to backup
withholding, tax will be withheld at the rate of 31% on the cash consideration
received by such shareholder in the Merger. Any amount paid as backup
withholding will be credited against the holder's federal income tax liability.
WIB shareholders who receive FPFG Common Stock must also comply with the
information reporting requirements of the Treasury regulations under Section 368
of the Code.

FEDERAL INCOME TAX TREATMENT OF DISSENTING SHAREHOLDERS. Any shareholder
of WIB who effectively dissents from the Merger and who receives cash for his or
her shares will be treated as receiving a distribution in redemption of their
WIB Common Shares. In general, a distribution in redemption of stock will be
treated as a payment in exchange for the shares. As a result of the
distribution, WIB shareholders who receive cash under their dissenter rights,
will recognize a gain (or loss) for federal income tax purposes equal to the
difference between the cash received for those shares and the shareholder's tax
basis for the shares. The amount of that gain (or loss), if any, will be
treated as ordinary income (or loss) or long-term or short-term capital gain
(or loss) depending on the length of time the shares are held by the dissenter
and whether the shares are held as a capital asset.

The foregoing discussion of the expected federal income tax consequences of
the Merger is based on the Code, the regulations thereunder, and the judicial
and administrative interpretations thereof, all in effect on the date thereof.
There is no assurance that subsequent legislative, regulatory, administrative,
or judicial decisions may not be forthcoming that would significantly change
these expected consequences. Any such changes may or may not be retroactive
with respect to transactions prior to the date of those changes.

EACH SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE
SPECIFIC TAX CONSEQUENCES OF THE MERGER APPLICABLE TO HIM OR HER, INCLUDING THE
APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND OTHER TAX LAWS.

ACCOUNTING TREATMENT

It is anticipated that the Merger will be accounted for as a
"pooling-of-interests" transaction under GAAP. Under such method of accounting,
holders of WIB Common Shares will be deemed to have combined their existing
voting common stock interest with that of holders of FPFG Common Stock by
exchanging their shares for the FPFG Common Stock. Accordingly, the book value
of the assets, liabilities and shareholders' equity of WIB, as reported on its
consolidated balance sheet, will be carried over to the consolidated balance
sheet of FPFG and no goodwill will be created. The combined WIB and FPFG entity
will be able to include in its consolidated income the consolidated income of
both companies for the entire fiscal year in which the Merger occurs less the
effect of any transactions between the two companies in prior periods; however,
certain expenses incurred to effect the Merger must be treated as current
charges against income rather than adjustments to the balance sheet.

It is a condition to FPFG's obligation to effect the Merger that FPFG
receives an opinion from Ernst & Young LLP, the independent auditors of FPFG,
based upon certain material facts and certain representations and warranties
described, that the Merger will qualify for "pooling-of-interests" accounting
treatment.

CONSEQUENCES UNDER FEDERAL SECURITIES LAWS

The FPFG Common Stock issuable in connection with the Merger has been
registered under the Securities Act. Accordingly, there will be no restrictions
upon the resale or transfer of such shares by WIB shareholders except for those
shareholders who are deemed "affiliates" of WIB, as that term is defined in Rule
144 and Rule 145 adopted under the Securities Act. See "--Resale of FPFG
Common Stock."

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RESALE OF FPFG COMMON STOCK

The shares of FPFG Common Stock issuable to shareholders of WIB upon the
Merger becoming effective have been registered under the Securities Act. Such
shares may be traded freely and without restriction by those shareholders not
deemed to be "affiliates" of WIB as that term is defined in the rules under the
Securities Act. FPFG Common Stock received by those shareholders of WIB who are
deemed to be "affiliates" of WIB may be resold without registration as provided
for by Rule 145 or as otherwise permitted under the Securities Act. Persons who
may be deemed to be affiliates of WIB generally include individuals or entities
that control, are controlled by or are under common control with, WIB and may
include the executive officers and directors of WIB as well as certain principal
shareholders of WIB. In the Merger Agreement, WIB has agreed to use its best
efforts to cause each shareholder who, in the opinion of WIB, is an affiliate of
WIB to enter into an agreement (each a "Company Affiliate Agreement") with FPFG
providing that such affiliate will not sell, transfer or otherwise dispose of
the shares of FPFG Common Stock to be received by such person in the Merger
except in compliance with the applicable provisions of the Securities Act and
the rules and regulations promulgated thereunder or (ii) sell, transfer or
otherwise dispose of the shares of FPFG Common Stock to be received by such
persons in the Merger or in any way reduce such shareholder's risk relative to
such shares until such time as financial results covering at least 30 days of
post-Merger combined operations of WIB and FPFG have been published. This Proxy
Statement/Prospectus does not cover any resales of FPFG Common Stock received by
affiliates of WIB.

DISSENTING SHAREHOLDERS' RIGHTS

THE FOLLOWING DISCUSSION IS A SUMMARY OF THE MATERIAL PROVISIONS OF
CALIFORNIA LAW RELATING TO DISSENTING SHAREHOLDERS' RIGHTS, AND IS QUALIFIED BY
REFERENCE TO APPENDIX C, WHICH SETS FORTH IN ITS ENTIRETY CHAPTER 13 OF THE
CALIFORNIA CORPORATIONS CODE ("CCC"), WHICH IS THE APPLICABLE LAW RELATING TO
DISSENTING SHAREHOLDERS' RIGHTS IN THIS CONTEXT AND WHICH IS INCORPORATED HEREIN
BY REFERENCE. THIS DISCUSSION AND APPENDIX C SHOULD BE REVIEWED CAREFULLY BY
EACH SHAREHOLDER OF WIB WHO WISHES TO EXERCISE DISSENTERS' RIGHTS BECAUSE
FAILURE TO COMPLY WITH THE REQUIRED PROCEDURES MAY RESULT IN THE LOSS OF SUCH
RIGHTS.

Any WIB Common Shares for which dissenters' rights are sought must not be
voted in favor of approval of the Merger Agreement. Such shares must either be
voted against approval of the Merger Agreement or not voted at all. Thus, any
shareholder of WIB who wishes to dissent and who executes and returns a proxy
must vote "AGAINST" approval of the Merger Agreement or abstain from voting on
the proposal to approve the Merger Agreement. If a shareholder of WIB signs,
dates and returns his or her proxy but does not indicate a choice thereon or
returns the written consent form by indicating that he or she votes "FOR" the
Agreement, his or her WIB Common Shares automatically will be voted in favor of
approval of the Merger Agreement and such stockholder will lose any and all
dissenters' rights with respect to those shares. However, any shareholder who
delivers a proxy has the right to revoke it at any time prior to the WIB
Meeting. See "The WIB Meeting--Solicitation and Revocation of Proxies; Quorum."

Each dissenting WIB shareholder who has not voted his or her WIB Common
Shares in favor of approval of the Merger Agreement and who has complied with
the procedures of Chapter 13 of the CCC, will be entitled to payment by WIB of
the fair market value of his or her shares of WIB Common Shares. Such value
will be determined as of the last trading day prior to the first announcement of
the terms of the proposed WIB Merger (the "Pre-Announcement Date"), excluding
any change in such value in consequence of the proposed WIB Merger. The
Pre-Announcement Date was February 19, 1997 and, in the opinion of the WIB Board
and management of WIB, the fair market value of the WIB Common Shares on the
Pre-Announcement Date was $7.25 per share.

Chapter 13 of the CCC represents the exclusive statutory remedy available
to any WIB shareholder who elects, as a dissenting shareholder, to seek payment
of the fair market value of his or her shares of WIB Common Shares. The
following summary of Chapter 13 of the CCC is qualified in its entirety by
reference to the text of Chapter 13, a complete copy of which is reprinted in
Appendix C to this Proxy Statement/Prospectus.

WIB is required to mail to each dissenting WIB shareholder a notice of the
approval by the shareholders of the Merger Agreement (the "Approval Notice"),
within ten days of the date of such approval, accompanied by a copy of Sections
1300 through 1304 of the CCC, a statement of the price determined by WIB to
represent the fair market value of the dissenting WIB Common Shares and a brief
description of the procedures to be followed if a WIB shareholder desires to
exercise dissenters' rights. To preserve his or her dissenters' rights, a
dissenting WIB shareholder must, within 30 days after the Approval Notice was
mailed, make a written demand on WIB at its principal office or at the office of
any transfer agent thereof for the purchase of his or her shares of WIB Common
Shares and the payment in cash of their

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fair market value. Such demand is required to state the number of shares of WIB
Common Shares which such shareholder demands WIB purchase and must contain a
statement of what such stockholder claims to be the fair market value of those
shares on the Pre-Announcement Date. WIB suggests that dissenting WIB
shareholders use registered or certified mail, return receipt requested, for
this purpose and that correspondence in this regard be directed to the attention
of James T. Capretz, Chairman of the Board of WIB, at 18302 Irvine Boulevard,
Suite 300, Tustin, California 92780. A vote against the Merger Agreement, in
person or by proxy, will not constitute such written demand. In addition,
within 30 days after the Approval Notice is mailed to the dissenting WIB
shareholder, such shareholder must submit to WIB at its principal office or at
the office of any transfer agent thereof such shareholder's certificates
representing the shares of WIB Common Shares subject to such demand.

If WIB and the dissenting WIB shareholder agree that the shares of WIB
Common Shares subject to the demand are "dissenting shares" (as defined in
Section 1300(b) of the CCC) and agree upon the price of such shares, the
dissenting WIB shareholder will be entitled to the agreed upon price with
interest thereon from the date of such agreement. The purchase price will be
paid within 30 days after such agreement or within 30 days after any statutory
or contractual conditions to the Merger are satisfied, whichever is later. If
WIB denies that such WIB Common Shares are "dissenting shares," or WIB and the
dissenting WIB shareholder fail to agree upon the fair market value of such
shares, then such dissenting WIB shareholder may, within six months after the
Approval Notice is mailed to him or her, file a complaint in the superior court
of the proper county requesting the court to determine whether the shares of WIB
Common Shares subject to such demand are "dissenting shares" or to determine the
fair market value of such shares, or both, or may intervene in any action
pending on such a complaint. The court may determine, or may appoint one or
more impartial appraisers to determine, the fair market value of the dissenting
shares. If the court appoints an independent appraiser or appraisers, they will
promptly make such determination. If the majority of the appraisers fail to
file a report of their findings within ten days from the date of their
appointment or such further time as the court allows, or if the report is not
confirmed by the court, the court will determine the fair market value of the
dissenting WIB Common Shares subject to such demand.

Once the court has determined the fair market value of each of such
dissenting WIB Common Shares, the court will enter a judgment requiring WIB to
pay an amount equal to the fair market value of each of those dissenting shares
multiplied by the number of dissenting shares that any dissenting WIB
shareholder who is a party to, or has intervened in, the action is entitled to
require WIB to purchase, with interest from the date of entry of the judgment.

Dissenting WIB shareholders cease to be entitled to require payment for
their shares of WIB Common Shares if (i) the Merger is abandoned (in which case
WIB would pay any dissenting WIB shareholder who in good faith initiated
proceedings for an appraisal all necessary expenses incurred in such action and
reasonable attorneys' fees); (ii) the dissenting WIB shareholder and WIB fail to
agree upon the status of such shares as "dissenting shares" or upon the purchase
price therefor and neither files a complaint and the dissenting WIB shareholder
fails to intervene in a pending action within six months after the Approval
Notice is mailed to all dissenting WIB shareholders; or (iii) the dissenting WIB
shareholder withdraws the demand for the purchase of his or her shares with the
consent of WIB.

41
<PAGE>

PRICE RANGES OF STOCK AND DIVIDEND POLICY

FPFG. The FPFG Common Stock has been quoted on the Nasdaq National Market
since FPFG's initial public offering in February 1996 at a price of $8.50 per
share. The FPFG Common Stock traded under the symbol "RACF" until March 7,
1997, when its trading symbol changed to "FPFG." The following table sets forth
the high and low sales prices of the Common Stock for the periods indicated, as
reported by the Nasdaq National Market.

HIGH LOW
---- ---
YEAR ENDED SEPTEMBER 30, 1996
Second Quarter (beginning February 1, 1996). . . . . . . $11.88 $ 8.75
Third Quarter. . . . . . . . . . . . . . . . . . . . . . $16.25 $11.00
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . $22.88 $12.44
YEAR ENDING SEPTEMBER 30, 1997
First Quarter. . . . . . . . . . . . . . . . . . . . . . $30.75 $19.75
Second Quarter . . . . . . . . . . . . . . . . . . . . . $36.75 $20.50
Third Quarter (through June 25, 1997). . . . . . . . . . $35.00 $20.50

On June 25, 1997, the last reported sales price for the Common Stock was
$33.75 per share. As of June 25, 1997, FPFG had 34,401,643 outstanding
shares of FPFG Voting Common Stock held by 108 stockholders of record. As of
June 25, 1997, FPFG also had 623,679 outstanding shares of non-voting common
stock, par value $.01 per share, held by two stockholders of record.

FPFG has never paid, and has no present intention of paying, cash dividends
on the FPFG Common Stock. FPFG currently intends to retain its earnings to
finance the growth and development of its business. Any determination in the
future to pay dividends will depend on FPFG's financial condition, capital
requirements, results of operations, contractual limitations and any other
factors deemed relevant by the FPFG Board. Under the terms of FPFG's warehouse
facilities, term lines of credit and the Convertible Notes, FPFG's ability to
pay cash dividends to its stockholders is limited.

WIB. WIB Common Shares are not listed on a national exchange or quoted on
any system of The Nasdaq Stock Market and are only traded sporadically. At June
25, 1997, there were 135 holders of record of WIB Common Shares and 1,211,156
WIB Common Shares issued and outstanding. At June 25, 1997, the last available
sales price for WIB Common Shares was $7.25 per share, which sale occurred in
January 1997. Management of WIB is aware of sales of 52,369 WIB Common Shares
in 1996 at prices of between $5.00 and $6.25 per share, and 64,722 shares in
1995 at prices of between $5.00 and $5.76 per share, including purchases by the
KSOP, totaling 52,000 shares in 1995 at a price of $5.76 per share, and 7,866
shares in 1996 at $5.75 per share. During the first quarter of 1997, one sale
of 5,000 shares occurred at a price of $7.25 per share.

The WIB Board declared an annual cash dividend of $.095 per share in 1994,
and declared regular dividends from 1988 through 1994. The WIB Board elected to
retain all 1995 earnings to increase the capital base and reserves of WIB and
Citizens, and no dividends were declared in 1995. In January 1996, a $0.10 per
share dividend was declared. While the WIB Board may elect to pay dividends in
the future in the event the Merger is not concluded, payment of future dividends
will be subject to the discretion of the WIB Board and will depend upon the
consolidated earnings and financial condition of WIB, the capital requirements
of Citizens, applicable governmental policies and regulations and such other
matters as the WIB Board deems appropriate. The Merger Agreement prohibits the
payment of dividends by WIB pending the completion of the Merger.

WIB's ability to pay dividends is also subject to restrictions set forth
under California law. Under the CCC, a corporation is prohibited from paying
dividends unless (i) the retained earnings of the corporation immediately prior
to the distribution exceeds the amount of the distribution, or (ii) after giving
effect to the distribution, the assets of the corporation equal at least 125% of
its liabilities and the current assets of the corporation at least equal its
current liabilities, but if the average pre-tax net earnings of the corporation
before interest expense for the two fiscal years preceding the distribution was
less than the average interest expense of the corporation for those years, the
current assets of the corporation must equal at least 125% of its current
liabilities.

WIB's ability to pay cash dividends in the future will depend in large part
on the ability of Citizens to pay dividends on its capital stock to WIB. The
ability of Citizens to pay dividends to WIB is also subject to the restrictions

42
<PAGE>

set forth above. In addition, a California thrift and loan is subject to
certain other capital requirements, and federal law also restricts payment of
dividends by Citizens as an FDIC-insured institution. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
WIB--Liquidity and Capital Resources.

43
<PAGE>

SELECTED FINANCIAL DATA OF WIB

The selected financial data presented below under the captions "Income
Statement Data" and "Balance Sheet Data" for, and as of the end of, each of the
years in the four-year period ended December 31, 1996, are derived from the
consolidated financial statements of Western Interstate Bancorp and
subsidiaries, which financial statements have been audited by KPMG Peat Marwick
LLP, independent auditors. The selected financial data presented below under the
Captions "Income Statement Data" and "Balance Sheet Data" as of and for the year
ended December 31, 1992, are derived from the consolidated financial statements
of Western Interstate Bancorp and subsidiaries, which financial statements have
been audited by other auditors. The selected financial data presented below
under the captions "Income Statement Data" and "Balance Sheet Data" for the
three-month periods ended March 31, 1997 and 1996, and as of March 31, 1997, are
derived from unaudited financial statements of Western Interstate Bancorp and
subsidiaries included elsewhere herein. The results of operations for the three
months ended March 31, 1997 are not necessarily indicative of the operating
results to be expected for a full year. The consolidated financial statements
as of December 31, 1996 and 1995, and for each of the years in the three-year
period ended December 31, 1996 and the report thereon, are included elsewhere
herein.

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------- -----------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income. . . . . . . $12,825 $13,150 $13,883 $13,067 $10,877 $ 2,520 $ 2,464
Total interest expense . . . . . 5,468 4,547 4,725 6,752 6,347 1,651 1,395
------- ------- ------- ------- ------- ------- -------
Net interest income. . . . . . 7,357 8,603 9,158 6,315 4,530 869 1,069
Provision for loan losses. . . . . 555 2,300 2,887 3,158 155 102 125
------- ------- ------- ------- ------- ------- -------
Net interest income after provision
for loan losses . . . . . . . . 6,802 6,303 6,271 3,157 4,375 767 944
Non-interest income:
Servicing fee income . . . . . . 913 1,211 1,409 1,174 1,374 360 340
Gain on sales of loans . . . . . 1,033 982 1,724 6,215 9,341 1,759 3,520
Other non-interest income. . . . 88 70 156 74 100 8 32
------- ------- ------- ------- ------- ------- -------
Total non-interest income. . . . . 2,034 2,263 3,289 7,463 10,815 2,127 3,892
Total non-interest expense . . . . 6,399 7,704 8,899 9,399 10,451 2,159 2,841
------- ------- ------- ------- ------- ------- -------
Income before provision for
income taxes . . . . . . . . . . . 2,437 862 661 1,221 4,739 735 1,995
Provision for income taxes . . . . 1,011 386 274 499 1,964 310 838
------- ------- ------- ------- ------- ------- -------
Income before cumulative effect
of accounting change . . . . . . 1,426 476 387 722 2,775 425 1,157
Cumulative effect of accounting
change . . . . . . . . . . . . . . - 133 - - - - -
------- ------- ------- ------- ------- ------- -------
Net income . . . . . . . . . . . . $ 1,426 $ 609 $ 387 $ 722 $ 2,775 $ 425 $ 1,157
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------

</TABLE>

AT DECEMBER 31, AT MARCH 31,
-------------------------------------------------------------------- ------------
1992 1993 1994 1995 1996 1997
-------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets . . . . . . . . . . . $104,773 $110,843 $119,184 $127,785 $124,548 $112,136
Loans receivable, net. . . . . . . 77,373 87,578 97,421 21,135 10,505 9,220
Loans held for sale. . . . . . . . 8,094 4,556 6,537 18,960 30,107 27,766
Cash and cash equivalents. . . . . 7,664 7,087 3,177 22,083 12,298 17,728
Mortgage-backed securities . . . . - 998 3,497 55,428 14,010 13,032
Investment securities. . . . . . . 3,006 4,996 2,003 5,052 52,982 39,943
Deposits . . . . . . . . . . . . . 94,046 99,784 107,671 113,808 106,902 94,106
Total borrowings . . . . . . . . . 1,634 1,472 1,837 1,736 1,723 1,355
Stockholders' equity . . . . . . . 6,981 7,799 8,126 9,245 11,761 12,934

</TABLE>

44
<PAGE>
<TABLE>
<CAPTION>

AT OR FOR THREE MONTHS
AT OR FOR YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL RATIOS AND OTHER DATA(1):
Performance Ratios:
Return on assets (ratio of net income to
average total assets). . . . . . . . . . . . 1.42% .57% .34% .57% 2.23% 1.34% 3.91%
Interest rate spread information:
Average during period. . . . . . . . . . . . 6.98 8.03 7.76 4.66 3.31 2.34 3.3
Net interest margin(2) . . . . . . . . . . . . . 7.51 8.33 8.10 5.03 3.78 2.83 3.82
Ratio of non-interest expense to average total assets 6.36 7.23 7.75 7.37 8.41 6.81 9.60
Return of stockholders' equity (ratio of net income
to average equity) . . . . . . . . . . . . . 22.50 8.09 4.78 8.40 27.47 18.07 37.48

Asset Quality Ratios:
Non-performing assets to total assets at end of
period(3). . . . . . . . . . . . . . . . . . 3.44 3.45 3.98 .67 .55 1.11 .59
Allowance for loan losses to non-performing loans 28.78 47.75 76.56 286.07 531.30 158.17 644.91
Allowance for loan losses to total loans . . . . 1.04 1.79 3.16 5.05 3.23 5.46 3.53
Net charge-offs to average loans . . . . . . . . .47 1.64 1.15 6.23 2.06 .30 .28

Capital Ratios:
Stockholders' equity to total assets . . . . . . 6.66 7.04 6.82 7.23 9.44 7.60 11.53
Average stockholders' equity to average assets . 6.30 7.07 7.05 6.74 8.13 7.41 10.43
Ratio of average interest-earning assets to average
interest-bearing liabilities. . . . . . . . 1.09% 1.07% 1.08% 1.07% 1.09% 1.09% 1.10%

Per Share Data:
Net income per WIB Common Share:
Primary. . . . . . . . . . . . . . . . . . $ 1.33 $ .55 $ .34 $ .57 $ 1.98 $ .35 $ .82
Fully-diluted. . . . . . . . . . . . . . . 1.33 .55 .34 .57 1.98 .35 .82
Cash dividends per share . . . . . . . . . . . 0.95 .095 .095 - .10 .10 -
Dividend payout ratio (ratio of dividends declared
per share to net income per share) . . . . . 7.01% 17.95% 28.48% - 4.37% 3.50% -
Book value per share . . . . . . . . . . . . . $ 6.38 $ 6.82 $ 7.01 $ 7.62 $ 9.71 $ 7.89 $10.68
Number of shares outstanding . . . . . . . . . 1,093,674 1,143,174 1,159,174 1,212,543 1,211,156 1,212,543 1,211,156

</TABLE>

- ---------------------

45
<PAGE>

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial statements
give effect to the merger of WESTERN INTERSTATE BANCORP with and into WESTERN
INTERSTATE ACQUISITION, INC., a wholly owned subsidiary of FIRSTPLUS FINANCIAL
GROUP, INC. pursuant to the Merger Agreement. It is anticipated that the
proposed Merger will be accounted for as a pooling-of-interests. The unaudited
pro forma condensed combined balance sheet presents the combined financial
position of FIRSTPLUS FINANCIAL GROUP, INC. and WIB based upon the historical
balance sheet data of FIRSTPLUS FINANCIAL GROUP, INC. and WIB as of March 31,
1997. The unaudited pro forma condensed combined statements of income present
the results of operations for FIRSTPLUS FINANCIAL GROUP, INC. for each of the
fiscal years in the three-year period ended September 30, 1996 and the six-month
period ended March 31, 1997, with the results of operations of WIB for each of
the years in the three year period ended December 31, 1996 and the six month
period ended March 31, 1997, respectively, on a pooling-of-interest basis as if
the proposed Merger had occurred as of the beginning of each period.

These unaudited pro forma condensed combined financial statements are
subject to the assumptions, estimates and adjustments in the accompanying notes
to the pro forma condensed combined financial statements. The following
information is not necessarily indicative of the financial position and results
of operations that would have occurred had the proposed Merger been consummated
on the dates for which the pro forma condensed combined financial statements are
being presented.

These unaudited pro forma condensed combined financial statements are based
upon assumptions, estimates and adjustments that FIRSTPLUS FINANCIAL GROUP, INC.
and WIB believe are reasonable and should be read in conjunction with the
historical financial statements and notes thereto of FIRSTPLUS FINANCIAL INC.
and WIB contained elsewhere in this prospectus. The adjustments are set forth
in the Notes to the Pro Forma Condensed Combined Financial Statements.

46
<PAGE>

PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

FOR THE YEAR ENDED SEPTEMBER 30, 1994 (a)
(UNAUDITED)
<TABLE>
<CAPTION>

FIRSTPLUS WESTERN PRO
FINANCIAL INTERSTATE FORMA
GROUP, INC. BANCORP COMBINED
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1994 1994 ADJUSTMENTS 1994
------------- ------------- ------------- -------------

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES:
Gains on sales of loans, net $ 27,671 $ 1,724 $ - $ 29,395
Interest income 1,845 13,883 15,728
Servicing income 72 1,409 1,481
Other income 252 156 408
--------- --------- --------- ---------
Total revenues 29,840 17,172 - 47,012
--------- --------- --------- ---------
EXPENSES:
Salaries and employee benefits 17,054 3,988 371 b 21,413
KSOP contribution 371 (371) b -
Interest 1,041 4,725 5,766
Other operating 6,465 4,540 b 11,005
General and administrative 3,772 (3,772) b -
Occupancy expenses 522 (522) b -
Real estate owned expenses 246 (246) b -
Provision for possible credit losses 125 2,887 3,012
--------- --------- --------- ---------
Total expenses 24,685 16,511 - 41,196
--------- --------- --------- ---------
Income before income taxes 5,155 661 - 5,816
Provision for income taxes (274) - (274)
--------- --------- --------- ---------
Net income $ 5,155 $ 387 $ - $ 5,542
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income per share of common stock $ 0.31 $ - $ 0.33
Weighted average common shares and --------- --------- ---------
--------- --------- ---------
common equivalent shares
outstanding 16,277 756 17,033
--------- --------- ---------
--------- --------- ---------

</TABLE>

See Notes to the Unaudited Pro Forma Condensed Combined Financial Information

47
<PAGE>

PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

FOR THE YEAR ENDED SEPTEMBER 30, 1995 (a)
(UNAUDITED)
<TABLE>
<CAPTION>

FIRSTPLUS WESTERN PRO
FINANCIAL INTERSTATE FORMA
GROUP, INC. BANCORP COMBINED
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1995 1995 ADJUSTMENTS 1995
------------- ------------- ------------- -------------

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES:
Gains on sales of loans, net $ 25,206 $ 6,215 $ (393) d $ 31,028
Interest income 2,860 13,067 15,927
Servicing income 1,049 1,174 2,223
Other income 873 74 947
--------- --------- --------- ---------
Total revenues 29,988 20,530 (393) 50,125
--------- --------- --------- ---------
EXPENSES:
Salaries and employee benefits 10,110 4,665 14,775
Interest 2,660 6,752 9,412
Other operating 6,963 4,734 b 11,697
General and administrative 4,176 (4,176) b -
Occupancy expenses 564 (564) b -
Real estate owned expenses (6) 6 b -
Provision for possible credit losses
on loans held for sale and excess
servicing receivable 513 3,158 3,671
--------- --------- --------- ---------
Total expenses 20,246 19,309 - 39,555
--------- --------- --------- ---------
Income before income taxes 9,742 1,221 (393) 10,570
Provision for income taxes (3,903) (499) 149 d (4,253)
--------- --------- --------- ---------
Net income $ 5,839 $ 722 $ (244) $ 6,317
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income per share of common stock $ 0.28 $ - $ 0.30
--------- --------- ---------
--------- --------- ---------
Weighted average common shares and
common equivalent shares
outstanding 20,297 756 21,053
--------- --------- ---------
--------- --------- ---------

</TABLE>

See Notes to the Unaudited Pro Forma Condensed Combined Financial Information

48
<PAGE>

PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

FOR THE YEAR ENDED SEPTEMBER 30, 1996 (a)
(UNAUDITED)
<TABLE>
<CAPTION>

FIRSTPLUS WESTERN PRO
FINANCIAL INTERSTATE FORMA
GROUP, INC. BANCORP COMBINED
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1996 1996 ADJUSTMENTS 1996
------------- ------------- ------------- -------------

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES:
Gains on sales of loans, net $ 105,368 $ 9,341 $ (1,050) d $ 113,659
Interest income 25,727 10,877 36,604
Servicing income 4,008 1,374 5,382
Other income 9,683 100 9,783
--------- --------- --------- ---------
Total revenues 144,786 21,692 (1,050) 165,428
--------- --------- --------- ---------
EXPENSES:
Salaries and employee benefits 36,402 5,278 41,680
KSOP contribution -
Interest 16,892 6,347 23,239
Other operating 29,938 5,173 b 35,111
General and administrative 4,588 (4,588) b -
Occupancy expenses 584 (584) b -
Real estate owned expenses 1 (1) b -
Provision for possible credit losses
on loans held for sale and excess
servicing receivable 6,373 155 6,528
--------- --------- --------- ---------
Total expenses 89,605 16,953 - 106,558
--------- --------- --------- ---------
Income before income taxes 55,181 4,739 (1,050) 58,870
Provision for income taxes (20,969) (1,964) 399 d (22,534)
--------- --------- --------- ---------
Net income $ 34,212 $ 2,775 $ (651) $ 36,336
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income per share of common stock $ 1.35 - $ 1.39
--------- --------- ---------
--------- --------- ---------
Weighted average common shares and
common equivalent shares
outstanding 25,358 756 26,114
--------- --------- ---------
--------- --------- ---------

</TABLE>

See Notes to the Pro Forma Condensed Combined Financial Information

49
<PAGE>

PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME

FOR THE SIX MONTHS ENDED MARCH 31, 1997 (a)
(UNAUDITED)
<TABLE>
<CAPTION>

FIRSTPLUS WESTERN PRO
FINANCIAL INTERSTATE FORMA
GROUP, INC. BANCORP COMBINED
MARCH 31, MARCH 31, MARCH 31,
1997 1997 ADJUSTMENTS 1997
------------- ------------- ------------- -------------

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
REVENUES:
Gains on sales of loans, net $ 132,540 $ 7,482 $ (1,182) d $ 138,840
Interest income 53,480 5,232 58,712
Servicing income 6,344 620 6,964
Other income 15,511 68 15,579
--------- --------- --------- ---------
Total revenues 207,875 13,402 (1,182) 220,095
--------- --------- --------- ---------
EXPENSES:
Salaries and employee benefits 35,772 3,156 38,928
Interest 32,371 2,978 35,349
Other operating 43,757 2,982 b 46,739
General and administrative 2,624 (2,624) b -
Occupancy expenses 297 (297) b -
Real estate owned expenses 61 (61) b -
Provision for possible credit losses
on loans held for sale and interest
only strips 18,264 (281) 17,983
--------- --------- --------- ---------
Total expenses 130,164 8,835 - 138,999
--------- --------- --------- ---------
Income before income taxes 77,711 4,567 (1,182) 81,096
Provision for income taxes (29,530) (1,910) 449 d (30,991)
--------- --------- --------- ---------
Net income $ 48,181 $ 2,657 $ (733) $ 50,105
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income per share of common stock $ 1.51 $ - $ 1.53
--------- --------- ---------
--------- --------- ---------
Weighted average common shares and
common equivalent shares outstanding 31,947 756 32,703
--------- --------- ---------
--------- --------- ---------

</TABLE>

See Notes to the Unaudited Pro Forma Condensed Combined Financial Information

50
<PAGE>

PRO FORMA CONDENSED COMBINED BALANCE SHEETS
MARCH 31, 1997 (a)

(UNAUDITED)

<TABLE>
<CAPTION>
FIRSTPLUS WESTERN PRO
FINANCIAL INTERSTATE FORMA
GROUP, INC. BANCORP COMBINED
MARCH 31, MARCH 31, MARCH 31,
1997 1997 ADJUSTMENTS 1997
---------- ---------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 73,949 $ 17,728 $ 91,677
Interest-bearing deposits with banks 245 245
Loans held for sale, net 987,775 25,766 $ (1,936) d 1,011,605
Investment securities, available for sale 52,975 52,975
Loans receivable, net 11,220 11,220
Accrued interest receivable 405 (405) b -
L/H improvements and equipment 1,074 (1,074) b -
Interest only strips and
servicing rights 418,661 1,634 420,295
Allowance for possible credit
losses on loans sold (148,078) (148,078)
Subordinated certificates held for sale 17,271 17,271
Servicing assets 10,643 10,643
Receivable from trusts 77,336 77,336
Deferred income taxes 281 (281) b -
Real estate owned, net 444 (444) b -
Prepaid expenses 194 (194) b -
Other assets 31,649 170 2,398 b 34,217
----------- --------- -------- -----------
Total assets $ 1,469,206 $ 112,136 $ (1,936) $ 1,579,406
----------- --------- -------- -----------
----------- --------- -------- -----------

LIABILITIES AND
STOCKHOLDERS' EQUITY

Liabilities:
Accounts payable and
accrued liabilities $ 22,357 $ 2,543 $ 1,198 b
(736) d $ 25,362
Thrift accounts 94,106 94,106
Warehouse financing facilities 894,368 894,368
Warehouse Lender term line
of credit 117,020 117,020
Accrued interest payable 460 (460) b -
Notes payable 2,046 1,355 3,401
Income taxes payable 738 (738) b -
Subordinated notes payable 7,002 7,002
Convertible subordinated notes 69,920 69,920
Deferred tax liabilities, net 48,855 48,855
----------- --------- -------- -----------
Total liabilities 1,161,568 99,202 (736) 1,260,034
----------- --------- -------- -----------
Contingencies and Commitments
Stockholders' equity:
Common stock 319 3,554 (3,554) c
8 e 327

Non-voting common stock 28 28
Additional capital 213,857 3,554 c
(1,200) d
(8) e 216,203

51
<PAGE>

Unrealized gain on interest
only strips, net 7,155 7,155
Retained earnings 86,279 9,405 95,684
Securities valuation allowance (25) (25)
----------- --------- -------- -----------
Total stockholders' equity 307,638 12,934 (1,200) 319,372
----------- --------- -------- -----------
Total liabilities and
stockholders' equity $ 1,469,206 $ 112,136 $ (1,936) $ 1,579,406
----------- --------- -------- -----------
----------- --------- -------- -----------
</TABLE>

See Notes to the Unaudited Pro Forma Condensed Combined Financial Information

52
<PAGE>

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The unaudited pro forma condensed combined financial statements give effect
to the following pro forma adjustments and are supplemented by the following
information:

(a) FPFG has a fiscal year ending on September 30 and WIB has a fiscal
year ending on December 31. The unaudited pro forma condensed combined
statements of income combined each company's historical results using their
respective year ends for all fiscal periods presented. For the six-month
periods ended March 31, 1997 and 1996, the results of operations for WIB have
been restated to conform to FPFG's fiscal year.

(b) The pro forma adjustments to various accounts are reclassifications to
conform WIB line items to FPFG financial presentation.

(c) The pro forma adjustments to Common Stock and Additional Capital
represents the reclassification of the existing common stock in WIB to
additional capital.

(d) Pro forma adjustments to loans held for sale, accounts payable and
accrued liabilities, additional capital, gain on sale of loans and provision for
income tax are to eliminate the gain on loans sold to FPFG by WIB, which have
not been securitized by FPFG.

(e) The pro forma adjustment to common stock and additional capital is to
record the issuance of stock in the acquisition of WIB, accounted for as a
pooling.

53
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF WIB

THIS DISCUSSION PRESENTS MANAGEMENT'S ANALYSIS OF THE FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF WIB AS OF AND FOR THE THREE MONTHS ENDED MARCH 31,
1997 AND MARCH 31, 1996, AND THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994.
THE DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED FINANCIAL
STATEMENTS OF WIB AS OF AND FOR THE YEARS THEN ENDED AND THE NOTES RELATED
THERETO PRESENTED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS. REFERENCES
HEREIN TO "WIB" ARE INTENDED TO REFER TO THE CONSOLIDATED OPERATIONS OF WIB,
INCLUDING CITIZENS, EXCEPT WHERE OTHERWISE INDICATED OR THE CONTEXT CLEARLY
REQUIRES.

GENERAL

WIB originates loans primarily for sale and, to a lesser extent, for
longer-term investment as part of its permanent loan portfolio, which consists
of all loans not held for sale. The primary sources of WIB's operating income
are gain on the sale of loans from mortgage banking activities and net interest
income earned on loans and investments. Net interest income is the difference
between the interest income earned on the loan investment portfolios and the
cost of funds of WIB, consisting primarily of interest paid on its deposits.
Net interest income is further reduced by the provision for loan losses.
Mortgage banking activities generate significant revenue from the sale of loans
in the secondary market and from the servicing and subservicing of loans for
third parties who have purchased the loans from Citizens. Substantially all of
the revenues of WIB are derived from the operations of its wholly-owned
subsidiary financial institution, Citizens, an industrial loan company formed in
1980.

WIB's principal expenses are interest paid on "thrift" or deposit accounts
and operating expenses. Operating expenses consist primarily of employee
compensation, occupancy expense, advertising and promotion and other general and
administrative expenses. WIB's results of operations are also significantly
affected by general economic and competitive conditions, particularly changes in
interest rates, government policies and actions of regulatory authorities.
Future changes in applicable law, regulations or government policies may
materially impact WIB. Lending activities are influenced by the demand for real
estate and other loans, which is in turn affected by the interest rates at which
Citizens' loans are made, general economic conditions affecting loan demand, and
the availability of funds for lending activities.

FINANCIAL CONDITION

MARCH 31, 1997 COMPARED WITH DECEMBER 31, 1996. Total assets decreased by
$12.4 million, or 10.0%, to $112.1 million at March 31, 1997 from $124.5 million
at December 31, 1996. The decline in total assets was primarily due to a
reduction in the investment securities portfolio. Citizens continued to have
liquidity in excess of the funding needs of its mortgage banking operations, and
priced its deposits at reduced levels to decrease its liabilities. Total
deposits decreased from $106.9 million at December 31, 1996 to $94.1 million at
March 31, 1997, or by 12.0%.

DECEMBER 31, 1996 COMPARED WITH DECEMBER 31, 1995. Total assets decreased
$3.3 million, or 2.6%, to $124.5 million at December 31, 1996 from $127.8
million at December 31, 1995. The decline in total assets was largely
attributable to the shrinkage of the permanent loan portfolio and cash
equivalents. Citizens sold substantially all of its commercial loan portfolio
of $9.7 million in December 1996. With the increased mortgage banking activity
of Citizens and the reduction in its permanent loan portfolio, WIB required less
resources to fund its business and the rates offered on deposit accounts were
reduced to lower total deposits and decrease liabilities. Deposits decreased by
$6.9 million, or 6.1%, to $106.9 million at December 31, 1996 from $113.8
million at December 31, 1995.

Management continued to focus lending operations on the origination of home
equity loans secured primarily by second liens on real property for sale in
the secondary market and to largely discontinue commercial lending. Citizens
emphasizes the provision of loan products to borrowers who have limited
access to consumer financing for a variety of reasons, including insufficient
home equity values. This mortgage banking emphasis is reflected both in an
increase in loans held for sale by 58.4%, or from $19.0 million at December
31, 1995 to $30.1 million at December 31, 1996, and in a decrease in the
loans receivable held for portfolio purposes from $21.1 million to $10.5
million. Citizens also sold the majority of the held-to-maturity investment
portfolio, $24.6 million, and transferred the remainder of this portfolio to
the available-for-sale portfolio. This sale was motivated, in part, by
prevailing bond market conditions and interest rates, which permitted the
portfolio to be sold at a price believed to be favorable based on
management's assessment of market conditions. The sale resulted in a loss of
approximately $139,000. The funds received from the sale of the held-

54
<PAGE>

to-maturity investment securities and commercial loans were generally
reinvested in shorter-term, high-grade investment securities. Investment
activities continued to be funded primarily by deposits.

DECEMBER 31, 1995 COMPARED WITH DECEMBER 31, 1994. Total assets increased
$8.6 million, or 7.2%, to $127.8 million at December 31, 1995 from
$119.2 million at December 31, 1994. As part of the redirection of WIB's
business toward mortgage banking activities, net loans receivable declined by
78.3% to $21.1 million at December 31, 1995 from $97.4 million at December 31,
1994. Included in such sales was the sale of the entire $86.7 million Title I
Loan portfolio of Citizens to FPFG in June 1995. See "The Merger---Background
of and Reasons for the Merger." At the same time, loans held for sale in
connection with mortgage banking activities increased from $6.5 million at
December 31, 1994 to $19.0 million at December 31, 1995, an increase of 192.3%.
As a result of the sale of the Title I Loans, WIB experienced a substantial
increase in its cash balances of $18.9 million or 590.6% from $3.2 million at
December 31, 1994 to $22.1 million at December 31, 1995. Substantial
investments were also made in mortgage-backed securities, which increased from
$3.5 million at December 31, 1994 to $55.4 million at December 31, 1995, or by
approximately 1,482.9%. Growth in assets in 1995 was funded largely by an
increase in deposits which grew by 5.7% or $6.1 million from $107.7 million at
December 31, 1994, to $113.8 million at December 31, 1995.

RESULTS OF OPERATIONS

GENERAL. Net income for the three-month period ended March 31, 1997 was
$1.2 million, an increase of 172.2%, from the $425,000 for the three months
ended March 31, 1996. This increase was substantially due to higher loan sales
in the period ended March 31, 1997 as compared to the same period in 1996. Net
income for 1996 was $2.8 million, representing an increase of $2.1 million or
284.4% from 1995 net income. The primary reason for this substantial increase
was an increase in the gain on sale of loans in connection with the mortgage
banking activities of Citizens, together with a substantial reduction in the
provision for loan losses reflecting the decrease in loan charge offs of $3.4
million or 75.9% from 1995 to 1996. Net income in 1995 of $722,000 represented
an increase of 86.6% as compared to 1994 net income of $387,000. Such increase
was also largely attributable to increased gain on sale of loans, and to a
substantial contribution of $371,000 to the KSOP in 1994. No KSOP contributions
were made in 1995 or 1996.

TOTAL INTEREST INCOME. Total interest income in both the three months
ended March 31, 1997 and the three months ended March 31, 1996 was $2.5
million. Total interest income decreased substantially in 1996, to $10.9
million dollars from $13.1 million dollars in 1995, or a decline of 16.8%.
The major reason for the decline relates to the sale in June 1995 of $86.7
million in Title I Loans, which had a weighted average yield of almost 14%,
and its reinvestment in investment securities with substantially lower
yields. In 1996, actions which reduced interest income included sales of the
higher-yield, longer-term held-to-maturity securities portfolio and
mortgage-backed securities, and the commercial loan portfolio, and reduction
in the overall permanent loan portfolio held by Citizens as operations
continued to be strongly redirected towards mortgage banking activities.
Total interest income in 1995 was down $816,000, or 5.9%, as compared to
1994. This reduction was due largely to the same factors that reduced
interest income in 1996, including the sale of the Title I portfolio, which
substantially reduced interest income on loans for the second half of 1995.

TOTAL INTEREST EXPENSE. Total interest expense declined by $0.3 million,
or 15.5%, to $1.4 million in the three months ended March 31, 1997 from $1.7
million in the three months ended March 31, 1996, reflecting lower deposit
balances and prevailing interest rates. Total interest expense declined by $0.5
million, or 6.0%, from $6.8 million dollars in 1995 to $6.3 million dollars in
1996, reflecting the 6.3% decrease in average interest earning liabilities, and
management's lowering of the rates offered on certain deposit accounts .
Interest expense increased substantially in 1995, by 42.9%, as compared to 1994,
reflecting deposit growth in 1995 and increases in the rates paid on term
certificates of deposit.

NET INTEREST INCOME. Net interest income for the three months ended
March 31, 1997 was $1.1 million as compared to $0.9 million in the first quarter
of 1996 due primarily to lower interest expense. Net interest income decreased
by $1.8 million, or 28.3%, to $4.5 million dollars in 1996 as compared to $6.3
million in 1995. This was primarily due to a 35.8% decrease in average
outstanding loan receivables, sales of higher-yielding, longer-term securities.
In 1995 net interest income dropped substantially from $9.2 million in 1994 to
$6.3 million in 1995, due in large part to the decrease in outstanding average
loan receivables, including the effect of the sale of Title I Loans.

<PAGE>

NET INTEREST INCOME ANALYSIS. The following table presents for the periods
indicated the distribution of average interest-earning assets and the resultant
yields, and the interest expense on average interest-bearing liabilities,
expressed both in dollars and rates. All average balances are monthly average
balances. Loans receivable includes loans held for sale. Nonaccrual loans have
been included in the table as loans having a zero yield.

YEAR ENDED DECEMBER 31,
-----------------------

1995 1996
---------------------------------- ------------------------------------

AVERAGE INT.EARNED/ YIELD/ AVERAGE INT. EARNED/ YIELD/
OUTSTANDING PAID RATE OUTSTANDING PAID RATE
----------- ---------- ------- ----------- ----------- --------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C>
Interest-Earning Assets:
Loans Receivable . . . . . $ 71,052 $10,153 14.29% $ 45,690 $ 6,519 14.27%
Investment securities. . . 3,852 221 5.74 8,080 300 3.71
Mortgage-backed securities
& collateralized mortgage
obligations ("CMOs") . . . 24,212 1,345 5.56 49,531 3,314 6.69
Other. . . . . . . . . . . 26,352 1,348 5.12 16,479 744 4.51
-------- -------- ------ --------- ------- -------
Total interest-earning
assets. . . . . . . . . $125,468 $13,067 10.41% $119,780 10,877 9.08%

Interest-Bearing Liabilities:
Certificates . . . . . . . $ 86,091 5,173 6.01% $ 72,254 4,454 6.16%
Passbook accounts. . . . . 29,525 1,419 4.81 36,001 1,705 4.74
Borrowings . . . . . . . . 1,834 161 8.78 1,825 188 10.30
-------- -------- ------ --------- ------- -----
liabilities . . . . . . $117,450 $ 6,753 5.75% $110,080 $6,347 5.77%

Net interest income. . . . . $ 6,314 $ 4,530
Net interest rate spread . . 4.66% 3.31%
Net earning assets . . . . . $ 8,018 $ 9,700
Net interest margin. . . . . 5.03% 3.78%
Average interest-earning
assets to average interest-
bearing liabilities. . . . 1.07x 1.09x

THREE MONTHS ENDED MARCH 31,
----------------------------

1996 1997
------------------------------- ------------------------------------

AVERAGE INT. EARNED/ YIELD/ AVERAGE INT. EARNED/ YIELD/
OUTSTANDING PAID RATE OUTSTANDING PAID RATE
----------- ----------- ------- ----------- ------------- -------
<S> <C> <C> <C> <C> <C> <C>

Interest-Earning Assets:
Loans Receivable . . . . . $42,171 $1,317 12.49% $43,591 $1,487 13.65%
Investment securities. . . 5,032 71 5.64 44,346 618 5.57
Mortgage-backed securities
& collateralized mortgage
obligations ("CMOs") . . . 57,141 889 6.22 13,275 215 6.48
Other. . . . . . . . . . . 18,571 243 5.23 10,770 144 5.35
------- ------- -------- ------ ----- -----
Total interest-earning
assets. . . . . . . . . 2,520 8.20% $111,982 2,464 8.80%

Interest-Bearing Liabilities:
Certificates . . . . . . . $75,436 1,182 6.27% $65,708 973 5.92%
Passbook accounts. . . . . 35,375 418 4.73 34,419 389 4.52
Borrowings . . . . . . . . 1,795 51 11.36 1,419 33 9.30
------- ------- -------- ------ ----- -----
Total interest-bearing
liabilities . . . . . . $112,606 1,651 5.86% $101,546 $1,395 5.50%

Net interest income. . . . . $ 869 $1,069
Net interest rate spread . . 2.34% 3.30%
Net earning assets . . . . . $ 10,309 $ 10,436
Net interest margin. . . . . 2.83% 3.82%
Average interest-earning
assets to average interest-
bearing liabilities. . . . 1.09x 1.10x

</TABLE>

56
<PAGE>

Interest income and interest expense can fluctuate widely based upon
changes in the level of market interest rates. Net interest income can also be
affected by a change in the composition of assets and liabilities, for example,
if higher yielding loan assets were to replace a like amount of lower yielding
short term government securities. Net interest income is affected by changes in
volume and changes in rates. Volume changes are caused by differences in the
level of interest-earning assets and interest-bearing liabilities. Rate changes
result from differences in yields earned on assets and rates paid on
liabilities.

The following table presents the dollar amount of changes in interest
income and interest expense for major components of interest-earning assets
and interest-bearing liabilities due to changes in outstanding balances and
changes in interest rates. For each category of interest-earning assets and
interest-bearing liabilities, information is provided on changes attributable
to (i) changes in volume; (i.e., changes in volume multiplied by old rate)
and (ii) changes in rate (i.e., changes in rate multiplied by old volume).
For purposes of this table, changes attributable to both rate and volume
which cannot be segregated, have been allocated proportionately to changes
due to volume and changes due to rate.

YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------
1995 VS. 1994 1996 VS. 1995
----------------------------------- ---------------------------------------
INCREASE INCREASE
(DECREASE) (DECREASE)
DUE TO DUE TO
--------------------- ----------------------
TOTAL TOTAL
INCREASE INCREASE
VOLUME RATE (DECREASE) VOLUME RATE (DECREASE)
------ ---- ---------- ------ ---- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable . . . . . . . . . . . . $ (3,906) $740 $(3,166) $(3,624) $ (10) $ (3,634)
Mortgage-backed securities and CMOs. . . 1,154 26 1,180 1,408 561 1,969
Investment Securities. . . . . . . . . . (45) 42 (3) 243 (164) 79
Other. . . . . . . . . . . . . . . . . . 803 370 1,173 (504) (100) (604)
-------- ------- ------- ------- ------ --------

Total interest-earning assets. . . . . . $ (1,994) $ 1,178 $ (816) $(2,477) $ 287 $ (2,190)
-------- ------- ------- ------- ------ --------
Interest-bearing liabilities:
Certificates . . . . . . . . . . . . . . $895 $ 1,070 $ 1,965 $ (832) $ 113 $ (719)
Passbook accounts. . . . . . . . . . . . (243) 273 30 311 (25) 286
Borrowings . . . . . . . . . . . . . . . 13 20 33 (1) 28 27
-------- ------- ------- ------- ------ --------
Total interest-bearing liabilities . . . $ 665 $ 1,363 $ 2,028 $ (522) $ 116 $ (406)
-------- ------- ------- ------- ------ --------
Net change in net interest income. . . . . $(2,844) $ (1,784)
------- --------
------- --------

<PAGE>

THREE MONTHS ENDED MARCH 31,
---------------------------------
1997 VS. 1996
---------------------------------
INCREASE
(DECREASE)
DUE TO
---------------
TOTAL
INCREASE
VOLUME RATE (DECREASE)
------ ---- ----------
<S> <C> <C> <C>
Interest-earning assets:
Loans receivable . . . . . . . . . . . . 177 (7) 170
Mortgage-backed securities and CMOs. . . 2,728 (3,402) (674)
Investment Securities. . . . . . . . . . (2,217) 2,764 547
Other. . . . . . . . . . . . . . . . . (408) 309 (99)
------ ------ -------

Total interest-earning assets. . . . . . $ 280 $ (336) $ (56)
------ ------- -------

Interest-bearing liabilities:
Certificates . . . . . . . . . . . . . . $ (610) 401 (209)
Passbook accounts. . . . . . . . . . . . (45) 16 (29)
Borrowings . . . . . . . . . . . . . . . (43) 25 (18)
------ ------- -------

Total interest-bearing liabilities . . . $ (698) $ 442 $ (256)
------ ------- -------

Net change in net interest income. . . . . $ 200
-------
-------
</TABLE>

57
<PAGE>

PROVISION FOR LOAN LOSSES. WIB provides for loan losses by a charge to
operations based upon management's evaluation of the loan portfolio, past loan
loss experience, economic conditions, and other factors. The level of the
allowance for loan losses as it relates to the total portfolio, the level of
classified assets and the loss experience determines the amount that will be
added to the provision. The provision for loan losses was $125,000 in the three
months ended March 31, 1997, an increase of $23,000, or 22.5%, from the $102,000
provided in the first quarter of 1996, and was approximately the amount of net
loans charged off in such three-month period. The provision for loan losses for
1996 decreased by $3.0 million, or 95.1%, to $0.2 million, as compared to $3.2
million in 1995. The reasons for the decrease were a substantial reduction in
loan charge-off experience in 1996, in which $1.1 million in loans were charged
off, as compared to 1995 in which $4.5 million in loans were charged off,
coupled with the sale of commercial loans of $9.7 million and a substantial
reduction in non-accruing loans and other classified assets, particularly with
respect to the Title I portfolio. Non-accruing Title I Loans were $0.2 million
at December 31, 1996, as compared to $0.3 million at December 31, 1995 and $4.1
million at December 31, 1994. See "Business of WIB -- Nonperforming Assets and
Classified Assets." The 1995 loan charge-offs related largely to the Title I
Loan business of Citizens. While economic conditions in California have
improved in 1996 and 1995, as compared with prior years, the generally weak
California economy in preceding periods, and attendant high unemployment and
devaluation of property values, continued to adversely affect the ability of
borrowers to repay loans in 1995 and 1996. The provision for loan losses
increased from $2.9 million in 1994 to $3.2 million in 1995, or 9.4%, reflecting
higher charge-offs in 1995 as compared to 1994 in which $1.2 million in loans
were charged off. During 1994 WIB maintained a higher total allowance for loan
losses than in 1995 and 1996, reflecting the generally weaker economy in such
year and prior years and the high level of non-accruing Title I Loans. As of
December 31, 1996, 1995 and 1994, the allowance for loan losses represented
3.2%, 5.0% and 3.2%, respectively, of total loans. The lower allowance (by
percentage of loans) in 1994 as compared to 1995 reflects the fact that the
Title I Loan HUD reserve account was higher in 1994 than in 1995, thereby
requiring a lower allowance on the part of WIB.

NONINTEREST INCOME. Total non-interest income for the three months ended
March 31, 1997 was $3.9 million, representing an increase of $1.8 million, or
83%, from the $2.1 million of non-interest income in the corresponding period of
1996, due substantially to increased gains on the sale of junior lien home
equity loans. Total noninterest income for 1996 increased $3.4 million or
44.9%, to $10.8 million primarily due to increased gain on loan sales from
increased sales of junior lien home equity loans. Servicing fee income also
increased by $0.2 million from $1.2 million in 1995 to $1.4 million in 1996
primarily due to the effect of the sale of Title I Loans with servicing or
subservicing responsibilities retained. Noninterest income increased
substantially in 1995 to $7.5 million from $3.3 million in 1994, an increase of
126.9%. This increase was also due to the increase in gain on sale of loans.

NONINTEREST EXPENSE. Non-interest expense increased substantially in the
first quarter of 1997 to $2.8 million, as compared to $2.2 million in the first
quarter of 1996, an increase of 31.6%. The increase resulted from the continued
expansion of lending activities. Total noninterest expense increased $1.1
million, or 11.2%, in 1996 as compared to 1995. Salaries and employee benefits
increased $0.6 million, or 13.1%, to $5.3 million due to salary increases and
additional staffing required for expanding operations. Other general and
administrative expenses also increased by $0.4 million, or 9.9%, due primarily
to increased lending operations and loan volume, including increases in retail
marketing expenses and the opening of the Seattle, Washington office and related
marketing expense. Noninterest expense increased from $8.9 million in 1994 to
$9.4 million, or by 5.6%, due to expansion in lending operations requiring
increased personnel and general and administrative costs. The increase was
partially offset by a substantial reduction in expenses of real estate owned
which declined by $0.3 million in 1995 as compared to 1994.

PROVISION FOR INCOME TAXES. The provision for income taxes increased from
$0.3 million in the three months ended March 31, 1996 to $0.8 million in the
three months ended March 31, 1997, generally in line with increased earnings.
The provision for income taxes for 1996 increased $1.5 million, from $0.5
million in 1995 to $2.0 million, and by $0.2 million in 1995 as compared to
1994, primarily due to increased earnings before income taxes.

ASSET/LIABILITY MANAGEMENT

The matching of assets and liabilities may be analyzed by examining the
extent to which such assets and liabilities are "interest rate sensitive" and
by monitoring an institution's interest rate sensitivity "gap." An asset or
liability is said to be interest rate sensitive within a specific time period
if it will mature or reprice within that period. The interest rate
sensitivity gap is defined as the difference between the amount of
interest-earning assets anticipated, based upon certain assumptions, to
mature or reprice within a specific time period and the amount of
interest-bearing liabilities anticipated,

58
<PAGE>

based upon certain assumptions, to mature and reprice within that same time
period. A gap is considered positive when the amount of interest rate
sensitive assets exceeds the amount of interest rate sensitive liabilities
and negative when the amount of interest rate sensitive liabilities exceeds
the amount of interest rate sensitive assets. During a period of rising
interest rates, a negative gap would generally tend to adversely affect net
interest income while a positive gap would generally tend to result in an
increase in net interest income. During a period of declining interest rates,
a negative gap would generally tend to result in increased net interest
income while a positive gap would generally tend to adversely affect net
interest income. At March 31, 1997, total interest-bearing assets maturing
or repricing within one year exceeded total interest-bearing liabilities
maturing or repricing in the same period by $16.8 million, representing a
positive one-year gap as a percentage of assets of 17.03%.

In an attempt to manage its exposure to changes in interest rates,
management closely monitors WIB's interest rate risk. WIB has an
asset/liability committee of senior management which meets monthly to review
WIB's interest rate risk position, the various product lines and make
recommendations for adjusting such position. On a weekly basis, the President
reviews the rates on both loan and savings products to determine
appropriateness. In addition, the Board of Directors of Citizens reviews the
gap ratio on a monthly basis.

In the first quarter of 1997, WIB originated or purchased for sale or
portfolio a total of approximately $39.0 millions in loans, and sold $41.1
million in loans. During 1996, WIB originated or purchased for sale or
portfolio a total of approximately $134.0 million in loans, and sold $133.5
million in loans. During 1995, approximately $86.0 million in loans were
originated or purchased and $140.4 million in loans were sold. By comparison,
total loans purchased or originated in 1994 were approximately $60.0 million,
and loans sold were $27.9 million. Loans held for sale increased from $6.5
million at December 31, 1994 to $19.0 million at year-end 1995 and $30.1 million
at year end 1996, before declining to $27.8 million at March 31, 1997,
reflecting WIB's shift in the nature of its business over the last three years
from being primarily a portfolio lender to mortgage banking. Loans held for
sale are typically held for 30 to 60 days before being sold to investors.

WIB has also shortened the maturity of its investment securities portfolio
from 16.87 years at December 31, 1994, and 20.32 years at year-end 1995 to 3.91
years at year-end 1996, and 4.40 years at March 31, 1997, and has substantially
increased its average cash holdings during the last two years in order to fund
loan production.

WIB's cost of funds responds to changes in interest rates due to the
relatively short-term nature of its deposit portfolio. Consequently, the
results of operations are influenced by the level of short-term interest rates.
WIB offers a range of maturities on its deposit products at competitive rates
and monitors the maturities on an ongoing basis.

WIB emphasizes and promotes passbook accounts and term certificates of
deposit with maturities of six months through three years. The passbook
accounts tend to be less susceptible to rapid changes in interest rates;
however, Citizens has paid slightly higher rates on all deposit accounts than
full service commercial banks and savings associations in order to attract
longer-term certificates of deposit, promote the stability of its passbook
accounts and to expand its customer base.

The following table sets forth the interest rate sensitivity of WIB's
assets and liabilities at March 31, 1997 on the basis of certain assumptions.
Except as stated below, the amounts of assets and liabilities shown which
reprice or mature during a particular period were determined in accordance with
the earlier of the repricing timing or contractual term of the asset or
liability.

59
<PAGE>

MATURING OR REPRICING
-------------------------------------------------------------

6 MONTHS OVER 6-12 OVER 1-3 OVER 3-5 OVER 5
OR LESS MONTHS YEARS YEARS YEARS TOTAL
-------------------------------------------------------------

(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
INTEREST-EARNING ASSETS:
Fixed rate mortgage loans . . . . . . $ 1 $ 8 $ 268 $ 247 $ 34,913 $ 35,437
Adjustable rate mortgage loans . . . 2,670 627 433 - - 3,730
Consumer loans . . . . . . . . . . . 15 27 37 50 152 281
Mortgage backed securities . . . . . 9,022 707 - 1,412 1,891 13,032
Investment securities and other . . . 55,903 - - 95 - 55,998
------- ------- ------ ------- -------- --------
Total interest-earning assets . . . 67,611 1,369 738 1,804 36,956 108,478
------- ------- ------ ------- -------- --------
INTEREST-BEARING LIABILITIES:
Certificates of deposit . . . . . . . 28,546 14,154 14,062 3,462 - 60,224
Passbook accounts . . . . . . . . . . 3,389 3,389 13,552 13,552 - 33,882
Borrowings . . . . . . . . . . . . . 391 639 325 - - 1,355
------- ------- ------ ------- -------- --------
Total interest-bearing liabilities 32,326 18,182 27,939 17,014 - 95,461
------- ------- ------ ------- -------- --------
Interest-earning assets less interest-
bearing liabilities . . . . . . . . . . $35,285 $(16,813) $(27,201) $(15,210) $36,956 $ 13,017
------- ------- ------ ------- -------- --------
------- ------- ------ ------- -------- --------

Cumulative interest-rate sensitivity gap $ - $18,472 $(8,729) $(23,939) $13,017
Cumulative interest-rate gap as
a percentage of assets . . . . . . . . . -% 17.03% (8.05)% (22.07)% 12.00%

</TABLE>

In evaluating WIB's exposure to interest rate risk, certain shortcomings
are inherent in the method of analysis presented in the preceding table. For
example, although certain assets and liabilities may have similar maturities or
periods to repricing, they may react in different degrees to changes in market
interest rates. Also, the interest rates on certain types of assets and
liabilities may fluctuate in advance of changes in market interest rates, while
interest rates on other types may lag behind changes in market rates.
Additionally, some adjustable-rate loans have features which restrict changes in
interest rates on a short-term basis and over the life of the asset. Further,
in the event of a change in interest rates, prepayment levels may deviate
significantly from those assumed in calculating the table. Finally, the ability
of many borrowers to service their debt may decrease in the event of an interest
rate increase. WIB considers all of these factors in monitoring its exposure to
interest rate risk.

LIQUIDITY AND CAPITAL RESOURCES

Citizen's primary sources of funds are deposits, payments of principal and
interest on loans, and proceeds from loan sales. While maturities and scheduled
principal amortization are a reasonably predictable source of funds, deposit
flows, loan prepayments and loan sales are greatly influenced by the level of
interest rates, economic conditions and competition. At the parent company
level, WIB also raises funds from borrowings from the sale of notes payable,
dividends and management fees received from Citizens. WIB has also received
funds from the sale of WIB Common Shares to the KSOP.

WIB's primary lending and investment activities are the origination of one-
to four-family junior lien loans that are generated for sale, and to a lesser
extent, the purchase of investment and mortgage-backed securities. During the
years ended December 31, 1996, 1995 and 1994, WIB originated and purchased loans
held for sale of $125.6 million, $66.1 million and $29.9 million, respectively.
For the three months ended March 31, 1997 such loans totaled $39.0 million.
Investing activities included the purchase of investment and mortgage-backed
securities. Lending and investment activities are funded primarily by the sale
of loans held for sale, principal and interest payments on loans, and increases
in deposits. Proceeds from the sale of loans for the three months ended
March 31, 1997 were $41.1 million, and for the years ended December 31, 1996,
1995 and 1994 were $123.8 million, $53.7 million and $28.0 million,
respectively. Over the same period, deposit balances were $107.7 million,
$113.8 million and $106.9 million, respectively, at year end 1994, 1995 and
1996. However, by March 31, 1997, total deposits had been reduced to $94.1
million as deposit rates were reduced and investment securities sold to run off
excess liquidity.

WIB's liquid assets are cash, cash in banks, Fed Funds sold and investments
in investment securities with maturities of less than one year. The level of
these assets depends on WIB's operating, financing, lending and investing
activities during any given period. At March 31, 1997 these liquid assets
totaled $57.9 million, and at December 31, 1996, 1995 and 1994, these liquid
assets totaled $65.3 million, $31.0 million and $4.2 million, respectively.

60
<PAGE>

Excess funds are generally invested in interest-earning overnight deposits
or short-term investment securities. In the event Citizens or WIB should
require funds beyond its ability to generate them internally, additional sources
of funds are available through the use of lines of credit with a third-party
bank of $3.8 million, under which $3.2 million in funds were available at
March 31, 1997.

Management believes that the liquidity and resources of WIB are adequate to
fund all foreseeable needs.

In the first quarter of 1997, stockholders' equity increased to $12.9
million, or by $1.1 million, from $11.8 million at December 31, 1996, an
increase of 10%. Stockholders' equity increased by $2.5 million, or 27.2%, to
$11.8 million at December 31, 1996 from $9.2 million at December 31, 1995. In
1995 stockholders' equity increased $1.1 million, or 13.8%, from $8.1 million at
December 31, 1994. Such increases were largely attributable to earnings, with
stock purchased by the KSOP contributing approximately $300,000 to stockholders'
equity in 1995 and $45,000 in 1996.

Current risk-based capital standards of the FDIC imposed under federal
law generally require insured financial institutions to maintain a ratio of
"core" or "Tier 1" capital (consisting principally of common equity) to
adjusted total assets (leverage ratio) of at least 4% to 5%, a ratio of Tier
1 capital to risk weighted assets of at least 4%, and a ratio of total
capital (which includes Tier 1 capital plus certain forms of subordinated
debt, a portion of the allowance for loan losses and preferred stock) to risk
weighted assets of at least 8%. Risk weighted assets are calculated by
multiplying the balance in each category of assets according to a risk factor
which ranges from zero for cash assets and certain government obligations to
100% for some types of loans, and adding the products together.

In 1991, the Federal Deposit Insurance Corporation Improvements Act
("FDICIA") was enacted. FDICIA includes significant changes to the legal and
regulatory environment for insured depository institutions, and specifies
requirements for the taking of prompt corrective action by the FDIC if an
institution fails to maintain certain capital ratios. The capital categories
are "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized."
Institutions characterized as undercapitalized or worse are subject to certain
restrictions including the requirement to file a capital plan with its primary
federal regulator, prohibitions on the payment of dividends and management fees,
restrictions on executive compensation and increased supervisory monitoring,
among other things. Other restrictions may be imposed on the institution by the
DOC or by the FDIC, including requirements to raise additional capital, sell
assets or sell the entire institution.

The following is a summary of the capital ratios of Citizens at March 31,
1997 as compared to minimum regulatory requirements for an institution to be
considered adequately capitalized and the requirements for being well
capitalized.

TO BE WELL-CAPITALIZED
FOR CAPITAL ADEQUACY UNDER PROMPT
ACTUAL PURPOSES CORRECTIVE ACTION PROVISIONS
--------------- -------------- ----------------------------

AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------ ----- ------ ----- ------ -----

<S> <C> <C> <C> <C> <C> <C>
Total capital (to risk-weighted
assets) . . . . . . . . . . . . . . $14,218,159 26.5% $4,300,707 8.0% $5,375,884 10.0%

Tier 1 capital (to average assets) . . 13,546,174 11.7 4,635,546 4.0 5,794,433 5.0

Tier 1 capital (to risk-weighted
assets) . . . . . . . . . . . . . . 13,546,174 25.2 2,150,353 4.0 3,225,530 6.0

</TABLE>

As reflected in the preceding table, at March 31, 1997, Citizens was
"well-capitalized" under the prompt corrective action provisions of FDICIA.

Regulations of the DOC also require industrial loan companies not to exceed
a defined ratio of outstanding "thrift" or deposit accounts in relation to
stockholders' equity less retained earnings restricted as to distribution and
certain intangible assets. The ratio established for Citizens is 20 to 1. In
addition, state law and regulations require Citizens to maintain a minimum
capital stock of $1,250,000 plus a portion of retained earnings restricted as to
distribution. At March 31, 1997, Citizens was in compliance with all state
capital requirements.

61
<PAGE>

IMPACT OF INFLATION AND CHANGING PRICES

The consolidated financial statements and notes thereto presented herein
have been prepared in accordance with GAAP, which require the measurement of
financial position and operating results in terms of historical dollars without
considering the change in the relative purchasing power of money over time due
to inflation. The impact of inflation is reflected in the increased cost of
WIB's operations. Unlike most industrial companies, nearly all the assets and
liabilities of WIB are monetary. As a result, interest rates have a greater
impact on WIB's performance than do the effects of general levels of inflation.
Interest rates do not necessarily move in the same direction or to the same
extent as the price of goods and services.

EFFECT OF RECENT ACCOUNTING STANDARDS

In June 1996, the FASB issued FASB 125. FASB 125 addresses the accounting
for all types of loan sales, securitization transactions, securities lending and
repurchase agreements, collateralized borrowing arrangements and other
transactions involving the transfer of financial assets. FASB 125 distinguishes
transfers of financial assets that are sales from transfers that are secured
borrowings. FASB 125 is generally effective for transactions that occur after
December 31, 1996, and it is to be applied prospectively. FASB 125 will require
WIB to allocate the total costs of mortgage loans sold to the mortgage loans
sold (servicing released), retained certificates and servicing rights based on
their relative fair values. WIB will be required to assess the retained
certificates and servicing rights for impairment based upon the fair value of
those rights. The pronouncement also will require WIB to provide additional
disclosure about the retained certificates and to account for these assets at
fair value in accordance with FASB 115. WIB will apply the news prospectively
beginning in the first calendar quarter of 1997 and, based on current
circumstances, does not believe the application of the new rules would have a
material impact on WIB's financial statements. There can be no assurance,
however, that the implementation by WIB of FASB 125 will not reduce WIB's gain
on sale of loans in the future or otherwise adversely affect WIB's results of
operations or financial condition.

Prior to January 1, 1996, WIB accounted for its stock option plan in
accordance with the provisions of Accounting Principles Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. As such, compensation expense would be recorded on the date
of grant only if the current market price of the underlying stock exceeded
the exercise price. On January 1, 1996, WIB adopted Statement of Financial
Accounting Standards No. 123 ("SFAS No. 123"), "Accounting for Stock-Based
Compensation," which permits entities to recognize as expense over the
vesting period the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net income and pro
forma earnings per share disclosures for employee stock option grants made in
1995 and future years as if the fair-value-based method defined in SFAS No.
123 had been applied. WIB has elected to continue to apply the provisions of
APB Opinion No. 25 and provide the pro forma disclosure provisions of SFAS
No. 123.

In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128 ("FASB No. 128"), "Earnings Per Share." FASB No. 128
supersedes APB Opinion No. 15 ("APB 15"), "Earnings Per Share" and specifies the
computation, presentation and disclosure requirements for earnings per share
("EPS") for entities with publicly held common stock or potential common stock.
FASB No. 128 was issued to simplify the computation of EPS and to make the U.S.
standard more compatible with the EPS standards of other countries and that of
the International Accounting Standards Committee ("IASC"). It replaces the
presentation of primary EPS with a presentation of basic EPS and fully diluted
EPS with diluted EPS.

Basic EPS, unlike primary EPS, excludes dilution and is computed by
dividing income available to common stockholders by the weighted-average number
of common shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity. Diluted EPS is
computed similarly to fully diluted EPS under APB No. 15.

FASB No. 128 is effective for financial statements for both interim and
annual periods ending after December 15, 1997. Earlier application is not
permitted. After adoption, all prior-period EPS data presented shall be
restated to conform with FASB No. 128. WIB has determined that this statement
will increase the earnings per share computation under Basic EPS as compared
to primary EPS.

62
<PAGE>

FASB No. 129, Disclosure of Information about Capital Structure, is
effective for financial statements for periods ending after December 15, 1997.
It is not expected that the issuance of FASB No. 129 will require significant
revision of prior disclosure since the Statement lists required disclosures that
had been included in a number of previously existing separate statements and
opinions.

63
<PAGE>

BUSINESS OF WIB

GENERAL

WIB is a financial institution holding company organized in 1979 under the
laws of the State of California for the primary purpose of holding all of the
outstanding shares of Citizens. WIB's only significant asset is the capital
stock of Citizens. WIB also owns Citizens Group, Inc., which acts as a trustee
in deeds of trust securing real estate loans made by Citizens. WIB is not a
bank holding company under the Bank Holding Company Act of 1956, as amended, or
a savings and loan association holding company under the Home Owners' Loan Act
of 1933, as amended, and, therefore, is not subject to supervision and
regulation by the Board of Governors of the Federal Reserve System or the Office
of Thrift Supervision.

Citizens is a California licensed industrial loan company that commenced
business in 1980 and is supervised and regulated by the DOC and the FDIC. The
deposits of Citizens are insured by the FDIC up to applicable limits. Citizens
services its customers through five full service branch offices located in the
California cities of Anaheim Hills, Citrus Heights, Concord, Irvine, and San
Clemente. It also operates additional loan production offices in Tustin,
California, Las Vegas, Nevada, Phoenix, Arizona and Seattle, Washington. The
executive offices of both WIB and Citizens are located at 18302 Irvine
Boulevard, Suite 300, Tustin, California 92680 and its telephone number at that
address is (714) 573-7500.

Citizens offers deposit accounts having a wide range of interest rates and
terms, which consist of passbook accounts and term certificates of deposit.
Citizens does not offer traditional banking services, such as checking accounts
or safe deposit boxes.

At March 31, 1997, WIB employed a total of 153 full-time and four part-time
employees.

MARKET AREAS

Citizens accepts deposits at its California branches and originates one- to
four-family real estate mortgage loans primarily within California, Arizona,
Nevada and Washington. During 1996, these states accounted for 80.2%, 7.3%,
7.8% and 4.7%, respectively, of Citizens' total loan originations.

LENDING ACTIVITIES

GENERAL. WIB focuses its lending activities on one- to four-family junior
lien home equity loans, including Title I Loans, and, to a lesser extent first
lien mortgage loans, and, from time to time, commercial and multi-family real
estate loans. Loans are generally originated for sale in the secondary market
and, to a lesser extent, to be retained in its loan portfolio.

Citizens' loans are primarily originated directly with the consumer by mass
mail solicitations, advertising in local newspapers, distributing fliers to
homes and references from realtors and the local business community. To a
lesser extent, Citizens also purchases loans from loan correspondents. Each
loan is pre-approved by Citizens prior to origination or purchase utilizing
WIB's underwriting criteria and those of its investors, in the case of loans
originated for sale. Citizens solicits and processes loan requests received at
each branch location. Following analysis of the borrower's credit and cash
flows and collateral appraisals, all loans may be approved by designated
officers up to $100,000 for junior lien loans and $225,000 for first lien loans.
All loans in excess of these amounts must be approved by the Loan Committee
which currently consists of Messrs. McGuire, Williams, Kagnoff and Rich. See
"Management of WIB--Meetings and Committees of the WIB Board."

64
<PAGE>

PORTFOLIO COMPOSITION. The following information presents the composition
of the loan portfolio in dollar amounts and in percentages (before deductions
for loans held for sale, deferred fees and discounts and allowance for loan
losses) as of the dates indicated.

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------
1995 1996 MARCH 31, 1997
--------------------- ------------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Real Estate:
One to four family - first lien . . $ 6,761 15.67% $ 6,443 14.97% $5,773 14.64%
One to four family - junior lien. . 16,569 38.40 28,645 66.54 26,621 67.48
Title I . . . . . . . . . . . . . . 10,590 24.54 7,570 17.58 6,773 17.17
Commercial real estate. . . . . . . 8,121 18.82 78 0.18 - -
Multi-family. . . . . . . . . . . . 906 2.10 - - - -

--------- -------- --------
Total real estate loans. . . . . 42,947 42,736 39,167

Consumer loans . . . . . . . . . . . . 201 0.47 313 0.73 281 0.71
--------- --------- -------- ------ -------- ------

Total loans. . . . . . . . . . . $43,148 100.0% $ 43,049 100.0% $ 39,448 100.0%
--------- --------- -------- ------ -------- ------
--------- --------- -------- ------ -------- ------

Less:
Loans held for sale . . . . . . . . $ (18,960) $(30,107) (27,766)
Deferred fees and discounts . . . . (876) ( 1,045) (1,069)
Allowance for loan losses . . . . . (2,177) ( 1,392) (1,393)
--------- -------- --------

Total loans receivable, net. . . $ 21,135 $10,505 $ 9,220
--------- -------- --------
--------- -------- --------
</TABLE>

65
<PAGE>

The following table shows the composition of WIB's loan portfolio by fixed
and adjustable rate at the dates indicated.

<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------------------------
1995 1996 MARCH 31, 1997
---------------------- --------------------- ----------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
--------- --------- -------- --------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Fixed-Rate Loans:
Real Estate:
Title I. . . . . . . . . . . . . . . . . $ 10,590 24.54% $7,570 17.58% $6,773 17.17%
One to four family - first lien . . . . . 3,738 8.66 2,908 6.76 2,26 5.73
One to four family - junior lien. . . . . 16,282 37.74 28,421 66.02 26,402 66.93
--------- --------- -------- --------- --------- ---------

Total real estate loans. . . . . . . . 30,610 70.94 38,899 90.36 35,437 89.83

Consumer loans . . . . . . . . . . . . . . . 201 0.47 313 0.73 281 0.71
--------- --------- -------- --------- --------- ---------
Total fixed rate loans . . . . . . . . 30,811 71.41 39,212 91.09 35,718 90.54
--------- --------- -------- --------- --------- ---------

Adjustable-Rate Loans:
Real Estate: . . . . . . . . . . . . . . . .
One- to four-family - first lien. . . . . 287 0.66 224 0.52 3,511 8.90
One-to four-family - junior lien. . . . . 8,121 18.82 78 0.18 219 0.56
Commercial real estate. . . . . . . . . . 906 2.10 - - - -
Multi-family. . . . . . . . . . . . . . . 3,023 7.01 3,535 8.21 - -
--------- --------- -------- --------- --------- ---------
Total adjustable-rate loans. . . . . . 12,337 28.59 3,837 8.91 3,730 9.46
--------- --------- -------- --------- --------- ---------

Total loans. . . . . . . . . . . . . . $ 43,148 100.00% $43,049 100.00% $ 39,448 100.00%
--------- --------- -------- --------- --------- ---------
--------- --------- -------- --------- --------- ---------
Less:
Loans held for sale . . . . . . . . . . . $(18,690) $(30,107) $(27,766)
Deferred fees and discounts . . . . . . . (876) ( 1,045) (1,069)
Allowance for loan losses . . . . . . . . (2,177) ( 1,392) (1,393)
--------- -------- ---------
Total loans receivable, net. . . . . . $21,135 $10,505 $9,220
--------- -------- ---------
--------- -------- ---------
</TABLE>

ONE- TO FOUR-FAMILY RESIDENTIAL MORTGAGE LENDING. WIB is also engaged in
residential loan originations in its market areas. WIB currently offers
fixed-rate and adjustable rate one- to four-family mortgage loans. WIB
focuses its one- to four-family lending efforts primarily on the origination
of home equity loans secured by junior liens on owner-occupied, one- to
four-family residences. Such loans are generally originated for sale to
investors in the secondary market. At March 31, 1997, WIB held $26.6 million
in such loans, or 67.5% of total loans at such date. LTV ratios for such
loans may go up to 125% at origination or purchase, depending on the loan
program and the requirements of investors. Loans have a maximum term of 20
years, fully amortized.

WIB also originates one- to four-family first lien loans with terms of up
to 30 years in amounts generally up to 90% of the appraised value of the
security property. For loans with a LTV ratio in excess of 80%, WIB generally
requires that private mortgage insurance be obtained in an amount sufficient to
reduce WIB's exposure to 75% or less of the LTV level. WIB generally sells
fixed-rate one- to four-family first lien loans, servicing retained in the
secondary market while holding in portfolio adjustable-rate one- to four-family
first lien loans.

In underwriting one- to four-family residential real estate loans, WIB
evaluates both the borrower's ability to make monthly payments and the value of
the property securing the loan. Properties securing real estate loans made by
WIB are generally appraised by independent appraisers approved by the WIB Board.
WIB generally requires borrowers to obtain title insurance (or conducts a title
search with respect to home equity loans) and fire and property insurance
(including flood insurance, if necessary) in an amount not less than the lesser
of the amount of the loan or replacement cost for loans held in portfolio. Real
estate loans originated by WIB generally contain a "due on sale" clause allowing
WIB to declare the unpaid principal balance due and payable upon the sale of the
security property.

66
<PAGE>

FHA INSURED TITLE I PROPERTY IMPROVEMENT LOANS. Since 1984, WIB has been
involved in the origination, purchase and servicing of Title I Loans, which are
insured by the United States under a program administered by HUD. Title I Loan
originations are generated by WIB's marketing efforts, its present customers,
walk-in customers and referrals from real estate agents. Title I loans are also
purchased from other HUD-approved lenders. Under the Title I Program sponsored
by HUD, eligible borrowers finance property improvements and HUD insures WIB
against principal loss of 90% of the outstanding balance at the time of default.

Prior to 1995, Title I lending constituted WIB's principal lending
activity. However, in 1995, other high LTV home equity loan products offering
higher loan balances diminished the competitiveness of the Title I Program, in
which loans on property in which the borrower has no equity are limited to
$25,000. In addition, the FDIC had expressed its concern to Citizens that
Citizens was overly concentrated in the Title I Loan business, which amounted to
$89.7 million, or 82.3% of total loans at December 31, 1994, and increasing
delinquencies were requiring increased reserves for losses on the Title I Loans.
In June 1995, WIB sold $86.7 million in Title I Loans then held in its portfolio
to FPFG and is now emphasizing the origination of other second mortgage home
equity products for sale. In 1996, WIB originated or purchased $13.0 million in
Title I Loans, compared with $30.5 million in 1995 and $35.4 million in 1994.
At March 31, 1997, WIB held $6.8 million in Title I Loans, amounting to 17.2% of
all loans. At December 31, 1996, WIB held $7.6 million in Title I Loans,
representing 17.6% of total loans, as compared to $10.6 million at year-end 1995
and $89.7 million at year-end 1994.

WIB currently sells the insured and uninsured portions of the Title I Loans
originated with interest rates below a designated yield in the secondary market
with servicing retained on sales to Fannie Mae and servicing released on sales
to other investors. Prior to 1996, WIB generally retained the uninsured 10%
portion for its portfolio.

The maximum loan amount permitted under this program is $25,000 for a
single-family residence, up to $60,000 for a multi-family unit and $25,000 on
non-residential real estate property. No equity is required for loans for
$25,000 or less. Title I Loans are fully amortizing with maximum terms to
maturity of 20 years. WIB evaluates the borrower's credit worthiness through
the use of a consumer credit report, verification of employment and a review of
the debt-to-income ratio of the borrower, which generally may not exceed 45% of
the applicant's gross income.

WIB is obligated to pay 1/2% per year of the original principal balance on
the loan anniversary for the cost of FHA insurance. WIB passes this charge on
to the borrower. The FHA insurance is a coinsurance program in which HUD
insures 90% of the loss of the outstanding principal of each loan in the event
of default. In the event of default, WIB will incur a loss on the 10% uninsured
portion of the loan. WIB's insurance contract with HUD limits the overall
amount of insurance claims that may be paid to Citizens to 10% of the amount
disbursed, advanced or expended by WIB originating or purchasing Title I Loans.
HUD has established a reserve account in that amount and adjusts the balance as
claims are paid and new loans are originated or acquired and annually reduces
the reserve balance by 10% to provide for prepayments of loans. At March 31,
1997, the entire $6.8 million in Title I Loans held by WIB were uninsured.

COMMERCIAL AND MULTI-FAMILY REAL ESTATE LENDING. WIB has also engaged in
commercial and multi-family real estate lending in its market areas, but does
not intend to make such loans on other than an occasional basis in the future.
At March 31, 1997, WIB had no commercial real estate loans or multi-family real
estate loans.

CONSUMER LENDING. WIB engages in consumer lending to a limited extent on a
secured or unsecured basis, as well as offering loans secured by deposit
accounts. However, at March 31, 1997, WIB had only $281,000 in such loans.
Management is considering expanding these product lines in the future.

ORIGINATIONS, PURCHASES, SALES AND SERVICING OF LOANS

For the year ended December 31, 1996, WIB originated or purchased, for sale
and for portfolio, approximately $134.0 million of net loans, compared to $86.0
million and $60.0 million in 1995 and 1994, respectively. Originated or
purchased loans in the three months ended March 31, 1997 totaled $39.0 million.
Loan originations are handled by the regular employees of WIB on both a salary
and commission basis. Loans are purchased through approved correspondents.

WIB currently sells virtually all one-to four-family fixed rate, and a
substantial part of its variable rate loan production, junior lien loans and
Title I Loans, and one- to four-family fixed-rate first lien loans to secondary
market

67
<PAGE>

purchasers. WIB sold loans in aggregate amounts of $123.8 million, $53.7
million and $27.9 million during the years ended December 31, 1996, 1995 and
1994 respectively, and $41.1 million in the three months ended March 31, 1997.

When loans are sold, WIB may retain the responsibility for servicing the
loans. WIB receives a fee for performing these services. WIB serviced for
others mortgage loans amounting to $100.8 million at March 31, 1997, and $105.3
million, $118.7 million and $42.0 million at December 31, 1996, 1995 and 1994,
respectively. Included within these amounts are $17.0 million, $23.0 million,
$27.9 million and $38.0 million of Title I Loans, respectively, at March 31,
1997 and December 31, 1996, 1995 and 1994.

NON-PERFORMING ASSETS AND CLASSIFIED ASSETS

Generally, when a borrower fails to make a required payment on real
estate secured loans and other loans WIB institutes collection procedures by
telephone or mail when the loan becomes five days delinquent. For one- to
four-family home equity junior lien loans, a notice of breach is mailed 10
days after default. The customer is contacted again, by telephone, if the
delinquency is not promptly cured. In most cases, delinquencies are cured
promptly; however, if a loan secured by real estate or other collateral has
been delinquent for more than 60 days, a final letter is sent demanding
payment and the customer is requested to make arrangements to bring the loan
current. At 90 days past due, if in the opinion of management the equity in
the property warrants, a thirty-day foreclosure notice may be sent, and if
the loan is 120 days overdue, unless satisfactory arrangements have been
made, immediate repossession commences or foreclosure proceedings are
instituted. If a Title I Loan is 241 days overdue and is secured by equity
that is deemed insufficient for foreclosure a claim may be filed with HUD for
the payment of 90% of the principal and delinquent interest.

The following table sets forth WIB's loan delinquencies by type, by amount
and by percentage of type at March 31, 1997.

30-59 DAYS 60-89 DAYS 90+ DAYS
-------------------------- ---------------------------- --------------------------
% OF LOAN % OF LOAN % OF LOAN
NUMBER AMOUNT CATEGORY NUMBER AMOUNT CATEGORY NUMBER AMOUNT CATEGORY
------- ------- -------- ------- ------- -------- ------- ------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Real Estate:
Title I. . . . . . . . . . . . . . . 34 $97 1.43% 13 $42 0.62% 61 $174 2.57%
One to four family - first liens . . 1 115 1.99 - - - - - -
One to four family - junior liens. . 1 25 0.09 1 52 0.20 2 42 0.16
Commercial . . . . . . . . . . . . . - - - - - - - - -

Consumer - Non-real estate . . . . . . - - - - - - - - -
------- ------- -------- ------- ------- -------- ------- ------- ---------
Total. . . . . . . . . . . . . . 36 $237 0.60% 14 $94 0.24% 63 $216 0.55%
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------

</TABLE>

The table below sets forth the amounts and categories of non-performing
assets in WIB's loan portfolio. Loans are placed on nonaccrual status when the
loans are 90 days delinquent or when collection of principal and/or interest
become doubtful. WIB does not have any loans classified as "troubled debt
restructurings" as defined in Statement of Financial Accounting Standards
No. 15. Foreclosed assets include assets acquired in settlement of loans. As
of March 31, 1997, WIB had no accruing loans that were contractually past due 90
days or more. At December 31, 1995, WIB had one restructured loan not included
in the following table that was performing in accordance with the restructured
terms. At March 31, 1997, WIB had no restructured loans.

68
<PAGE>

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED
----------------------- --------------
1995 1996 MARCH 31, 1997
-------- ------ --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Nonaccrual loans:
Real Estate:
Title I. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 264 $ 167 $ 174
One- to four-family - first lien . . . . . . . . . . . . . . . 45 - -
One- to four-family - junior lien. . . . . . . . . . . . . . 56 16 42
Commercial real estate . . . . . . . . . . . . . . . . . . . . 396 78 -
Multi-family . . . . . . . . . . . . . . . . . . . . . . . . . - - -

Consumer - non real estate . . . . . . . . . . . . . . . . . . . - 1 -
------- ------- --------
Total nonaccrual loans . . . . . . . . . . . . . . . . . . . $ 761 $ 262 $ 216
------- ------ --------
Foreclosed assets:
Real Estate:
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . $96 $144 $176
Multi-family . . . . . . . . . . . . . . . . . . . . . . . . . - 185 184
One- to four-family - first lien . . . . . . . . . . . . . . . - 89 84
------- ------- --------

Total foreclosed assets. . . . . . . . . . . . . . . . . . $96 $418 $444
------- ------- --------

Total non-performing assets. . . . . . . . . . . . . . . . $ 857 $ 680 $ 660
------- ------- --------
------- ------- --------

Non-accruing loans as a percentage of total loans. . . . . . . 0.60% 0.67% 0.21%

Non-performing assets as a percentage of total assets. . . . . 0.55% 0.19% 0.59%

Allowance for loan losses to non-performing loans. . . . . . . 286.07% 531.30% 644.91%

</TABLE>

For the three months ended March 31, 1997 and the year ended December 31,
1996, gross interest income which would have been recorded had the nonaccrual
loans been current in accordance with their original terms amounted to $9,557
and $10,399, respectively. No interest income was recorded on nonaccrual loans
in the first three months of 1997 or in 1996. All accrued interest is reversed
when loans are placed on nonaccrual status.

Real estate owned at March 31, 1997 consists of six real estate properties
with an aggregate net book value of $444,164.

OTHER LOANS OF CONCERN. As of March 31, 1997, there were six loans
aggregating $148,000 that were not included in the table or discussed above
where known information about the possible credit problems of borrowers caused
management to have doubts as to the ability of the borrower to comply with
present loan repayment terms. The largest of such loans is a home loan secured
by a second lien on a residence in Southern California with an unpaid principal
balance of $52,000 at March 31, 1997.

These loans have been considered by management in conjunction with the
analysis of the adequacy of the allowance for loan losses.

CLASSIFIED ASSETS. Federal regulations provide for the classification of
loans and other assets such as debt and equity securities considered by the FDIC
and DOC to be of lesser quality as "substandard," "doubtful" or "loss." An
asset is considered "substandard" if it is inadequately protected by the current
net worth and paying capacity of the obligor or of the collateral pledged, if
any. "Substandard" assets include those characterized by the "distinct
possibility" that the institution will sustain "some loss" if the deficiencies
are not corrected. Assets classified as "doubtful" have all of the weaknesses
inherent in those classified "substandard," with the added characteristic that
the weaknesses present make "collection or liquidation in full," on the basis of
currently existing facts, conditions and values, "highly questionable and
improbable." Assets classified as "loss" are those considered "uncollectible"
and of such little value that their continuance as assets without the
establishment of a specific loss reserve is not warranted.

When an institution classifies problem assets as either substandard or
doubtful, it may establish general allowances for loan losses in an amount
deemed prudent by management. General allowances represent loss allowances
which have

<PAGE>

been established to recognize the inherent risk associated with lending
activities, but which, unlike specific allowances, have not been allocated to
particular problem assets. When an institution classifies problem assets as
"loss," it is required either to establish a specific allowance for losses
equal to 100% of that portion of the asset so classified or to charge-off
such amount. An institution's determination as to the classification of its
assets and the amount of its valuation allowances is subject to review by the
FDIC and the DOC, who may order the establishment of additional general or
specific loss allowances.

On the basis of management's review of its assets at December 31, 1996,
Citizens classified assets, including real estate owned, totaled $173,000 as
substandard, $35,000 as doubtful and none as loss. At March 31, 1997, $97,000 in
assets were classified as substandard, $74,000 as doubtful, and none as loss.

ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the risk
inherent in its loan portfolio and changes in the nature and volume of its loan
activity. Such evaluation, which includes a review of loans for which full
collectibility may not be reasonably assured, considers, among other matters,
the loan classifications discussed above, the estimated fair value of the
underlying collateral, economic conditions, historical loan loss experience, and
other factors that warrant recognition in providing for an adequate loan loss
allowance.

Real estate properties acquired through foreclosure are recorded at fair
value less estimated carrying costs and costs of disposition. If fair value at
the date of foreclosure is lower than the balance of the related loan, the
difference will be charged-off to the allowance for loan losses at the time of
transfer. Valuations are periodically updated by management and if the value
declines, a specific provision for losses on such property is established by a
charge to operations.

Although management believes that it uses the best information available to
determine the allowance, unforeseen market conditions could result in
adjustments and net earnings could be significantly affected if circumstances
differ substantially from the assumptions used in making the final
determination. Future additions to the allowance will be the result of periodic
loan, property and collateral reviews, as well as the level of the HUD reserve
for Title I Loans and thus cannot be predicted in advance. In addition, federal
and state regulatory agencies, as an integral part of the examination process,
periodically review the allowance for loan losses. Such agencies may require
Citizens to recognize additions to the allowance level based upon their judgment
of the information available to them at the time of their examination. At
December 31, 1996, WIB had a total allowance for loan losses of $1.4 million,
representing 531.3% of total nonperforming loans, and 3.2% of total loans. At
March 31, 1997, the total allowance was $1.4 million, representing 644.9% of
non-performing loans, and 3.5% of total loans.

70
<PAGE>

The following table sets forth an analysis of Citizens' allowance for loan
losses:

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------- --------------
1995 1996 MARCH 31, 1997
---------- ---------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . . . . . . $ 3,442 $ 2,177 $ 1,392

Charge-offs:
Title I. . . . . . . . . . . . . . . . . . . . . . . 4,422 850 127
One to four family - first trust deed. . . . . . . . 25 23 -
One to four family - junior lien . . . . . . . . . . 81 39 -
Commercial . . . . . . . . . . . . . . . . . . . . . - 108 15
Multi-family . . . . . . . . . . . . . . . . . . . . - 70 -
Non-real estate. . . . . . . . . . . . . . . . . . . 10 4 1
--------- --------- ---------
Total. . . . . . . . . . . . . . . . . . . . . . . $ 4,538 $ 1,094 $ 143
--------- --------- ---------
--------- --------- ---------
Recoveries:
Title I. . . . . . . . . . . . . . . . . . . . . . . 104 100 17
One to four family - first trust deed. . . . . . . . - 17 -
One to four family - junior lien . . . . . . . . . . 6 16 1
Commercial . . . . . . . . . . . . . . . . . . . . . - 17 -
Non-real estate. . . . . . . . . . . . . . . . . . . 5 4 1
--------- --------- ---------
Total. . . . . . . . . . . . . . . . . . . . . . . $ 115 $ 154 $ 19
--------- --------- ---------
--------- --------- ---------
Net charge-offs. . . . . . . . . . . . . . . . . . . . 4,423 940 124
Additions charged to operations. . . . . . . . . . . . 3,158 155 125
--------- --------- ---------
Balance at end of period . . . . . . . . . . . . . . . $ 2,177 $ 1,392 $ 1,393
--------- --------- ---------
--------- --------- ---------

Ratio of net charge-offs during the period to average
loans outstanding during the period . . . . . . . 6.23% 2.06% 0.28%
Ratio of net charge-offs during the period to average
non-performing assets . . . . . . . . . . . . . . . 164.61% 69.12% 18.79%

</TABLE>

71
<PAGE>

The distribution of the allowance for losses on loans at the dates
indicated is summarized as follows:

DECEMBER 31,
----------------------------------------------------
1995 1996 MARCH 31, 1997
---------------------- ---------------------- ----------------------
% TO TOTAL % TO TOTAL % TO TOTAL
AMOUNT LOANS (1) AMOUNT LOANS (1) AMOUNT LOANS (1)
------ -------- ------ -------- ------ --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Title I . . . . . . . . . . . . . $1,288 24.54% $ 954 17.58% $ 802 17.17%
One to four family - first lien . 36 15.67 26 14.97 23 14.64
One to four family - junior lien. 204 38.40 326 66.54 357 67.48
Commercial. . . . . . . . . . . . 542 18.82 34 0.18 - -
Multi-family. . . . . . . . . . . 51 2.10 - - - -
Consumer - Non-real estate. . . . 6 0.47 8 0.73 5 0.71
Unallocated . . . . . . . . . . . 50 44 206
------ ------ ------ ------ ------ ------
Total . . . . . . . . . . . . $2,177 100.00% $1,392 100.00% $1,393 100.00%
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------

</TABLE>

- --------------------

(1) Percentage is the percent of loans in each category to total loans

INVESTMENT ACTIVITIES

WIB's investments are managed in accordance with a written investment
policy adopted by the WIB Board. Generally, the investment policy of WIB is to
invest funds among various categories of investments and maturities based upon
WIB's need for liquidity, in order to generate income, to provide collateral for
borrowings, if needed, and to fulfill its asset/liability management policies.

At March 31, 1997, WIB had an investment portfolio consisting principally
of United States government and federal agency obligations. At that date, WIB's
investment securities, including mortgage-backed securities, totaled $53.0
million, or 47.3% of its total assets. It is WIB's general policy to purchase
United States Government securities and federal agency obligations and other
investment grade securities. Investments are classified as "held-to-maturity"
or "available-for-sale" in accordance with FASB 115. In December 1996, WIB sold
$24.7 million of its held-to-maturity portfolio and transferred the balance of
$2.4 million to the available-for-sale portfolio.

72
<PAGE>

The following table sets forth the composition of the available-for-sale
and held-to-maturity investment securities portfolios at the dates indicated:

DECEMBER 31,
---------------------------------------------
1995 1996 MARCH 31, 1997
-------------------- -------------------- --------------------
(IN THOUSANDS)
AMORTIZED FAIR AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE COST VALUE
--------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Investment Securities (available-for-sale):

Federal National Mortgage Association ("FNMA"). . . $22,107 $22,161 $55,962 $55,868 $32,673 $32,632
Federal Home Loan Mortgage Corporation ("FHLMC"). . 3,758 3,839 329 335 10,305 10,309
Small Business Administration ("SBA") . . . . . . . 9,907 9,925 8,396 8,315 7,754 7,702
Other Mortgages . . . . . . . . . . . . . . . . . . -- -- 2,377 2,474 2,287 2,332
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . . . . . . . . . $35,772 $35,925 $67,064 $66,992 $53,019 $52,975
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------

Investment Securities (held-to-maturity):
FNMA. . . . . . . . . . . . . . . . . . . . . . . . $ 2,204 $ 2,246 $ - $ - $ - $ -
FNMA. . . . . . . . . . . . . . . . . . . . . . . . 10,692 10,766 - - - -
FHLMC . . . . . . . . . . . . . . . . . . . . . . . 9,896 9,908 - - - -
Student Loan Marketing Association. . . . . . . . . 1,000 1,000 - - - -
U.S. Treasuries . . . . . . . . . . . . . . . . . . - - - - - -
Other Mortgages . . . . . . . . . . . . . . . . . . 762 762 - - - -
------- ------- ------ ------- ------- -------
Total . . . . . . . . . . . . . . . . . . . . . . $24,554 $24,682 $ - $ - $ - $ -
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------

</TABLE>

The composition, maturities and average yields of all investment securities
at March 31, 1997 are indicated in the following table:

MARCH 31, 1997
-----------------------------------------------------------------------------------------------
LESS THAN 1 YEAR 1 TO 5 YEARS 5 TO 10 YEARS OVER TEN YEARS
---------------- --------------- ---------------- ----------------
AMOR- AMOR- AMOR- AMOR- TOTAL TOTAL
TIZED FAIR TIZED FAIR TIZED FAIR TIZED FAIR AMORTIZED FAIR
ISSUER COST VALUE COST VALUE COST VALUE COST VALUE COST VALUE
- ------ ------ ----- ------ ----- ------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
FNMA.. . . . . . . . . . . . $29,961 $29,908 $ 1,423 $ 1,412 $ - $ - $ 1,289 $ 1,311 $32,673 $32,631
FHLMC. . . . . . . . . . . . 10,305 10,309 - - - - - - 10,305 10,309
SBA . . . . . . . . . . . . . - - - - - - 7,754 7,703 7,754 7,703
Other Mortgages. . . . . . . - - - - 602 601 1,685 1,731 2,287 2,332
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total. . . . . . . . . . $40,266 $40,217 $ 1,423 $ 1,412 $ 602 $ 601 $10,728 $10,745 $53,019 $52,975
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- ------- ------- -------

Weighted average yield . . . 5.32% 6.73% 9.43% 6.73% 5.69%

</TABLE>

WIB's investment securities portfolio at March 31, 1997, contained neither
securities of any issuer nor tax-exempt securities with an aggregate book value
in excess of 10% of WIB's stockholders' equity, excluding those issued by the
United States Government.

SOURCES OF FUNDS

GENERAL. WIB's sources of funds are proceeds from the sale of loans,
deposits, borrowings, payment of principal and interest on loans, and interest
earned on or maturation of investment securities and funds provided from the
operations.

Borrowings, including lines of credit from commercial banks, have been used
at times to compensate for deposit inflows at less than projected levels or as a
cost-effective alternative to deposits, may be used on a longer-term basis to
support expanded lending activities, and may also be used to match fund a
corresponding asset. WIB, at the parent company level, also has borrowings
consisting of unsecured notes to directors, executive officers, stockholders and
other persons. See Notes 6 and 7 to Notes to consolidated Financial Statements.

73
<PAGE>

DEPOSITS. WIB offers a variety of deposit accounts having varying ranges
of interest rates and terms. Deposits consist of passbook accounts and term
certificates of deposit. WIB only solicits deposits from the geographic area
surrounding its branch locations and may use brokers to obtain deposits. The WIB
Board has mandated that brokered deposits and deposits from governmental and
other public entities shall be limited to 5% and 10%, respectively, of total
deposits. At March 31, 1997, WIB had $99,000 in brokered deposits and $392,000
of deposits from governmental and other public entities. WIB relies primarily
on competitive pricing policies, advertising and customer service to attract and
retain these deposits.

The flow of deposits is influenced significantly by general economic
conditions, changes in money market and prevailing interest rates, and
competition.

The variety of deposit accounts offered by WIB has allowed it to be
competitive in obtaining funds and to respond with flexibility to changes in
consumer demand. WIB is susceptible to short-term fluctuations in deposit
flows, as customer are interest-rate sensitive. WIB endeavors to manage the
pricing of its deposits in keeping with its asset/liability management,
liquidity and profitability objectives. In this regard, WIB has paid slightly
higher rates than its full service competitors to attract longer-term
certificates of deposit. Based on its experience, WIB believes that its
passbook and certificate accounts are relatively stable sources of deposits.
However, the ability of WIB to attract and maintain certificates of deposit and
the rates paid on these deposits has been and will continue to be significantly
affected by market conditions.

The following table sets forth information regarding the amount of deposits
held in deposit programs offered by WIB for the periods indicated. WIB offers
no demand deposit accounts.

DECEMBER 31,
-----------------------------------------------------
1995 1996 MARCH 31, 1997
----------------------- ----------------------- -----------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Savings Deposits:
Passbook accounts. . . . . . . . . . . $ 32,930 28.83% $ 33,240 30.94% $ 33,882 35.83%
-------- -------- -------- -------- -------- --------

Certificates by rate:
2.75 - 5.49% . . . . . . . . . . . . . 17,582 15.39 21,150 19.69 17,324 18.32
5.50 - 7.49% . . . . . . . . . . . . . 63,109 55.25 52,493 48.87 42,900 45.36
7.50 - 9.49% . . . . . . . . . . . . . 187 0.16 19 0.02 - -
-------- -------- -------- -------- -------- --------

Total certificates . . . . . . . . 80,878 70.80 73,662 68.58 60,224 63.68
-------- -------- -------- -------- -------- --------
Accrued interest . . . . . . . . . . . 427 0.37 512 0.48 460 0.49
-------- -------- -------- -------- -------- --------
Total deposits . . . . . . . . . . $114,235 100.00% $107,414 100.00% $94,566 100.00%

</TABLE>

74
<PAGE>

The following table shows rate and maturity information for WIB's
certificates of deposit as of March 31, 1997:

MATURITY
----------------------------------------------------------------------------------
OVER OVER OVER OVER
3 MONTHS 3 TO 6 6 TO 12 1 YEAR 3 YEARS
OR LESS MONTHS MONTHS THROUGH 3 YEARS THROUGH 5 YEARS TOTAL
--------- -------- -------- --------------- --------------- -------
<S> <C> <C> <C> <C> <C> <C>

(DOLLARS IN THOUSANDS)
Certificates of deposit less
than $100,000 . . . . . . . . . $15,526 $6,356 $10,852 $10,660 $2,857 $46,251

Certificates of deposit less
$100,000 or more . . . . . . . 4,813 1,653 3,203 3,307 605 13,581

Public Funds (1) . . . . . . . . 198 - 99 95 - 392
------- ------- ------- ------- ------- -------
Total certificates of deposit . . $20,537 $8,009 $14,154 $14,062 $3,462 $60,224
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------

</TABLE>

(1) Deposits from governmental and other public entities.

The following table sets forth the maximum month-end balance and average
balance of WIB bank borrowings, securities sold under agreements to repurchase
and other borrowings for the periods indicated.

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED
----------------------- --------------
1995 1996 March 31, 1997
------ ------ --------------
(DOLLARS IN THOUSANDS)
Maximum Balance:
Bank borrowings . . . . . . $ 670 $ 754 $ 495
Other borrowings . . . . . 1,475 1,251 1,355

Average Balance:
Bank borrowings . . . . . . 504 672 142
Other borrowings . . . . . 1,331 1,154 1,277

The following table sets forth certain information as to WIB's bank
borrowings and other borrowings at the dates indicated.

THEE MONTHS
YEAR ENDED DECEMBER 31, ENDED
----------------------- -----------
1995 1996 MARCH 31, 1997
-------- --------- --------------
(DOLLARS IN THOUSANDS)
Bank borrowings . . . . . . $ 485 $ 495 $ -
Other borrowings . . . . . 1,251 1,228 1,355
-------- -------- --------
Total borrowings . . . . $ 1,736 $ 1,723 $ 1,355
-------- -------- --------
-------- -------- --------
Weighted average interest
rate on bank borrowings . . 10.09% 9.52% 9.50%
-------- -------- --------
-------- -------- --------
Weighted average interest
rate on other borrowings . 8.14% 8.90% 9.28%
-------- -------- --------
-------- -------- --------

75
<PAGE>

COMPETITION

WIB faces significant competition for new loans from other thrift and
loans, commercial banks, savings and loan associations, credit unions, credit
companies and mortgage bankers. Many of these competitors are much larger than
WIB and have larger branch systems and extensive advertising budgets. WIB
attempts to compensate for disadvantages that may exist by providing a high
level of personal service to borrowers and direct involvement of management to
facilitate the loan approval process.

WIB also faces competition for deposits from banks, savings and loans,
credit unions and, increasingly, from mutual funds and life insurance annuity
products. Many of WIB's competitors offer a greater array of products to
customers than WIB. WIB competes with other insured depository institutions by
offering an interest rate on deposits that is generally slightly higher than the
rates paid by most full-service financial institutions.

SUPERVISION AND REGULATION

WIB and Citizens are subject to extensive regulation and supervision under
various federal and state laws. Citizens is an industrial loan company
organized under the laws of the State of California and is subject to regulation
by the DOC, effective July 1, 1997, responsibility for the regulation of
Citizens and all industrial loan companies will be transferred to the new
California Department of Financial Institutions. The deposits of Citizens are
insured by the FDIC to the maximum extent permitted by law, which is currently
$100,000 per depositor in most cases.

California and federal law and regulations govern most aspects of the
business and operations of Citizens and WIB, including investments, reserves,
the nature and amount of any collateral for loans, maximum loans to one
borrower, the timing of availability of deposited funds, the issuance of
securities, payment of dividends, branching and expansion. Citizens is also
subject to requirements and restrictions of various consumer laws and
regulations in connection with both its lending and deposit-taking activities.

Federal and state agencies have broad enforcement powers over depository
institutions, including the power to impose substantial fines and other civil
and criminal penalties, to terminate deposit insurance and to appoint a
conservator or a receiver under a variety of circumstances.

76
<PAGE>

MANAGEMENT OF WIB

DIRECTORS AND EXECUTIVE OFFICERS

The WIB Board currently consists of five members, each of whom is also a
director of Citizens. Directors of WIB and Citizens serve one-year terms. The
directors are elected annually at each annual meeting of stockholders. Because
WIB owns all of the issued and outstanding shares of capital stock of Citizens,
directors of WIB elect the directors of Citizens.

The following table sets forth certain information regarding the directors
of WIB.

Positions(s) Term
Name Held With WIB Age Director Since Expires
- -------------------- --------------------------- --- -------------- -------
<S> <C> <C> <C> <C>
James T. Capretz Chairman of the Board and 58 1979 1997
Chief Executive Officer
Michael W. McGuire Director and President 53 1984 1997
Dr. David B. Kagnoff Director and Corporate
Vice President 59 1979 1997
Dr. James E. Rich Director and Secretary 53 1979 1997
Barry K. Williams Director 57 1979 1997

</TABLE>

The business experience of each director is set forth below.

JAMES T. CAPRETZ - Mr. Capretz has been a practicing attorney in the
Newport Beach/Irvine, California area for 25 years. He is the senior and
managing partner of Capretz & Radcliffe, a law partnership located in Newport
Beach, California. He has served as Chairman and Chief Executive Officer of WIB
and Chairman of Citizens since 1979.

MICHAEL W. MCGUIRE - Mr. McGuire has been President and Chief Executive
Officer of Citizens Thrift & Loan since 1980 and President of WIB since 1989.
As President of WIB and President and Chief Executive Officer of Citizens, Mr.
McGuire is responsible for overseeing the operations of all areas of Citizens
and WIB. Mr. McGuire is also a director of the California Association of Thrift
and Loan Companies, and a director of the Corporation Commissioners Advisory
Council for the DOC.

DR. DAVID B. KAGNOFF - Dr. Kagnoff has been a practicing pediatrician in
the Newport Beach/Irvine, California area for the last 30 years. Dr. Kagnoff is
also involved with the building and management of apartment complexes and mobile
home parks. Dr. Kagnoff also serve as a Corporate Vice President and Treasurer
of WIB.

DR. JAMES E. RICH - Dr. Rich has been a Doctor of Veterinary Medicine for
at least five years. Dr. Rich currently owns two animal hospitals, is a
licensed Real Estate Broker, and is an active broker of veterinary practices and
animal hospitals. Dr. Rich also serves as Secretary of WIB.

BARRY K. WILLIAMS - Mr. Williams has been for more than five years the
President of Williams and Associates, a real estate development, investment and
property management company with offices in both Northern and Southern
California.

DIRECTOR COMPENSATION

All directors of WIB currently receive fees of approximately $750 per
meeting. Directors of Citizens, other than Michael W. McGuire, also receive
fees of $750 per meeting for each Citizens board meeting. During fiscal year
1996, each non-employee director received additional payments of $24,000 for
serving on committees of WIB and Citizens.

Certain agreements and plans under which the forgoing persons currently
receive benefits may receive benefits in connection with the Merger are
described in "The Merger--Interests of Certain Persons in the Merger."

77
<PAGE>

MEETINGS AND COMMITTEES OF THE WIB BOARD

The WIB Board conducts its business through meetings of the WIB Board and
through activities of its committees. During the year ended December 31, 1996,
the WIB Board held 17 meetings and the Board of Directors of Citizens held 12
meetings. No incumbent director attended fewer than 75% of the total meetings
of the WIB Board and committees on which he served during this period.

WIB and Citizens have established various committees composed of certain
members of their respective WIB Board. Set forth below is a description of
their principal committees. WIB's Executive Committee acts in lieu of the full
WIB Board between meetings. The current members of the Executive Committee are
Messrs. Capretz, McGuire, Kagnoff and Rich. The Executive Committee met four
times during 1996.

The Audit Committee reviews audit reports, evaluates audit performance and
handles relations with the WIB's independent auditors to ensure effective
compliance with regulatory and internal policies and procedures. The current
members of the Audit Committee are Messrs. Capretz, Kagnoff and Rich. The
Audit Committee met two times during 1996.

Citizens Loan Committee is responsible for the review and approval of all
first lien loans in excess of $225,000 and all junior loans in excess of
$100,000 and for the overall supervision of the lending department. The current
members of the Loan Committee are Messrs. McGuire, Williams, Kagnoff and Rich.
The Loan Committee met 11 times during 1996.

EXECUTIVE OFFICERS OF WIB

The executive officers of WIB are elected annually and hold office until
their respective successors have been elected and qualified or until death,
resignation or removal by the WIB Board. The executive officers of WIB are as
follows: James T. Capretz, Chairman of the Board and Chief Executive Officer;
Michael W. McGuire, President of WIB and President and Chief Executive Officer
of Citizens; Dr. James Rich, Secretary of WIB; Dr. David B. Kagnoff, Corporate
Vice President of WIB; Gustavo Mendoza, Executive Vice President - Operations of
Citizens; Marie A. Reich, Executive Vice President and Chief Financial Officer
of Citizens; and Javier S. Llanes, Vice President, Regional Manager of Citizens.
Each of the officers of Citizens are elected annually by the Board of Directors
of Citizens.

The business experience of the executive officers who are not also
directors is set forth below.

GUSTAVO MENDOZA, AGE 60 - Mr. Mendoza is currently Executive Vice President
- - Operations of Citizens. In that capacity, Mr. Mendoza is responsible for
administering Citizens' loan policies as well as overseeing asset quality.
Prior to his position as Executive Vice President - Operations, Mr. Mendoza
served as Vice President - Operations of Citizens since 1981.

MARIE A. REICH, AGE 46 - Ms. Reich is currently Executive Vice President
and Chief Financial Officer of Citizens. In that capacity, Ms. Reich is
responsible for establishing and maintaining the accounting system of Citizens.
In addition, Ms. Reich is responsible for overseeing investments to establish
their compliance with Citizens asset/liability management policy. Ms. Reich
joined Citizens in 1985 as Controller. She was subsequently promoted to Chief
Financial Officer and Vice President in 1991 and served in that capacity until
she was promoted to her current position in 1993. Ms. Reich has also been
Secretary of Citizens since 1988.

JAVIER S. LLANES, AGE 41 - Mr. Llanes is currently Vice President,
Regional Manager of Citizens. In that capacity, he is responsible for
supervising all branch locations as well as overseeing the lending functions of
Citizens such as loan production, loan approval and loan product training. Mr.
Llanes joined Citizens in 1981 as a branch representative.

78
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation paid
or granted to the Chief Executive Officer of WIB and to the other executive
officers of WIB whose aggregate cash compensation exceeded $100,000 in fiscal
1996.

SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
-----------------------------------------
NAME AND PRINCIPAL OTHER ANNUAL ALL OTHER
POSITION YEAR SALARY BONUS (1) COMPENSATION (2) COMPENSATION (3)
- ----------------------------- ---- ------ --------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
James T. Capretz
Chairman of the Board and 1996 $ - $ - $ 43,500 $ -
Chief Executive Officer of 1995 - - 37,500 -
WIB 1994 - - 37,320 -

Michael W. McGuire 1996 185,000 121,561 12,400 882
President of WIB; President 1995 129,288 90,989 8,275 862
and Chief Executive Officer
of Citizens 1994 127,211 130,118 10,338 21,681

Javier S. Llanes 1996 62,625 45,062 3,000 155
Vice President, 1995 59,680 26,349 3,000 348
Regional Manager of
Citizens
1994 54,210 18,479 3,000 8,480
Marie A. Reich 1996 85,750 15,000 900 348
Executive Vice President 1995 77,155 12,500 900 348
and Chief Financial Officer 1994 71,273 25,000 900 12,752
of Citizens

</TABLE>

- ---------------------------
(1) All bonuses reflect payments made during the year indicated and accrued by
WIB during the preceding year.
(2) For Mr. Capretz, consists solely of fees relating to service on the WIB
Board and the board of directors of Citizens. For the other individuals,
includes auto allowance and, in the case of Mr. McGuire, fees for meetings
of the WIB Board.
(3) Consists of certain insurance premiums and, for 1994, contributions made to
the KSOP.

Certain agreements and plans under which the foregoing person currently
receive and may receive benefits in connection with or following the Merger are
discussed in "The Merger--Interests of Certain Persons in the Merger" herein.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Citizens is prohibited under California law from granting loans to
directors and officers or members of their immediate families. It is Citizens'
policy to grant loans to employees only if they are fully secured by thrift
accounts. All outstanding loans to Citizens' employees have been made in the
ordinary course of business and on the same terms and interest rates as those
prevailing at the time for comparable transactions and do not involve more than
the normal risk of collectibility.

WIB currently raises funds from time-to-time through the sale of unsecured
notes with terms of from one to two years at rates equal to three percentage
points in excess of the rate paid by Citizens on certificates of deposit with
comparable maturities. At December 31, 1996, the directors of WIB held an
aggregate of $229,000 in such notes with interest rates of between 8.75% and
10.00%.

79
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT OF WIB

As of June 25, 1997, there were approximately 135 holders of record of WIB
Common Shares.

The following table presents information to the best knowledge of
management as to each beneficial owner of more than five percent of the
outstanding WIB Common Shares and as to the shares of WIB Common Shares owned by
each director of WIB, each person named in the Summary Compensation Table above
and all directors and executive officers of WIB as a group as of June 25, 1997.
Except as otherwise described, all shares are held with sole voting and
investment power.

COMMON STOCK BENEFICIALLY OWNED(1)
----------------------------------
PERCENT OF
NAME OF BENEFICIAL OWNER NUMBER CLASS(2)
- ----------------------------------- ---------------- ----------------
James T. Capretz 127,136 10.3%
Chairman of the Board and
Chief Executive Officer of WIB
5000 Birch, West Tower, Suite 2500
Newport Beach, California 92660

Michael W. McGuire 154,158 11.9
President and Director of WIB
18302 Irvine Boulevard, Suite 300
Tustin, California 92780

Marie A. Reich 27,369 2.2
Executive Vice President and
Chief Financial Officer of Citizens
18302 Irvine Boulevard, Suite 2500
Newport Beach, California 92660

Javier S. Llanes 11,414 *
Vice President, Regional Manager of Citizens
18302 Irvine Boulevard, Suite 2500
Newport Beach, California 92260

Barry K. Williams 89,027 7.3
Director of WIB
1601 Dove Street, Suite 190
Newport Beach, California 92660

James E. Rich 126,745 10.4
Director of WIB
17526-A Von Karman
Irvine, California 92714

David B. Kagnoff 125,894 10.3
Director of WIB
1401 Avocado, Suite 802
Newport Beach, California 92660

All directors and executive officers 582,399 41.4
as a group (8 persons)

- --------------------------

(*) Less than 1%
(1) Includes shares which (i) are subject to options exercisable within 60 days
after June 25, 1997, (ii) are held in individual retirement, pension or
similar accounts and plans over which such persons may be deemed to have
voting or investment power or in family trusts, (iii) have been allocated
to such persons under the KSOP, or (iv) are owned by or for minor children.
The named persons hold options exercisable within 60 days of June 25, 1997
on the following shares: James T. Capretz (18,811), Michael W. McGuire
(90,507), Marie A. Reich (14,300), Javier S. Llanes (1,000), Barry K.
Williams (15,211), James. E. Rich (11,211) and David B. Kagnoff (15,211).

80
<PAGE>

(2) Shares which the individual has the right to acquire currently or within 60
days after April 15, 1997 by the exercise of options are deemed to be
outstanding in calculating the percentage of shares beneficially owned, but
are not deemed to be outstanding as to any other individual.

COMPARISON OF SHAREHOLDER RIGHTS

GENERAL

The rights of FPFG stockholders are currently governed by the FPFG
Articles, the FPFG Bylaws, and the NGCL. The rights of WIB shareholders are
governed by the WIB Articles, the Bylaws of WIB (the "WIB Bylaws"), and the CCC.
After the Effective Time, the rights of WIB shareholders who become stockholders
of FPFG will by governed by the FPFG Articles, the FPFG Bylaws and the NGCL. In
most respects, the rights of WIB shareholders are similar to those of FPFG
stockholders. The following is a summary of the material differences between
the rights of holders of WIB Common Shares and those of holders of FPFG Common
Stock. The following is a discussion only of those material differences between
the right of holders of FPFG Common Stock under the FPFG Articles, FPFG Bylaws
and the NGCL, on the one hand, and the rights of holders of WIB Common Shares
under the WIB Articles, the WIB Bylaws and the CCC, on the other. This summary
does not purport to be a complete discussion of, and is qualified in its
entirety by reference to the FPFG Articles, FPFG Bylaws, the WIB Articles, the
WIB Bylaws, the NGCL and the CCC.

SHAREHOLDER MEETINGS

BUSINESS AT ANNUAL MEETINGS. The FPFG Articles provide that at an annual
meeting of stockholders, only such business shall be conducted as shall have
been brought before the meeting by or at the direction of the FPFG Board or by
any stockholder of FPFG who complies with certain notice procedures. For
business to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
FPFG. A stockholder's notice to the Secretary shall set forth as to each matter
the stockholder proposes to bring before the annual meeting certain specified
information, including a brief description of the business proposed to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, the name and address of the stockholder proposing such
business, the number of shares of FPFG which are beneficially owned by the
stockholder, and any material interest of the stockholder in such business. If
the foregoing provisions are not complied with, the business not properly
brought before the meeting shall not be transacted.

Neither the WIB Articles, WIB Bylaws nor the CCC provide for similar
procedures in respect of annual meetings of WIB.

SPECIAL MEETINGS. The FPFG Bylaws permit the Chairman, President,
Secretary or, at the request in writing of the holders of not less than 50% of
all shares entitled to vote at the meeting to call a special meeting of FPFG
Stockholders. The WIB Bylaws permit the Chairman, President, the WIB Board, or
one or more shareholders not holding less than 10% of the voting power of WIB,
to call a special meeting of the WIB Shareholders.

NOTICE OF NOMINATIONS. The FPFG Articles provide that nominations for the
election of directors may be made by the Board of Directors of FPFG or a
committee appointed by the Board of Directors, FPFG or by any stockholder
entitled to vote in the election of directors generally. However, a stockholder
entitled to vote in the election of directors generally may nominate one or more
persons for election as directors at a meeting only if written notice of such
stockholder's intent to make such nomination or nominations has been delivered
to or mailed and received by the Secretary of FPFG at the principal executive
offices of FPFG not later than, with respect to an election to be held at an
annual meeting of stockholders, 90 days prior to the date one year after the
immediately preceding annual meeting of stockholders, and with respect to an
election to be held at a special meeting of stockholders, the close of business
on the tenth day following the date on which notice of such meeting is first
given to stockholders. Each such notice must set forth certain specified
information, including, the name and address of the stockholder who intends to
make the nomination and of the person or persons to be nominated, a description
of all arrangements or understandings between the stockholder and each nominee
and any other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by the stockholder and such
other information regarding each nominee proposed by such stockholder as would
be required to be included in a proxy statement filed pursuant to the proxy
rules of the Commission, had the nominee been nominated, or intended to be
nominated, by the FPFG Board. The presiding officer at the meeting may refuse
to acknowledge the nomination of any person not made in compliance with the
foregoing procedure.

81
<PAGE>

Neither the WIB Articles, WIB Bylaws nor the CCC provide for similar
procedures in respect of nominations of directors by shareholders.

PROXIES. Both the FPFG Bylaws and the WIB Bylaws allow voting by proxy or
proxies. The FPFG Bylaws specify that no such proxy shall be valid after the
expiration of six (6) months from the date of its execution, unless coupled with
an interest, or unless the person executing the proxy specifies the length of
time for which the proxy shall remain in force (which in no case may exceed
seven (7) years from the date of its execution). Any proxy duly executed is not
revoked and continues in force until revoked by another instrument or a duly
executed proxy bearing a later date. The WIB Bylaws specify that no proxy is
valid after the expiration of eleven (11) months from the date of its execution
unless otherwise provided in the proxy. Any such duly executed proxy continues
in force until revoked by the person executing it prior to the vote by a writing
delivered to WIB stating that it is revoked, or by a subsequent proxy executed
by that person, or by that person's attending the meeting and voting in person.

QUORUM. The FPFG Bylaws specify that the holders of a majority of the
stock issued and outstanding and entitled to vote in person or by proxy shall
constitute a quorum at all meetings. If, however, a quorum is not present or
represented at any meeting of the stockholders, the stockholders entitled to
vote at such meeting have the power to adjourn the meeting from time to time
until a quorum is present, at which time any business which might have been
transacted at the meeting as originally notified may be conducted at such
adjourned meeting. The WIB Bylaws specify that a majority of the shares
entitled to vote at any meeting constitutes a quorum. The shareholders present
at a meeting at which a quorum is present may continue to business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave less
than a quorum if any action taken is approved by at least a majority of the
shares required to constitute a quorum. If, however, a quorum is not present,
no business other than adjournment of the meeting may be conducted.

VOTING RIGHTS

The FPFG Bylaws provide that each outstanding share, regardless of class,
is entitled to one vote on each matter submitted to vote at a meeting, except as
limited by the FPFG Articles or the NGCL. No cumulative voting is permitted
under the FPFG Bylaws and there are no preemptive rights. The WIB Bylaws,
subject to the CCC, permit cumulative voting at any election of directors
provided the name of the candidate or candidates has been placed in nomination
prior to the voting and the shareholder has given notice of the intention to
cumulate that shareholder's votes.

The FPFG Articles expressly deny the right of stockholders to act by
written consent in lieu of a meeting. The WIB Bylaws expressly permit action to
be taken at any annual or special meeting to be taken without a meeting if the
consent of not less than the minimum number of votes necessary to authorize or
take such action were the shareholders present at a meeting is given.

AMENDMENTS TO ARTICLES OF INCORPORATION AND BYLAWS

The FPFG Articles delegate the power to adopt, alter, amend or repeal the
FPFG Bylaws exclusively to the FPFG Board, and may not be exercised by the
stockholders. The WIB Articles specify that any amendment to the WIB Articles
or WIB Bylaws must be approved by the WIB Board and approved by a majority of
the outstanding shares of each class entitled to vote on the amendment.

CERTAIN ANTITAKEOVER PROVISIONS

FPFG is subject to provisions of the NGCL that prohibit a publicly held
Nevada corporation from engaging in a broad range of business combinations with
a person who, together with affiliates and associates, owns 10% or more of the
corporation's outstanding voting shares for three years after the person became
an interested stockholder, unless the business combination is approved in
prescribed manner.

Neither the WIB Articles, WIB Bylaws nor the CCC provide for similar
treatment of business combinations.

82
<PAGE>

OTHER MATTERS

The WIB Board is not aware of any matters not set forth herein that may
come before the WIB Meeting. If, however, further business properly comes
before the meeting, the persons named in the proxies will vote the shares
represented thereby in accordance with their judgment.

LEGAL AND TAX MATTERS

Jenkens & Gilchrist, a Professional Corporation, Dallas, Texas will render
an opinion with respect to the validity of the shares of FPFG Common Stock to be
issued in connection with the Merger. King, Purtich, Holmes, Paterno &
Berliner, Los Angeles, California, will render an opinion with respect to
certain matters on behalf of WIB. KPMG Peat Marwick LLP will render an opinion
with respect to certain tax matters on behalf of WIB.

EXPERTS

The consolidated financial statements of FIRSTPLUS Financial Group, Inc.,
formerly RAC Financial Group, Inc., appearing in FPFG's Annual Report
(Form 10-K) for the year ended September 30, 1996, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.

The consolidated financial statements of WIB and subsidiaries as of
December 31, 1996 and 1995 and for each of the years in the three-year period
ended December 31, 1996 included in this Proxy Statement/Prospectus have been
audited by KPMG Peat Marwick LLP, independent auditors, as stated in their
reports appearing in this Proxy Statement/Prospectus, and have been so included
in reliance upon the report of such firm given upon their authority as experts
in auditing and accounting.

83
<PAGE>

INDEX TO FINANCIAL STATEMENTS

Independent Auditors' Report................................................F-2

Consolidated Balance Sheets at December 31, 1996 and 1995
of Western Interstate Bancorp and Subsidiaries..........................F-3

Consolidated Statements of Earnings for the Years Ended
December 31, 1996, 1995 and 1994 of Western Interstate
Bancorp and Subsidiaries................................................F-4

Consolidated Statements of Stockholders' Equity for the Years Ended
December 31, 1996, 1995 and 1994 of Western Interstate Bancorp and
Subsidiaries............................................................F-5

Consolidated Statements of Cash Flows for the Years Ended
December 31, 1996, 1995 and 1994 of Western Interstate Bancorp and
Subsidiaries............................................................F-6

Notes to Consolidated Financial Statements of Western Interstate
Bancorp and Subsidiaries................................................F-8

Condensed Consolidated Balance Sheets at March 31, 1997 and
December 31, 1996 of Western Interstate Bancorp and Subsidiaries.......F-31

Condensed Consolidated Statements of Earnings for the Three Months Ended
March 31, 1997 and 1996 of Western Interstate Bancorp and
Subsidiaries...........................................................F-32

Condensed Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1997 and 1996 of Western Interstate Bancorp and
Subsidiaries...........................................................F-33

Notes to Condensed Consolidated Financial Statements for the
Three Months Ended March 31, 1997 and 1996 of Western Interstate
Bancorp and Subsidiaries...............................................F-34

F - 1
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors of
Western Interstate Bancorp:

We have audited the accompanying consolidated balance sheets of Western
Interstate Bancorp (a California corporation) and subsidiaries as of December
31, 1996 and 1995 and the related consolidated statements of earnings,
stockholders' equity and cash flows for each of the years in three-year period
ended December 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Western Interstate
Bancorp and subsidiaries as of December 31, 1996 and 1995 and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1996 in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP

Orange County, California
February 28, 1997

F - 2
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 1996 and 1995

ASSETS 1996 1995
----------- -----------
<S> <C> <C>
Cash and cash equivalents $12,298,155 22,082,518
Interest-bearing deposits with banks 245,000 249,000
Loans receivable held for sale, at lower of cost or market
(notes 3 and 15) 30,106,908 18,960,383
Investment securities, available-for-sale at fair value (note 2) 66,992,337 35,925,416
Investment securities, held-to-maturity, fair value of
$24,681,891 at December 31, 1995 (note 2) --- 24,554,415
Loans receivable, net (note 3) 10,504,696 21,134,993
Accrued interest receivable (note 4) 445,270 849,373
Leasehold improvements and equipment (note 9) 1,051,019 742,777
Servicing rights (notes 8 and 15) 1,737,575 1,734,505
Deferred income taxes (note 11) 363,162 600,484
Income taxes receivable (note 11) --- 499,614
Real estate owned, net (note 5) 417,559 96,134
Prepaid expenses 226,395 157,807
Other assets 159,712 197,328
----------- -----------
$124,547,788 $127,784,747
----------- -----------
----------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Thrift accounts (note 10):
Passbooks $33,239,746 $32,929,964
Certificates 73,662,109 80,878,090
----------- -----------
106,901,855 113,808,054

Accrued interest payable 512,342 427,039
Notes payable (notes 6 and 7) 1,723,167 1,736,106
Accounts payable and accrued expenses 2,947,436 2,568,680
Income taxes payable (note 11) 702,441 ---
----------- -----------
Total liabilities 112,787,241 118,539,879
----------- -----------
Stockholders' equity (notes 12, 13 and 14):
Common stock, no par value. Authorized 20,000,000 shares;
issued and outstanding 1,211,156 and 1,212,543 shares
in 1996 and 1995, respectively 3,553,917 3,561,911
Securities valuation allowance, net (note 2) (41,353) 89,029
Retained earnings, appropriated by the board of directors'
restriction (note 12) 8,247,983 5,593,928
----------- -----------
Total stockholders' equity 11,760,547 9,244,868

Commitments and contingencies (notes 14, 15, 18 and 19)
Subsequent event (note 20)
----------- -----------
$124,547,788 $127,784,747
----------- -----------
----------- -----------
</TABLE>

See accompanying notes to consolidated financial statements.

F - 3
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Consolidated Statements of Earnings

Years ended December 31, 1996, 1995 and 1994

1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Interest income:
Loans, including fees and discounts $ 6,519,158 $10,152,870 $13,318,641
Investments 3,614,193 1,566,132 389,034
Cash equivalents 743,271 1,348,443 175,489
---------- ---------- ----------
Total interest income 10,876,622 13,067,445 13,883,164
---------- ---------- ----------

Interest expense on thrift accounts (note 10) 6,158,871 6,591,834 4,597,000
Interest expense on notes payable 187,639 160,742 128,327
---------- ---------- ----------
Total interest expense 6,346,510 6,752,576 4,725,327
---------- ---------- ----------
Net interest income 4,530,112 6,314,869 9,157,837

Provision for loan losses (note 3) 155,241 3,158,329 2,887,222
---------- ---------- ----------
Net interest income after
provision for loan losses 4,374,871 3,156,540 6,270,615
---------- ---------- ----------
Noninterest income:
Gain on sales of loans (notes 3 and 15) 9,340,879 6,215,434 1,724,293
Servicing fee income, net (note 15) 1,373,987 1,173,909 1,408,794
Other income 100,471 74,492 156,035
---------- ---------- ----------
Total noninterest income 10,815,337 7,463,835 3,289,122
---------- ---------- ----------

Noninterest expense:
General and administrative (note 16) 4,588,496 4,176,208 3,771,999
Salaries 5,277,848 4,665,098 3,988,525
KSOP contributions (note 14) --- --- 370,594
Occupancy expenses 584,437 563,565 522,218
Real estate owned expenses (income), net
(note 5) 515 (6,098) 245,340
---------- ---------- ----------
Total noninterest expense 10,451,296 9,398,773 8,898,676
---------- ---------- ----------
Earnings before income taxes 4,738,912 1,221,602 661,061

Income taxes (note 11) 1,963,603 499,264 274,358
---------- ---------- ----------
Net earnings $ 2,775,309 $ 722,338 $ 386,703
---------- ---------- ----------
---------- ---------- ----------

Earnings per common share:
Primary $ 1.98 $ .57 $ .34
---------- ---------- ----------
---------- ---------- ----------
Fully diluted $ 1.98 $ .57 $ .34
---------- ---------- ----------
---------- ---------- ----------

</TABLE>

See accompanying notes to consolidated financial statements.

F - 4
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity

Years ended December 31, 1996, 1995 and 1994

Securities Retained
Valuation Earnings,
Shares Common Allowance, Substantially
Outstanding Stock Net Restricted Total
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1993 1,143,174 $3,204,425 --- 4,595,009 7,799,434

Net earnings --- --- --- 386,703 386,703
Dividends Paid ($.095 per
share) --- --- --- (110,122) (110,122)
Shares issued for options
exercised (note 13) 16,000 50,080 --- --- 50,080
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1994 1,159,174 3,254,505 --- 4,871,590 8,126,095

Net earnings --- --- --- 722,338 722,338
Shares issued (note 18) 4,340 24,999 --- --- 24,999
Change in net unrealized
holding gain on securities
available-for-sale --- --- 89,029 --- 89,029
Stock redemption (note 14) (2,971) (17,113) --- --- (17,113)
Shares issued to the KSOP
(note 14) 52,000 299,520 --- --- 299,520
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1995 1,212,543 3,561,911 89,029 5,593,928 9,244,868

Net earnings --- --- --- 2,775,309 2,775,309
Change in net unrealized
holding gain on securities
available-for-sale --- --- (130,382) --- (130,382)
Stock redemption (note 14) (9,253) (53,224) --- --- (53,224)
Shares issued to KSOP
(note 14) 7,866 45,230 --- --- 45,230
Dividends paid ($.10 per
share) --- --- --- (121,254) (121,254)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1996 1,211,156 $3,553,917 (41,353) 8,247,983 11,760,547
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------

</TABLE>

See accompanying notes to consolidated financial statements.

F - 5
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 1996, 1995 and 1994

1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 2,775,309 $ 722,338 $ 386,703
Adjustments to reconcile net earnings to
net cash used in operating activities:
Depreciation and amortization 847,813 880,001 698,824
Deferred income taxes (benefit) 331,739 873,115 (879,802)
Provision for loan losses 155,241 3,158,329 2,887,222
Provision for loss on real estate owned 44,460 86,337 162,439
Gain on sale of real estate owned (69,502) (103,078) ---
Loss on disposal of leasehold
improvements and equipment 3,448 2,126 16,272
Gain on sale of loans (9,340,879) (6,215,434) (1,724,293)
Loans purchased or originated for sale, net (125,564,198) (66,088,328) (29,929,080)
Proceeds from loan sales 123,758,552 53,664,841 27,948,080
Capitalization of servicing rights (560,701) (869,209) ---
(Increase) decrease in other assets and
liabilities 2,039,245 1,752,734 (741,713)
------------ ------------ ------------
Net cash used in operating activities (5,579,473) (12,136,228) (1,175,348)
------------ ------------ ------------
Cash flows from investing activities:
Net decrease in interest-bearing deposits 4,000 197,000 196,000
Maturities and principal reductions of
investment securities 2,885,495 3,967,202 10,589,331
Purchases of investment securities
available-for-sale (44,669,405) (38,187,421) ---
Purchases of investment securities
held-to-maturity (5,035,401) (20,606,495) (10,094,988)
Proceeds from sale of investment securities
available-for-sale 15,350,922 --- ---
Proceeds from sale of investment securities
held-to-maturity 24,731,084 --- ---
Net increase in loans receivable (81,125) (7,547,749) (11,166,431)
Proceeds from sale of loans receivable 9,748,774 86,694,489 ---
Proceeds from sale of leasehold improvements
and equipment --- 2,190 1,199
Purchases of leasehold improvements
and equipment (601,872) (181,685) (451,084)
Proceeds from sale of real estate owned 511,024 360,118 ---
------------ ------------ ------------
Net cash provided by (used in)
investment activities 2,843,496 24,697,649 (10,925,973)
------------ ------------ ------------

</TABLE>

F - 6
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Cash flows from financing activities:
Net increase (decrease) in passbook accounts $ 309,782 $ (448,576) $(1,314,009)
Net increase (decrease) in certificate accounts (7,215,981) 6,585,546 9,200,886
Proceeds (repayments) from borrowings on
lines of credit 10,000 (14,112) 650,000
Proceeds from notes payable to stockholders 321,300 239,000 315,630
Repayment of notes payable to stockholders (344,239) (325,447) (600,838)
Stock purchased by ESOP 45,230 299,520 ---
Proceeds from stock issued --- 24,999 ---
Proceeds from stock options exercised --- --- 50,080
Stock redemption (53,224) (17,113) ---
Dividends paid (121,254) --- (110,122)
---------- ---------- ----------
Net cash provided by (used in)
financing activities (7,048,386) 6,343,817 8,191,627
---------- ---------- ----------
Net increase (decrease) in cash (9,784,363) 18,905,238 (3,909,694)

Cash and cash equivalents, beginning of period 22,082,518 3,177,280 7,086,974
---------- ---------- ----------
Cash and cash equivalents, end of period $12,298,155 $22,082,518 $ 3,177,280
---------- ---------- ----------
---------- ---------- ----------
Supplemental disclosure of cash flow information:
Cash paid during the year:
Interest $ 6,261,207 $ 6,573,253 $ 4,739,973
Income taxes 678,508 5,000 1,387,000
---------- ---------- ----------
---------- ---------- ----------

Supplemental disclosure of noncash information
--- transfers to real estate owned $ 807,407 $ 192,177 $ 161,024
---------- ---------- ----------
---------- ---------- ----------

</TABLE>

See accompanying notes to consolidated financial statements.

F - 7

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years ended December 31, 1996 and 1995

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Western Interstate Bancorp (the Company) was organized for the purpose of
acting as a holding company for Citizens Thrift & Loan Association (the
Association), a licensed industrial loan company, and Citizens Group, Inc.,
dba Citizens Finance (Finance), a consumer finance licensed company and a
mortgage banking licensed company. The Association is subject to the
regulatory requirements and its thrift deposits are insured by the Federal
Deposit Insurance Corporation (FDIC).

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All material intercompany items and
transactions have been eliminated in consolidation.

BASIS OF FINANCIAL STATEMENT PRESENTATION

The financial statements have been prepared in conformity with generally
accepted accounting principles. In preparing the financial statements,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the dates of the balance
sheets and revenues and expenses for the periods. Actual results could
differ significantly from those estimates.

INTEREST-BEARING DEPOSITS WITH BANKS

Interest-bearing deposits with banks consist of certificates of deposit
with initial maturities of three months or greater and less than or equal
to one year.

INVESTMENT SECURITIES

Investments are classified as "held-to-maturity," "available-for-sale" or
"trading securities." Investments are classified as "held-to-maturity" if
there is a positive intent and ability to hold those securities to
maturity. Investments held-to-maturity are reported at amortized cost,
adjusted for the accretion of discounts and amortization of premiums.
Discount accretion and premium amortization are included in interest income
using a method which approximates the level yield method. The adjusted
cost of specific securities sold is used to compute gain or loss an sales.
Debt and equity securities that are bought and held principally for the
purpose of selling them in the near term are classified as "trading
securities" and are reported at fair value, with unrealized gains and
losses included in operations. Debt and equity securities not classified
as "held-to-maturity" or "trading securities" are classified as
"available-for-sale" and are recorded at fair value, with unrealized gains
and losses excluded from operations and reported as a separate component of
stockholders' equity, net of tax effect. Investment securities
"held-to-maturity" are carried at amortized cost.

F-8

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

Investments securities "available-for-sale" are recorded at fair value,
with unrealized gains and losses reported as a separate component of
stockholders' equity, net of the tax effect. Designation of securities is
made at the time of acquisition by management. The Company has no
investments in trading securities.

LOANS RECEIVABLE

Loans are carried at face value, net of participations sold, unearned
discounts, net loan origination fees and the allowance for possible loan
losses. Interest is accrued daily on a simple-interest basis, except where
reasonable doubt exists as to the collectibility of the interest, in which
case the accrual of income amortization of fees and accretion of discounts
is discontinued. Unearned discounts, fees and costs are recognized using
the effective-interest method. Loans receivable includes direct cash loans
and real estate improvement loans insured by the Federal Housing
Administration (FHA) pursuant to Title I, Section 2 of the National Housing
Act (Title I Loans).

Loan fees and direct costs relating to loans are netted and amortized to
operations as an adjustment to yield over the respective lives of the loans
using the interest method. Net deferred loan fees are taken directly into
income when loans are sold.

In May 1993, the FASB issued Statement of Financial Accounting Standards
No. 114, "Accounting by Creditors for Impairment of a Loan" (SFAS No. 114)
and in October 1994, the FASB issued SFAS No.118, "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures" (SFAS No.
118). Under the provisions of SFAS No. 114, a loan is considered impaired
when, based on current information and events, it is probable that a
creditor will be unable to collect all amounts due according to the
contractual terms of the loan agreement. SFAS No. 114 requires creditors
to measure impairment of a loan based on the present value of expected
future cash flows discounted at the loan's effective interest rate. If the
measure of the impaired loan is less than the recorded investment in the
loan, a creditor shall recognize an impairment by recording a valuation
allowance with a corresponding charge to bad debt expense. This statement
also applies to restructured loans and eliminates the requirement to
classify loans that are in substance foreclosures as foreclosed assets
except for loans where the creditor has physical possession of the
underlying collateral but not legal title. SFAS No. 118 amends SFAS No.
114 to allow a creditor to use existing methods for recognizing interest
income on impaired loans. In addition, SFAS No. 118 amends certain
disclosure requirements of SFAS No. 114. SFAS Nos. 114 and 118 apply to
financial statements for fiscal years beginning after December 15, 1994 and
initial adoption is required to be reflected prospectively. The Company
adopted these statements effective January 1, 1995 and the effect on the
financial statements was not material.

LOANS RECEIVABLE HELD FOR SALE

Loans receivable held for sale represent loans originated by the Company
for sale to third parties. Loans receivable held for sale are stated at
the lower of aggregate cost or market. Loan fees and costs are deferred
and recognized in income when the loans are sold.

F-9

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

ALLOWANCE FOR POSSIBLE LOAN LOSSES

The allowance for possible loan losses is established through a provision
for possible loan losses. Loans are charged against the allowance for
possible loan losses when management believes that the collectibility of
the principal is unlikely. The allowance is an amount that management
believes will be adequate to absorb possible losses on existing loans that
may become uncollectible, based on evaluations of the collectibility of
loans and prior credit loss experience. The evaluations take into
consideration such factors as changes in the nature and volume of the
portfolio, overall portfolio quality, review of specific problem loans,
regulatory guidelines, adequacy of the HUD reserve and current economic
conditions that may affect the borrowers' ability to pay.

Management believes that the allowance for possible loan losses is
adequate. While management uses available information to recognize losses
on loans, future additions to the allowance may be necessary based on
changes in economic conditions. In addition, the DOC and FDIC, as an
integral part of their examination process, periodically review the
Company's allowance for possible loan losses. These agencies may require
the Company to recognize additions to the allowance based on their judgment
about information available to them at the time of their examination.

LEASEHOLD IMPROVEMENTS AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation
which is charged to expense on a straight-line basis over the estimated
useful life of the assets which range from five to ten years.

Leasehold improvements are amortized over the shorter of the term of the
applicable lease or the life of the asset.

ADVERTISING

The Company accounts for its advertising costs as nondirect response
advertising. Accordingly, advertising costs are expensed as incurred.

REAL ESTATE OWNED

Real estate owned represents real estate acquired through foreclosure or
deed in lieu of foreclosure. Real estate owned is carried at fair value,
less estimated carrying costs and costs of disposition. Cost is determined
at the date of acquisition as the result of a foreclosure sale and is equal
to the receivable balance at that date. If the cost (plus any liabilities
assumed at foreclosure) exceeds fair value less estimated selling costs,
the carrying value of the property is reduced by a charge to the allowance
for loan losses. All related carrying costs on revaluation are expensed as
incurred. Any subsequent write-downs are recognized as a valuation
allowance on real estate owned. Gains or losses on sales are recorded in
conformity with standards which apply to the accounting for sales of real
estate.

SERVICING RIGHTS

In May 1995, the FASB issued Statement of Financial Accounting Standards
No. 122 (SFAS No. 122), "Accounting for Mortgage Servicing Rights," an
amendment to Statement of Financial

F-10
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

Accounting Standards No. 65 (SFAS No. 65). In June 1995, the Company
adopted early application of SFAS No. 122. SFAS No. 122 requires an
institution that purchases or originates mortgage loans and subsequently
sells or securitizes those loans with servicing rights retained to allocate
the total cost of the mortgage loans to the mortgage servicing rights and
the loans (without the mortgage servicing rights) based on their relative
fair values. Institutions are required to assess impairment of the
capitalized mortgage servicing portfolio based on the fair value of those
rights on a stratum-by-stratum basis with any impairment recognized through
a valuation allowance for each impaired stratum. Capitalized mortgage
servicing rights should be stratified based upon one or more of the
predominant risk characteristics of the underlying loans such as loan type,
size, note rate, date of origination, term and/or geographic location.

The Company elected to retroactively implement SFAS No. 122 as of January
1, 1995. As a result, the Company capitalized servicing rights that
resulted from sales of receivables with servicing retained where a clearly
defined value of those rights was available. Also, at the time of
implementation, the Company established no impairment valuation allowance
based upon an evaluation performed on the entire servicing rights portfolio
under the provisions of the statement. As SFAS No. 122 prohibits
retroactive application to 1994, the Company's financial statement
reporting for 1994 was accounted for under the original SFAS No. 65.

In order to determine the fair value of the servicing rights, the Company
uses market prices under comparable servicing sale contracts, when
available, or alternatively, it uses a valuation model that calculates the
present value of future cash flows. Assumptions used in the valuation
model include market discount rates and anticipated prepayment speeds. The
prepayment speeds are determined from market sources for fixed-rate
mortgages with similar coupons and prepayment reports for comparable ARM
loans. In addition, the Company uses market comparables for estimates of
the cost of servicing per loan, float value, an inflation rate, ancillary
income per loan and default rates.

The Company amortizes the servicing rights in proportion to and over the
period of estimated future net servicing income.

For the purpose of measuring impairment, the Company stratified the
capitalized mortgage servicing rights using the type of loan as the primary
risk. Impairment is measured utilizing fair value.

Purchased servicing rights (PSR) represents the price paid to acquire
rights to service mortgage loans for investors. Purchased servicing rights
are being amortized in proportion to and over the period of estimated net
servicing revenues.

Excess servicing fee receivables (ESFR) result from the sale of
participating interests in Title I Loans on which the Company retains
servicing rights. The amount of ESFR is determined by computing the
difference between the weighted average yield of the loans sold and the
yield guaranteed to the purchaser, adjusted for a normal servicing fee
rate. Normal servicing fees are generally defined as the total of the
minimum servicing fee which comparable mortgage issuers typically require
servicers to charge and other costs born by the Company, if any. The
resulting excess servicing fee receivables are recorded as a gain in the
year of sale equal to the present value of net cash flows to be received in
future years over the estimated life of the loans, adjusted for anticipated
prepayments. The present value of the excess servicing fees is calculated
using market prepayment, default and interest rate

F-11
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

assumptions. The gain is recorded net of cash expenditures, including
discounts on the sale of the loans, and the recognition of deferred amounts
as expense, including net deferred origination costs and purchase premiums
related to the acquisition of the loans. The ESFR is amortized using the
interest method; such amortization offsets the servicing fee income
recorded on Title I Loans.

PSR and ESFR are periodically reviewed by management based upon many
factors, including the historical prepayment activity of the related loans
and management's estimates of the remaining future cash flows to be
generated by the underlying Title I Loans. At any point in time in which
PSR and ESFR are reviewed, an estimate of the future prepayment rate of the
underlying Title I Loans is made by management. If the actual future
prepayment rate proves to be higher than the estimate, impairment of PSR
and ESFR occurs. PSR and ESFR are adjusted downward when an impairment is
evident based upon management's review and revised estimates.

LOAN SALES

Gains or losses resulting from sales of loans are recognized at the date of
settlement and are based on the difference between the selling price and
carrying value of the related loans sold. Such gains and losses may be
increased or decreased by the amount of any servicing released premiums
received. Nonrefundable fees and direct costs associated with the
origination of loans are deferred and recognized when the loans are sold.

When selling participating interests in real estate improvement loans, the
Company retains an interest equivalent to 10% (uninsured portion) of the
principal balance sold and subordinates its interest with respect to losses
to the extent of the retained portion. Sales of loans that involve the
sale of a loan or pool of loans with disproportionate credit and prepayment
risk require the allocation of cost based on the relative fair values of
the portion sold and the portion retained on the date that such loans were
acquired or the date of sale, whichever is most practical. In addition,
the present value of the excess servicing fees is calculated using market
prepayment, default and interest rate assumptions.

INCOME TAXES

Income taxes are provided by the Company based on income reported for
financial accounting purposes. The Company and its subsidiaries are
included in the consolidated tax return and are parties to the tax-sharing
agreement. In accordance with the agreement, the consolidated taxes
payable are allocated between the Company and its subsidiaries based an
their respective contributions to consolidated taxable income.

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

F-12

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

EARNINGS PER COMMON SHARE

Primary earnings per share is computed based upon the weighted average
number of shares outstanding during the period plus dilutive effects of
common shares contingently issuable from stock options. Fully diluted
earnings per share reflect additional dilution related to common stock
equivalents due to the use of the market price at the end of the period,
when higher than the average price for the period. Common stock
equivalents are excluded from the computations of earnings per share for
all periods presented due to their antidilutive effect.

The weighted average number of shares outstanding are as follows:

December 31
-----------------------------------------
1996 1995 1994
----------- ----------- ----------
Primary 1,410,106 1,267,409 1,150,626
Fully diluted 1,410,106 1,267,409 1,150,626
----------- ----------- ----------
----------- ----------- ----------

STATEMENTS OF CASH FLOWS

For the purposes of this statement, cash and cash equivalents include cash
on hand and Federal funds sold.

Cash and cash equivalents consisted of the following at:

December 31
----------------------------
1996 1995
------------- -------------
Cash and certificates of deposit $ 3,098,155 $ 2,982,518
Federal funds sold 9,200,000 19,100,000
------------- -------------
$ 12,298,155 $ 22,082,518
------------- -------------
------------- -------------

CURRENT ACCOUNTING PRONOUNCEMENTS

Prior to January 1, 1996, the Company accounted for its stock option plan
in accordance with the provisions of Accounting Principles Board (APB)
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. As such, compensation expense would be recorded on the
date of grant only if the current market price of the underlying stock
exceeded the exercise price. On January 1, 1996, the Company adopted
Statement of Financial Accounting Standards No. 123 (SFAS No. 123),
"Accounting for Stock-Based Compensation," which permits entities to
recognize as expense over the vesting period the fair value of all
stock-based awards on the date of grant. Alternatively, SFAS No. 123 also
allows entities to continue to apply the provisions of APB Opinion

F-13
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

No. 25 and provide pro forma net income and pro forma earnings per share
disclosures for employee stock option grants made in 1995 and future years
as if the fair-value-based method defined in SFAS No. 123 had been applied.
The Company has elected to continue to apply the provisions of APB Opinion
No. 25 and provide the pro forma disclosure provisions of SFAS No. 123.

In June 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS No. 125), "Accounting for Transfer and
Servicing of Financial Assets and Extinguishment of Liabilities." SFAS No.
125 addresses the accounting for all types of securitization transactions,
securities lending and repurchase agreements, collateralized borrowing
arrangements and other transactions involving the transfer of financial
assets. SFAS No. 125 distinguishes transfers of financial assets that are
sales from transfers that are secured borrowings. SFAS No. 125 is
generally effective for transactions that occur after December 31, 1996,
and it is to be applied prospectively. SFAS No. 125 requires the
allocation of the total cost of mortgage loans sold to the mortgage loans
sold (servicing released), interest-only and retained certificates and
servicing rights on their relative fair values. Under SFAS No. 125 the
interest-only and retained certificates and servicing rights are assessed
for impairment based upon the fair value of those rights. The
pronouncement also requires the additional disclosure about the
interest-only and retained certificates in securitizations and the
accounting for these assets at fair value in accordance with Statement of
Financial Accounting Standards No. 115. Management believes the adoption
of SFAS No. 125 on January 1, 1997 will not have a material impact on the
Company's operations.

RECLASSIFICATIONS

Certain amounts in prior years have been reclassified to conform to the
1996 presentation.

(2) INVESTMENT SECURITIES

The amortized cost and estimated fair values of investment securities
available-for-sale are as follows:

<TABLE>
<CAPTION>
December 31, 1996
---------------------------------------------------------

Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ----------- ----------- -----------

<S> <C> <C> <C> <C>
Federal National Mortgage
Association $ 55,962,076 --- 93,745 55,868,331

Federal Home Loan Mortgage
Corporation 392,202 6,319 --- 335,521
Small Business Association 8,395,320 --- 80,726 8,314,594
United Savings Participation
Certificates 1,175,849 76,430 --- 1,252,279
Other investments 1,201,191 27,556 7,135 1,221,612
------------ ----------- ----------- -----------
$ 67,063,638 110,305 181,606 66,992,337
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------

</TABLE>

F-14

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

The Company recorded net unrealized losses of $41,353 as a separate
component of stockholders' equity calculated as the gross unrealized loss
on investment securities available-for-sale of $71,301, net of the tax
effect of $29,948.

December 31, 1995
--------------------------------------------------------

Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ----------- ---------- -----------

<S> <C> <C> <C> <C>
Federal National Mortgage
Association $ 22,107,078 53,746 --- 22,160,824
Federal Home Loan Mortgage
Corporation 3,758,314 81,191 --- 3,839,505
Small Business Association 9,906,526 18,561 --- 9,925,087
------------ ----------- ---------- -----------
$ 35,771,918 153,498 --- 35,925,416
------------ ----------- ---------- -----------
------------ ----------- ---------- -----------

</TABLE>

The Association recorded net unrealized gains of $89,029 as a separate
component of stockholders' equity calculated as the gross unrealized gains
on investment securities available-for-sale of $153,498, net of the tax
effect of $64,469.

The maturities of investment securities available-for-sale at December 31,
1996 are as follows:

Amortized Fair
Cost Value
------------- -------------

Due in 1 year or less $ 53,111,835 $ 53,000,485
Due after 1 through 5 years 1,794,591 1,795,509
Due after 5 through 10 years --- ---
Due after 10 years 12,157,212 12,196,343
------------- -------------
$ 67,063,638 $ 66,992,337
------------- -------------
------------- -------------

During the year ended December 31, 1996, the Association sold certain
investments from its held-to-maturity portfolio. The unamortized cost on
the sale date was $24,730,085 which yielded a loss of $138,595. Management
sold the securities to increase liquidity.

F-15
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

December 31, 1995
---------------------------------------------------------

Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------ ------------ ------------ -----------

<S> <C> <C> <C> <C>
Federal National Mortgage
Association $ 2,203,317 42,178 -- 2,245,495
Government National Mortgage
Association 10,691,866 74,505 -- 10,766,371
Student Loan Marketing
Association 1,000,691 -- 891 999,800
Federal Home Loan Mortgage
Corporation REMIC 9,896,118 11,684 -- 9,907,802
Mortgage Pass Through 762,423 -- -- 762,423
------------ ------------ ------------ -----------
$ 24,554,415 128,367 891 24,681,891
------------ ------------ ------------ -----------
------------ ------------ ------------ -----------

</TABLE>

There were no sales of investment securities held-to-maturity during the
years ended December 31, 1995 and 1994.

During the year ended December 31, 1996, the Association transferred
investment securities in the amount of $2,426,949 to available-for-sale and
recognized an unrealized gain of $46,945 as an adjustment to the securities
valuation allowance. At December 31, 1996, the unrealized gain on these
securities was $96,851.

(3) LOANS RECEIVABLE

Receivables consist of the following at December 31:

1996 1995
-------------- -------------
Multifamily $ -- 906,323
Commercial 77,955 8,120,997
Title I 7,569,921 10,590,417
Real Estate - first liens 6,443,033 6,760,584
Real estate - junior liens 28,644,609 16,569,370
Conditional sales contracts 4,047 4,902
Other loans 309,348 195,551
-------------- ------------
43,048,913 43,148,144
-------------- ------------
Less:
Receivable held for sale 30,106,908 18,960,383
Unearned discounts, fees and costs 1,045,379 875,710
Allowance for loan losses 1,391,930 2,177,058
-------------- ------------
$ 10,504,696 21,134,993
-------------- ------------
-------------- ------------

F-16

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

The following table identifies the Company's total recorded investment in
impaired loans by type at December 31, 1996 and 1995:

1996 1995
------------ ---------
Nonaccrual loans- commercial $ 77,955 396,200
------------ ---------
------------ ---------
Restructured loans - commercial $ -- 497,428
------------ ---------
------------ ---------

The related impairment valuation allowance at December 31, 1995 was
$134,044 which is included as part of the allowance for loan losses in the
accompanying balance sheet. The provision for losses and any related
recoveries are recorded as part of the provision for loan losses in the
accompanying consolidated statements of earnings.

The average recorded investment in impaired loans for the years ended
December 31, 1996 and 1995 was $662,511 and $893,628, respectively. The
amount of interest income recorded on impaired loans for the year ended
December 31, 1996 and 1995 was $40,833 and $38,136, respectively.

The Company's primary service areas are Orange, Sacramento, Contra Costa
and Riverside counties; however, the Company extends credit to customers
throughout California, Arizona and Nevada. At December 31, 1996, 47% of
total Title I and real estate loans were concentrated in Southern
California.

The FHA insurance on Title I loans is a coinsurance program in which the
U.S. Department of Housing and Urban Development (HUD) insures 90% of the
loss of the outstanding principal of each loan in the event of default. In
the event of default, the Company will incur a loss an the 10% uninsured
portion of a loan. HUD charges the Company a fee of .50% per annum of the
original balance for each loan it insures. In most cases, this fee is
passed through to the borrower. The Company's insurance contract with HUD
limits the overall amount of insurance claims that may be paid to the
Company to 10% of the amount disbursed, advanced or expended by the Company
originating or purchasing Title I loans. HUD has established a reserve
account in that amount and adjusts the balance as claims are paid and new
loans are originated or acquired. At December 31, 1996, the Company had no
reserve account available to insure Title I loans of approximately
$24,706,848, of which the Association has a participating interest in
$5,758,577.

Loans on which the accrual of interest has been discontinued amounted to
$236,813, $760,902 and $5,456,204 at December 31, 1996, 1995 and 1994,
respectively. If these loans had been current throughout their terms,
interest income would have increased approximately $10,399, $21,734 and
$129,318 for 1996, 1995 and 1994, respectively.

F-17

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

Activity in the allowance for loan losses is as follows:

DECEMBER 31
-----------------------------------------
1996 1995 1994
------------ ------------ ------------

Balance, beginning of year $ 2,177,058 3,441,615 1,707,376
Provision for loan losses 155,241 3,158,329 2,887,222
Recoveries 154,254 115,302 68,607
Charge-offs (1,094,623) (4,538,188) (1,221,590)
----------- ----------- -----------
Balance, end of year $ 1,391,930 2,177,058 3,441,615
----------- ----------- -----------
----------- ----------- -----------

During the year, the Company sold commercial loans receivable for approximately
$9.7 million resulting in no gain or loss.

(4) ACCRUED INTEREST RECEIVABLE

Accrued interest receivable at December 31, 1996 and 1995 is summarized as
follows:

1996 1995
------------ ----------

Interest on investments $ 288,349 503,941
Interest on loans 156,921 345,432
---------- -------
$ 445,270 849,373
---------- -------
---------- -------

(5) REAL ESTATE OWNED

Real estate acquired through foreclosure is summarized as follows:

DECEMBER 31
---------------------------
1996 1995
----------- ---------
Properties:
Acquired in settlement of loans $ 428,748 102,271
Less allowance for estimated losses (11,189) (6,137)
----------- ---------
$ 417,559 96,134
----------- ---------
----------- ---------

Changes in the allowance for losses on real estate owned is as follows:

DECEMBER 31
-----------------------------------
1996 1995 1994
--------- --------- ---------
Balance, beginning of period $ 6,137 220,283 57,844
Add provisions 44,460 86,337 162,439
Less charge-offs (39,408) (300,483) --
------- ------- -------
Balance, end of period $11,189 6,137 220,283
------- ------- -------
------- ------- -------

F-18

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

Summary of real estate owned expenses (income) is as follows:

1996 1995 1994
------------- ----------- ----------
Rental income $ (105,467) (32,219) (32,992)
Rental expenses 131,024 42,862 115,893
Gain on sales (69,502) (103,078) --
Provision for losses 44,460 86,337 162,439
---------- -------- --------
$ 515 (6,098) 245,340
---------- -------- --------
---------- -------- --------

(6) NOTES PAYABLE

Notes payable at December 31, 1996 and 1995 is summarized as follows:

1996 1995
----------- ----------

<S> <C> <C>
A $700,000 revolving line of credit expiring in April 1996
which the Company intends to renew, interest due monthly
at Wall Street prime rate plus 1.25% (8.25% at
December 31, 1996), secured by the stock of the
Association $ 495,000 485,000
Unsecured notes payable to stockholders and to other persons
due at varying dates through January 1999 and bearing
interest at rates ranging from 7.50% to 10.0% 1,228,167 1,245,245
Unsecured notes payable bearing interest at 8% -- 5,861
---------- ----------
$ 1,723,167 1,736,106
----------- ----------
----------- ----------
</TABLE>

(7) INDEBTEDNESS TO RELATED PARTIES

Changes in unsecured notes payable to related parties consist of the
following:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------------
1996 1995
------------- ------------
<S> <C> <C>
Balance, beginning of period $ 286,378 207,000
Add proceeds from notes payable 103,000 128,378
Less payments on notes payable (231,378) (49,000)
--------- --------
Balance, end of period $ 158,000 286,378
--------- --------
--------- --------

</TABLE>

F-19

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(8) SERVICING RIGHTS

An analysis of servicing rights is as follows:

DECEMBER 31
---------------------------------------------
1996 1995 1994
--------------- ------------- -------------
<S> <C> <C> <C>
Mortgage servicing rights:
Balance, beginning of year $ 713,778 -- --
Gain on sales 560,701 869,209 --
Amortization (166,312) (155,431) --
----------- ----------- ------------
Balance, end of year $ 1,108,167 713,778 --
----------- ----------- ------------
Purchased servicing rights:
Balance, beginning of year 423,268 673,200 904,130
Amortization (185,270) (249,932) (230,930)
----------- ----------- ------------
Balance, end of year 237,998 423,268 673,200
----------- ----------- ------------
Excess servicing fee receivables:
Balance, beginning of year 597,459 809,379 1,010,181
Amortization (206,049) (211,920) (200,802)
----------- ----------- ------------
Balance, end of year 391,410 597,459 809,379
----------- ----------- ------------
$ 1,737,575 1,734,505 1,482,579
----------- ----------- ------------
----------- ----------- ------------

</TABLE>

(9) LEASEHOLD IMPROVEMENTS AND EQUIPMENT

Leasehold improvements and equipment are recorded at cost and consist of
the following at December 31:

1996 1995
------------ ----------
<S> <C> <C>
Leasehold improvements $ 397,663 347,962
Furniture and equipment 2,322,956 1,823,423
Automobiles 24,961 24,961
----------- -----------
2,745,580 2,196,346
Accumulated depreciation and amortization (1,694,561) (1,453,569)
----------- -----------
$1,051,019 742,777
----------- -----------
----------- -----------

</TABLE>

F-20

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

(10) THRIFT ACCOUNTS

Thrift accounts at December 31, 1996 and 1995 are summarized as
follows:

1996 1995
------------- -----------
Passbook accounts $ 33,239,746 32,929,964
------------- -----------
Term certificate accounts:
Certificates under $100,000 53,270,434 62,710,601
Certificates of $100,000 or more 20,391,675 18,167,489
------------- -----------
Total term certificates accounts 73,662,109 80,878,090
------------- -----------
$ 106,901,855 113,808,054
------------- -----------
------------- -----------

Interest expense on thrift accounts for the years ended December 31,
1996, 1995 and 1994 is summarized as follows:

1996 1995 1994
------------ --------- ---------
Passbook accounts $ 1,704,646 1,418,581 1,388,576
Term certificate accounts 4,454,225 5,173,253 3,208,424
------------ --------- ---------
$ 6,158,871 6,591,834 4,597,000
------------ --------- ---------
------------ --------- ---------

(11) INCOME TAXES

The income taxes (benefit) consists of the following:

YEAR ENDED DECEMBER 31
-----------------------------------------------
1996 1995 1994
----------- --------- ----------
Current:
Federal $ 1,448,508 (375,851) 806,988
State 183,358 2,000 347,172
----------- --------- ----------
1,631,866 (373,851) 1,154,160
----------- --------- ----------
Deferred:
Federal 68,109 671,200 (598,265)
State 263,628 201,915 (281,537
----------- --------- ----------)
331,737 873,115 (879,802)
----------- --------- ----------
$ 1,963,603 499,264 274,358
----------- --------- ----------
----------- --------- ----------

F-21

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

Income taxes attributable to earnings before the cumulative effect of the
accounting change differed from the amounts computed by applying the
Federal income tax rate of 34% to pretax earnings as a result of the
following:

YEAR ENDED DECEMBER 31
-----------------------------------
1996 1995 1994
----------- ------- -------
Computed "expected" tax expense $ 1,611,220 415,345 224,761
State income taxes, net of
Federal income tax benefit 353,049 87,299 43,319
Others, net (666) (3,380) 6,278
----------- ------- -------
$ 1,963,603 499,264 274,358
----------- ------- -------
----------- ------- -------

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1996 and 1995 are as follows:

1996 1995
----------- -----------
Deferred tax assets:
Allowance for possible credit losses $ 632,000 845,236
State taxes allowed for Federal purposes 133,000 --
Excess servicing fees receivables -- 93,858
Accrual for tax purposes, not deductible 68,000 --
Other 42,162 62,000
--------- ---------
875,162 1,001,094
Deferred tax liabilities:
Depreciation (60,000) (60,000)
Gain on loan sales (452,000) (322,000)
State taxes allowed for Federal purposes -- (18,610)
--------- -------
Net deferred income tax asset $ 363,162 600,484
--------- -------
--------- -------

Based on the Company's current and historical pretax earning for
significant items, management believes it is more likely than not that
the Company will realize the benefit of the existing net deferred tax
asset at December 31, 1996. Management believes the existing net
deductible temporary differences will reverse during periods in which
the Company generates net taxable income; however, there can be no
assurance that the Company will generate any earnings or any specific
level of continuing earnings in future years. Certain tax planning or
other strategies could be implemented, if necessary, to supplement
income from operations to fully realize recorded tax benefits.

(12) CAPITAL REQUIREMENTS AND REGULATORY MATTERS OF THE ASSOCIATION

State regulations require industrial loan companies not to exceed a
defined ratio of outstanding thrift accounts in relation to
stockholder's equity less retained earnings restricted as to
distribution and certain intangible assets. The Association's ratio
has been established at 20 to 1 for the years ended December 31, 1996
and 1995. In addition, state regulations require the Association to
maintain a minimum capital stock of $1,250,000 plus a portion of
retained earnings restricted as to distribution.

F-22

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

FDICIA was signed into law on December 19, 1991. Regulations
implementing the prompt corrective action provision of FDICIA became
effective on December 19, 1992. In addition to the prompt corrective
action requirements, FDICIA includes significant changes to the legal
and regulatory environment for insured depository institutions,
including reductions in insurance coverage for certain kinds of
deposits, increased supervision by the Federal regulatory agencies,
increased reporting requirements for insured institutions and new
regulations concerning internal controls, accounting and operations.

The prompt corrective action regulations define specific capital
categories based on an institution's capital ratios. The capital
categories, in declining order, are "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized"
and "critically undercapitalized." Institutions categorized as
"undercapitalized" or worse are subject to certain restrictions
including the requirement to file a capital plan with its primary
Federal regulator, prohibitions on the payment of dividends and
management fees, restrictions on executive compensation and increased
supervisory monitoring, among other things. Other restrictions may be
imposed on the institution either by its primary Federal regulator or
by the FDIC, including requirements to raise additional capital, sell
assets or sell the entire institution.

The table below presents the Association's capital ratios at
December 31, 1996 as compared to minimum regulatory requirements for an
institution to be considered "adequately capitalized" and "well
capitalized."

The Association's actual capital amounts and ratios as of December 31,
1996 are presented in the table.

<TABLE>
<CAPTION>
To be well capitalized under
For capital adequacy prompt corrective action
Actual purposes provisions
-------------------------- ------------------------ -------------------------
Amount Ratio Amount Ratio Amount Ratio
------------ ---------- ------------ -------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total capital (to risk-
weighted assets) $13,725,490 23.7% $4,643,797 8.0% $ 5,804,746 10.0%
Tier 1 capital (to
average assets) 12,999,897 10.3% 5,034,148 4.0% 6,292,684 5.0%
Tier 1 capital (to risk-
weighted assets) 12,999,897 22.4% 2,321,898 4.0% 3,482,848 6.0%
---------- ----- --------- ---- --------- ----
---------- ----- --------- ---- --------- ----

</TABLE>

An institution is deemed to be "critically undercapitalized" if it has
a tangible equity ratio of 2% or less.

The following table reconciles the Association's capital in accordance
with generally accepted accounting principles to the Association's
risk-based capital as of December 31, 1996:

<TABLE>
<CAPTION>
<S> <C>
Capital in accordance with general accepted accounting principles $ 12,958,544
Adjustments for tangible and core capital 41,353
------------
Total Tier 1 capital 12,999,897
Adjustments for risk-based capital - allowance for general loan losses (1) 725,593
------------
Total risk-based capital $ 13,725,490
------------
------------

</TABLE>

(1) Limited to 1.25% of risk-weighted assets.

F-23
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

At December 31, 1996, the Association's Board of Directors has designated
approximately $10,900,000 of the Association's stockholder's equity as
unavailable for distribution.

(13) STOCK OPTION PLAN

The Company has adopted a qualified incentive stock option plan under which
95,336 shares of common stock were reserved for officers and key employees of
the Company and its subsidiaries. Options were granted at prices not less than
the fair market value of the stock at the date of grant. Outstanding options
are exercisable immediately and expire in 2006.

The Company also has a nonqualified stock option plan under which 257,419 shares
of common stock were reserved for directors, officers and key employees of the
Company and its subsidiaries. Options were granted at prices not less than the
fair market value of the stock at the date of grant. Outstanding options are
exercisable immediately and expire from 2002 to 2013.

A summary of stock option transactions under the plans for the years ended
December 31, 1996, 1995 and 1994 follows:

1996 1995 1994
---------------------- ------------------------ ----------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
OPTION NUMBER OPTION NUMBER OF OPTION NUMBER
PRICE OF SHARES PRICE SHARES PRICE OF SHARES
-------- ----------- ----------- ----------- ---------- ----------

<S> <C> <C> <C> <C> <C> <C>
Options outstanding,
beginning of year $ 3.52 198,136 $ 3.52 198,136 $ 3.49 214,136
Granted -- -- -- -- -- --
Exercised -- -- -- -- -- --
Canceled 5.11 (1,000) -- -- 3.13 (16,000)
------ -------- --------- ------- ------ -------
Options outstanding and
exercisable, end of year $ 3.51 197,136 $ 3.52 198,136 $ 3.52 198,136
------ -------- --------- ------- ------ -------
------ -------- --------- ------- ------ -------

</TABLE>

(14) EMPLOYEE STOCK OWNERSHIP PLAN

Effective January 1, 1988, the Company established an employee stock
ownership plan (ESOP) covering substantially all employees of the
Company and its subsidiaries. The Company converted the ESOP during
1995 to a KSOP. Company contributions (whether in cash or stock) are
determined annually by the Board of Directors in an amount not to
exceed the maximum allowable as an income tax deduction. The employees
can contribute cash to the KSOP. The maximum amount that an employee
could contribute for 1996 was $9,500. On termination of employment,
the employees have an option to redeem stock or receive cash from KSOP.
The contributions approved by the Board of Directors were $0, $0 and
$370,594 for 1996,1995 and 1994, respectively. The KSOP acquired 7,866
and 52,000 shares of the Company during 1996 and 1995, respectively.
There were no shares of the Company acquired by the KSOP during 1994.
At December 31, 1996, KSOP owns 276,460 shares (22.8%) of the Company.

During 1996, fully vested terminated employees exercised their option
and redeemed 9,253 shares for cash of $53,224.

(15) LOAN SERVICING AND SALES ACTIVITIES

Loan serving and sales activities are summarized as follows:

F-24
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------
1996 1995 1994
------------- ----------- -----------
<S> <C> <C> <C>
Loans serviced for others $ 105,307,686 118,701,865 42,044,453
------------- ----------- -----------
------------- ----------- -----------

Balance sheet information:
Loans held for sale 30,106,908 18,960,383 6,536,896
------------- ----------- -----------
------------- ----------- -----------
Excess servicing fee receivable 391,410 597,459 809,379
------------- ----------- -----------
------------- ----------- -----------
Purchased servicing rights 237,998 423,268 673,200
------------- ----------- -----------
------------- ----------- -----------
Mortgage servicing rights 1,108,167 713,778 --
------------- ----------- -----------
------------- ----------- -----------

Statement of earnings information:
Servicing fee income 1,931,618 1,791,192 1,840,526
Amortization of:
Excess servicing fees (206,049) (211,920) (200,802)
Purchased mortgage servicing
rights (185,270) (249,932) (230,930)
Mortgage servicing rights (166,312) (155,431) --
------------- ----------- -----------
Servicing fee income, net $ 1,373,987 1,173,909 1,408,794
------------- ----------- -----------
------------- ----------- -----------
Gain on sale of loans $ 9,340,879 6,215,434 1,724,293
------------- ----------- -----------
------------- ----------- -----------

Statement of cash flow information:
Loans originated, net $(125,564,198) (66,088,328) (29,929,080)
------------- ----------- -----------
------------- ----------- -----------
Loans sold $ 133,507,326 140,359,329 27,948,080
------------- ----------- -----------
------------- ----------- -----------

</TABLE>

The Company originated Title I loans, certain second trust deeds, Small
Business Administration guaranteed loans and conforming mortgage loans,
which depending upon whether the loans meet the Company's investment
objectives may be sold in the secondary market or to other private
investors. The servicing of these loans may or may not be retained by
the Company. Indirect nondeferrable origination and servicing costs
for loan servicing and sales activities cannot be presented as these
operations are integrated with and not separable from the origination
and servicing of portfolio loans and, as a result, cannot be accurately
estimated.

Title I loans serviced for investors at December 31, 1996, 1995 and
1994 were approximately $22,980,373, $27,892,000 and $38,014,000,
respectively. The Company also subserviced Title I loans for investors
which were approximated $83,900,000 and $86,950,000 at December 31,
1996 and 1995, respectively. There were no loans subserviced for
investors at December 31, 1994.

Included in loans serviced and subserviced for others are conforming
one-to-four first lien loans. Related fiduciary funds held by the
Company in non-interest bearing accounts totaled approximately
$2,543,000 and $2,214,000 at December 31, 1996 and 1995, respectively.

(16) GENERAL AND ADMINISTRATIVE EXPENSES

YEAR ENDED DECEMBER 31
----------------------------------
1996 1995 1994
--------- --------- ---------

Advertising and promotion $ 956,556 843,565 690,319
Recording fees 500,009 365,555 220,398
Data processing 358,798 324,963 284,840
Insurance and bond premiums 315,255 295,944 330,800
Offering expenses -- 277,870 150,000
Telephone 286,984 269,794 272,177

F-25
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

Depreciation 290,182 262,718 267,092
Legal and accounting 303,166 231,154 164,405
Office supplies 249,627 202,381 195,225
FDIC & DOC assessments 10,933 161,622 282,422
Director fees 188,250 134,750 154,500
Travel, conferences and entertainment 106,257 111,596 118,941
Other administrative expenses 1,022,479 694,296 640,880
----------- --------- ---------
$ 4,588,496 4,176,208 3,771,999
----------- --------- ---------
----------- --------- ---------

(17) DISCLOSURE ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of Statement of
Financial Accounting Standards No. 107 (SFAS No. 107), "Disclosures
about Fair Value of Financial Instruments." The estimated fair value
amounts have been determined using available market information and
appropriate valuation methodologies. However, considerable judgment is
necessarily required to interpret market data to develop the estimates
of fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts that could be realized in a
current market exchange. The use of different market assumptions or
estimation methodologies may have a material impact an the estimated
fair value amounts.

Fair value information related to financial instruments is as follows:

DECEMBER 31, 1996
--------------------------
CARRYING FAIR
FINANCIAL INSTRUMENT VALUE VALUE
----------------------------------- ------------ ----------
Cash and cash equivalents $ 12,298,155 12,298,155
Certificates of deposit 245,000 245,000
Investment securities
available-for-sale 66,992,337 66,992,337
Loans receivable 40,611,604 41,750,177
Passbooks 33,239,746 33,239,746
Certificates 73,662,109 73,786,348
------------ ----------
------------ ----------

CASH AND CASH EQUIVALENTS

The carrying amount for cash approximates fair value because these
instruments are demand deposits and do not present unanticipated
interest rate or credit concerns. The carrying amount of Federal funds
sold approximates fair value because these are overnight deposits and
do not present unanticipated interest rate or credit concerns.

CERTIFICATES OF DEPOSIT

The carrying amount approximates fair value because these certificates
have maturities of one year or less and do not present unanticipated
interest rate for credit concerns.

INVESTMENT SECURITIES

The fair value of investment securities is estimated based on quoted
market prices.

F-26
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

LOANS RECEIVABLE

The fair value of loans receivable is estimated by a method that
discounts the future cash flows using the current rates at which
similar loans would be made to borrowers with similar credit ratings
and maturities.

DEPOSITS

For passbooks, fair value is the amount reported as payable in the
financial statements as such amounts are payable on demand. For
certificates, fair value is estimated using the rates currently offered
for deposits of similar remaining maturities.

(18) TRANSACTIONS WITH AFFILIATES, DIRECTORS AND OFFICERS

During 1996, 1995 and 1994, in the normal course of business, the
Company paid $47,985, $32,430 and $30,659, respectively, in legal fees
to a law firm in which one of the Association's directors is a partner.

For the year ended December 31, 1996, the chief executive officer has
entered into a new contract which provides a bonus of 15% to 100% of
the base salary based on certain financial performance achieved by the
Company.

Prior to January 1, 1996, the chief executive officer had a contract
which provided for a bonus of 10% of the Company's subsidiaries'
after-tax net income, less the bonus amounts for the previous year,
provided after-tax net income is at least $200,000. Approximately
$185,000, $103,000 and $86,000 were expensed under the new and old
agreement for 1996, 1995 and 1994, respectively.

(19) COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

The Company leases space under various noncancelable operating lease
agreements which expire at various dates through January 1999. Total
rental expense included in the statements of operations for the years
ended December 31, 1996, 1995 and 1994 is $542,028, $522,657 and
$487,500, respectively.

The total future minimum lease commitments under noncancelable
operating leases at December 31, 1996 are as follows:

December 31:
1997 $ 557,544
1998 466,115
1999 216,796
2000 45,228
2001 30,152
-----------
$ 1,315,835
-----------
-----------

LITIGATION

The Company is involved in certain litigation which, in the opinion of
management and the Company's legal counsel, will not have a material
adverse effect on the Company's financial position.

F-27

<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

SALE OF COMMERCIAL LOANS RECEIVABLE

Subsequent to the year end, the buyer of the Company's commercial loans
receivable (described in note 3) requested the Company to repurchase two
loans totaling $732,223 of the approximately $9.7 million of commercial
loans sold to them in December 1996. In the opinion of management, the
allowance for possible loan losses is sufficient to cover any potential
exposure for losses relating to these loans.

(20) SALE TO FIRSTPLUS FINANCIAL GROUP, INC.

On February 19, 1997, the Company entered into an "Agreement and Plan of
Merger" with FIRSTPLUS Financial Group, Inc., formerly named RAC Financial
Group, Inc. (the Acquiror), providing for the acquisition of 100% of
outstanding shares of the Company in exchange for the right to receive pro
rata common shares of the Acquiror based an two times the book value of the
Company. The merger is subject to approval of state and Federal regulators
and the transaction is expected to be completed soon after approval by
state and Federal regulators.

The Company has retained a Financial Advisor (the Advisor) to the Company
to advise it with respect to the Agreement between the Acquiror and the
Company. The Company has agreed to pay a "Business Combination Fee" equal
to 1% for the aggregate purchase price to the Advisor for services
rendered.

(21) (PARENT ONLY) FINANCIAL INFORMATION

The following is condensed information as to the financial condition,
results of operations and cash flows of Western Interstate Bancorp only.

CONDENSED BALANCE SHEETS

DECEMBER 31
-------------------------
ASSETS 1996 1995
------------ -----------
Cash $ 3,548 3,053
Investment in subsidiaries 13,039,594 10,635,280
Income taxes receivable 623,777 415,705
Deferred income taxes 35,389 35,389
------------ ----------
$ 13,702,308 11,089,427
------------ ----------
------------ ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Notes payable $ 1,723,167 1,736,106
Accounts payable and accrued expenses 218,594 108,453
------------ ----------
Total liabilities 1,941,761 1,844,559
------------ ----------
Stockholders' equity:
Common stock 3,553,917 3,561,911
Retained earnings, substantially restricted 8,206,630 5,682,957
------------ ----------
Total stockholders' equity 11,760,547 9,244,868
------------ ----------
$ 13,702,308 11,089,427
------------ ----------
------------ ----------

F-28
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

CONDENSED STATEMENTS OF EARNINGS

YEAR ENDED DECEMBER 31
------------------------------------------
1996 1995 1994
------------- ------------- -----------
Equity in earnings of subsidiaries $ 3,108,696 $ 1,075,427 $ 832,189
Other income 75,273 75,248 80,628
Interest expense (171,170) (160,027) (126,546)
Offering costs -- (277,870) (150,000)
KSOP contributions -- -- (370,594)
Other expenses (478,908) (274,848) (263,625)
----------- --------- ---------
Earnings before benefit for income
taxes 2,533,891 437,930 2,052
Benefit for income taxes (241,418) (284,408) (384,651)
----------- --------- ---------
Net earnings $ 2,775,309 $ 722,338 $ 386,703
----------- --------- ---------
----------- --------- ---------

F-29
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

CONDENSED STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31
--------------------------------------------
1996 1995 1994
-------------- ------------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 2,775,309 722,338 386,703
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Equity in earnings of subsidiaries (3,108,696) (1,075,427) (832,189)
Dividends received 574,000 233,000 442,587
Increase in net other assets and liabilities (97,931) (121,724) (264,619)
----------- ---------- --------
Net cash provided by (used in) operating
activities 142,682 (241,813) (267,518)
----------- ---------- --------

Cash flows from financing activities:
Proceeds from notes payable to stockholders 321,300 325,444 315,630
Repayment of notes payable to stockholders (344,239) (261,003) (600,838)
Stock issued -- 24,999 --
Stock redemption (53,224) (17,113) --
Proceeds from (repayment of) line of credit 10,000 (165,000) 650,000
Dividends paid (121,254) -- (110,122)
Stock purchased by ESOP 45,230 299,520 --
Proceeds from stock options exercised -- -- 50,080
----------- ---------- --------
Net cash (used in) provided by financing activities (142,187) 206,847 304,750
----------- ---------- --------
Net increase (decrease) in cash 495 (34,966) 37,232
Cash and equivalents at beginning of year 3,053 38,019 787
----------- ---------- --------
Cash and equivalents at end of year $ 3,548 3,053 38,019
----------- ---------- --------
----------- ---------- --------

</TABLE>

F-30
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

March 31, December 31,
Assets 1997 1996
-------------- ---------------

<S> <C> <C>
Cash and cash equivalents $17,727,851 $12,298,155
Interest-bearing deposits with banks 245,000 245,000
Loans receivable held for sale, at lower of cost or market (note 3) 27,766,040 30,106,908
Investment securities, available-for-sale at fair value (note 2) 52,974,998 66,992,337
Loans receivable, net (note 3) 9,220,122 10,504,696
Accrued interest receivable 404,578 445,270
Leasehold improvements and equipment 1,074,281 1,051,019
Servicing rights 1,633,979 1,737,575
Deferred income taxes 280,612 363,162
Real estate owned, net 444,164 417,559
Prepaid expenses 193,914 226,395
Other assets 170,096 159,712
------------- ------------

$ 112,135,635 $ 124,547,788
------------- -------------
------------- -------------

Liabilities and Stockholders' Equity

Thrift accounts (note 4)
Passbooks $ 33,881,799 $ 33,239,746
Certificates 60,224,181 73,662,109
------------- -------------
94,105,980 106,901,855

Accrued interest payable 459,680 512,342
Notes payable 1,355,167 1,723,167
Accounts payable and accrued expenses 2,542,931 2,947,436
Income taxes payable 738,236 702,441
------------- -------------

Total liabilities 99,201,994 112,787,241
------------- -------------

Stockholders' equity:
Common stock, no par value. Authorized 20,000,000 shares; issued and
outstanding 1,211,156 shares 3,553,917 3,553,917
Securities valuation allowance, net (25,316) (41,353)
Retained earnings, substantially restricted 9,405,040 8,247,983
------------- -------------

Total stockholders' equity 12,933,641 11,760,547
------------- -------------

$ 112,135,635 $ 124,547,788
------------- -------------
------------- -------------

</TABLE>

See accompanying notes to condensed consolidated financial statements.

F-31
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Condensed Consolidated Statement of Earnings

THREE MONTHS ENDED MARCH 31
----------------------------
1997 1996
-------------- -----------

Interest income:
Loans, including fee discounts $ 1,487,064 $ 1,317,097
Investments 833,376 960,508
Cash equivalents 143,725 242,711
----------- ---------

Total interest income 2,464,165 2,520,316
----------- ---------

Interest expense on thrift accounts (note 4) 1,362,502 1,600,188
Interest expense on notes payable 33,011 51,103
----------- ---------

Total interest expense 1,395,513 1,651,291
----------- ---------

Net interest income 1,068,652 869,025

Provision for loan losses 125,000 101,798
----------- ---------

Net interest income after provision for loan losses 943,652 767,227
----------- ---------

Noninterest income:
Gain on sales of loans 3,520,044 1,758,738
Servicing fee income, net 339,719 360,043
Other income 32,667 8,121
----------- ---------

Total noninterest income 3,892,430 2,126,902
----------- ---------

Noninterest expenses:
General and administrative 1,225,857 878,621
Salaries 1,400,981 1,172,055
Occupancy Expenses 149,010 140,710
Real estate owned expenses (income), net 65,379 (32,052)
----------- ---------

Total noninterest expenses 2,841,227 2,159,334
----------- ---------

Earnings before income taxes 1,994,855 734,795

Income taxes 837,798 309,919
----------- ---------

Net earnings $ 1,157,057 $ 424,876
----------- ---------
----------- ---------

Earnings per common share:
Primary $ 0.82 $ 0.35
----------- ---------
----------- ---------
Fully diluted $ 0.82 $ 0.35
----------- ---------
----------- ---------

See accompanying notes to condensed consolidated financial statements.

F-32
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flow

<TABLE>
<CAPTION>
Three months ended March 31
---------------------------------
1997 1996
--------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,157,057 $ 424,876
Adjustments to reconcile net earnings to net cash used in operating
activities:
Depreciation and amortization 187,774 209,636
Deferred income taxes 98,587 1,022
Provision for loan losses 125,000 101,798
Provision for loss on real estate owned 36,350 1,850
Gain on sale of real estate owned --- (41,370)
Gain on sale of loans (3,520,044) (1,758,7
Loans purchased or originated for sale, net (39,030,727) (18,939,162)
Proceeds from loan sales 41,072,337 23,579,279
(Increase) decrease in other assets and liabilities (358,583) 502,036
------------ ------------
Net cash provided by (used in) operating activities (232,249) 4,081,500
------------ ------------
Cash flows from investing activities:
Net decrease in interest-bearing deposits --- (95,000)
Maturities and principal reductions of investment securities 54,041,927 3,223,326
Purchases of investment securities available-for-sale (40,024,588) (1,694,064)
Purchases of investment securities held-to-maturity --- (3,225,000)
Net increase in loans receivable 4,915,921 648,441
Purchases of leasehold improvements and equipment (107,440) (143,164)
Proceeds from sale of real estate owned --- 137,504
------------ ------------

Net cash provided by (used in) investing activities 18,825,820 (1,147,957)
------------ ------------

Cash flows from financing activities:
Net increase in passbook accounts 642,053 5,294,365
Net increase (decrease) in certificate accounts (13,437,928) (8,000,863)
Proceeds (repayments) from borrowings on lines of credit (495,000) 215,000
Proceeds from notes payable to stockholders 213,000 90,000
Repayment of notes payable to stockholders (86,000) (190,050)
Dividends paid --- (121,254)
------------ ------------

Net cash used in financing activities (13,163,875) (2,712,802)
------------ ------------

Net increase in cash 5,429,696 220,741

Cash and cash equivalents, beginning of period 12,298,155 22,082,518
------------ ------------

Cash and cash equivalents, end of period $ 17,727,851 $ 22,303,259
------------ ------------
------------ ------------

Supplemental disclosure of cash flow information:
Cash paid during period:
Interest $ 1,488,175 $ 1,689,555
Income taxes 654,177 --
------------ ------------
------------ ------------

Supplemental disclosure of non-cash information:
- transfer to real estate owned $ 62,995 $ 43,880
------------ ------------
------------ ------------

See accompanying notes to condensed consolidated financial statements.
</TABLE>

F-33
<PAGE>
WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(1) BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ended March 31,
1997 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1997. For further information, refer to the
consolidated financial statements and footnotes thereto for the year ended
December 31, 1996 included elsewhere herein.

RECENT ACCOUNTING DEVELOPMENTS

In June 1996, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS No. 125), "Accounting for Transfer and
Servicing of Financial Assets and Extinguishment of Liabilities." SFAS No. 125
addresses the accounting for all types of securitization transactions,
securities lending and repurchase agreements, collateralized borrowing
arrangements and other transactions involving the transfer of financial assets.
SFAS No. 125 distinguishes transfers of financial assets that are sales from
transfers that are secured borrowings. SFAS No. 125 is generally effective for
transactions that occur after December 31, 1996, and it is to be applied
prospectively. SFAS No. 125 requires the allocation of the total cost of
mortgage loans sold to the mortgage loans sold (servicing released),
interest-only and retained certificates and servicing rights, based on their
relative fair values. Under SFAS No. 125 the interest-only and retained
certificates and servicing rights are assessed for impairment based upon the
fair value of those rights. The pronouncement also requires the additional
disclosure about the interest-only and retained certificates in securitizations
and the accounting for these assets at fair value in accordance with Statement
of Financial Accounting Standards No. 115. The Company adopted SFAS No. 125 on
January 1, 1997 and it did not have a material impact on the Company's
operations.

In February 1997, the FASB issued Statement of Financial Accounting Standards
No. 128, (FASB No. 128), "Earnings Per Share." FASB No. 128 supersedes APB
Opinion No. 15, (APB 15), "Earnings Per Share" and specifies the computation,
presentation and disclosure requirements for earnings per share (EPS) for
entities with publicly held common stock or potential common stock. FASB No.
128 was issued to simplify the computation of EPS and to make the U.S. standard
more compatible with the EPS standards of other countries and that of the
International Accounting Standards Committee (IASC). It replaces the
presentation of primary EPS with a presentation of basic EPS and fully diluted
EPS with diluted EPS.

Basic EPS, unlike primary EPS, excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. Diluted EPS is computed
similarly to fully diluted EPS under APB No. 15.

FASB No. 128 is effective for financial statements for both interim and annual
periods ending after December 15, 1997. Earlier application is not permitted.
After adoption, all prior-period EPS data presented shall be restated to conform
with FASB No. 128. The Company has determined that this statement will increase
the earnings per share computation under Basic EPS as compared to primary EPS.

FASB No. 129, Disclosure of Information about Capital Structure, is effective
for financial statements for periods ending after December 15, 1997. It is not
expected that the issuance of FASB No. 129 will require significant revision of
prior disclosure since the Statement lists required disclosures that had been
included in a number of previously existing separate statements and opinions.

F-34
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(2) INVESTMENT SECURITIES

The amortized cost and estimated fair values of investment securities
available-for-sale are as follows:

March 31, 1997
-----------------------------------------------------------
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
-------------- ------------- ------------- -------------

<S> <C> <C> <C> <C>
Federal National Mortgage Association $ 32,672,744 $ 22,052 $ 63,229 $32,631,567
Federal Home Loan Mortgage
Corporation 10,304,998 4,287 ---- 10,309,285
Small Business Association 7,753,573 ---- 51,031 7,702,542
United Savings Participation Certificates 1,122,852 51,539 ---- 1,174,391
Other investments 1,164,482 5,794 13,063 1,157,213
----------- --------- --------- ----------

$ 53,018,649 $ 83,672 $ 127,323 $52,974,998
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------

</TABLE>
The Company recorded net unrealized losses of $25,316 as a separate component of
stockholders' equity calculated as the gross unrealized loss on investment
securities available-for-sale of $43,651, net of the tax effect of $18,335.

F-35
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements, Continued

December 31, 1996
-------------------------------------------------------------
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
-------------- ------------ ------------- -------------

Federal National Mortgage Association $ 55,962,076 $ ---- $ 93,745 $ 55,868,331
Federal Home Loan Mortgage
Corporation 329,202 6,319 ---- 335,521
Small Business Association 8,395,320 ---- 80,726 8,314,594
United Savings Participation Certificates 1,175,849 76,430 ---- 1,252,279
Other investments 1,201,191 27,556 7,135 1,221,612
---------- ---------- ---------- -----------

$ 67,063,638 $ 110,305 $ 181,606 $ 66,992,337
------------ ----------- ----------- ------------
------------ ----------- ----------- ------------

</TABLE>
The Association recorded net unrealized losses of $41,353 as a separate
component of stockholders' equity calculated as the gross unrealized losses on
investment securities available-for-sale of $71,301, net of the tax effect of
$29,948.

The maturities of investment securities available-for-sale at March 31,
1997 are as follows:

Amortized Fair
cost value
--------------- --------------
Due in 1 year or less $ 40,266,276 $ 40,217,600
Due after 1 through 5 years 1,422,653 1,412,386
Due after 5 through 10 years 601,686 600,844
Due after 10 years 10,728,034 10,744,168
------------ ------------

$ 53,018,649 $ 52,974,998
------------ ------------
------------ ------------

F-36
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements, Continued

(3) LOANS RECEIVABLE

Receivables consist of the following at March 31, 1997 and December 31,
1996:

March 31, December 31
1997 1996
-------------- -------------

Commercial $ ----- $ 77,955
Title I 6,773,022 7,569,921
Real estate - first liens 5,773,295 6,443,033
Real estate - junior liens 26,620,917 28,644,609
Conditional sales contracts ---- 4,047
Other loans 280,748 309,348
------------- -----------

39,447,982 43,048,913

Less:
Receivables held for sale 27,766,040 30,106,908
Unearned discounts, fees and costs 1,068,413 1,045,379
Allowance for loan losses 1,393,407 1,391,930
------------- -----------

$ 9,220,122 $10,504,696
------------- -----------
------------- -----------

Activity in the allowance for loan losses is as follows:

March 31 December 31,
1997 1996
------------ ------------

Balance, beginning of period $ 1,391,930 $ 2,177,058
Provision for loan losses 125,000 155,241
Recoveries 18,944 154,254
Charge-offs (142,467) (1,094,623)
----------- -----------

Balance, end of period $ 1,393,407 $ 1,391,930
----------- -----------
----------- -----------

F-37
<PAGE>

WESTERN INTERSTATE BANCORP
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements, Continued

(4) THRIFT ACCOUNTS

Thrift accounts at March 31, 1997 and December 31, 1996 are summarized as
follows:

March 31 December 31,
1997 1996
------------ -------------

Passbook accounts $ 33,881,799 $ 33,239,746
------------ -------------

Term certificate accounts:
Certificates under $100,000 46,642,921 53,270,434
Certificates of $100,000 or more 13,581,260 20,391,675
------------ -------------

Total term certificate accounts 60,224,181 73,662,109
------------ -------------

$ 94,105,980 $ 106,901,855
------------ -------------
------------ -------------

Interest expense on thrift accounts for the three months ended March 31, 1997
and 1996 is summarized as follows:

1997 1996
------------ -------------

Passbook accounts $ 388,879 $ 418,568
Term certificate accounts 973,623 1,181,620
---------- -----------

$ 1,362,502 $ 1,600,188
----------- -----------
----------- -----------

F-38

<PAGE>

APPENDIX A

AGREEMENT AND PLAN OF MERGER

DATED AS OF FEBRUARY 19, 1997

AMONG

RAC FINANCIAL GROUP, INC.
WESTERN INTERSTATE ACQUISITION, INC.

AND

WESTERN INTERSTATE BANCORP

<PAGE>

AGREEMENT AND PLAN OF MERGER

<TABLE>

SECTION PAGE NO.
- ------- --------
<S> <C>
1. Transactions on or Prior to the Closing Date.......................................... 1
1.1 The Merger..................................................................... 1
1.2 Conversion of Stock............................................................ 2
1.3 Shareholders' Meeting.......................................................... 5
2. Closing............................................................................... 5
3. Representations and Warranties of the Company......................................... 5
3.1 Organization and Qualification; Subsidiaries................................... 6
3.2 Capitalization................................................................. 7
3.3 Financial Condition............................................................ 7
3.4 Tax Matters.................................................................... 9
3.5 Litigation and Claims; Regulatory Compliance................................... 10
3.6 Properties and Assets.......................................................... 11
3.7 Loans, Etc. ................................................................... 14
3.8 Insurance...................................................................... 14
3.9 Contracts and Other Instruments................................................ 15
3.10 Employee Benefit Plans......................................................... 16
3.11 Officers, Directors and Employees; Compensation of and Indebtedness
to and from Officers, Directors, Stockholders and Employees.................. 17
3.12 Agreement Not in Breach of Certain Instruments................................. 18
3.13 Approvals...................................................................... 18
3.14 No Undisclosed Liabilities..................................................... 18
3.15 Disclosure..................................................................... 18
3.16 Brokerage...................................................................... 19
3.17 Authorization of Agreement..................................................... 19
3.18 Proxy Statement, Etc........................................................... 19
4. Representations and Warranties of the Acquiror........................................ 20
4.1 Organization................................................................... 20
4.2 Authority...................................................................... 20
4.3 Brokerage...................................................................... 20
4.4 Issuance of Common Stock....................................................... 20
4.5 Acquiror Disclosure Documents.................................................. 20
4.6 Registration Statement, Etc. .................................................. 20
4.7 No Material Adverse Effect..................................................... 21
4.8 Litigation, Etc. .............................................................. 21
4.9 Violations of Law.............................................................. 21
4.10 Agreement Not in Breach of Certain Instruments................................. 21
4.11 Approvals...................................................................... 21
4.12 Certain Changes................................................................ 21
5. Covenants and Agreements of the Company............................................... 21
5.1 Articles of Incorporation and Bylaws........................................... 22
5.2 Existence and Rights; Loan Practices........................................... 22
5.3 Transactions Affecting Business and Properties of the Company.................. 22
5.4 Negotiations................................................................... 23
5.5 Access and Information Before the Closing...................................... 24
5.6 Current Information............................................................ 24
5.7 Consents....................................................................... 24

A-i
<PAGE>

5.8 Contracts...................................................................... 24
5.9 Insurance...................................................................... 25
5.10 No Default..................................................................... 25
5.11 Compliance with Laws........................................................... 25
5.12 Registration Statement......................................................... 25
5.13 Pooling........................................................................ 25
5.14 Amendment to Employment Agreement.............................................. 25
5.15 Affiliates..................................................................... 25
5.16 Resignations................................................................... 26
5.17 Annual Financial Statements.................................................... 26
5.18 Quarterly and Monthly Financial Statements..................................... 26
5.19 Supplements to Disclosure Schedules............................................ 26
5.20 Covenants Not to Compete....................................................... 26
6. Covenants and Agreements of the Acquiror.............................................. 27
6.1 Current Information............................................................ 27
6.2 Listing........................................................................ 27
6.3 Consents....................................................................... 27
6.4 Registration Statement......................................................... 27
6.5 Proxy Statement................................................................ 28
6.6 Pooling........................................................................ 28
6.7 Representations and Warranties................................................. 28
6.8 Affiliates..................................................................... 28
7. Conditions to Obligations of the Company.............................................. 28
7.1 Correctness of Representations and Warranties.................................. 28
7.2 Performance of Covenants and Agreements........................................ 28
7.3 Opinion of Counsel for Acquiror................................................ 29
7.4 Additional Closing Documents................................................... 29
7.5 No Legal Bar................................................................... 30
7.6 Listing........................................................................ 30
7.7 Shareholder Approval........................................................... 30
7.8 Registration Statement......................................................... 30
7.9 Acquiror MAE................................................................... 30
7.10 HSR Act........................................................................ 30
7.11 Tax-Free Opinion............................................................... 31
8. Conditions to Obligations of Acquiror................................................. 31
8.1 Correctness of Representations and Warranties.................................. 31
8.2 Performance of Covenants and Agreements........................................ 31
8.3 Opinion of Counsel for the Company............................................. 31
8.4 Additional Closing Documents................................................... 31
8.5 No Legal Bar................................................................... 32
8.6 Material Adverse Effect........................................................ 32
8.7 Listing........................................................................ 32
8.8 Pooling Letter................................................................. 33
8.9 Amendment to Employment Agreement.............................................. 33
8.10 Registration Statement......................................................... 33
8.11 Shareholder Approval........................................................... 33
8.12 Existing Stock Rights.......................................................... 33
8.13 Resignations................................................................... 33
8.14 Company Affiliate Agreements................................................... 33
8.15 Dissenters..................................................................... 33
8.16 Accountant's Letter............................................................ 33
8.17 HSR Act........................................................................ 33

A-ii
<PAGE>

8.18 Regulatory Approval............................................................ 33
8.19 Director Agreements............................................................ 33
9. Termination of Agreement.............................................................. 34
9.1 Events of Termination.......................................................... 34
9.2 Fees, Expenses and Other Payments.............................................. 35
10. Miscellaneous Provisions.............................................................. 37
10.1 Construction; Venue, Etc. ..................................................... 37
10.2 Notices........................................................................ 37
10.3 Assignment..................................................................... 38
10.4 Amendments and Waivers......................................................... 38
10.5 Survival....................................................................... 39
10.6 Attorneys' Fees................................................................ 39
10.7 Binding Nature of Agreement.................................................... 39
10.8 Entire Agreement............................................................... 39
10.9 Severability................................................................... 39
10.10 Counterparts; Section Headings................................................. 39
10.11 Public Announcements........................................................... 39
10.12 Best Efforts; Further Assurances; Cooperation.................................. 40
10.13 Tail Policy.................................................................... 40
10.14 Employee Credit For Service.................................................... 41
</TABLE>

A-iii
<PAGE>

SCHEDULES

Schedule 3.1(a)................................. Organization and Qualification
Schedule 3.1(b)................................................... Subsidiaries
Schedule 3.2(b).......................................... Existing Stock Rights
Schedule 3.3(c)............................................ Financial Condition
Schedule 3.4....................................................... Tax Matters
Schedule 3.5(a)..................................................... Litigation
Schedule 3.6(a)............................................ Real Property Liens
Schedule 3.6(b).................................. Defaults on Real Estate, Etc.
Schedule 3.6(c)............................................ Hazardous Materials
Schedule 3.6(d).......................................... Environmental Actions
Schedule 3.8(d)...................................................... Insurance
Schedule 3.9(a)...................................................... Contracts
Schedule 3.9(b).......................................... Defaults on Contracts
Schedule 3.9(c).............................................. Bids or Proposals
Schedule 3.10........................................... Employee Benefit Plans
Schedule 3.11(a)................................................ Officers, Etc.
Schedule 3.11(b).................................... Related Party Indebtedness
Schedule 3.14...................................................... Liabilities
Schedule 3.15....................................................... Disclosure
Schedule 3.16........................................................ Brokerage

EXHIBITS

Exhibit A - Company Shareholders and Percentage Interest
Exhibit B - Capitalization
Exhibit C - Form of Amendment to Employment Agreement
Exhibit D - Form of Opinion of Counsel for Acquiror
Exhibit E - Form of Opinion of Counsel for Company

A-iv
<PAGE>
AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of February
19, 1997, by and among RAC Financial Group, Inc., a Nevada corporation (the
"Acquiror"), Western Interstate Acquisition, Inc., a Nevada corporation and
wholly owned subsidiary of Acquiror ("Acquisition"), and Western Interstate
Bancorp, a California corporation (the "Company").

R E C I T A L S

A. Acquiror and the Company desire to cause Acquisition to merge with and
into the Company in accordance with articles of merger and a certificate of
approval of merger, pursuant to the Nevada General Corporation Law (the "NGCL")
and the California Corporations Code (the "CCC"), respectively, and upon the
terms and conditions of this Agreement.

B. For reference, "Percentage Interest" of any of the holders (the
"Shareholders") of the Company's common stock, par value $.01 per share (the
"Company Common Stock") means with respect to the shares of Company Common Stock
(the "Common Shares") issued and outstanding at the Effective Time, a number,
expressed as a percentage, obtained by dividing the number of Common Shares
owned by such Shareholder immediately prior to the Effective Time, by the
aggregate number of Common Shares issued and outstanding.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants and agreements contained herein, the parties agree as follows:

1. TRANSACTIONS ON OR PRIOR TO THE CLOSING DATE.

1.1 THE MERGER.

(a) Subject to the terms and provisions of this Agreement, and in
accordance with the NGCL and the CCC, at the Effective Time (as defined in
SECTION 1.1(e)), Acquisition shall be merged with and into the Company (the
"Merger"). The Company shall be the surviving corporation of the Merger
(sometimes called the "Surviving Corporation") and shall continue its corporate
existence under the laws of the State of California. At the Effective Time, the
separate corporate existence of Acquisition shall cease.

(b) At the Effective Time, the Merger shall have the effects provided
for in this Agreement and in the NGCL and the CCC.

(c) In connection with the filing of the Certificates (as defined in
SECTION 1.1(e)), the Articles of Incorporation and Bylaws of the Company as
respectively existing immediately prior to the Effective Time shall be the
Articles of Incorporation and Bylaws of the Surviving Corporation, unless and
until amended in the manner provided by law.

(d) Subject to SECTION 5.16, the board of directors, the committees
and members of the board, and the officers of the Company serving immediately
prior to the Effective Time shall be the board of directors of the Surviving
Corporation, and the committees and members of the board and the officers of the
Surviving Corporation.

(e) As soon as practicable following the Closing (as defined herein),
the parties to this Agreement shall effect the Merger by filing with the
Secretary of State of Nevada properly executed articles of merger and with the
Secretary of State of the State of California a properly executed certificate of
approval of merger (together with the Nevada articles of merger, the
"Certificates"). The date and time at which the Merger shall become effective
is herein referred to as the "Effective Time."

<PAGE>

(f) If, at any time after the Effective Time, the Surviving
Corporation shall consider or be advised that any further assignments or
assurances in law or any other acts are necessary or desirable (i) to vest,
perfect or confirm of record or otherwise, in the Surviving Corporation, title
to and possession of any property or right to Acquisition or the Company, as
the case may be, acquired or to be acquired by reason of, or as a result of, the
Merger, or (ii) otherwise to carry out the purposes of this Agreement, each of
Acquisition and the Company and its respective proper officers and directors
shall be deemed to have granted hereby to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such proper deeds,
assignments and assurances in law and to do all acts necessary or proper to
vest, perfect or confirm title to, and the possession of such property or rights
in, the Surviving Corporation and otherwise to carry out the purposes of this
Agreement, and the proper officers and directors of the Surviving Corporation
are hereby fully authorized in the name of Acquisition or the Company or
otherwise to take any and all such action.

1.2 CONVERSION OF STOCK.

(a) MERGER CONSIDERATION. At the Effective Time, by virtue of the
Merger and without any action on the part of the Shareholders, each one of the
Common Shares outstanding as of the Effective Time (except for Dissenting Shares
(as defined in SECTION 1.2(e)) shall be converted into the right to receive such
fraction of a share of common stock, par value $.01 per share (the "Common
Stock"), of the Acquiror as is equal to the decimal fraction determined by
dividing (i) the "Acquiror Share Number" by (ii)(A) the number of Common Shares
outstanding as of the Effective Time plus (B) the number of Common Shares
issuable upon exercise of all Existing Stock Rights (as defined herein) as of
the Effective Time (the "Conversion Ratio"); provided that no scrip or
fractional shares of Common Stock shall be issued in the Merger, but rather the
total number of shares to be received by each Shareholder pursuant to this
SECTION 1.2(a) shall be rounded up to the next whole number of shares (the
"Merger Consideration"). Upon the surrender by a Shareholder, other than a
Dissenting Shareholder (as defined in SECTION 1.2(e)), to the Exchange Agent (as
defined in SECTION 1.2(f)) of the certificates representing such Shareholder's
Common Shares in accordance with SECTION 1.2(f), the Acquiror shall deliver to
each such Shareholder certificates representing the number of shares equal to
such Common Shareholder's PRO RATA portion (based upon such Shareholder's
Percentage Interest immediately prior to the Effective Time) of the Merger
Consideration. For purposes hereof, the term "Acquiror Share Number" shall mean
the number determined by dividing (i) two times the December 31, 1996 "book
value per share" of the Company, as determined in accordance with generally
accepted accounting principles and as reflected on the 1996 Audited Statements
of the Company referred to in SECTION 5.17 hereof, by (ii) the "Fair Market
Value of the Common Stock." For purposes hereof, (i) the term "book value per
share" (A) shall be deemed to include the aggregate exercise price which would
have been payable to the Company upon exercise of all Existing Stock Rights if
such Existing Stock Rights had been exercised on December 31, 1996 and (B) shall
be calculated by the Company using the accounting methods, pronouncements and
nuances used by the Company in prior periods (the "Prior Procedures") if any new
methods, estimates, estimates, pronouncements and nuances are permissible under
generally accepted accounting principles and would result in an increase in the
book value per share as compared to the book value per share resulting from the
use of the Prior Procedures; and (ii) the term "Fair Market Value of the Common
Stock" shall mean the average closing price per share of the Common Stock on the
Nasdaq National Market as reported in THE WALL STREET JOURNAL for the ten (10)
trading days prior to the date that is two (2) calendar days prior to the
Closing Date.

(b) CONVERSION OF ACQUISITION COMMON STOCK. At the Effective Time,
by virtue of the Merger, and without any action on the part of the holders
thereof, each share of Acquisition's common stock outstanding immediately prior
to the Effective Time shall be converted into one share of common stock of the
Surviving Corporation.

(c) CANCELLATION OF SHARES. The Merger Consideration for which the
Common Shares shall have been converted pursuant to this SECTION 1 shall be
deemed to have been paid in full satisfaction of all rights pertaining to such
Common Shares. At the Effective Time, the Common Shares, and all treasury
shares of the Company shall be, by virtue of the Merger and without any action
on the part of the holders thereof, canceled.

(d) NO FURTHER TRANSFERS. After the Effective Time, there shall be
no further registration of transfers on the stock transfer books of the Company
of the shares of capital stock of the Company that were outstanding immediately
prior to the Effective Time and that are to be converted into the right to
receive the Merger Consideration, as provided in this SECTION 1.2.

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(e) DISSENTING SHARES.

(i) Notwithstanding anything in this Agreement to the contrary,
any Common Shares outstanding immediately prior to the Effective Time and which
are held by shareholders of the Company who object to the Merger and comply with
all of the relevant provisions of the CCC ("Dissenting Shares") shall not be
converted into or represent a right to receive Common Stock hereunder, but
instead shall be entitled to receive payment of the appraised value of such
shares in accordance with the provisions of the CCC, unless and until the holder
thereof shall have failed to perfect, or shall have waived or effectively
withdrawn or lost, his or her rights to appraisal and payment under the CCC.
The Company shall give Acquiror prompt notice upon receipt by the Company of any
written objection to the plan of merger set forth herein (any shareholder duly
making such objection being hereinafter called a "Dissenting Shareholder"). The
Company agrees that prior to the Effective Time, it will not, without the prior
written consent of Acquiror, voluntarily make or agree to make any payment with
respect to, or settle or offer to settle, any such objection.

(ii) Each Dissenting Shareholder who becomes entitled, pursuant
to the provisions of the CCC, to payment for his Dissenting Shares shall receive
payment therefor after the Effective Time from the Surviving Corporation (but
only after the amount thereof shall have been agreed upon or finally determined
pursuant to such provisions) and such shares shall be canceled.

(f) EXCHANGE OF CERTIFICATES. Promptly after the Effective Time,
Acquiror shall cause KeyCorp Shareholder Services, Inc. ("Exchange Agent") to
mail to each record holder, as of the Effective Time, of an outstanding
certificate or certificates which immediately prior to the Effective Time
represented outstanding Common Shares, a form letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates shall pass, only upon proper delivery of the certificates to the
Exchange Agent) and instructions for use in effecting the surrender of the
certificate(s). Upon surrender to the Exchange Agent of such certificates,
together with such letter of transmittal duly executed, each holder of such
certificates formerly representing shares of the Company's capital stock shall
be entitled to receive in exchange therefor a certificate representing such
holder's PRO RATA portion of the Merger Consideration, and such certificates
formerly representing Common Shares shall then be canceled. Until so
surrendered, each certificate (other than certificates for Dissenting Shares)
which prior to the Merger represented Common Shares shall be deemed, for all
purposes, and without any further act or deed on the part of the holder thereof,
to evidence ownership of the whole number of shares of Common Stock which the
holder thereof would be entitled to receive upon its surrender to the Exchange
Agent; PROVIDED, HOWEVER, that no dividends with respect to said shares of
Common Stock shall be paid until such holder shall surrender such certificate,
at which time there shall be paid to the record holder of the certificates
issued in the exchange therefor the amount of the dividends, without interest,
which have theretofore become payable with respect to the shares of Common Stock
represented thereby.

(g) OPTIONS.

(i) At the Effective Time, Acquiror shall assume all of the
Company's rights and obligations with respect to certain outstanding stock
options held by employees and directors of the Company as set forth in SCHEDULE
3.2(b) hereto, which are outstanding and unexercised at the Effective Time (the
"Existing Stock Rights"), whether or not the Existing Stock Rights are then
exercisable. Immediately following such assumption, Acquiror shall substitute
for such Existing Stock Rights new options (each of which shall be a non-
qualified stock option) to be granted under Acquiror's option plan for employees
of acquired companies (the "New Options") with vesting terms and conditions
matching those contained in the Existing Stock Rights at the Effective Time to
the extent such vesting terms and conditions are consistent with the terms and
conditions of Acquiror's option plan for employees of acquired companies;
PROVIDED, HOWEVER, that the periodic vesting schedules set forth in the grant
provisions of the Existing Stock Rights, including any provisions accelerating
the vesting of the Existing Stock Rights as a result of the Merger, shall be
matched and the optionholders shall have a period of not less than one year
following termination of their employment or other service with the Company
within which to exercise the New Options. Each New Option shall thereafter
evidence the right to purchase the number of shares of Common Stock equal to the
product (rounded up or down as appropriate to the next whole share) of (i) the
number of Common Shares covered by such Existing Stock Right immediately prior
to the Effective Time, MULTIPLIED by (ii) the Conversion Ratio. The exercise
price of such New Options for each share of Common Stock subject thereto shall
be equal to the quotient obtained by DIVIDING (i) the per share exercise price
for Common Shares subject to such Existing Stock Right immediately prior to the
Effective Time by (ii) the Conversion Ratio.

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(ii) As soon as practicable after the Effective Time, Acquiror
shall deliver to each holder of a New Option an appropriate written notice and
option agreement setting forth Acquiror's assumption of the Existing Stock Right
and substitution of the New Option in accordance with the terms of SECTION
1.2(g).

(iii) The Company shall not grant any options, warrants or
other rights to acquire capital stock or securities of the Company under any
plan or otherwise after the date of this Agreement.

(iv) As soon as practicable following execution of this
Agreement, the Company shall cause each holder of Existing Stock Rights to
execute and deliver to Acquiror a written agreement (each a "Treatment of
Existing Stock Right Agreement"), in form reasonably satisfactory to Acquiror,
pursuant to which each holder of Existing Stock Rights agrees to the treatment
set forth in this SECTION 1.2(g).

(v) Acquiror will use its best efforts to register (on Form S-8
or other comparable form) the shares of Common Stock issuable upon exercise of
the New Options under the Securities Act of 1933, as amended, promptly following
the Effective Time.

1.3 SHAREHOLDERS' MEETING. The Company, acting through its board of
directors, shall duly call, give notice of, convene and hold a special meeting
(the "Special Meeting") of its shareholders as soon as practicable (and in any
event before May 15, 1997) for the purpose of considering and taking action upon
this Agreement and the Merger. The board of directors of the Company will
recommend to its shareholders approval of the Merger and this Agreement at the
Special Meeting, PROVIDED, HOWEVER, that such recommendation is subject to any
action taken by the board of directors of the Company in the exercise of its
good faith judgment as to its fiduciary duties to the shareholders of the
Company, which judgment is based upon the advice of independent counsel that a
failure of the board of directors to withdraw or change its recommendation might
reasonably constitute a breach of its fiduciary duties to such shareholders.

2. CLOSING.

(a) Subject to the terms and conditions of this Agreement, the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place at the offices of Jenkens & Gilchrist, a Professional Corporation,
1445 Ross Avenue, Suite 3200, Dallas, Texas 75202, on (i) the later of (A)
May 30, 1997 and (B) the date of satisfaction or waiver of all other conditions
to the obligations of the parties hereto or (ii) such other time and place as
the parties may otherwise agree (the date thereof being the "Closing Date").

(b) Concurrent with the Closing, the Company and Acquisition shall
execute and deliver to the Secretary of State of Nevada and the Secretary of
State of California the Certificates, as required by the NGCL and the CCC,
respectively, and the parties shall take such other and further action as may be
required by law to make the Merger effective.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Acquiror as follows:

3.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.

(a) The Company is duly organized and validly existing as a
corporation in good standing under the laws of California, with the power to
own, lease and operate its properties and assets and to carry on its business in
the manner in which such business is now being conducted. The Company is not a
bank holding company registered under the Bank Holding Company Act of 1956, as
amended, nor is the Company required to be so registered. The Company is duly
qualified to transact business, and is in good standing, as a foreign
corporation in each jurisdiction where the character of its activities requires
such qualification (except for such failures as would not result in a material
adverse effect on the business or financial condition of the Company), and each
such jurisdiction of qualification is listed in SCHEDULE 3.1(a) hereto. True
and complete copies of the Articles of Incorporation, or other charter
documents, and Bylaws of the Company in effect on the date hereof have been
delivered to Acquiror in SCHEDULE 3.1(a).

(b) The Company does not own or control any "affiliate" (as defined
under the Securities Act of 1933, as amended (the "Securities Act")) or any
"Subsidiary" (as defined below) other than (i) Citizens Thrift and Loan
Association (the "Association") or (ii) the Subsidiaries set forth on
SCHEDULE 3.1(b). For purposes hereof the term

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"Subsidiary" means, when used with reference to an entity, any corporation, a
majority of the outstanding voting securities of which are owned directly or
indirectly by such entity, or any partnership, joint venture or other
enterprise in which any entity has, directly or indirectly, any equity
interest. All of the outstanding shares of capital stock and other ownership
interests of the Association and each of the other Subsidiaries are owned
directly by the Company, and are duly and validly issued and outstanding,
fully paid and nonassessable, and were not issued in violation of, and are
not subject to, preemptive rights. Except as set forth in SCHEDULE 3.1(b),
none of the shares or other ownership interests of the Association or any of
the other Subsidiaries owned or held by the Company is subject to any lien,
claim or encumbrance of any kind ("Lien"). No Subsidiary has outstanding any
shares of capital stock or other ownership interests or any securities
convertible into or exchangeable or exercisable for any shares of its capital
stock or other ownership interests, nor are there outstanding any options,
warrants, rights, calls, contracts, commitments, understandings, arrangements
or claims of any character by which the Company or any of its Subsidiaries is
or may become bound to issue, transfer or sell, repurchase or otherwise
acquire or retire any shares of capital stock or other ownership interests of
any Subsidiary or any securities convertible into or exchangeable or
exercisable for, or otherwise evidencing a right to acquire, any such shares
or ownership interests. The Association is an "industrial loan company" (as
such term is defined in Division 7 of the California Financial Code), duly
organized, validly existing and in good standing under the laws of California
and in good standing under all laws, rules and regulations applicable to
industrial loan companies in California. Each Subsidiary other than the
Association is duly organized and validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with the power
to own, lease and operate its properties and assets and to carry on its
business in the manner in which such business is now being conducted. The
Association is an insured bank as defined in the Federal Deposit Insurance
Act (the "FDIC") and is required to maintain such insurance under the
California Financial Code. The Association has the necessary corporate power
to own, lease and operate properties and assets and to carry on its business
in the manner in which such business is now being conducted. Each Subsidiary
is duly qualified to transact business, and is in good standing, as a foreign
corporation in each jurisdiction where the character of such activities
requires such qualification, except for such failures as would not result in
a material adverse effect on the business or financial condition of the
Company or any of such Subsidiaries.

(c) The depositors of the Association may not withdraw their deposits
by check or similar means for payment to third parties. The Association has not
permitted any overdraft (including any intraday overdraft), or incurred any such
overdraft in the Association's account at the Federal Reserve bank, on behalf of
the Association or any affiliate.

3.2 CAPITALIZATION.

(a) EXHIBIT B attached hereto sets forth the authorized
capitalization of the Company and of each Subsidiary and the number of
outstanding shares of the Company and of each Subsidiary as of the date hereof.
No person or entity, other than as shown on EXHIBIT A, owns of record any of the
outstanding capital stock of the Company. All of the outstanding capital shares
of the Company are and will be validly issued and outstanding and fully paid and
nonassessable. The outstanding capital shares of the Company are not subject to
and were not issued in violation of any preemptive rights. Each share of
capital stock was issued in conformity with applicable law and neither any party
to whom such shares of capital stock of the Company were issued nor any person
claiming through any such party has any claim against the Company in respect of
any such issuance. There are no voting trusts or other agreements or
understandings to which the Company is a party with respect to the voting of the
capital stock of the Company. The Company is not nor, to the Company's
knowledge, is any shareholder of the Company party to or bound by any agreement
relating to or restricting the transfer of the outstanding capital shares of the
Company, except for this Agreement.

(b) Except for the Existing Stock Rights (which are listed in detail
on SCHEDULE 3.2(b)), or as otherwise set forth in SCHEDULE 3.2(b), there are no
outstanding subscriptions, options, rights, warrants, convertible securities or
other agreements or commitments ("Rights") obligating the Company to issue or to
transfer any additional outstanding shares of the Company or any securities
convertible into, or exchangeable or exercisable for, or otherwise evidencing a
right to acquire, any shares of capital stock of the Company. There are no
preemptive rights relating to the Company's shares of capital stock. There are
no outstanding contractual obligations of the Company to repurchase, redeem or
otherwise acquire any outstanding shares of capital stock or other ownership
interest in the Company.

3.3 FINANCIAL CONDITION.

(a) The Company has furnished to the Acquiror: (a) its consolidated
financial statements for the fiscal years ended December 31, 1995 and 1994
consisting of balance sheets as of December 31, 1995 and 1994, and the related
statement of operations, statement of cash flows and statement of shareholders'
equity for the fiscal year ended

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December 31, 1995 and 1994, respectively (the "Audited Financial Statements"),
all as audited by KPMG Peat Marwick LLP (the "Auditors"); and (b) its unaudited
financial statements for the nine-month periods ended September 30, 1996 and
1995 consisting of unaudited balance sheets as of September 30, 1996 and 1995
and the related unaudited statements of operations, statements of cash flows and
statements of shareholders' equity for such nine-month periods (the "Unaudited
Financial Statements"). The Audited Financial Statements and Unaudited
Financial Statements are referred to herein collectively as the "Financial
Statements."

(b) The Financial Statements: (i) have been prepared in accordance
with the books and records of the Company; (ii) have been prepared in accordance
with generally accepted accounting principles consistently applied ("GAAP")
throughout the periods covered and subject, in the case of the Unaudited
Financial Statements, to normal year-end audit adjustments that may result or
may have resulted from the audit of such Unaudited Financial Statements by the
Auditors and the absence of detailed notes customary for GAAP financial
statements; (iii) reflect and provide adequate reserves and disclosures with
respect to all liabilities of the Company, including all contingent liabilities,
as of their respective dates to the extent required by GAAP; and (iv) present
fairly the financial position and results of operations of the Company at and
for the fiscal periods ended on such dates (subject to, in the case of the
Unaudited Financial Statements, normal year-end audit adjustments that may
result from the audit of such Unaudited Financial Statements by the Auditors).

(i) any declaration, setting aside for, or payment of, a
dividend or any distribution of assets of any kind whatsoever by the Company or
any Subsidiary, including any distribution in redemption of, or as the purchase
price for, any equity interest, or in discharge or cancellation, in whole or in
part, of any indebtedness, whether in payment of principal, interest or
otherwise, owing to the equity holders of the Company or any of the
Subsidiaries;

(ii) any increase in the salary or other compensation payable or
to become payable to any officer, director or employee of the Company or any
Subsidiary, or the declaration, payment, commitment or obligation of any kind
for the payment of a bonus or other additional salary compensation or benefit,
other than normal cost-of-living and normal merit increases totaling not more
than 5% per annum (or 10% per annum to employees who made less than $25,000
during 1996) in the ordinary course of business consistent with past practice to
employees;

(iii) any entry into any agreement, commitment or transaction by
the Company or any Subsidiary not in the ordinary and usual course of business;

(iv) any Material Adverse Effect (as hereinafter defined);

(v) any damage, destruction or loss, whether or not covered by
insurance, having a Material Adverse Effect;

(vi) any material alteration in the manner in which the Company
or any Subsidiary keeps its books, accounts or records or in the accounting
methods, principles or practices therein reflected;

(vii) other than in the ordinary course of business and consistent
with past practices and safe and sound banking practices, the incurrence of any
liability or issuance of any indebtedness for borrowed money or any commitment
to borrow money or any guaranty, direct or indirect, of indebtedness of others,
or any prepayment of long-term debt, except for deposits taken and federal funds
purchased;

(viii) any acquisition or lease of or commitment to acquire or lease any
realty, or any item of personal property in excess of $25,000;

(ix) any change in the Articles of Incorporation or other charter
document or in the Bylaws or other governing documents of the Company or any
Subsidiary, or in the authorized, issued or outstanding equity capital of the
Company or any Subsidiary;

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(x) any change in the operations, business or manner of conducting
the business of the Company or any Subsidiary, other than changes in the
ordinary and usual course of business consistent with past practice, none of
which, individually or in the aggregate, has had or is expected to have a
Material Adverse Effect;

(xi) any acquisition of any capital stock or other equity securities
or acquisition of any equity or ownership interest in any bank, corporation,
partnership or other entity, except (A) through settlement of indebtedness,
foreclosure, or the exercise of creditors' remedies or (B) in a fiduciary
capacity, the ownership of which does not expose it to any liability from the
business, operations or liabilities of such person; or

(xii) any making, renewal or extension of, or alteration of any of
the material terms of, any loan to any single borrower and his or its related
interests in excess of the principal amount of $200,000.

As used in this Agreement, "Material Adverse Effect" means any change which
would have a material adverse effect on the Company's results of operations or
financial position taken as a whole.

3.4 TAX MATTERS. Within the times (including extensions) and in the
manner prescribed by law, the Company and each of the Subsidiaries have filed
all federal, state, local and foreign returns for Taxes (as defined below)
("Returns") required to be filed in any jurisdiction (including, without
limitation, informational returns) and such Returns are complete, true and
correct in all material respects; all Returns filed by the Company and the
Subsidiaries complied in all material respects with the tax laws, rules and
regulations, as presently interpreted, applicable to such Returns; neither the
Company nor any Subsidiary has waived or extended any statute of limitations
relating to the assessment of any federal, state, county, local or foreign
income, franchise or other taxes ("Taxes"); except as set forth in SCHEDULE 3.4
hereto, no audit or examination of any of the Returns of the Company or any
Subsidiary is currently in progress or threatened or has occurred in the past.
All Taxes required to be paid pursuant to such Returns have been paid on or
before their respective due dates; the charges, accruals, and reserves with
respect to Taxes on the respective books of the Company and each of the
Subsidiaries are adequate (determined in accordance with GAAP) and are at least
equal to the Company's and each Subsidiaries' liability for Taxes; all Taxes
that the Company and each of the Subsidiaries are required to withhold or
collect have been duly withheld or collected and, to the extent required, have
been paid; and no payment that is owed or may become due to any director,
officer, employee, or agent of the Company or any of the Subsidiaries will be
nondeductible to the Company or to that Subsidiary or subject to tax under
Section 280G or Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), nor will the Company or any Subsidiary be required to "gross up"
or otherwise compensate any such person because of the imposition of any excise
tax on a payment to such person.

3.5 LITIGATION AND CLAIMS; REGULATORY COMPLIANCE.

(a) LITIGATION PENDING OR THREATENED. Except as set forth in
SCHEDULE 3.5(a), there is no action, suit, arbitration proceeding, including any
grievance proceeding, or investigation pending or, to the knowledge of the
Company, threatened, before any court, tribunal, panel, master or governmental
agency, authority or body in which the Company or any Subsidiary is a party or
to which their respective businesses or properties are subject; nor is the
Company or any Subsidiary, or any officer or employee of the Company or any
Subsidiary, enjoined from any action or subject to any continuing restriction
that may have a Material Adverse Effect.

(b) VIOLATION OF LAW. Neither the Company nor any Subsidiary is in
violation of any provision of any law, decree, order or regulation applicable to
the Company or the Subsidiaries or their respective businesses or properties,
except for such violations as would not have a Material Adverse Effect. The
Company and the Subsidiaries have all federal, state, local and foreign
licenses, permits and other governmental authorizations required in the conduct
of their businesses and the operation of their properties.

(c) UNLAWFUL PRACTICES. None of the Company, any Subsidiary, or any
officer, employee or agent of the Company or any Subsidiary or any person acting
on their behalf has, directly or indirectly, given or agreed to give any gift or
similar benefit to any customer, supplier, competitor or governmental employee
or official or has engaged in any other practice or received or retained any
such gift or similar benefit, that (i) in any case would subject the Company or
any Subsidiary to (A) any damage or penalty in any criminal litigation or
proceeding or (B) any material damage or penalty in any civil or governmental
litigation or preceding or (ii) would be grounds for termination or modification
of any material contract, license or other instrument to which the Company or
any Subsidiary is a party.

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(d) REGULATORY COMPLIANCE. All reports, records, registrations,
statements, notices and other documents or information required to be filed by
the Company or any of the Subsidiaries during the last three (3) years with any
federal or state regulatory authority including, without limitation, the
California Department of Corporations, the Federal Deposit Insurance Corporation
(the "FDIC"), the Board of Governors of the Federal Reserve System ("Federal
Reserve") and the Internal Revenue Service ("IRS") have been duly and timely
filed and all information and data contained in such reports, records or other
documents are true, accurate, correct and complete. None of the Company or any
Subsidiary is now or has been, within the past five (5) years, subject to any
memorandum of understanding, cease and desist order, written agreement or other
formal or informal administrative action with any such regulatory bodies. None
of the Company or any Subsidiary believes any such regulatory bodies have any
present intent to place the Company or any Subsidiary under any administrative
action.

3.6 PROPERTIES AND ASSETS.

(a) True and complete copies of all existing deeds, leases and title
insurance policies for all real property owned or leased by the Company or any
Subsidiary (collectively, the "Real Properties") and all mortgages, deeds of
trust, security agreements and other documents describing encumbrances to which
such property is subject have been made available to Acquiror. Each of the
Company and the Subsidiaries has good and indefeasible title to all of its
assets and properties including, without limitation, all personal and intangible
properties reflected in the Financial Statements or acquired subsequent thereto,
subject to no Liens except for: (i) those disclosed in SCHEDULE 3.6(a);
(ii) Liens for taxes not yet delinquent; (iii) Liens of landlords, carriers,
warehousemen, mechanics, materialmen and repairmen incurred in the ordinary
course of business for sums not yet delinquent; and (iv) other Liens which do
not impair the value of such assets.

(b) Except as set forth in SCHEDULE 3.6(b), (i) neither the Company
nor any Subsidiary is in default under any lease and there is no outstanding
notice of termination or cancellation in connection with any lease; (ii) each of
the tangible assets, including the Real Properties, of the Company is
structurally sound and in good repair and operating condition, normal wear and
tear excepted; and (iii) there is no pending or contemplated eminent domain or
condemnation proceedings, or under any environmental law concerning the disposal
of any hazardous substance, affecting any of the Real Properties. There are no
outstanding options or rights in any person to acquire any of such property or
assets, or any interest therein, except as is stated on SCHEDULE 3.6(b).

(c) (i) For purposes of SECTION 3.6(c)(ii) through SECTION
3.6(c)(vii) below, the following terms shall have the following meanings:

(A) "Hazardous Materials" shall mean (i) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901 ET SEQ.), as amended from time to time, and regulations
promulgated thereunder or under the California Hazardous Waste Control Law
(Cal. Health & Safety Code Section 25100 ET SEQ., the California Hazardous
Substances Account Act (Cal. Health & Safety Code Section 25300 ET SEQ.)
and the regulations promulgated thereunder (collectively, the "California
Act and Rules"); (ii) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 (42 U.S.C. Section 9601 ET SEQ.), as amended from time to time, and
regulations promulgated thereunder or under the Texas Act and Rules; (iii)
asbestos; (iv) polychlorinated biphenyls; (v) any substance the presence of
which on the Real Properties is prohibited by any governmental
requirements; (vi) any petroleum-based products; (vii) underground or
aboveground storage tanks; (viii) wells; (ix) covered-over surface
impoundments or similar areas; and (x) any other substance that by any
governmental requirements requires special handling or notification of any
federal, state, or local governmental entity in its collection, storage,
transport, treatment, or disposal.

(B) "Governmental Requirements" shall mean all laws, ordinances,
statutes, codes, rules, regulations, orders, and decrees of the United
States, the state, the county, the city, or any other political subdivision
in which the Real Properties is located, and any other political
subdivision, agency or instrumentality exercising jurisdiction over Seller
(collectively, the "Governmental Authority"), or the Real Properties
relating to pollution, the protection of the environment, the emission,
discharge, release or threatened release of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or waste or
Hazardous Materials into the environment (including, without limitation,
ambient air, surface water, ground water or land or soil), the provision of
information to a Governmental Authority for purposes relating to the
Governmental Authority's regulation of Hazardous Materials, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or

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handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substance or waste or Hazardous Materials.

(C) "Environmental Costs" shall mean (i) costs incurred or required
to be incurred or reasonably expected to be required to be incurred under
any Governmental Requirement to remedy a condition or incident of on-site
or off-site environmental contamination arising due to actions, events, or
omissions occurring at or prior to the Closing or directly attributable to
conditions existing on or prior to the Closing, or (ii) damages to property
or people resulting from a condition or incident of on-site or off-site
environmental contamination arising due to actions, events, or omissions
occurring at or prior to the Closing or directly attributable to conditions
existing at or prior to the Closing.

(D) "Environmental Noncompliance" shall mean failure to comply on or
prior to the Closing with any existing Governmental Requirement.

(ii) Except as set forth on SCHEDULE 3.6(c), no Hazardous Materials
are or have been located on, at, upon or under the Real Properties at any time
during or, to the knowledge of the Company, prior to the tenancy, operation or
occupancy of the Real Properties by the Company.

(iii) Except as set forth on SCHEDULE 3.6(c) hereto, during and, to
the knowledge of the Company, prior to the ownership, tenancy, operation or
occupancy of the Real Properties by the Company, no Hazardous Materials have
been generated, manufactured, managed, transported, disposed on-site, recycled
or sent off-site from, on, at, or upon such Real Properties.

(iv) Except as set forth on SCHEDULE 3.6(c) hereto, there are no
on-site or off-site locations where Hazardous Materials generated, manufactured,
managed or transported from the Real Properties have been stored, treated,
recycled or disposed of.

(v) The Company does not have any permits, licenses or authorizations
from any Governmental Authority on account of any Governmental Requirement nor
is the Company required by reason of any Governmental Requirement to have any
such permit, license or authorization in order to operate any aspect of the Real
Properties or any business conducted at the Real Properties.

(vi) With respect to the Real Properties and/or the Company, there are
no Environmental Costs, there is no Environmental Noncompliance and the Company
has not received notice of any past, present or future events, conditions,
circumstances, activities, practices, incidents, actions, or plans which may
result in Environmental Noncompliance or Environmental Costs or which may give
rise to any common law or legal liability based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling or omission, discharge, release or threatened release
into the environment, of any Hazardous Materials or exposure of any person to a
Hazardous Material.

(vii) No civil, criminal or administrative action, suit, claim,
hearing, investigation or proceeding has been brought or, to the best knowledge
of the Company, been threatened nor, except as set forth on SCHEDULE 3.6(c),
have any settlements been reached by or with any parties alleging the presence,
disposal, release or threatened release of any Hazardous Materials from the use
or operation of the Real Properties or alleging Environmental Noncompliance.

(d) SCHEDULE 3.6(d) attached hereto sets forth a complete and
accurate description of the following (herein "Intangible Personal Property"):

(i) each United States and foreign patent license, patent
application, trade name, trademark, trade name and trademark registration,
copyright, copyright registration and application for any other of the foregoing
owned or used by the Company or any Subsidiary in the conduct of their
businesses;

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(ii) a description of each material license, franchise and similar
agreement or arrangement to which the Company or any Subsidiary is a party
either as licensee or licensor for each such item of Intangible Personal
Property; and

(iii) a description of all confidential and material inventions,
processes, designs and formulae owned by, in the possession of or used in the
business of the Company or any Subsidiary; and

(iv) a description of all royalty and other similar agreements or
arrangements to which the Company or any Subsidiary is a party or by which
either is bound.

The Company or a Subsidiary is the owner of all right, title and interest in and
to each item of such Intangible Personal Property and each other invention,
process, design, formula, license, royalty arrangement, trade secret, know how
and proprietary technique necessary for the conduct of the business of the
Company and/or the Subsidiaries. The Company or a Subsidiary has the right and
authority to use each item of Intangible Personal Property and each other
invention, process, design, formula, license, royalty arrangement, trade secret,
know how and proprietary technique necessary for the conduct of the business of
the Company and/or the Subsidiaries; and such use does not conflict with,
infringe upon or violate any patent, trademark, trade name, trademark or trade
name registration, copyright, copyright registration or any pending application
relating thereto of any other person, firm or corporation. There is no
outstanding or, to the knowledge of the Company, threatened dispute or other
disagreement with respect to any license or similar agreement used in the
Company's or any Subsidiary's business. Neither the Company nor any Subsidiary
has knowledge that any employee of the Company or any Subsidiary is obligated
under any contract (including any license, covenant or commitment of any
nature), or subject to any judgment, decree or order of any court or
administrative agency (other than through a decree of divorce), that would
materially interfere with the use of such employee's best efforts to promote the
interests of the Company and the Subsidiaries or would conflict with their
businesses as presently conducted. No prior employer of any employee of the
Company or any of the Subsidiaries has any right to, or interest in, any
inventions, improvements, discoveries or other information assigned to the
Company or any of the Subsidiaries by such employee.

3.7 LOANS, ETC.

(a) The Company and each Subsidiary has properly administered all
accounts for which it acts as a fiduciary, including but not limited to,
accounts for which it serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment advisor, in accordance with
the terms of the governing documents and applicable state and federal law and
regulation and common law. Neither the Company, the Subsidiaries nor any
director, officer or employee of the Company or any Subsidiary has committed any
breach of trust with respect to any such fiduciary account, and the accountings
for each such fiduciary account are true and correct in all material respects
and accurately reflect the assets of such fiduciary account.

(b) All evidences of indebtedness and leases that are reflected as
assets of the Company or any Subsidiary are legal, valid and binding obligations
of the respective obligors thereof, enforceable in accordance with their
respective terms (except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors generally and
the availability of injunctive relief, specific performance and other equitable
remedies) and are not subject to any known or threatened defenses, offsets or
counterclaims that may be asserted against the Company or any Subsidiary or the
present holder thereof. The credit files of the Company and the Subsidiaries
contain all material information known to the Company or any Subsidiary that is
reasonably required to evaluate in accordance with generally prevailing
practices in the banking industry the collectibility of the loan portfolio of
the Company and the Subsidiaries (including loans that will be outstanding if
any of them advances funds they are obligated to advance). The Company has
disclosed all of the substandard, doubtful, loss, nonperforming or loans
identified by the Company as problem loans on the internal watch list of the
Company, a copy of which as of December 31, 1996, has been provided to
Purchaser.

3.8 INSURANCE. SCHEDULE 3.8 attached hereto sets forth a summary
description of insurance coverage, including fidelity and bond insurance,
covering the business and properties of the Company and each of the
Subsidiaries, which description includes, among other things, the property
covered and the insurer and the amount and period of coverage. There are no
outstanding requirements or recommendations of any insurance company that issued
any policy of fire or extended coverage insurance covering the properties of the
Company or any of the Subsidiaries or by any Board of Fire Underwriters or other
similar body exercising similar functions, or by any governmental authority
exercising similar functions which require or recommend any repairs or other
work to be done on or with respect to any of the properties

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insured in any of said policies. Except as set forth in SCHEDULE 3.8, all of
such policies of insurance are on an occurrence basis and will be in full
force and effect immediately after the Closing Date. Except as set forth on
SCHEDULE 3.8, there has been no claim under any fidelity bond during the last
five (5) years and the Company is not aware of any facts that would form the
basis of a claim under such bonds.

3.9 CONTRACTS AND OTHER INSTRUMENTS.

(a) SCHEDULE 3.9(a) sets forth a list of each contract, agreement,
lease, license, indenture, commitment or mortgage, trust or other instrument,
written or oral, including all amendments or modifications thereof, to which the
Company or any Subsidiary is a party or by which any of their respective assets
are bound, that relates to any of the matters listed in (i) through (xii) below:

(i) All collective bargaining agreements involving the Company or any
Subsidiary and all other agreements with employees, as a group, of the Company
or any Subsidiary;

(ii) All employment agreements, contracts or commitments, not
terminable at will without contractual penalty, with or between the Company or
any Subsidiary and a director, officer or employee of the Company or any
Subsidiary;

(iii) All agreements of guaranty, repurchase or indemnification,
other than signature guaranties and bank items presented for collection or
contractual agreements related to loans sold, each in the ordinary course of
business, running from the Company or any Subsidiary to any person or entity
in excess of $5,000;

(iv) All agreements, contracts or commitments containing any
covenant limiting the right of the Company or any Subsidiary to engage in any
line of business or compete with any person or entity;

(v) All agreements, contracts or commitments to which the Company
or any Subsidiary is a party or by which either of them is bound evidencing
or providing for loans individually or in the aggregate in excess of $200,000
or purchase of receivables or other financing individually or in the
aggregate in excess of $200,000 which have been entered into since December
31, 1996;

(vi) All agreements, contracts or commitments of the Company or any
Subsidiary relating to material capital expenditures or involving material
future payments, excluding real estate borrowings made in the ordinary course
of business or existing leases;

(vii) All agreements, contracts or commitments relating to the
acquisition of assets or capital stock of any business enterprise other than
assets acquired in the ordinary course of business of the Company or any
Subsidiary;

(viii) All agreements, contracts or commitments involving the Company
or any Subsidiary relating to the syndication, sale or underwriting of
conventional or government or other guaranteed mortgages, loans or mortgage
loan pools or other securities other than such agreements, contracts or
commitments made in the ordinary course of business;

(ix) All agreements, contracts or commitments to which the Company
or any Subsidiary is a party and that may require consent by any other person
or entity in connection with the consummation of the transactions
contemplated hereby either to prevent a breach or to continue the
effectiveness thereof;

(x) All letters of credit, whether direct pay or contingent, and
all other commitments undertaken by the Company or any Subsidiary in excess
of $25,000;

(xi) Each lease with a third party where total annual lease
payments are in excess of $25,000 to which the Company or any Subsidiary is a
party; and

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(xii) Each other contract, agreement or instrument to which the
Company or any Subsidiary is a party which is material to the business,
results of operations or financial condition of the Company.

The contracts, agreements, leases, licenses, indentures or commitments that are
required to be identified in SCHEDULE 3.9(a) are referred to as the "Contracts."
True and complete copies of each of the Contracts, or where they are oral, true
and complete written summaries thereof, have been delivered to the Acquiror by
the Company.

(b) Except as set forth in SCHEDULE 3.9(b) attached hereto, there has
not been any breach of, nor has there occurred any default under any, Contract
on the part of the Company or any Subsidiary or, to the knowledge of the
Company, on the part of the other parties thereto, and no event has occurred
which with the giving of notice or the lapse of time, or both would constitute a
default under any Contract. Except as set forth in SCHEDULE 3.9(b), no consent
of any party to any Contract is required in order to permit the execution,
delivery or performance of this Agreement and the consummation of the
transactions contemplated hereby, nor will the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby, result in a breach of any of the terms and provisions of,
or constitute a default under, or conflict with, or result in a modification of,
or give any third party the right to terminate, cancel, accelerate or increase
the rate of interest payable under, any liabilities, obligations, rights or
benefits under, any Contract of the Company or any Subsidiary.

(c) Set forth in SCHEDULE 3.9(c) attached hereto is a list of
(i) each outstanding bid or proposal for a Contract and a description of and
projected dollar value of each such bid or proposal; and (ii) the aggregate
dollar amount of all outstanding claims against the Company or any Subsidiary or
claims, which, to the knowledge of the Company, have been threatened against the
Company or a Subsidiary, under each Contract presently or heretofore in effect.

3.10 EMPLOYEE BENEFIT PLANS. Except as listed on SCHEDULE 3.10
hereto, the Company does not maintain or sponsor or make and is not required to
make contributions to any pension, profit-sharing, stock bonus, stock option,
thrift or other retirement plan, medical, hospitalization, vision, dental, life,
disability, vacation or other insurance or benefit plan, employee stock
ownership plan, deferred compensation, stock ownership, stock purchase,
performance share, bonus, benefit or other incentive plan, severance plan or
other similar plan, agreement, arrangement or understanding relating to the
Company or its employees (the "Employee Benefit Plans"), whether or not such
plan is or is intended to be qualified under Section 401(a), 404A or any other
section of the Code, including without limitation, all employee benefit plans
(within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), whether or not subject to the provisions of
ERISA. Except as set forth in SCHEDULE 3.10, each Employee Benefit Plan
maintained or sponsored by the Company or to which the Company makes or is
required to make employer contributions (collectively, the "Plans") is in full
force and effect in accordance with its terms and is, and each plan
administrator and fiduciary of each Plan is, in compliance with all applicable
requirements of ERISA and other applicable laws, regulations and rulings. The
only Plans which are "pension benefit plans" (within the meaning of Section 3(2)
of ERISA), other than any such plans which are described in Section 401(a)(1) of
ERISA, maintained or sponsored by the Company or to which the Company makes or
is required to make employer contributions, are identified on SCHEDULE 3.10 as
such (the "Pension Benefit Plans"). No Pension Benefit Plan or any trust
created under one of the Pension Benefit Plans or any trustee, administrator or
sponsor thereof, has engaged in a "prohibited transaction" as that term is
defined in Section 4975(c)(1) of the Code, which could subject the Pension
Benefit Plan, trust, trustee, administrator or sponsor thereof, or any party
dealing with the Pension Benefit Plan or any such trust to the tax or penalty on
prohibited transactions imposed by said Section 4975, nor to the best of the
knowledge of the Company is the fiduciary (as defined in Section 3 of ERISA) of
any Pension Benefit Plan or any employee benefit plan (as defined in Section 3
of ERISA) maintained by the Company acting in a manner which constitutes a
breach of its fiduciary duty, as set forth in ERISA. Except as set forth in
SCHEDULE 3.10, the Pension Benefit Plans have not been terminated, nor have
contributions thereto been discontinued, nor, to the Company's knowledge, have
there been any "reportable events", as that term is defined in Section 4043 of
ERISA, since the effective date of Section 4043 of ERISA. The Pension Benefit
Plans have not incurred any "accumulated funding deficiency", as such term is
defined in Section 302 of ERISA (whether or not waived), since the effective
date of Section 302 of ERISA, or prior thereto, and all contributions required
to be made have been made. The Company does not have an existing defined
benefit pension plan covering its employees. None of the Pension Benefit Plans
identified on SCHEDULE 3.10 are multiemployer plans as defined in Section 3(37)
of ERISA. All appropriate administrative actions and required compliance with
appropriate administrative actions and required compliance with appropriate
Internal Revenue Service and Department of Labor rules and regulations have been
taken or are in process in a timely manner. No contributions pursuant to the
Pension Benefit Plans have been made in such amounts as would violate Section
404 of the Code so as to disqualify the accompanying trust. The Company has in

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force sufficient bonding for every fiduciary who is required to be bonded with
respect to the Pension Benefit Plans pursuant to Section 412 of ERISA. There
does not exist any pending or, to the best of the knowledge of The Company,
threatened litigation against any fiduciary of any Pension Benefit Plan, nor has
any bonding company been called on to defend any such fiduciary. A true and
complete copy of each existing Plan has been furnished to Purchaser along with
the most recent favorable determination letter issued by the Internal Revenue
Service with respect thereto and the two most recent annual reports (on form 550
series) required to be filed with respect thereto.

3.11 OFFICERS, DIRECTORS AND EMPLOYEES; COMPENSATION OF AND
INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS, STOCKHOLDERS AND EMPLOYEES.

(a) SCHEDULE 3.11(a) attached hereto sets forth a true and complete
list of the names of, the offices held by, and the compensation paid to, the
officers, directors and employees of the Company and each of the Subsidiaries.

(b) Except as set forth on SCHEDULE 3.11(b), neither the Company nor
any Subsidiary has any financial obligation or is otherwise indebted to any
person who is an officer, director, stockholder or employee of the Company or
any Subsidiary, or to any spouse, child or relative of any such person or to any
entity controlled directly or indirectly by such person, in any amount
whatsoever other than for compensation for services rendered since the start of
the current pay period of the Company and the Subsidiaries generally utilized by
their employees and for business expenses, nor is any director, stockholder or
employee of the Company or any Subsidiary, or any spouse, child or other
relative of such person, indebted to the Company or any Subsidiary except for
reimbursement of advances made in the ordinary course of business.

3.12 AGREEMENT NOT IN BREACH OF CERTAIN INSTRUMENTS. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will violate or conflict with any provision of
the Articles of Incorporation or Bylaws of the Company or charter and bylaws of
any Subsidiary or result in a breach of any of the terms and provisions of, or
constitute a violation or default (or an event that with notice or lapse of
time, or both, would constitute a default) under, or conflict with, (a) any
Contract or permit to which the Company or any Subsidiary is or may be bound,
(b) any judgment, decree, order or award of any court, governmental body or
arbitrator to which the Company or any Subsidiary is a party, or (c) any law,
rule or regulation applicable to the Company or any of the Subsidiaries.

3.13 APPROVALS. Other than (i) the filing of any required blue sky
filings, (ii) applicable regulatory approvals of the Merger (including, if
necessary, approval of the transaction under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act")), and (iii) Shareholder
approval of the Merger, no consent, declaration, filing or approval or
authorization of, or registration with, any federal, state, municipal or local
governmental or regulatory authority or any other person is required in
connection with the execution and delivery of this Agreement by the Company or
the consummation of the transactions contemplated hereby by the Company or the
continuation of the Company's and each Subsidiaries' business and operations
after the Closing.

3.14 NO UNDISCLOSED LIABILITIES. Except as and to the extent
disclosed in SCHEDULE 3.14 and except:

(a) as and to the extent reflected or reserved against in the
Financial Statements at the date thereof; or

(b) obligations incurred after the Base Date, in the ordinary and
usual course of business in amounts and on terms consistent with past
practice;

neither Company nor any Subsidiary has any Liability. "Liability" means any
liability or obligation of any nature, whether direct, indirect, absolute,
accrued, contingent or otherwise, and whether due or to become due (including,
without limitation, any liability for Taxes and interest, penalties and other
charges payable with respect to any such liability or obligation).

3.15 DISCLOSURE. Except as contemplated by or disclosed in this
Agreement, including the Schedules and other documents delivered with such
Schedules, and in SCHEDULE 3.15, there is no fact or circumstance within the
knowledge of the Company that might reasonably result in any Material Adverse
Effect. None of the statements or information contained in any of the
representations, warranties or covenants of the Company set forth in this
Agreement (including the Schedules and other certificates, agreements or other
documents to be furnished hereunder) or in any other

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document or written statement furnished to the Acquiror by the Company contains
or will contain any misstatement of a material fact or omission to state a
material fact necessary to make the statements contained herein or therein not
misleading.

3.16 BROKERAGE. Except as set forth in SCHEDULE 3.16, neither the
Company nor any Subsidiary has dealt with any finder, broker, investment banker
or financial advisor in connection with any of the transactions contemplated by
this Agreement or the negotiations looking toward the consummation of such
transactions which might as a result reasonably give rise to the obligation to
pay a fee therefor.

3.17 AUTHORIZATION OF AGREEMENT.

(a) The Company has full power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the board of directors of the Company, and no other proceedings on the part of
the Company, other than approval by its Shareholders, are necessary.

(b) This Agreement and all other agreements herein contemplated to be
executed in connection herewith by the Company have been duly executed and
delivered by or for the benefit of the Company, and of the Company, constitute
binding obligations, enforceable in accordance with their respective terms
against the Company. The Company is not, and immediately prior to the Closing
Date each of the Company will not be, a party to, subject to or bound by any
provision of the Articles of Incorporation or Bylaws of the Company, or any
agreement or judgment, order, writ, prohibition, injunction or decree of any
court or other governmental body that would prevent the execution and delivery
of, or the consummation of the transactions contemplated by, this Agreement.

3.18 PROXY STATEMENT, ETC. None of the information regarding the
Company and the Subsidiaries supplied or to be supplied by the Company for
inclusion in (i) a Registration Statement on Form S-4 to be filed with the SEC
by Acquiror for the purpose of registering the shares of Common Stock to be
exchanged for Common Shares pursuant to the provisions of the Merger (the
"Registration Statement"), or (ii) the proxy statement to be mailed to the
Company's shareholders in connection with the Special Meeting (the "Proxy
Statement") will, at the respective times such documents are filed with the SEC
or any regulatory authority and, in the case of the Registration Statement, when
it becomes effective and, with respect to the Proxy Statement, when mailed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not misleading
or, in the case of the Proxy Statement or any amendment thereof or supplement
thereto, at the time of the Special Meeting, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to correct
any statement in any earlier communication with respect to the solicitation of
any proxy for such meeting.

4. REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR. The Acquiror
represents and warrants to the Company as follows:

4.1 ORGANIZATION. Acquiror is duly organized and validly existing as
a corporation in good standing under the laws of Nevada, with the corporate
power to own, lease and operate its properties and assets and to carry on its
business in the manner in which such business is now being conducted. The
Acquiror is duly qualified to transact business, and is in good standing, as a
foreign corporation where the character of its activity requires such
qualification.

4.2 AUTHORITY. The Acquiror has the requisite corporate power, and
prior to the Closing Date will have taken all corporate action, necessary to
execute, deliver and perform this Agreement. This Agreement and all other
agreements herein contemplated to be executed by the Acquiror have been (or upon
execution will have been) duly executed and delivered by the Acquiror have been
effectively authorized by all necessary corporate action on the part of the
Acquiror and constitute (or upon execution will constitute) legal, valid and
binding obligations of the Acquiror, enforceable against the Acquiror in
accordance with their respective terms.

4.3 BROKERAGE. Neither the Acquiror nor any affiliate, director,
officer or employee of the Acquiror has dealt with any finder or broker, in
connection with any of the transactions contemplated by this Agreement or the
negotiations looking toward the consummation of such transactions.

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4.4 ISSUANCE OF COMMON STOCK. The issuance, sale and delivery of the
shares of Common Stock pursuant to the Merger, in accordance with this
Agreement, have been, or will be on or prior to the Closing Date, duly
authorized by all necessary corporate action on the part of the Acquiror, and
such shares when so issued and sold, in accordance with the provisions of this
Agreement, will be duly and validly issued, fully paid and nonassessable.

4.5 ACQUIROR DISCLOSURE DOCUMENTS. Acquiror has furnished to the
Company its Annual Report on Form 10-K and its Annual Report to Shareholders for
the fiscal year ended September 30, 1996, its Proxy Statement for the 1997
Annual Meeting of Shareholders, and its Quarterly Report on Form 10-Q for the
period ending December 31, 1996,(such documents are collectively referred to
herein as the "Disclosure Documents"). Each of such Disclosure Documents, at
the time it was filed, complied in all material respects with all applicable
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and of the forms, rules and regulations of the SEC promulgated
thereunder, and did not contain at the time filed any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

4.6 REGISTRATION STATEMENT, ETC. None of the information regarding
Acquiror and its subsidiaries supplied or to be supplied by Acquiror for
inclusion in the Registration Statement or any other documents to be filed with
the SEC or any regulatory authority in connection with the transactions
contemplated hereby will, at the respective times such documents are filed with
the SEC or any regulatory authority and, in the case of the Registration
Statement, when it becomes effective, be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make the
statements therein not misleading. All documents which Acquiror is responsible
for filing with the SEC and any other regulatory authority in connection with
the Merger will comply as to form in all material respects with the provisions
of applicable law.

4.7 NO MATERIAL ADVERSE EFFECT. Since September 30, 1996, there has been
no change which would have a material adverse effect on Acquiror's (on a
consolidated basis) results of operations or financial position (an "Acquiror
MAE").

4.8 LITIGATION, ETC. Except as disclosed in the Disclosure Documents,
there is no action, suit, arbitration, proceeding, including any grievance
proceeding, or investigation pending or, to the knowledge of Acquiror,
threatened, before any court, tribunal, panel, master or governmental agency,
authority or body in which Acquiror or any of its subsidiaries is a party or to
which their respective businesses or properties are subject, except for such
actions, suits or proceedings as would not have an Acquiror MAE. There has not
been any legal proceeding instituted or, to Acquiror's knowledge, threatened
against Acquiror or any of its subsidiaries seeking to prohibit the consummation
of the transactions contemplated by this Agreement.

4.9 VIOLATIONS OF LAW. Neither Acquiror nor any of its subsidiaries is in
violation of any provision of any law, decree, order or regulation applicable to
Acquiror and its subsidiaries, except for such violations as would not have an
Acquiror MAE.

4.10 AGREEMENT NOT IN BREACH OF CERTAIN INSTRUMENTS. Neither the execution
and delivery of this Agreement nor the consummation of the transactions
contemplated hereby will violate or conflict with any provision of the Articles
of Incorporation or Bylaws of the Acquiror or Acquisition or result in a breach
of any of the terms and provisions of, or constitute a violation or default (or
an event that with notice or lapse of time, or both, would constitute a default)
under of conflict with (a) any of the documents filed as "material contracts"
pursuant to Item 601(a)(10) of Regulation S-K in any of the Disclosure
Documents, (b) any judgment, decree, order or award of any court, governmental
body or arbitrator to which Acquiror or any of its subsidiaries is a party, or
(c) any material law, rule or regulation applicable to Acquiror or any of its
subsidiaries.

4.11 APPROVALS. Other than (i) the filing of any required blue sky
filings, (ii) applicable regulatory approvals of the Merger (including, if
necessary, approval of the transaction under the HSR Act), (iii) Shareholder
approval of the Merger and (iv) the filing and effectiveness of the Registration
Statement, no consent, declaration, filing or approval or authorization or, or
registration with, any federal, state, municipal or local governmental or
regulatory authority or any other person is required in connection with the
execution and delivery of this Agreement by Acquiror and Acquisition or the
consummation of the transactions contemplated hereby by Acquisition or Acquiror.

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4.12 CERTAIN CHANGES. Except as disclosed in the Disclosure Documents,
since September 30, 1996, there has not been any material alteration in the
manner in which the Acquiror or any of its subsidiaries keeps its books,
accounts or records or in the accounting methods, principles or practices
therein reflected.

5. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants and
agrees that it will comply with each of the covenants and agreements set forth
in this SECTION 5.

5.1 ARTICLES OF INCORPORATION AND BYLAWS. Except as specifically
required by this Agreement, the Company will not, and will not allow any of the
Subsidiaries to, without the prior written consent of the Acquiror, take any of
the following actions or agree to take any of such actions:

(a) amend or otherwise change its Articles of Incorporation and
Bylaws or any instrument similar in purpose and intent to them;

(b) other than pursuant to the exercise or conversion of Existing
Stock Rights, issue any equity interests in the Company or such Subsidiary;

(c) issue or create any warrants, obligations, subscriptions,
options, convertible securities, or other commitments under which any
additional equity interests in the Company's or such Subsidiary's capital
stock may be authorized, issued or transferred from treasury;

(d) take any action that would make any of the representations and
warranties made by the Company in this Agreement untrue or incorrect; or

(e) agree to do any of the acts listed above.

5.2 EXISTENCE AND RIGHTS; LOAN PRACTICES. Except as specifically
required by this Agreement, between the date hereof and the Closing Date, the
Company will take all necessary actions to keep in full force and effect the
existence and good standing of the Company and each of the Subsidiaries and will
cause the operations of the Company and the Subsidiaries to be conducted only
according to their ordinary and usual course. Neither the Company nor any
Subsidiary shall do, nor permit to be done, anything that is represented or
warranted not to have occurred since the date of the Financial Statements as
represented in SECTION 3.3(c) hereof. The Company shall and shall cause each of
the Subsidiaries to: extend credit in accordance with existing lending
policies, except that neither the Company nor any Subsidiary shall, without the
prior written consent of Acquiror (A) make any extensions of credit aggregating
in excess of $200,000 to a person or entity that is not a borrower as of the
date hereof, except for loans which CIT Group/Consumer Finance, Inc. has
committed to purchase prior to their approval by the Association, or (B) engage
in any loan transaction or series of contemporaneous loan transactions involving
an aggregate of more than $200,000 with any borrower who has aggregate
extensions of credit in excess of $200,000 as of the date hereof; maintain
proper business and accounting records in accordance with generally accepted
principles; maintain its properties in good repair and condition, ordinary wear
and tear excepted; use its best efforts to preserve its business organization
intact, to keep the services of its present principal employees and to preserve
its good will and the good will of its suppliers, customers and others having
business relationships with it; use its best efforts to obtain any approvals or
consents required to maintain existing leases and other contracts in effect
following the Merger; comply in all respects with all laws, regulations,
ordinances, codes, orders, licenses and permits applicable to the properties and
operations of the Company and each Subsidiary the non-compliance with which
might reasonably be expected to have a Material Adverse Effect.

5.3 TRANSACTIONS AFFECTING BUSINESS AND PROPERTIES OF THE COMPANY.
Except as specifically required by this Agreement, between the date hereof and
the Closing Date, neither the Company nor any Subsidiary will authorize or incur
any long-term debt (other than deposit liabilities and liabilities under the
existing investor note program of the Company, provided that each note issued
under such program shall be pre-payable at any time by the Company without
penalty); mortgage, pledge or subject to lien or other encumbrance any of its
properties, except in the ordinary course of business; enter into any material
agreement, contract or commitment in excess of $50,000 except banking
transactions and treasury investments in debt securities, each in the ordinary
course of business and in accordance with policies and procedures in effect on
the date hereof, and except for agreements and commitments related to the
implementation by the Association of a wide area network that will be compatible
with Acquiror's systems (and not to exceed $200,000 for such

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implementation); make any investments except investments made in the ordinary
course of business, in accordance with past practice; amend or terminate any
Employee Benefit Plan except as required by law; make any contributions to
any Employee Benefit Plan except as required by the terms of such Employee
Benefit Plan in effect as of the date hereof; declare, set aside, make or pay
any dividend or other distribution with respect to its capital stock; redeem,
purchase or otherwise acquire, directly or indirectly, any of the capital
stock of the Company; increase the compensation of any officers, directors or
executive employees, except pursuant to existing compensation plans and
practices (including bonus plans); sell or otherwise dispose of any shares of
the capital stock of any Subsidiary; or sell or dispose of any of its assets
or properties other than in the ordinary course of business.

5.4 NEGOTIATIONS. During the term of this Agreement, the Company
agrees not to, and shall cause the Company's officers, directors and affiliates
(as such term is defined in the regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) and its representative, Carpenter & Co.,
not to, take any action, which could impede, or adversely effect the likelihood
of, the consummation of the transactions contemplated by this Agreement, or
otherwise directly or indirectly make, solicit, initiate, participate in or
otherwise encourage the submission of any proposal or offer from any person
(including, without limitation, any of the managers, officers, or employees of
the Company or any of its Subsidiaries) relating to any liquidation,
dissolution, recapitalization, reorganization, merger, consolidation or the
acquisition of all or a material portion of the assets of, or any equity
interest in, the Company or any of its Subsidiaries or any other similar
transaction or business combination involving the Company or any of its
Subsidiaries, other than the Merger (an "Alternative Transaction") and shall
not, and shall cause the Company's officers, directors and affiliates and its
representative, Carpenter & Co., not to, directly or indirectly, participate in
any negotiations or discussions regarding, or furnish any information with
respect to, or otherwise cooperate in any way in connection with, or assist or
participate in, facilitate or encourage, any effort or attempt to effect or seek
to effect, any Alternative Transaction with or involving any person other than
Acquiror or an affiliate of Acquiror; PROVIDED, HOWEVER, that the actions
prohibited above shall be subject to any action taken by the Board of Directors
of the Company in the exercise of its good faith judgment as to its fiduciary
duties to the stockholders of the Company, which judgment is based upon the
advice of independent counsel that a failure of the Board of Directors to take
such action might reasonably constitute a breach of its fiduciary duties to the
shareholders of the Company. The Company shall immediately cease and cause to
be terminated any existing activities, discussion or negotiations with any third
parties which may have been conducted on or prior to the date hereof with
respect to an Alternative Transaction and shall direct and use reasonable
efforts to cause its officers, advisors and representatives not to engage in any
such activities, discussions or negotiations. The Company shall notify Acquiror
promptly in writing if the Company becomes aware that any inquiries or proposals
are received by, any information is rejected from, or any negotiations or
discussions are sought to be initiated with the Company in respect of an
Alternative Transaction.

5.5 ACCESS AND INFORMATION BEFORE THE CLOSING. Between the date
hereof and the Closing Date, the Company and the Subsidiaries will afford to the
Acquiror and the Acquiror's counsel, accountants and other representatives
reasonable access, upon reasonable notice, to all of the properties, books,
contracts and records of the Company and the Subsidiaries and will furnish the
Acquiror and the Acquiror's counsel, accountants and other representatives with
all information, including copies of books, contracts and records, concerning
the affairs of the Company and the Subsidiaries, which Acquiror may reasonably
request.

5.6 CURRENT INFORMATION. The Company will advise the Acquiror in
writing as promptly as possible of:

(a) the occurrence of any event that renders any of the
representations or warranties of the Company set forth herein materially
inaccurate;

(b) the awareness of the Company that any representation or warranty
of the Company set forth herein was not accurate in all material respects
when made; and

(c) the failure of the Company to comply with or accomplish any of
the covenants or agreements set forth herein in any material respect.

The Company will also provide the Acquiror promptly on becoming available copies
of all material operating and financial reports prepared by or for the normal
conduct of business of the Company.

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5.7 CONSENTS. Subject to SECTION 5.4, the Company agrees to use its
best efforts to take, or cause to be taken, all action, and to do or cause to be
done all things necessary, proper, or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, and shall refrain from any action that would materially impair
the likelihood of the consummation of the transactions contemplated by this
Agreement. In particular, the Company shall use its best efforts to obtain as
soon as practicable, and, in any event, prior to the Closing Date, all consents,
authorizations, orders and approvals required in connection with, and waivers of
violations, breaches and defaults that may be caused by, the consummation of the
transactions contemplated by this Agreement, and to make all declarations,
filings and registrations, required to be obtained or made by it pursuant to any
law, regulation, order, agreement or instrument prior to consummating the
transactions contemplated hereby, whether any such consent, waiver,
authorization or approval, or such declaration, filing or registration, is to be
obtained from or made with private parties or governmental or regulatory
authorities. Subject to SECTION 5.4, the Company hereby agrees not to take any
action that may materially and adversely affect the obtaining of any such
consent, waiver, authorization or approval.

5.8 CONTRACTS. Between the date hereof and the Closing Date, the
Company will not and will not allow any Subsidiary to, without the prior written
consent of the Acquiror, amend or allow to be amended in any material respect or
consent to the termination of any Contract.

5.9 INSURANCE. Between the date hereof and the Closing Date, the
Company and each of the Subsidiaries shall continue in force its existing
insurance policies or replace them with new policies providing substantially the
same coverage and rates.

5.10 NO DEFAULT. Neither the Company nor any Subsidiary shall do any
act or omit to do any act, or permit any act or omission to act which will cause
a breach of any contract, agreement or commitment of the Company or any
Subsidiary which could have a Material Adverse Effect and the Company and the
Subsidiaries shall maintain in full force and effect all permits, licenses and
authorizations which are material to the condition (financial and otherwise),
assets, liabilities, properties, business and results of operations of the
Company and the Subsidiaries.

5.11 COMPLIANCE WITH LAWS. The Company and its Subsidiaries shall
duly comply with all laws applicable to them and their properties, business,
operations and employees, except to the extent that any such noncompliance would
not have a Material Adverse Effect.

5.12 REGISTRATION STATEMENT. The Company will furnish or cause to be
furnished to Acquiror all the information concerning the Company and the
Subsidiaries required for inclusion in the Registration Statement, or any
statement or application made by Acquiror to any governmental body in connection
with the transactions contemplated by this Agreement. Any financial statement
for any fiscal year provided under this paragraph must include the audit opinion
and the consent of the Auditors to use such opinion in such Registration
Statement.

5.13 POOLING. Neither the Company nor any Subsidiary shall take any
action which with respect to the Company would disqualify the Merger as a
"pooling of interests" for accounting purposes.

5.14 AMENDMENT TO EMPLOYMENT AGREEMENT. The Company shall cause Mike
McGuire to enter into an amendment (the "Amendment to Employment Agreement") to
his existing Employment Agreement with the Association, effective as of the
Closing Date, substantially on the terms set forth in EXHIBIT C hereto. Prior
to the Effective Time, no amendment to Mr. McGuire's Employment Agreement shall
be made or effected, except for the Amendment to Employment Agreement.

5.15 AFFILIATES. Prior to the Effective Time, the Company shall
deliver to Acquiror a letter identifying all persons who are, at the time the
Merger is submitted to a vote to the stockholders of the Company, "affiliates"
of the Company for purposes of Rule 145 under the Securities Act. The Company
shall cause each person who is identified as an "affiliate" in such letter to
deliver to Acquiror on or prior to the Effective Time a written statement, in
form satisfactory to Acquiror and the Company (each a "Company Affiliate
Agreement"), that such person will not offer to sell, transfer or otherwise
dispose of any of the shares of Common Stock issued to such person pursuant to
the Merger (or any other shares of Common Stock held by such "affiliate"),
except in accordance with the applicable provisions of the Securities Act and
the rules and regulations thereunder. Acquiror shall be entitled to place
legends on any certificates of Common Stock issued to such affiliates to
restrict transfer of such shares as set forth above. Each such Company
Affiliate Agreement shall also

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<PAGE>

contain, among other things, an agreement of such "affiliate" to refrain from
selling the shares of Common Stock issued to such "affiliate" in the Merger
(or any other shares of Common Stock held by such "affiliate") until such
time as a post-Merger financial statement covering 30 days or more of
post-Merger combined results of operations have been published as provided in
SEC Release Nos. AS-130 and 135 (the "Post-Merger Statement"). Acquiror
agrees to use its best efforts to cause the Post-Merger Statement to be
published as soon as possible following the end of the first fiscal quarter
of Acquiror containing 30 days of post-Merger combined results of operations.

5.16 RESIGNATIONS. Prior to the Effective Time, the Company and the
Subsidiaries shall cause each of their respective directors to execute and
deliver to Acquiror his or her resignation from all directorships with the
Company, effective as of the Effective Time (the "Resignations").

5.17 ANNUAL FINANCIAL STATEMENTS. As soon as available, the Company
shall deliver to Acquiror its consolidated financial statements for the fiscal
year ended December 31, 1996 consisting of a balance sheet as of December 31,
1996 and the related statement of operations, statement of cash flows and
statement of shareholders' equity for the fiscal year ended December 31, 1996
(the "1996 Audited Statements"), as audited by the Auditors. Such delivery
shall constitute an additional representation and warranty of the Company that
the 1996 Audited Statements: (i) have been prepared in accordance with the books
and records of the Company; (ii) have been prepared in accordance with GAAP
throughout the periods covered; (iii) reflect and provide adequate reserves and
disclosures with respect to all liabilities of the Company, including all
contingent liabilities, as of their respective dates to the extent required by
GAAP; and (iv) present fairly the financial position and results of operations
of the Company at and for the fiscal periods ended on such dates. Such 1996
Audited Statements shall have fully accrued for, and shall reflect as such, (i)
all bonuses payable to employees of the Company or any Subsidiary that are
payable based upon the financial condition of results of operations of the
Company or any Subsidiary for 1996, (ii) all amounts reasonably estimated to be
due and/or payable as a result of any matter disclosed on SCHEDULE 3.4, and
(iii) any fees listed in SCHEDULE 3.16, except for an aggregate of $225,000
(which, if proper, may be accrued in 1997). The report of the Auditors in such
1996 Audited Statements shall be unqualified and such 1996 Audited Statements
shall reflect shareholders' equity of at least $10,000,000.

5.18 QUARTERLY AND MONTHLY FINANCIAL STATEMENTS. Prior to the
Effective Time, the Company shall deliver to Acquiror, as soon as possible but
in no event later than 45 days after the end of each fiscal quarter, a
consolidated balance sheet as of the last day of such fiscal period and the
consolidated statements of income, shareholders' equity and cash flows of the
Company and its subsidiaries for the fiscal period then ended prepared in
accordance with generally accepted accounting principles. The Company shall
also deliver to Acquiror, as soon as available but in no event later than 30
days after the end of each month, monthly statements of income and financial
position for any periods after the date hereof.

5.19 SUPPLEMENTS TO DISCLOSURE SCHEDULES. From time to time prior to
the Effective time, the Company will promptly supplement or amend the Disclosure
Schedules which it has delivered pursuant to this Agreement with respect to any
matter hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in any such
Disclosure Schedules or which is necessary to correct any information in any
such disclosure letter which has been rendered inaccurate thereby. Subject to
SECTION 9.1, no supplement or amendment to any such Disclosure Schedule shall
have any effect for the purpose of determining satisfaction of the conditions
set forth in SECTION 8.1 of this Agreement.

5.20 COVENANTS NOT TO COMPETE. Prior to the Closing, the Company shall
cause each one of its nonemployee directors to execute and deliver to Acquiror a
written agreement (the "Directors Agreements"), effective as of the Effective
Time, wherein each such nonemplyee director agrees not to compete with Acquiror
or its affiliates in the California cities of Anaheim, Irvine and Tustin for a
period of two (2) years following the Effective Time. The Director Agreements
shall provide for a payment to each such nonemployee director of $45,000 (with
one-half being payable on the Closing Date and one-half being payable on the
first anniversary of the Closing Date) and shall contain such other terms as are
mutually satisfactory to each of such nonemployee directors and Acquiror.

6. COVENANTS AND AGREEMENTS OF THE ACQUIROR. The Acquiror covenants and
agrees that it will comply with each of the covenants and agreements set forth
in this SECTION 6.

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<PAGE>

6.1 CURRENT INFORMATION. The Acquiror will advise the Company in
writing as promptly as possible, but in any event prior to the Closing, of:

(a) the occurrence of any event that renders any of the
representations or warranties of the Acquiror set forth herein materially
inaccurate;

(b) the awareness of the Acquiror that any representation or warranty
of the Acquiror, set forth herein was not accurate in all material respects
when made; and

(c) the failure of the Acquiror to comply with or accomplish any of
the covenants or agreements set forth herein in any material respect.

6.2 LISTING. Acquiror shall file an application with the Nasdaq
National Market to list the shares of Common Stock to be issued hereunder and
shall use its best efforts to cause such application to be approved prior to the
Closing Date and to comply in all material respects with the requirements of the
Nasdaq National Market.

6.3 CONSENTS. Acquiror agrees to use its best efforts to take, or
cause to be taken, all action, and to do or cause to be done all things
necessary, proper, or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
and shall refrain from any action that would materially impair the likelihood of
the consummation of the sale of the Interests hereunder and the transactions
contemplated by this Agreement. In particular, the Acquiror shall use its best
efforts to obtain as soon as practicable, and, in any event, prior to the
Closing Date, all consents, authorizations, orders and approvals required in
connection with, and waivers of violations, breaches and defaults that may be
caused by, the consummation of the Merger hereunder and the other transactions
contemplated by this Agreement, and to make all declarations, filings and
registrations, required to be obtained or made by it pursuant to any law,
regulation, order, agreement or instrument prior to consummating the
transactions contemplated hereby, whether any such consent, waiver,
authorization or approval, or such declaration, filing or registration, is to be
obtained from or made with private parties or governmental or regulatory
authorities. Acquiror hereby agrees not to take any action that may materially
and adversely affect the obtaining of any such consent, waiver, authorization or
approval.

6.4 REGISTRATION STATEMENT. Acquiror shall prepare and file with the
SEC as soon as is reasonably practicable a Registration Statement on Form S-4
relating to the shares of Common Stock to be issued in the Merger and shall use
all reasonable efforts to have the Registration Statement declared effective by
the SEC as promptly as practicable. Acquiror also shall take any action
required to be taken under state blue sky or securities laws in connection with
the issuance of the Common Stock pursuant to the Merger. Acquiror and the
Company will furnish each other with all information concerning themselves,
their subsidiaries, directors, officers and stockholders and such other matters
as may be necessary or advisable for the Registration Statement, filings under
the blue sky laws, and any other statement or application made by or on behalf
of Acquiror or the Company to any governmental body in connection with the
Merger and the other transactions contemplated by this Agreement.

6.5 PROXY STATEMENT. Acquiror will furnish the Company all the
information concerning Acquiror required for inclusion in the Proxy Statement to
be sent to the shareholders of the Company, or in any statement or application
made by the Company to any governmental body in connection with the transactions
contemplated by this Agreement.

6.6 POOLING. Neither Acquiror nor any of its subsidiaries shall take
any action which with respect to Acquiror would disqualify the Merger as a
"pooling of interests" for accounting purposes.

6.7 REPRESENTATIONS AND WARRANTIES. Except as specifically required
by this Agreement, Acquiror will not, and will not allow Acquisition to, without
the prior written consent of the Company take any action that would make any of
the representations and warranties made by Acquiror in this Agreement untrue or
incorrect.

6.8 AFFILIATES. At the Closing, Acquiror shall deliver to the
Company a letter identifying all persons who are, at the time of the Closing
Date, "affiliates" of the Company for purposes of Rule 145 under the Securities
Act. Acquiror shall cause each person who is identified as an "affiliate" in
such letter to deliver to the Company on or prior to the Effective Time a
written statement, in form satisfactory to Acquiror and the Company (each an
"Acquiror Affiliate

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<PAGE>

Agreement"), that such person will not offer to sell, transfer or otherwise
dispose of any of the shares of Common Stock held by such person, except in
accordance with the applicable provisions of the Securities Act and the rules
and regulations thereunder. Acquiror shall be entitled to place legends on
any certificates of Common Stock issued to such affiliates to restrict
transfer of such shares as set forth above. Each such Acquiror Affiliate
Agreement shall also contain, among other things, an agreement of such
"affiliate" to refrain from selling any of such "affiliate's" shares of
Common Stock until the publication of the Post-Merger Statement.

7. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the
Company to consummate the Merger hereunder and to make the deliveries
contemplated at the Closing shall, in addition to the conditions set forth
elsewhere herein, be subject to satisfactory completion on or prior to the
Closing Date of each of the following conditions:

7.1 CORRECTNESS OF REPRESENTATIONS AND WARRANTIES. Subject to
SECTION 9.1(b), each of the representations and warranties of the Acquiror
contained in this Agreement shall have been true and correct on the date hereof
and shall be true and correct on the Closing Date with the same effect as if
made on the Closing Date, and the Acquiror shall have executed and delivered to
the Company at Closing a certificate to that effect.

7.2 PERFORMANCE OF COVENANTS AND AGREEMENTS. Subject to
SECTION 9.1(b), all of the covenants and agreements of the Acquiror contained in
this Agreement and required to be performed by the Acquiror before the Closing
Date shall have been performed in all respects, and the Acquiror shall have
executed and delivered to the Company at Closing a certificate to that effect.

7.3 OPINION OF COUNSEL FOR ACQUIROR. The Company shall have received
an opinion of counsel from Jenkens & Gilchrist, a Professional Corporation,
counsel for the Acquiror, in form and substance reasonably satisfactory to the
Company and dated the Closing Date, substantially in the form of EXHIBIT D
hereto. In rendering such opinion, counsel may rely upon certificates of public
officials and upon certificates of officers of the Acquiror as to factual
matters and on opinions of other counsel of good standing whom such counsel
believes to be reliable as to matters with respect to which the Nevada General
Corporation Law or the laws of California are applicable, provided that all such
certificates and opinions of other counsel shall be delivered to the Company
along with such counsel's opinion.

7.4 ADDITIONAL CLOSING DOCUMENTS. At the Closing, Acquiror shall
execute and acknowledge (where appropriate) and deliver to the Company such
documents and certificates necessary to carry out the terms and provisions of
this Agreement, including without limitation, the following:

(i) True, correct and complete copies of Acquiror's Articles of
Incorporation and all amendments thereto, duly certified as of a recent date
by the Secretary of State of the State of Nevada.

(ii) True, correct and complete copies of the Articles of
Incorporation and all amendments thereto, of Acquisition, duly certified as
of a recent date by the Secretary of State of the State of Nevada.

(iii) Good standing and existence certificates for Acquiror and
Acquisition, each dated as of the recent date, issued by the appropriate
state officials, duly certifying as to the existence and good standing of
Acquiror and Acquisition in the State of Nevada.

(iv) A certificate, dated as of the Closing Date, executed by the
Secretary or an Assistant Secretary of Acquiror pursuant to which such
officer shall certify (a) the due adoption by the Board of Directors of
Acquiror of corporate resolutions attached to such certificate authorizing
the execution and delivery of this Agreement and the other agreements and
documents contemplated hereby and the taking of all actions contemplated
hereby and thereby; (b) the incumbency and true signatures of those officers
of Acquiror duly authorized to act on its behalf in connection with the
transactions contemplated by this Agreement and to execute and deliver this
Agreement and other agreements and documents contemplated hereby and the
taking of all actions contemplated hereby and thereby on behalf of Acquiror,
and (c) that the copy of the Bylaws of Acquiror attached to such certificate
is true and correct and such Bylaws have not been amended except as reflected
in such copy.

(v) A certificate, dated as of the Closing Date, executed by the
Secretary or an Assistant Secretary of Acquisition, pursuant to which such
officer shall certify (a) the due adoption by the Board of Directors of

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Acquisition of corporate resolutions attached to such certificate authorizing
the execution and delivery of the Agreement and the taking of all actions
contemplated thereby; (b) the due adoption by the sole shareholder of the
Acquisition of resolutions authorizing the Merger and the execution and
delivery of this Agreement and the other agreements and documents
contemplated hereby and the taking of all actions contemplated hereby and
thereby; and (c) the incumbency and true signatures of those officers of
Acquisition duly authorized to act on its behalf in connection with the
transactions contemplated by this Agreement and to execute and deliver the
Agreement and the taking of all actions contemplated thereby on behalf of
Acquisition; and (d) that the copy of the bylaws of Acquisition attached to
such certificate is true and correct and such Bylaws have not been amended
except as reflected in such copy.

(vi) All consents required to be obtained by Acquiror or
Acquisition from third parties to consummate the transactions contemplated by
this Agreement.

(viii) All other documents required to be delivered to the Company by
Acquiror under the provisions of this Agreement, and all other documents,
certificates and instruments as are reasonably requested by the Company or
its counsel.

7.5 NO LEGAL BAR.

(a) There shall not have been instituted or threatened any legal
proceeding seeking to prohibit the consummation of the transactions contemplated
by this Agreement or to obtain substantial damages with respect thereto.

(b) None of the parties hereto shall be prohibited by any law, order,
writ, injunction or decree of any governmental body of competent jurisdiction
from consummating the transactions contemplated by this Agreement, and no action
or proceeding shall then be pending that questions the validity of this
Agreement, any of the transactions contemplated hereby or any action that has
been taken by any of the parties or any corporate entity, in connection
herewith, or in connection with any of the transactions contemplated hereby.

7.6 LISTING. The Nasdaq National Market shall have approved the
listing, subject to official notice of issuance, of the shares of Common Stock
to be issued hereunder.

7.7 SHAREHOLDER APPROVAL. This Agreement shall have been approved by
the shareholders of the Company in accordance with the applicable requirements
of the CCC and of the Articles of Incorporation and Bylaws of the Company.

7.8 REGISTRATION STATEMENT. The Registration Statement (as amended
or supplemented) shall have become effective under the Securities Act and shall
not be subject to any stop order, and no action, suit, proceeding or
investigation by the SEC to suspend the effectiveness of the Registration
Statement shall have been initiated and be continuing, or have been threatened
and be unresolved. Acquiror shall have received all state securities law or
blue sky authorizations necessary to carry out the transactions contemplated by
this Agreement.

7.9 ACQUIROR MAE. Since September 30, 1996, there shall have been no
Acquiror MAE.

7.10 HSR ACT. If filing under the HSR Act is required to be made
prior to consummation of the Merger, early termination shall have been granted
or applicable waiting periods shall have expired under the HSR Act.

7.11 TAX-FREE OPINION. The Company shall have received an opinion
from KPMG Peat Marwick LLP or Company counsel to the effect that the Merger will
be treated as a "tax-free" reorganization within Section 368 of the Internal
Revenue Code of 1986, as amended.

8. CONDITIONS TO OBLIGATIONS OF ACQUIROR. The obligations of the
Acquiror to consummate the Merger hereunder and to make the deliveries
contemplated at the Closing shall, in addition to conditions set forth elsewhere
herein, be subject to the satisfactory completion on or prior to the Closing
Date of each of the following conditions, any of which may be waived by the
Acquiror:

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8.1 CORRECTNESS OF REPRESENTATIONS AND WARRANTIES. Subject to
SECTION 9.1(a), each of the representations and warranties of the Company
contained in this Agreement shall have been true and correct on the date hereof
and shall be true and correct in all respects on the Closing Date with the same
effect as if made on the Closing Date, and the Company shall have executed and
delivered to the Acquiror at Closing a certificate of an officer of the Company
to that effect.

8.2 PERFORMANCE OF COVENANTS AND AGREEMENTS. Subject to
SECTION 9.1(a), all of the covenants and agreements of the Company contained in
this Agreement and required to be performed on or before the Closing Date shall
have been performed in all respects, and the Company and shall have delivered to
the Acquiror at Closing a certificate of an officer of the Company to that
effect.

8.3 OPINION OF COUNSEL FOR THE COMPANY. The Acquiror shall have
received an opinion of counsel from King, Purtich, Holmes, Paterno & Berliner,
counsel for the Company, in form and substance reasonably satisfactory to the
Acquiror and dated the Closing Date, and substantially in the form of EXHIBIT E
hereto. In rendering such opinion, counsel may rely upon certificates of public
officials and upon certificates of officers of the Company as to factual matters
and on opinions of other counsel of good standing, whom such counsel believes to
be reliable, provided that all such certificates and opinions of other counsel
shall be delivered to the Acquiror along with such counsel's opinion.

8.4 ADDITIONAL CLOSING DOCUMENTS. At the Closing, the Company shall
execute and acknowledge (where appropriate) and deliver to Acquiror such
documents and certificates necessary to carry out the terms and provisions of
this Agreement, including without limitation, the following (all of such actions
constituting conditions precedent to Acquiror's obligations to close hereunder):

(i) True, correct and complete copies of the Articles of
Incorporation of the Company and each of the Subsidiaries and all amendments
thereto, each duly certified as of a recent date by the California Secretary
of State, and true, correct and complete copies of the Bylaws of the Company
and each of the Subsidiaries and all amendments thereto.

(ii) Certificates of existence, each dated as of a recent date,
issued by the California Secretary of State, duly certifying as to the
existence of the Company and each of the Subsidiaries under the laws of the
State of California.

(iii) Certificates of good standing, each dated as of a recent date,
issued by the California Franchise Tax Board, duly certifying as to the good
standing of the Company and each of the Subsidiaries in the State of
California.

(iv) A certificate, dated as of a recent date, issued by the
Federal Deposit Insurance Corporation (the "FDIC"), duly certifying that the
deposits of the Association are insured by the FDIC pursuant to the FDIA.

(v) A certificate, dated as of the Closing Date, executed by the
President or other appropriate executive officer of the Company, pursuant to
which such officer shall certify (a) the due adoption by the Board of
Directors of the Company of corporate resolutions attached to such
certificate authorizing the execution and delivery of this Agreement and the
other agreements and documents contemplated hereby, and the taking of all
actions contemplated hereby and thereby; (b) the due adoption by the
shareholders of the Company of resolutions authorizing the Merger and the
execution and delivery of this Agreement and the other agreements and
documents contemplated hereby and the taking of all actions contemplated
hereby and thereby; and (c) the incumbency and true signatures of those
officers of the Company duly authorized to act on its behalf in connection
with the transactions contemplated by this Agreement and to execute and
deliver this Agreement and other agreements and documents contemplated hereby
and the taking of all actions contemplated hereby and thereby on behalf of
the Company.

(vi) All consents required to be obtained by the Company or any
Subsidiary from third parties to consummate the transactions contemplated by
this Agreement.

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<PAGE>

(vii) All other documents required to be delivered to Acquiror by
the Company under the provisions of this Agreement, and all other documents,
certificates and instruments as are reasonably requested by Acquiror or its
counsel.

8.5 NO LEGAL BAR.

(b) None of the parties hereto shall be prohibited by any law, order,
writ, injunction or decree of any governmental body of competent jurisdiction
from consummating the transactions contemplated by this Agreement and no action
or proceeding shall then be pending that questions the validity of this
Agreement, any of the transactions contemplated hereby or any action that has
been taken by any of the parties in connection herewith or in connection with
any of the transactions contemplated hereby.

8.6 MATERIAL ADVERSE EFFECT. Since the Base Date, there shall have
been no Material Adverse Effect.

8.7 LISTING. The Nasdaq National Market shall have approved the
listing, subject to official notice of issuance, of the shares of Common Stock
to be issued hereunder.

8.8 POOLING LETTER. Acquiror shall have received a letter from
Ernst & Young LLP, in form reasonably acceptable to Acquiror, to the effect that
the transactions contemplated by this Agreement will be accounted for as a
"pooling of interests" under GAAP.

8.9 AMENDMENT TO EMPLOYMENT AGREEMENT. Mike McGuire shall have
entered into the Amendment to Employment Agreement.

8.10 REGISTRATION STATEMENT. The Registration Statement (as amended or
supplemented) shall have become effective under the Securities Act and shall not
be subject to any stop order, and no action, suit, proceeding or investigation
by the SEC to suspend the effectiveness of the Registration Statement shall have
been initiated and be continuing, or have been threatened or be unresolved.
Acquiror shall have received all state securities law or blue sky authorizations
necessary to carry out the transactions contemplated by this Agreement.

8.11 SHAREHOLDER APPROVAL. This Agreement shall have been approved by
the shareholders of the Company in accordance with the applicable requirements
of the CCC and of the Articles of Incorporation and Bylaws of the Company.

8.12 EXISTING STOCK RIGHTS. Acquiror shall have received duly
executed copies of the Treatment of Existing Stock Right Agreements.

8.13 RESIGNATIONS. Acquiror shall have received duly executed copies
of the Resignations.

8.14 COMPANY AFFILIATE AGREEMENTS. Acquiror shall have received duly
executed copies of the Company Affiliate Agreements.

8.15 DISSENTERS. Holders of no more than 9.9% of the outstanding
Common Shares shall have elected to exercise appraisal rights pursuant to the
CCC.

8.16 ACCOUNTANT'S LETTER. Acquiror shall have received from KPMG Peat
Marwick LLP a letter dated the effective date of the Registration Statement
under the Securities Act, with respect to certain financial and statistical
information concerning the Company included or incorporated by reference in the
Registration Statement, in form and substance customary in transactions of the
nature of the Merger.

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<PAGE>

8.17 HSR ACT. If filing under the HSR Act is required to be made
prior to consummation of the Merger, early termination shall have been granted
or applicable waiting periods shall have expired under the HSR Act.

8.18 REGULATORY APPROVAL. Acquiror shall have received approval of
the Merger and the "change in control" of the Association contemplated hereby
from all applicable regulatory agencies, including without limitation the FDIC
and the California Department of Corporations.

8.19 DIRECTOR AGREEMENTS. The Director Agreements shall have been
duly executed and delivered to Acquiror.

9. TERMINATION OF AGREEMENT.

9.1 EVENTS OF TERMINATION. This Agreement may be, by written notice
given prior to the Closing Date in the manner hereinafter provided, terminated
and the transactions contemplated hereby shall be abandoned (and, subject to
SECTION 9.2, this Agreement shall be of no further force or effect between the
parties hereto, except as to liabilities for misrepresentations, breaches or
defaults in connection with any warranty, representation, covenant, duty or
obligation given, occurring or arising prior to the date of termination and
abandonment):

(a) MISREPRESENTATION, BREACH OR FAILURE BY THE COMPANY. By the
Acquiror, at Acquiror's election, if any of the conditions precedent to its
obligation to close stated in SECTION 8 have not been fulfilled or waived by the
scheduled Closing Date, or if there has been any misrepresentation or breach of
or failure to satisfy timely on the part of the Company any condition or any
warranty, representation or agreement contained herein, if such breach or
failure is not cured within ten (10) days after receipt of notice from the
Acquiror. Notwithstanding the foregoing, the Acquiror shall not be entitled to
terminate the Agreement by reason of (i) any misrepresentation or breach of, or
failure to cure any misrepresentation or breach of, any warranty or
representation made by the Company or (ii) any breach of, or failure to comply
with, any covenant or agreement of the Company contained in this Agreement, if
Company has provided Acquiror with written notice of such breach or failure
prior to the Closing, has used its best efforts to cure such breach or failure
promptly and in any event within any cure period provided hereunder and Acquiror
has not elected to terminate this Agreement within 15 days of the later to occur
of (A) receipt by Acquiror of notice of such breach or failure and (B) the end
of any applicable cure period respecting such breach or failure.

(b) MISREPRESENTATION, BREACH OR FAILURE BY THE ACQUIROR. By the
Company, at the Company's election, if any of the conditions precedent to its
obligations to close stated in SECTION 7 have not been fulfilled or waived by
the scheduled Closing Date, or if there has been any misrepresentation or breach
of or failure to satisfy timely on the part of the Acquiror any condition or any
warranty, representation or agreement contained herein, if such breach or
failure is not cured within ten (10) business days of receipt of notice from the
Company. Notwithstanding the foregoing, the Company shall not be entitled to
terminate the Agreement by reason of (i) any misrepresentation or breach of, or
failure to cure any misrepresentation or breach of, any warranty or
representation made by the Acquiror or (ii) any breach of, or failure to comply
with, any covenant or agreement of the Acquiror contained in this Agreement, if
Acquiror has provided the Company with written notice of such breach or failure
prior to the Closing, has used its best efforts to cure such breach or failure
promptly and in any event within any cure period provided hereunder and the
Company has not elected to terminate this Agreement within 15 days of the later
to occur of (A) receipt by the Company of notice of such breach or failure and
(B) the end of any applicable cure period respecting such breach or failure.

(c) EXPIRATION OF TIME. By either the Company, on the one hand, or
the Acquiror, on the other hand, if the Closing shall not have taken place by
September 30, 1997; provided, however, that neither the Company nor the Acquiror
shall be entitled to terminate this Agreement pursuant to this SECTION 9.1(c) if
such party is in material breach of this Agreement at such time.

(d) LACK OF SHAREHOLDER APPROVAL. By either Acquiror or the Company
if, at the Special Meeting (including any adjournments thereof), this Agreement
and the Merger shall fail to be approved and adopted by the Company's
shareholders in accordance with the CCC and the Company's Articles of
Incorporation.

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<PAGE>

(e) LACK OF SHAREHOLDER MEETING. By Acquiror, if the Special Meeting
has not been held and the Merger approved by the Company's shareholders by
May 15, 1997, unless delayed by circumstances beyond the reasonable control of
the Company.

(f) FIDUCIARY DUTY. By the Company, if the Company, based upon the
fiduciary obligation of the Board of Directors under applicable law, after
taking into account in good faith the advice of independent counsel with respect
thereto, enters into an Alternative Transaction.

(g) WITHDRAWAL OF RECOMMENDATION, ETC. By Acquiror, if (i) the Board
of Directors of the Company fails to recommend prior to the Special Meeting or
withdraws, modifies or changes its recommendations of this Agreement or the
Merger (other than pursuant to a termination of this Agreement as otherwise
permitted hereunder) in a manner adverse to Acquiror or shall have resolved to
do any of the foregoing; (ii) if the Board of Directors of the Company shall
have recommended to the Shareholders of the Company an Alternative Transaction
or shall have resolved to do so; (iii) a tender offer or exchange offer for 20%
or more of the outstanding shares of the Company is commenced, and the Board of
Directors of the Company recommends that Shareholders tender their shares in
such tender or exchange offer; or (iv) any person shall have acquired after the
date of this Agreement beneficial ownerships or the right to acquire beneficial
ownership of, or any "group" (as such term is defined under Section 13(d)(3) of
the Exchange Act and the rules and regulations promulgated thereunder) shall
have been formed which beneficially owns, or has the right to acquire beneficial
ownership of, more than 20% of the then outstanding shares of the Company or
shares representing 20% or more of the outstanding voting power of the Company.

9.2 FEES, EXPENSES AND OTHER PAYMENTS.

(a) Subject to SECTION 9.2(c) and (d), all Expenses (as defined in
paragraph (b) of this SECTION 9.2) incurred by the parties hereto shall be borne
solely and entirely by the party which has incurred such Expenses.

(b) "Expenses" as used in this Agreement shall include all out-of-
pocket expenses (including, without limitation, all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to a party
hereto and its affiliates) incurred by a party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution and
performance of this Agreement, the preparation, printing, filing and mailing of
the Registration Statement and the Proxy Statement, the solicitation of
stockholder approvals and all other matters related to the consummation of the
transactions contemplated hereby.

(i) The Company shall pay to Acquiror in same day funds the
aggregate amount of all Expenses incurred by Acquiror and its affiliates in
connection with this Agreement and the transactions contemplated hereby
(including fees and expenses of counsel, accountants, and financial advisors
incurred by Acquiror) (the "Acquiror Expense Reimbursement") if any of the
following events shall have occurred and there shall be no material breach of
this Agreement continuing by Acquiror: Acquiror shall have terminated this
Agreement in accordance with the terms of SECTION 9.1(a), SECTION 9.1(d),
SECTION 9.1(e), SECTION 9.1(f) OR SECTION 9.1(g); provided, however, that the
Acquiror Expense Reimbursement shall be payable by the Company upon a
termination by Acquiror pursuant to SECTION 9.1(a) only if Acquiror terminated
due to a breach of this Agreement by the Company of a representation, warranty
or covenant of the Company contained herein or due to a failure of any of the
conditions set forth in SECTION 8.3, SECTION 8.4, SECTION 8.9, SECTION 8.11,
SECTION 8.12, SECTION 8.13, SECTION 8.14, SECTION 8.15, SECTION 8.16, or
SECTION 8.19 (other than by reason of the failure of the Acquiror to reasonably
approve the terms of the Director Agreements).

(ii) Acquiror shall pay to the Company in same day funds the
aggregate amount of all Expenses incurred by the Company and its affiliates in
connection with this Agreement and the transactions contemplated hereby
(including fees and expenses of counsel, accountants and financial advisors
incurred by the Company) (the "Company Expense Reimbursement") if any of the
following events shall have occurred and there shall be no material breach of
this Agreement continuing by the Company: the Company shall have terminated this
Agreement (A) due to the failure of Acquiror to receive approval of the Merger
from the FDIC and/or the California Department of Corporations on or before
September 30, 1997 or (B) in accordance with SECTION 9.1(b); provided, however,
that the Company Expense Reimbursement shall be payable by Acquiror pursuant to
SECTION 9.1(b) only if the Company terminated due to a breach

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<PAGE>

of this Agreement by Acquiror of a representation, warranty or covenant of
Acquiror contained herein or due to a failure of any of the conditions set
forth in SECTION 7.3, SECTION 7.4 OR SECTION 7.6.

(iii) The Company shall pay to Acquiror in same day funds a fee
of $1,500,000 (the "Termination Fee") upon demand and with the Acquiror
Expense Reimbursement, if (A) this Agreement shall have been terminated; (B)
there shall be no material breach of this Agreement by Acquiror continuing at
the time of such termination; (C) any of the following events shall have
occurred: (I) the Company shall have willfully breached the representations
warranties, covenants or conditions contained in this Agreement or the other
agreements executed in connection herewith; or (II) such termination was by
Acquiror pursuant to SECTION 9.1(d), SECTION 9.1(f), or SECTION 9.1(g); or
(III) such termination was by the Company pursuant to SECTION 9.1(e) or due
to a failure of the condition set forth in SECTION 7.11 hereof; and (D)(I)
the Company shall have entered into an agreement with respect to an
Alternative Transaction on or prior to June 1, 1998; or (II) the stockholders
of the Company shall fail to approve the Merger and the transactions
contemplated hereby and shall approve an Alternative Transaction on or prior
to June 1, 1998; or (III) on or prior to June 1, 1998, the Company's
stockholders shall receive a proposal for an Alternative Transaction and such
proposal shall result in a party unaffiliated with Acquiror acquiring
securities of the Company representing in excess of a majority of the voting
power of the Company's then outstanding voting securities.

(d) Any payment required to be made pursuant to SECTION 9.2(c) of
this Agreement shall be made as promptly as practicable but not later than 5
business days after such payment becomes due and shall be made by wire transfer
of immediately available funds to an account designated by Acquiror.

10. MISCELLANEOUS PROVISIONS.

10.1 CONSTRUCTION; VENUE, ETC.

(a) THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.

(b) THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS. ANY ACTION OR PROCEEDING AGAINST
THE COMPANY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT
OR AGREEMENT EVIDENCING OR RELATING TO THE RIGHTS OR OBLIGATIONS OR ANY PARTY
THEREOF MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN CLARK COUNTY, NEVADA.
THE COMPANY HEREBY IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURTS AND (B) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. THE COMPANY AGREES THAT SERVICE OF PROCESS UPON IT
MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS
ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THIS
AGREEMENT. NOTHING IN THIS AGREEMENT OR ANY OTHER INSTRUMENT OR AGREEMENT
EVIDENCING OR RELATING TO THE OBLIGATIONS OR ANY PARTY THEREOF SHALL AFFECT THE
RIGHT OF ACQUIROR OR ACQUISITION TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR SHALL LIMIT THE RIGHT OF ACQUIROR OR ACQUISITION TO BRING ANY ACTION
OR PROCEEDING AGAINST THE COMPANY OR WITH RESPECT TO ANY OF ITS PROPERTY IN
COURTS IN OTHER JURISDICTIONS. ANY ACTION OR PROCEEDING BY THE COMPANY AGAINST
ACQUIROR OR ACQUISITION SHALL BE BROUGHT ONLY IN A COURT LOCATED IN CLARK
COUNTY, NEVADA.

10.2 NOTICES. All notices and other communications called for or
contemplated hereunder shall be in writing and shall be deemed to have been duly
given when delivered to the party to whom addressed or when sent by telecopy,
telegram, telex or wire (if promptly confirmed by registered or certified mail,
return receipt requested, prepaid and addressed) to the parties, their
successors in interest, or their assignees at the following addresses, or at
such other addresses as the parties may designate by written notice in the
manner aforesaid:

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<PAGE>

If to the Acquiror: RAC Financial Group, Inc.
1250 West Mockingbird Lane
Dallas, Texas 75247
Attn: Chief Financial Officer
Facsimile: (214) 583-4901

With copies to: Jenkens & Gilchrist, a Professional Corporation
1445 Ross Avenue
Suite 3200
Dallas, Texas 75202
Attn: Ronald J. Frappier, Esq.
Facsimile: 214-855-4300

If to the Company: Western Interstate Bancorp.
5000 Birch, West Tower
Suite 2500
Newport Beach, California 92660
Attn: Mr. Mike McGuire
Facsimile: (310) 282-8903

With copies to: King, Purtich, Holmes, Paterno & Berliner
2181 Avenue of the Stars
Twenty-Second Floor
Los Angeles, California 90067
Attn: Keith T. Holmes
Facsimile: (310) 282-8903

10.3 ASSIGNMENT. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties. Nothing contained herein, express or implied,
is intended to confer upon any person or entity other than the parties hereto
and their successors in interest and permitted assignees any rights or remedies
under or by reason of this Agreement unless so stated herein to the contrary.

10.4 AMENDMENTS AND WAIVERS. No breach of any covenant, agreement,
warranty or representation shall be deemed waived unless expressly waived in
writing by the party who might assert such breach. No waiver of any right
hereunder shall operate as a waiver of any other right or of the same or a
similar right on another occasion. This Agreement and all Exhibits and
Schedules hereto may be modified only by a written instrument duly executed by
the parties hereto.

10.5 SURVIVAL. The representations and warranties set forth herein
shall not survive the Closing; provided, however, that nothing herein shall
prejudice the right of Acquiror or Acquisition to maintain an action or claim
for fraud or intentional misrepresentation.

10.6 ATTORNEYS' FEES. In the event that any action or proceeding,
including arbitration, is commenced by any party hereto for the purpose of
enforcing any provision of this Agreement, the parties to such action,
proceeding or arbitration may receive as part of any award, judgment, decision
or other resolution of such action, proceeding or arbitration their costs and
reasonable attorneys' fees as determined by the person or body making such
award, judgment, decision or resolution. Should any claim hereunder be settled
short of the commencement of any such action or proceeding, including
arbitration, the parties in such settlement shall be entitled to include as part
of the damages alleged to have been incurred reasonable costs of attorneys or
other professionals in investigation or counseling on such claim.

10.7 BINDING NATURE OF AGREEMENT. The Agreement includes each of the
Schedules and Exhibits that are referred to herein or attached hereto, all of
which are incorporated by reference herein. All the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective executors, heirs, legal representatives, successors
and assigns. The provisions of SECTION 6.8 will inure to the benefit of and
shall be

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<PAGE>

enforceable by the directors, affiliates and officers of the Company, each of
whom is a beneficiary of such Section. There are no other third-party
beneficiaries of this Agreement.

10.8 ENTIRE AGREEMENT. Except for the confidentiality agreement,
dated November 22, 1996, executed by the parties hereto, this Agreement contains
the entire understanding of the parties with respect to the subject matter
hereof, and supersedes all prior agreements and understandings relating to the
subject matter hereof.

10.9 SEVERABILITY. Any provision of this Agreement that is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.

10.10 COUNTERPARTS; SECTION HEADINGS. This Agreement may be executed
by the parties in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument. The headings of each Section,
subsection or other subdivision of this Agreement are for reference only and
shall not limit or control the meaning thereof.

10.11 PUBLIC ANNOUNCEMENTS. The Acquiror and the Company will
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement and shall not issue any such
press release or make any such public statement prior to an agreement among the
Company and the Acquiror as to the content of any such press release, except as
may be required by law or the Nasdaq National Market.

10.12 BEST EFFORTS; FURTHER ASSURANCES; COOPERATION. Subject to
the other provisions of this Agreement, the parties hereto shall each use their
reasonable, good faith efforts to perform their obligations herein and to take,
or cause to be taken or do, or cause to be done, all things necessary, proper or
advisable under applicable law to obtain all regulatory approvals and satisfy
all conditions to the obligations of the parties under this Agreement and to
cause the Merger and the other transactions contemplated herein to be effected
as promptly as is practicable, and in any event on or prior to September 30,
1997, in accordance with the terms hereof and shall cooperate fully with each
other and their respective officers, directors, employees, agents, counsel,
accountants and other designees in connection with any steps required to be
taken as a part of their respective obligations under this Agreement, including
without limitation:

(a) Acquiror and the Company shall promptly make their
respective filings and submissions and shall take, or cause to be taken, all
actions and do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to obtain any required approval of any
other federal, state or local governmental agency or regulatory body with
jurisdiction over the transactions contemplated by this Agreement.

(b) In the event any claim, action, suit, investigation or other
proceeding by any governmental body or other person is commenced which questions
the validity or legality of the Merger or any of the other transactions
contemplated hereby or seeks damages in connection therewith, the parties agree
to cooperate and use all reasonable efforts to defend against such claim,
action, suit, investigation or other proceeding and, if an injunction or other
order is issued in any such action, suit or other proceeding, to use all
reasonable efforts to have such injunction or other order lifted, and to
cooperate reasonably regarding any other impediment to the consummation of the
transactions contemplated by this Agreement.

(c) Without the prior written consent of Acquiror, the Company
will not terminate any employee if such termination would result in the payment
of any amounts pursuant to "change in control" provisions of any employment
agreement or arrangement.

10.13 TAIL POLICY. Notwithstanding anything herein to the contrary,
the Company may provide for officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering the
officers and directors of the Company. Such policy shall provide for a term
not to exceed three (3) years from the Effective Time and shall be at
competitive rates.

10.14 EMPLOYEE CREDIT FOR SERVICE. Acquiror covenants and agrees
with the Company that the employee benefit plans of Acquiror under which the
employees of the Company are covered following the Effective Time

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<PAGE>

shall give appropriate credit to such employees for service completed prior
to the Effective Time with the Company under the Employee Benefit Plans. The
provisions of this SECTION 10.14 shall inure solely to the benefit of the
Company, and no third party (including, without limitation, any employee of
the Company) shall be permitted to rely hereon as a third party beneficiary
or otherwise.

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<PAGE>

IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
and Plan of Merger as of the date first written above.

ACQUIROR:

RAC FINANCIAL GROUP, INC.

By: /s/ ERIC C. GREEN
------------------------------
Name: Eric C. Green
Title: Chief Financial Officer

ACQUISITION:

WESTERN INTERSTATE
ACQUISITION, INC.

By: /s/ ERIC C. GREEN
------------------------------
Name: Eric C. Green
Title: President

THE COMPANY:

WESTERN INTERSTATE BANCORP

By: /s/ JAMES T. CAPRETZ
------------------------------
Name: James T. Capretz
Title: Chairman and Chief
Executive Officer

<PAGE>
AMENDMENT AND RESTATEMENT OF
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER

AMONG FIRSTPLUS FINANCIAL GROUP, INC., FORMERLY KNOWN AS
RAC FINANCIAL GROUP, INC., WESTERN INTERSTATE ACQUISITION, INC.,
AND WESTERN INTERSTATE BANCORP

THIS AMENDMENT AND RESTATEMENT OF FIRST AMENDMENT TO AGREEMENT AND PLAN OF
MERGER (this "Amendment"), dated as of July 1, 1997, is entered into by and
among FIRSTPLUS Financial Group, Inc., formerly known as RAC Financial Group,
Inc. (the "Acquiror"), Western Interstate Acquisition, Inc. ("Acquisition") and
Western Interstate Bancorp (the "Company").

WHEREAS, the undersigned parties have entered into that certain Agreement
and Plan of Merger (the "Merger Agreement"), dated as of February 19, 1997, as
amended by a First Amendment thereto dated April 21, 1997 (the "First
Amendment"); and

WHEREAS, the parties desire to amend and restate the First Amendment.

NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the undersigned parties hereby agree
as follows.

1. Capitalized terms used herein and not otherwise defined shall have the
meanings given them in the Merger Agreement.

2. The parties hereto agree that in each place in the Merger Agreement,
as amended by the First Amendment, where it requires that the Company hold the
Special Meeting and/or that the shareholders of the Company approve the Merger
by May 30, 1997, such date of May 30, 1997 is hereby amended to be August 15,
1997.

3. Except as modified by this Amendment, the Merger Agreement shall
continue in full force and effect.

[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

<PAGE>

IN WITNESS WHEREOF, the undersigned have duly executed this Amendment as
of the date first written above.

ACQUIROR:

FIRSTPLUS FINANCIAL GROUP, INC.

By: /s/ ERIC C. GREEN
------------------------------
Name: Eric C. Green
Title: Chief Financial Officer

ACQUISITION:

WESTERN INTERSTATE
ACQUISITION, INC.

By: /s/ ERIC C. GREEN
------------------------------
Name: Eric C. Green
Title: President

THE COMPANY:

WESTERN INTERSTATE BANCORP

By: /s/ JAMES T. CAPRETZ
------------------------------
Name: James T. Capretz
Title: Chairman and Chief
Executive Officer

<PAGE>

APPENDIX B

CARPENTER & COMPANY

March 26, 1997

Board of Directors
Western Interstate Bancorp
18302 Irvine Blvd. Suite 300
Tustin, CA 62680

Members of the Board:

We understand that Western Interstate Bancorp (the "Company") has entered
into a Plan of Acquisition and Merger Agreement dated as of February 19,
1997 ("the Agreement") with FirstPlus Financial Group (formerly RAC
Financial Group, Inc, and hereinafter referred to as "FirstPlus") pursuant
to which FirstPlus will acquire all the shares of common stock of the
Company (the "Merger") in exchange for common shares of FirstPlus valued at
approximately $24,862,000, as set forth in the Agreement ("the
Consideration"). You have asked for our opinion as to whether the
Consideration to be received by shareholders of the Company, as described
in the Agreement, taken as a whole is fair from a financial point of view
to such shareholders, as of the date hereof.

In connection with our opinion, we have among other activities: (a)
reviewed certain publicly available financial and other data with respect
to the Company and FirstPlus, including the consolidated financial
statements for recent years and for interim periods to December 31, 1996,
and certain other relevant financial and operating data relating to the
Company made available to us from published sources and from the internal
records of the Company; (b) reviewed the terms of the Agreement; (c)
reviewed certain historical market prices and trading volume of common
stock of California thrift and loan and banking companies; (d) compared the
Company and FirstPlus Financial from a financial point of view with certain
other companies in the industry which we deemed to be relevant; (e)
considered the financial terms, to the extent publicly available, of
selected recent transactions which we deem to be comparable, in whole or in
part, to the Merger; (f) reviewed and discussed with representatives of the
management of the Company certain information of a business and financial
nature regarding the Company, including financial forecasts and related
assumptions of the Company; (g) made inquiries and held discussions on the
Merger and the Agreement and other matters relating thereto with the
Company's counsel; and (h) performed such other analyses and examinations
as we have deemed appropriate.

<PAGE>

FAIRNESS OPINION MARCH 26, 1997
WESTERN INTERSTATE BANCORP PAGE 2

In connection with our review, we have not independently verified any of
the foregoing information with respect to the Company or FirstPlus. We have
relied on all such information provided by the Company and have assumed
that all such information is complete and accurate in all material
respects. We have assumed that there have been no material changes in the
Company's or FirstPlus's assets, financial condition, results of
operations, business or prospects since the respective dates of their last
financial statements made available to us. We have relied on advice of
counsel to the Company as to all legal matters with respect to the Company,
the Merger, and the Agreement. In addition, we have not made an independent
evaluation, appraisal or physical inspection of the assets or individual
properties of the Company or FirstPlus, nor have we been furnished with any
such appraisals. Further, our opinion is based upon economic, monetary, and
market conditions existing as of the date hereof.

Based upon the foregoing, and in reliance thereon, it is our opinion that,
as of today's date, the Consideration is fair to the shareholders of the
Company from a financial point of view.

This opinion is furnished pursuant to our engagement letter dated January
3, 1997, and is solely for the benefit of the Board of Directors and
stockholders of the Company. In furnishing this opinion, we do not admit
that we are an expert with respect to any registration statement or other
securities filing within the meaning of the term "experts" as used in the
Securities Act and the rules and regulations promulgated thereunder. Nor do
we admit that this opinion constitutes a report or valuation within the
meaning of Section 11 of the Securities Act. Our opinion is directed to
the Board of the Company, covers only the fairness of the consideration to
be received by holders of the Company's common stock from a financial point
of view as of the date hereof and does not constitute a recommendation to
any holder of Company Common Stock as to how such shareholder should vote
concerning the Merger. Except as provided in the engagement letter, this
opinion may not be used or referred to by the Company or quoted or
disclosed to any person in any manner without our prior written consent.

Very truly yours,

SEAPOWER CARPENTER CAPITAL, INC.,
DBA CARPENTER & COMPANY

By: /s/ John Fleming
-------------------------
<PAGE>

APPENDIX C

CHAPTER 13 OF THE CALIFORNIA CORPORATIONS CODE

SECTION 1300. RIGHT TO REQUIRE PURCHASE--"DISSENTING SHARES" AND "DISSENTING
SHAREHOLDER" DEFINED.

(a) If the approval of the outstanding shares (Section 152) of a
corporation is required for a reorganization under subdivisions (a) and (b) or
subdivision (e) or (f) of Section 1201, each shareholder of the corporation
entitled to vote on the transaction and each shareholder of a subsidiary
corporation in a short-form merger may, by complying with this chapter, require
the corporation in which the shareholder holds shares to purchase for cash at
their fair market value the shares owned by the shareholder which are dissenting
shares as defined in subdivision (b). The fair market value shall be determined
as of the day before the first announcement of the terms of the proposed
reorganization or short-form merger, excluding any appreciation or depreciation
in consequence of the proposed action, but adjusted for any stock split, reverse
stock split or share dividend which becomes effective thereafter.

(b) As used in this chapter, "dissenting shares" means shares which come
within all of the following descriptions:

(1) Which were not immediately prior to the reorganization or short-
form merger either (A) listed on any national securities exchange certified by
the Commissioner of Corporations under subdivision (o) of Section 25100 or (B)
listed on the list of OTC margin stocks issued by the Board of Governors of the
Federal Reserve System, and the notice of meeting of shareholders to act upon
the reorganization summarizes this section and Sections 1301, 1302, 1303 and
1304; provided, however, that this provision does not apply to any shares with
respect to which there exists any restriction on transfer imposed by the
corporation or by any law or regulation; and provided, further, that this
provision does not apply to any class of shares described in subparagraph (A) or
(B) if demands for payment are filed with respect to 5 percent or more of the
outstanding shares of that class.

(2) Which were outstanding on the date for the determination of
shareholders entitled to vote on the reorganization and (A) were not voted in
favor of the reorganization or, (B) if described in subparagraph (A) or (B) of
paragraph (1) (without regard to the provisos in that paragraph), were voted
against the reorganization, or which were held of record on the effective date
of a short-form merger; provided, however, that subparagraph (A) rather than
subparagraph (B) of this paragraph applies in any case where the approval
required by Section 1201 is sought by written consent rather than at a meeting.

(3) Which the dissenting shareholder has demanded that the
corporation purchase at their fair market value, in accordance with
Section 1301.

(4) Which the dissenting shareholder has submitted for endorsement,
in accordance with Section 1302.

(c) As used in this chapter, "dissenting shareholder" means the
recordholder of dissenting shares and includes a transferee of record. LEG.H.
1975 ch. 682, 1976 ch. 641, effective January 1, 1977, 1982 ch. 36, effective
February 17, 1982, 1990 ch. 1018, 1993 ch. 543.

1993 NOTES: Nothing in this act shall be construed to modify or alter the
prohibition contained in Sections 15503 and 15616 of the Corporations Code or
Section 1648 of the Insurance Code, or modify or alter any similar prohibition
relating to the operation of a business in limited partnership form.
Stats. 1993 ch. 543 Section 24.

Nothing in this act shall be construed to modify or impair any rights of
limited partners under the Thompson-Killea Limited Partners Protection Act of
1992 (chapter 1183 of the Statutes of 1992). Stats. 1993 ch. 543 Section 25.

C-1
<PAGE>

SECTION 1301. DEMAND FOR PURCHASE.

(a) If, in the case of a reorganization, any shareholders of a corporation
have a right under Section 1300, subject to compliance with paragraphs (3) and
(4) of subdivision (b) thereof, to require the corporation to purchase their
shares for cash, such corporation shall mail to each such shareholder a notice
of the approval of the reorganization by its outstanding shares (Section 152)
within 10 days after the date of such approval, accompanied by a copy of
Sections 1300, 1302, 1303, 1304 and this section, a statement of the price
determined by the corporation to represent the fair market value of the
dissenting shares, and a brief description of the procedure to be followed if
the shareholder desires to exercise the shareholder's right under such sections.
The statement of price constitutes an offer by the corporation to purchase at
the price stated any dissenting shares as defined in subdivision (b) of
Section 1300, unless they lose their status as dissenting shares under
Section 1309.

(b) Any shareholder who has a right to require the corporation to purchase
the shareholder's shares for cash under Section 1300, subject to compliance with
paragraphs (3) and (4) of subdivision (b) thereof, and who desires the
corporation to purchase such shares shall make written demand upon the
corporation for the purchase of such shares and payment to the shareholder in
cash of their fair market value. The demand is not effective for any purpose
unless it is received by the corporation or any transfer agent thereof (1) in
the case of shares described in clause (i) or (ii) of paragraph (1) of
subdivision (b) of Section 1300 (without regard to the provisos in that
paragraph), not later than the date of the shareholders' meeting to vote upon
the reorganization, or (2) in any other case within 30 days after the date on
which the notice of the approval by the outstanding shares pursuant to
subdivision (a) or the notice pursuant to subdivision (i) of Section 1110 was
mailed to the shareholder.

(c) The demand shall state the number and class of the shares held of
record by the shareholder which the shareholder demands that the corporation
purchase and shall contain a statement of what such shareholder claims to be the
fair market value of those shares as of the day before the announcement of the
proposed reorganization or short-form merger. The statement of fair market
value constitutes an offer by the shareholder to sell the shares at such price.
LEG.H. 1975 ch. 682, 1976 ch. 641, effective January 1, 1977, 1980 chs.501,
1155.

SECTION 1302. ENDORSEMENT OF SHARES.

Within 30 days after the date on which notice of the approval by the
outstanding shares or the notice pursuant to subdivision (i) of Section 1110 was
mailed to the shareholder, the shareholder shall submit to the corporation at
its principal office or at the office of any transfer agent thereof, (a) if the
shares are certificated securities, the shareholder's certificates representing
any shares which the shareholder demands that the corporation purchase, to be
stamped or endorsed or (b) if the shares are uncertificated securities, written
notice of the number of shares which the shareholder demands that the
corporation purchase. Upon subsequent transfers of the dissenting shares on the
books of the corporation, the new certificates, initial transaction statement,
and other written statements issued therefor shall bear a like statement,
together with the name of the original dissenting holder of the shares. LEG.H.
1975 ch. 682, effective January 1, 1997, 1986 ch. 766.

SECTION 1303. AGREED PRICE--TIME FOR PAYMENT.

(a) If the corporation and the shareholder agree that the shares are
dissenting shares and agree upon the price of the shares, the dissenting
shareholder is entitled to the agreed price with interest thereon at the legal
rate on judgments from the date of the agreement. Any agreements fixing the
fair market value of any dissenting shares as between the corporation and the
holders thereof shall be filed with the secretary of the corporation.

(b) Subject to the provisions of Section 1306, payment of the fair market
value of dissenting shares shall be made within 30 days after the amount thereof
has been agreed or within 30 days after any statutory or contractual conditions
to the reorganization are satisfied, whichever is later, and in the case of
certificated securities, subject to surrender of the certificates therefor,
unless provided otherwise by agreement. LEG.H. 1975 ch. 682, effective
January 1, 1977, 1980 ch. 501, 1986 ch. 766.

C-2
<PAGE>

SECTION 1304. DISSENTER'S ACTION TO ENFORCE PAYMENT.

(a) If the corporation denies that the shares are dissenting shares, or
the corporation and the shareholder fail to agree upon the fair market value of
the shares, then the shareholder demanding purchase of such shares as dissenting
shares or any interested corporation, within six months after the date on which
notice of the approval by the outstanding shares (Section 152) or notice
pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, but
not thereafter, may file a complaint in the superior court of the proper county
praying the court to determine whether the shares are dissenting shares or the
fair market value of the dissenting shares or both or may intervene in any
action pending on such a complaint.

(b) Two or more dissenting shareholders may join as plaintiffs or be
joined as defendants in any such action and two or more such actions may be
consolidated.

(c) On the trial of the action, the court shall determine the issues. If
the status of the shares as dissenting shares is in issue, the court shall first
determine that issue. If the fair market value of the dissenting shares is in
issue, the court shall determine, or shall appoint one or more impartial
appraisers to determine, the fair market value of the shares. LEG.H. 1975
ch. 682, effective January 1, 1977.

SECTION 1305. APPRAISER'S REPORT--PAYMENT--COSTS.

(a) If the court appoints an appraiser or appraisers, they shall proceed
forthwith to determine the fair market value per share. Within the time fixed
by the court, the appraisers, or a majority of them, shall make and file a
report in the office of the clerk of the court. Thereupon, on the motion of any
party, the report shall be submitted to the court and considered on such
evidence as the court considers relevant. If the court finds the report
reasonable, the court may confirm it.

(b) If a majority of the appraisers appointed fail to make and file a
report within 10 days from the date of their appointment or within such further
time as may be allowed by the court or the report is not confirmed by the court,
the court shall determine the fair market value of the dissenting shares.

(c) Subject to the provisions of Section 1306, judgment shall be rendered
against the corporation for payment of an amount equal to the fair market value
of each dissenting share multiplied by the number of dissenting shares which any
dissenting shareholder who is a party, or who has intervened, is entitled to
require the corporation to purchase, with interest thereon at the legal rate
from the date on which judgment was entered.

(d) Any such judgment shall be payable forthwith with respect to
uncertificated securities and, with respect to certificated securities, only
upon the endorsement and delivery to the corporation of the certificates for the
shares described in the judgment. Any party may appeal from the judgment.

(e) The costs of the action, including reasonable compensation to the
appraisers to be fixed by the court, shall be assessed or apportioned as the
court considers equitable, but, if the appraisal exceeds the price offered by
the corporation, the corporation shall pay the costs (including in the
discretion of the court attorneys' fees, fees of expert witnesses and interest
at the legal rate on judgments from the date of compliance with Sections 1300,
1301 and 1302 if the value awarded by the court for the shares is more than 125
percent of the price offered by the corporation under subdivision (a) of
Section 1301). LEG.H. 1975 ch. 682, 1976 ch. 641, effective January 1, 1977,
1977 ch. 235, 1986 ch. 766.

SECTION 1306. DISSENTING SHAREHOLDER'S STATUS AS CREDITOR.

To the extent that the provisions of Chapter 5 prevent the payment to any
holders of dissenting shares of their fair market value, they shall become
creditors of the corporation for the amount thereof together with interest at
the legal rate on judgments until the date of payment, but subordinate to all
other creditors in any liquidation proceeding, such debt to be payable when
permissible under the provisions of Chapter 5. LEG.H. 1975 ch. 682, effective
January 1, 1977.

C-3
<PAGE>

SECTION 1307. DIVIDENDS PAID AS CREDIT AGAINST PAYMENT.

Cash dividends declared and paid by the corporation upon the dissenting
shares after the date of approval of the reorganization by the outstanding
shares (Section 152) and prior to payment for the shares by the corporation
shall be credited against the total amount to be paid by the corporation
therefor. LEG.H. 1975 ch. 682, effective January 1, 1977.

SECTION 1308. CONTINUING RIGHTS AND PRIVILEGES OF DISSENTING SHAREHOLDERS.

Except as expressly limited in this chapter, holders of dissenting shares
continue to have all the rights and privileges incident to their shares until
the fair market value of their shares is agreed upon or determined. A
dissenting shareholder may not withdraw a demand for payment unless the
corporation consents thereto. LEG.H. 1975 ch. 682, effective January 1, 1977.

SECTION 1309. TERMINATION OF DISSENTING SHAREHOLDER STATUS.

Dissenting shares lose their status as dissenting shares and the holders
thereof cease to be dissenting shareholders and cease to be entitled to require
the corporation to purchase their shares upon the happening of any of the
following:

(a) The corporation abandons the reorganization. Upon abandonment of the
reorganization, the corporation shall pay on demand to any dissenting
shareholder who has initiated proceedings in good faith under this chapter all
necessary expenses incurred in such proceedings and reasonable attorneys' fees.

(b) The shares are transferred prior to their submission for endorsement
in accordance with Section 1302 or are surrendered for conversion into shares of
another class in accordance with the articles.

(c) The dissenting shareholder and the corporation do not agree upon the
status of the shares as dissenting shares or upon the purchase price of the
shares, and neither files a complaint or intervenes in a pending action as
provided in Section 1304, within six months after the date on which notice of
the approval by the outstanding shares or notice pursuant to subdivision (i) of
Section 1110 was mailed to the shareholder.

(d) The dissenting shareholder, with the consent of the corporation,
withdraws the shareholder's demand for purchase of the dissenting shares.
LEG.H. 1975 ch. 682, effective January 1, 1977.

SECTION 1310. SUSPENSION OF PROCEEDINGS FOR PAYMENT PENDING LITIGATION.

If litigation is instituted to test the sufficiency or regularity of the
votes of the shareholders in authorizing a reorganization, any proceedings under
Section 1304 and 1305 shall be suspended until final determination of such
litigation. LEG.H. 1975 ch. 682, effective January 1, 1977.

SECTION 1311. EXEMPT SHARES.

This chapter, except Section 1312, does not apply to classes of shares
whose terms and provisions specifically set forth the amount to be paid in
respect to such shares in the event of a reorganization or merger. LEG.H. 1975
ch. 682, effective January 1, 1977, 1988 ch. 919.

SECTION 1312. ATTACKING VALIDITY OF REORGANIZATION OR MERGER.

(a) No shareholder of a corporation who has a right under this chapter to
demand payment of cash for the shares held by the shareholder shall have any
right at law or in equity to attack the validity of the reorganization or short-
form merger, or to have the reorganization or short-form merger set aside or
rescinded, except in an action to test whether the number of shares required to
authorize or approve the reorganization have been legally voted in favor
thereof; but any holder of shares of a class whose terms and provisions
specifically set forth the amount to be paid in respect to them in the event of
a reorganization or short-form merger is entitled to payment in accordance with
those terms and provisions or, if the principal terms of the reorganization are
approved pursuant to subdivision (b) of Section 1202, is entitled to payment in
accordance with the terms and provisions of the approved reorganization.

C-4
<PAGE>

(b) If one of the parties to a reorganization or short-form merger is
directly or indirectly controlled by, or under common control with, another
party to the reorganization or short-form merger, subdivision (a) shall not
apply to any shareholder of such party who has not demanded payment of cash for
such shareholder's shares pursuant to this chapter, but if the shareholder
institutes any action to attack the validity of the reorganization or short-form
merger or to have the reorganization or short-form merger set aside or
rescinded, the shareholder shall not thereafter have any right to demand payment
of cash for the shareholder's shares pursuant to this chapter. The court in any
action attacking the validity of the reorganization or short-form merger or to
have the reorganization or short-form merger set aside or rescinded shall not
restrain or enjoin the consummation of the transaction except upon 10 days'
prior notice to the corporation and upon a determination by the court that
clearly no other remedy will adequately protect the complaining shareholder or
the class of shareholders of which such shareholder is a member.

(c) If one of the parties to a reorganization or short-form merger is
directly or indirectly controlled by, or under common control with, another
party to the reorganization or short-form merger, in any action to attack the
validity of the reorganization or short-form merger or to have the
reorganization or short-form merger set aside or rescinded, (1) a party to a
reorganization or short-form merger which controls another party to the
reorganization or short-form merger shall have the burden of proving that the
transaction is just and reasonable as to the shareholders of the controlled
party, and (2) a person who controls two or more parties to a reorganization
shall have the burden of proving that the transaction is just and reasonable as
to the shareholders of any party so controlled. LEG.H. 1975 ch. 682, 1976
ch. 641, effective January 1, 1977, 1988 ch. 919.

C-5

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICER

(a) The Amended and Restated Articles of Incorporation, as amended, of the
Registrant, together with its Amended and Restated Bylaws, as amended, provide
that the Registrant shall indemnify officers and directors, and may indemnify
its other employees and agents, to the fullest extent permitted by law. The
laws of the State of Nevada permit, and in some cases require, corporations to
indemnify officers, directors, agents and employees who are or have been a party
to or are threatened to be made a party to litigation against judgments, fines,
settlements and reasonable expenses under certain circumstances.

(b) The Registrant has also adopted provisions in its Amended and Restated
Articles of Incorporation, as amended, that limit the liability of its directors
and officers to the fullest extent permitted by the laws of the State of Nevada.
Under the Registrant's Amended and Restated Articles of Incorporation, as
amended, and as permitted by the laws of the State of Nevada, a director or
officer is not liable to the Registrant or its stockholders for damages for
breach of fiduciary duty. Such limitation of liability does not affect
liability for (i) acts or omissions which involve intentional misconduct, fraud
or a knowing violation of the law, or (ii) the payment of any unlawful
distribution.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits:

Exhibit Sequential
Number Description
------- -----------

2.1* Agreement and Plan of Merger, dated February 19, 1997,
as amended, among WIB, FPFG and WIA is Appendix A to
the Proxy Statement/Prospectus included in Part I and
is incorporated herein by reference

4.1*** Amended and Restated Articles of Incorporation of the
Registrant, as amended

4.2*** Amended and Restated Bylaws of the Registrant, as
amended

4.3+ Form of FPFG Common Stock Certificate (Exhibit 4)

5.1* Opinion of Jenkens & Gilchrist, a Professional
Corporation, regarding legality of the shares being
registered

8.1* Opinion of KPMG Peat Marwick LLP regarding tax matters

23.1* Consent of Jenkens & Gilchrist, a Professional
Corporation (included in its opinion filed as Exhibit
5.1 hereto)

23.2* Consent of Ernst & Young LLP regarding the Registrant

23.3* Consent of KPMG Peat Marwick LLP regarding Western
Interstate Bancorp and tax matters

23.4* Consent of Carpenter & Company

24*** Power of Attorney

99.1* Form of Proxy of Western Interstate Bancorp

II-1
<PAGE>
99.2* Form of Employment Agreement of Michael W. McGuire, as
proposed to be amended

(b) Financial Statement Schedules:

Not Applicable

- ---------------------

* Filed herewith.
** To be filed by amendment.
*** Previously filed.

+ Incorporated by reference from the exhibit shown in parenthesis contained in
the Registrant's Registration Statement on Form S-1 (No. 33-96688), filed by
the Company with the Commission.

ITEM 22. UNDERTAKINGS

(1) The undersigned registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.

(2) The registrant undertakes that every prospectus (a) that is filed
pursuant to paragraph (2) immediately preceding, or (b) that purports to meet
the requirements of section 10(a)(3) of the Securities Act of 1933 and is used
in connection with an offering of securities subject to Rule 415, will be filed
as a part of an amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the time shall be deemed
to be the initial bona fide offering thereof.

(3) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

II-2
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 1 to Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in Dallas,
Texas, on July 2, 1997.

FIRSTPLUS FINANCIAL GROUP, INC.

By: /s/ Daniel T. Phillips
------------------------------
Daniel T. Phillips
President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement on Form S-4 has been signed below by the
following persons in the capacities and on the date indicated.

Signature Title Date
--------- ----- ----

*
- ---------------------- President, Chief Executive Officer July 2, 1997
Daniel T. Phillips and Director (Principal Executive
Officer)

/s/ Eric C. Green Executive Vice President, Chief July 2, 1997
- ---------------------- Financial Officer and Director
Eric C. Green (Principal Financial
and Accounting Officer)

* Director July 2, 1997
- ----------------------
John Fitzgerald

* Director July 2, 1997
- ----------------------
Dan Jesse

* Director July 2, 1997
- ----------------------
Paul Seegers

* Director July 2, 1997
- ----------------------
Sheldon I. Stein

* By: /s/ Eric C. Green
-----------------
Eric C. Green,
Attorney-in-Fact

II-3
<PAGE>

INDEX TO EXHIBITS

Exhibit Sequential
Number Description
- ------- -----------
2.1* Agreement and Plan of Merger, dated February 19, 1997,
as amended, among WIB, FPFG and WIA is Appendix A to
the Proxy Statement/Prospectus included in Part I and
is incorporated herein by reference

4.1*** Amended and Restated Articles of Incorporation of the
Registrant, as amended

4.2*** Amended and Restated Bylaws of the Registrant, as
amended

4.3+ Form of FPFG Common Stock Certificate (Exhibit 4)

5.1* Opinion of Jenkens & Gilchrist, a Professional
Corporation, regarding legality of the shares being
registered

8.1* Opinion of KPMG Peat Marwick LLP regarding tax matters

23.1* Consent of Jenkens & Gilchrist, a Professional
Corporation (included in its opinion filed as Exhibit
5.1 hereto)

23.2* Consent of Ernst & Young LLP regarding the Registrant

23.3* Consent of KPMG Peat Marwick LLP regarding Western
Interstate Bancorp and tax matters

23.4* Consent of Carpenter & Company

24*** Power of Attorney

99.1* Form of Proxy of Western Interstate Bancorp

99.2* Form of Employment Agreement of Michael W. McGuire, as
proposed to be amended

- ---------------------
* Filed herewith.
** To be filed by amendment.
*** Previously filed.
+ Incorporated by reference from the exhibit shown in parenthesis contained in
the Registrant's Registration Statement on Form S-1 (No. 33-96688), filed by
the Company with the Commission.

<PAGE>

[JENKINS & GILCHRIST LETTERHEAD]

July 3, 1997

FIRSTPLUS Financial Group, Inc.
1600 Viceroy, 8th Floor
Dallas, Texas 75235

Re: Registration Statement on Form S-4
FIRSTPLUS Financial Group, Inc.

Gentlemen:

On April 24, 1997, FIRSTPLUS Financial Group, Inc., a Nevada corporation
(the "Company"), filed with the Securities and Exchange Commission (the
"Commission") its registration statement on Form S-4 (No. 333-25715) (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"). The Registration Statement relates to the issuance by the Company of up
to 1,243,134 shares (the "Shares") of common stock, par value $.01 per share, of
the Company, pursuant to an Agreement and Plan of Merger dated as of February
19, 1997 (the "Merger Agreement"). We have acted as counsel to the Company in
connection with the preparation and filing of the Registration Statement.

In connection therewith, we have examined and relied upon the original or
copies, certified to our satisfaction, of (i) the Amended and Restated Articles
of Incorporation and Bylaws of the Company, in each case as amended to date,
(ii) copies of resolutions of the Board of Directors of the Company authorizing
the issuance of the Shares pursuant to the Merger Agreement, (iii) the
Registration Statement, and all exhibits thereto, and (iv) such other documents
and instruments as we have deemed necessary for the expression of the opinions
herein contained. In making the foregoing examinations, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, and the conformity to original documents of all documents
submitted to us as certified or photostatic copies. As to various questions of
fact material to this opinion, we have relied, to the extent we deem reasonably
appropriate, upon representations or certificates of officers or directors of
the Company and upon documents, records and instruments furnished to us by the
Company, without independent check or verification of their accuracy.

<PAGE>

FIRSTPLUS Financial Group, Inc.
July 3, 1997
Page 2

Based upon the foregoing examination, we are of the opinion that the Shares
to be issued in connection with the merger contemplated by the Merger Agreement,
when issued as described in the Registration Statement, have been duly and
validly authorized for issuance and the Shares, when issued in the manner stated
in the Registration Statement, will be legally issued, fully paid and
nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement. In
giving such consent, we do not admit that we come within the category of persons
whose consent is required by Section 7 of the Act or the rules and regulations
of the Commission thereunder.

Respectfully submitted,

JENKENS & GILCHRIST, A
PROFESSIONAL CORPORATION

By: /s/ RONALD J. FRAPPIER
-----------------------------------
Ronald J. Frappier, Esq.

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[LETTERHEAD]

June 10, 1997

Board of Directors Board of Directors
Western Interstate Bancorp FIRSTPLUS Financial
Tustin, California Group, Inc.
Dallas, Texas

Gentlemen:

You have requested the opinion of KPMG Peat Marwick LLP ("KPMG") regarding
certain federal income tax and state income and franchise tax consequences of
the merger of Western Interstate Bancorp ("WIB") with Western Interstate
Acquisition, Inc. ("WIA"), a wholly-owned subsidiary of FIRSTPLUS Financial
Group, Inc., formerly known as RAC Financial Group, Inc. ("FPFG"). In preparing
this opinion letter, KPMG has relied in part upon certain factual descriptions
provided in the Agreement and Plan of Merger dated as of February 19, 1997 (the
"Plan") by and between the addressees hereto, as well as the facts and
representations which are made to KPMG as provided below under the headings
STATEMENT OF FACTS and REPRESENTATIONS. Specifically, you have requested us to
opine the following:

1. The form and substance of the merger of WIA with and into WIB constitutes a
tax-free reorganization under Section 368(a)(1)(A) and Section 368(a)(2)(E)
of the Internal Revenue Code of 1986, as amended (hereinafter, all section
references are to the Internal Revenue Code of 1986 unless otherwise
indicated).

2. WIA will not recognize any gain or loss upon the transfer of its assets to
WIB in exchange for WIB stock and the assumption by WIB of the liabilities,
if any, of WIA.

3. WIB will not recognize any gain or loss on the receipt by it of the assets
of WIA solely in exchange for WIB stock.

4. No gain or loss will be recognized to FPFG on the exchange of WIA stock
solely for WIB stock.

5. The basis of the assets of WIA in the hands of WIB will be the same as the
basis of those assets in the hands of WIA immediately prior to the merger.

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KPMG Peat Marwick LLP

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June 10, 1997
Page 2

6. The holding period of the assets of WIA acquired by WIB in the merger will
include the holding period of those assets in the hands of WIA immediately
prior to the exchange.

7. Based on Regulation Section 1.358-6(c), the basis of the stock of WIB owned
by FPFG after the transaction will equal the sum of (i) FPFG's basis in the
stock of WIA immediately before the merger, plus (ii) WIB's net basis in
its assets immediately before the merger, or at the election of FPFG, the
basis in the stock of WIB in the hands of the WIB shareholders immediately
before the proposed transaction.

8. WIB will succeed to and take into account the earnings and profits, or
deficit in earnings and profits, of WIA as of the date or dates of
transfer. Any deficit in earnings and profits of either WIA or WIB will
be used only to offset earnings and profits accumulated after the date or
dates of transfer.

9. No gain or loss will be recognized to shareholders of WIB upon the exchange
of WIB stock solely for the FPFG voting common stock pursuant to the
merger.

10. The basis of the FPFG Common Stock received by the shareholders of WIB in
the merger will be the same as the basis of the WIB stock surrendered in
exchange therefor.

11. With respect to each shareholder of WIB, the holding period of the FPFG
Common stock received by the shareholders of WIB will include the period
during which the WIB stock surrendered therefor was held, provided the
stock of WIB is a capital asset in the hands of each such shareholder of
WIB on the date of the merger.

12. Any of WIB's common shareholders who exercise their statutory dissenters
rights against the merger and receive only cash in exchange for their Stock
(Dissenters), and who as a result of the transaction own no FPFG common
stock directly, indirectly, or constructively, will be treated as receiving
cash in redemption of and in complete termination of their stock interest
in WIB, provided WIB is not a collapsible corporation as defined in
Section 341(b). Gain or loss will be calculated based on cash received
less the shareholders tax basis in the WIB stock given up in the merger.
See Rev. Rul. 75-515, 1975-2 CB 117.

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KPMG Peat Marwick LLP

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June 10, 1997
Page 3

of the cash received. As stated in number 12 above, cash received by a
dissenting WIB shareholder is treated as having been received in redemption
of WIB shares. Whether such redemption transaction qualifies for sale or
exchange treatment or is treated as a dividend is determined on a
shareholder by shareholder basis applying the rules of Section 302,
including, apparently, the attribution rules of Section 318. Such WIB
shareholders should consult their own tax advisors.

STATEMENT OF FACTS

FPFG is duly organized and validly existing as a corporation in good standing
under the laws of the State of Nevada. FPFG is a financial services holding
company. FPFG's common stock is traded over-the-counter and is quoted on the
National Association of Securities Dealers Automated Quotation System.

FPFG was formerly known as, and is considered the same legal entity as, RAC
Financial Group, Inc.

The authorized capital stock of the FPFG consists solely of common stock, par
value $.01 per share ("FPFG Common Stock"), of which 29,033,369 shares were
outstanding as of December 31, 1996. Each share of FPFG Common Stock has one
vote.

WIA is a newly-formed Nevada corporation organized as a wholly-owned subsidiary
of FPFG. WIA was incorporated solely for the purpose of effecting the proposed
transaction as described below and will not conduct any actual business after
its incorporation, therefore, at the time of the proposed merger, it will have
no other assets other than the amount with which it is originally capitalized by
FPFG and it will have no liabilities.

WIB is duly organized and validly existing as a corporation in good standing
under the laws of the State of California. WIB is a financial institutions
holding company organized for the primary purpose of holding all the outstanding
shares of Citizens Thrift & Loan Association ("Citizens"), a California
industrial loan company. WIB also owns Citizens Group, Inc., which acts as a
trustee on deeds of trust securing Citizens' real estate loans. Citizens is
supervised and regulated by the California Department of Corporations ("DOC")
and the Federal Deposit Insurance Corporation ("FDIC").

The authorized capital stock of the WIB consists solely of one class of common
stock ("WIB Common Stock"), of which 1,211,156 shares were outstanding as of
December 31, 1996.

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June 10, 1997
Page 4

For valid business purposes, FPFG and WIB want to combine their businesses. In
order to reach that result, the following transaction is proposed.

1. Pursuant to an acquisition agreement and plan of merger dated February 19,
1997, by and among FPFG (formerly known as RAC Financial Group, Inc.), WIA
and WIB, WIA will merge with and into WIB, with WIB surviving the merger,
in accordance with all applicable provisions of federal law and the laws of
the states of Nevada and California as may be applicable.

2. On the effective date of the merger, each one of the WIB common shares
outstanding as of the effective date of the merger (except for Dissenting
Shares) shall be converted into the right to receive such fraction of a
share of FPFG Common Stock as is equal to the decimal determined by
dividing (i) "FPFG Share Number" (as defined below) by (ii)(A) the number
of WIB common shares outstanding as of the effective date plus (B) the
number of WIB common shares issuable upon exercise of all Existing Stock
Rights (as defined in paragraph 5 below) as of the effective date (the
"Conversion Ratio"). The term FPFG Share Number means the number
determined by dividing (i) two times the December 31, 1996 "book value
per share" of WIB, by the "Fair Market Value of the FPFG Common Stock."
The term "Fair Market Value of the FPFG Common Stock" means the average
closing price per share of the FPFG Common Stock on the NASDAQ National
Market as reported in the Wall Street Journal for the ten trading days
prior to the date that is (2) calendar days prior to the Closing Date.

3. No fractional shares of FPFG Common Stock shall be issued in the merger,
but rather the total number of shares to be received by each WIB
Shareholder shall be rounded up to the next whole number of shares (the
"Merger Consideration"). Upon the surrender by a WIB shareholder, other
than a dissenting shareholder, of the certificates representing WIB common
shares, FPFG shall deliver to each WIB shareholder certificates
representing the number of shares equal to such WIB shareholder's pro rata
portion (based upon such WIB shareholder's percentage interest immediately
prior to the effective date) of the Merger Consideration.

4. At the effective date, FPFG shall assume all of WIB's rights and
obligations with respect to certain outstanding stock options (the
"Existing Stock Rights") held by employees and directors of WIB.
Immediately following the assumption, FPFG shall substitute new options
(each of which shall be a non-qualified stock option) for such Existing
Stock Rights to be granted under FPFG's option plan for employees of
acquired companies with vesting terms matching those contained in the
Existing Stock Rights at the effective date. The periodic vesting
schedules of the Existing

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KPMG Peat Marwick LLP

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June 10, 1997
Page 5

Stock Rights shall be matched and the optionholders shall have a period
of not less than one year following termination of their employment within
which to exercise the new options. Each new option evidences the right
to purchase the number of shares of FPFG common stock equal to the
product (rounded up or down as appropriate to the next whole dollar) of
(i) the number of WIB common shares covered by the Existing Stock Right
immediately prior to the effective date, multiplied by (ii) the Conversion
Ratio (as defined in paragraph 4 above). The exercise price of such new
option for each share of Common Stock to which it is subject shall be
equal to the quotient obtained by dividing (i) the per share exercise
price for WIB common shares subject to the Existing Stock Right
immediately prior to the effective time by (ii) the Conversion Ratio.

5. WIB will not grant any options, warrants or other rights to acquire capital
stock or securities of WIB under any plan or otherwise after the date of
the Agreement and Plan of Merger.

6. All expenses incurred by FPFG, WIA and WIB shall be borne by the party
which incurred the expenses. Expenses shall include all out-of-pocket
expenses, including fees and expenses of counsel, accountants,
investment bankers, experts and consultants incurred in connection with
the authorization, preparation, negotiation, execution and performance
of the Agreement, the preparation, printing, filing and mailing of the
Registration Statement and the Proxy Statement, the solicitation of
stockholder approvals and all other matters related to the consummation
of the reorganization.

REPRESENTATIONS

KPMG is relying upon the following representations made to KPMG by the
management of FPFG and WIB in rendering the opinions contained herein. It is
understood that KPMG has not independently verified the accuracy of any of these
representations.

(a) At least 90 percent of the fair market value of the net assets and at
least 70 percent of the fair market value of the gross assets held by each
of WIA and WIB immediately preceding the merger, will be held by WIB upon
consummation of the merger. For purposes of this assumption, amounts paid
by WIB to dissenters, amounts used by WIB to pay costs of the
reorganization, and all redemptions, and distributions (except for regular,
normal dividends) made by WIB will be included as assets of WIB
immediately prior to the reorganization.

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June 10, 1997
Page 6

(b) In the merger, shares of the WIB common stock representing control of WIB,
as defined in section 368(c), will be exchanged solely for voting stock of
the FPFG. For purposes of this assumption, shares of the WIB stock
exchanged for cash or property originating with FPFG will be treated as
outstanding WIB stock on the date of the transaction.

(c) There is no intercorporate debt existing between FPFG and WIB that was
issued, acquired, settled or will be settled at a discount.

(d) The fair market value of the FPFG voting common stock to be received by
each of the WIB shareholders in the merger is approximately equal, in each
instance, to the fair market value of the WIB common stock exchanged
therefor.

(e) There is no plan or intention by the WIB shareholders to sell or otherwise
dispose of any FPFG voting stock received by them in the transaction which
would reduce their ownership of FPFG voting stock to a number of shares
having, in the aggregate, a fair market value as of the date of the
transaction of less than 50 percent of the fair market value of the
formerly outstanding stock of WIB as of the date of the transaction. For
purposes of this assumption, the sale, redemption or other disposition of
stock occurring prior or subsequent to the exchange which is part of the
reorganization will be considered in determining whether there will be a
50 percent continuing interest through stock ownership as of the effective
date of the reorganization.

(f) Prior to the transaction, FPFG will be in control of WIA within the meaning
of section 368(c) of the Code. Additionally, following the proposed
transaction, WIB will not issue additional shares of its stock or create
any new classes of WIB stock that would cause FPFG to lose control within
the meaning of Section 368(c).

(g) WIB will not have any warrants, options, convertible securities or any
other type of right pursuant to which any person could acquire stock in WIB
if exercised or converted, which would affect FPFG's acquisition or
retention of control of WIB as defined in Section 368(c).

(h) FPFG and WIB have no intention of selling or disposing any of the assets of
WIB subsequent to the merger other than in the ordinary course of business.
FPFG plans to continue to actively operate the business conducted by WIB
prior to the merger and FPFG has no plan or intention to liquidate WIB or
cause it to merge with any other corporation.

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KPMG Peat Marwick LLP

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June 10, 1997
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(i) FPFG has no plan or intention to redeem or otherwise reacquire any of its
voting stock to be issued in the proposed merger.

(j) No two parties to the merger are investment companies within the meaning
of such term as used in Section 368(a)(2)(F)(iii) and (iv).

(k) The fair market value of the assets of WIB will exceed its liabilities on
the effective date of the merger.

(l) None of the FPFG Common Stock being issued to the WIB shareholders will
represent compensation for past or future services. The compensation to
be paid to WIB officers and employees who are stockholders employed
following the merger will not be part of the consideration paid for their
WIB common stock and will be commensurate, in each instance, with past or
future services.

(m) FPFG does not own, nor has it owned during the past five years, any shares
of the common stock of WIB, and will acquire none prior to the transaction.

(n) WIB is not under the jurisdiction of a court in a title 11, or similar case
within the meaning of Section 368(a)(3)(A) of the code.

(o) The liabilities of WIA, if any, assumed by WIB and the liabilities to which
the transferred assets of WIA are subject were incurred by WIA in the
ordinary course of business.

(p) The rounding up of the FPFG Common Stock to the next whole share in lieu of
fractional shares is solely for the purpose of avoiding the expense and
inconvenience to FPFG of issuing fractional shares and does not represent
separately bargained for consideration.

(q) FPFG was formerly known as, and is considered the same legal entity as, RAC
Financial Group, Inc.

(r) The sole consideration to be received by the WIB shareholders in the merger
will be shares of FPFG Common Stock.

DISCUSSION

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KPMG Peat Marwick LLP

Board of Directors
June 10, 1997
Page 8

Section 368(a)(2)(E) in general, provides that a transaction otherwise
qualifying as a statutory merger under Section 368(a)(1)(A) will not be
disqualified by reason of the fact that stock of a corporation ("controlling
corporation") which before the merger was in control of the merged
corporation is used in the transaction if (1) after the transaction, the
corporation surviving the merger holds substantially all of its properties
and substantially all of the properties of the merged corporation (other than
stock of the controlling corporation distributed in the transaction), and (2)
in the transaction, former shareholders of the surviving corporation
exchange, for an amount of voting stock of the controlling corporation, an
amount of stock in the surviving corporation which constitutes control of
such corporation.

Section 368(a)(2)(E)(ii) requires that, in the transaction, former
shareholders of the surviving corporation exchange for voting stock of the
controlling corporation, an amount of stock which constitutes control of the
surviving corporation. Control for this purpose is defined in Section 368(c)
as the direct ownership of stock possessing at least 80 percent of the total
combined voting power and at least 80 percent of the total number of shares
of all other classes of stock. The amount of stock constituting control is
measured immediately before the transaction. See Treasury Regulation (Reg.)
Section 1.368-2(j)(3)(i). Accordingly, if more than 20 percent of the
outstanding stock of the surviving corporation is acquired with consideration
other than voting stock of the controlling corporation, the transaction will
not qualify under Section 368(a)(2)(E).

Section 368(a)(2)(E)(i) requires that after the transaction, the surviving
corporation must hold substantially all of its properties and substantially
all of the properties of the merged corporation. The term "substantially
all" has the same meaning as the phrase is used in Section 368(a)(1)(C). See
Reg. Section 1.368-2(j)(3)(iii). Section 368(a)(1)(C) and the regulations
promulgated thereunder do not define what constitutes "substantially all the
properties" of a corporation. The Service has established a safe harbor
quantitative test as to the amount of assets of a corporation that will
satisfy the substantially all the properties requirement for purposes of
obtaining a private letter ruling. Under Rev. Proc. 77-37, 1977-2 C.B. 568,
the "substantially all" requirement is satisfied only if the acquiring
corporation acquires properties of the transferor corporation representing at
least 90 percent of the fair market value of the net assets and at least 70
percent of fair market value of the gross assets held by the transferor
corporation immediately prior to the reorganization. The "ninety/seventy"
guidelines are arbitrary percentages selected by the Service that do not
represent judicial interpretations of the meaning of the phrase
"substantially all of the properties" under various subdivisions of Section
368. See LOUIS F. VIERECK V. UNITED STATES, 83-2 U.S.T.G. para. 9664 (C1.
Cts.), RALPH C. WILSON, SR. 46 T.C. 334 (1966), JOHN G. MOFFAT 42 T.C. 558,
363 F.2d 860 (9th Cir. 1966) (aff'g T.C.) 66-2 U.S.T.C. para. 9498, JAMES
ARMOUR, INC., 43 T.C. 295 (1964).

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KPMG Peat Marwick LLP

Board of Directors
June 10, 1997
Page 9

What constitutes "substantially all of the properties" in a nonruling situation
depends upon the facts and circumstances in each case rather than upon any
particular percentage. See Rev. Rul. 57-518, 1957-2 C.B. 253. The Service
is of the view that the substantially all properties requirement applies
separately to each trade or business of the transferor corporation.

In the present merger, it has been represented to KPMG that at least 90
percent of the fair market value of the net assets and at least 70 percent of
the fair market value of the gross assets which WIB holds immediately
preceding the merger will be held by WIB upon consummation of the merger, so
it appears the substantially all test of Section 368(a)(2)(E)(i) will be met.

Requisite to a reorganization under Section 368(a)(1)(A) and Section
368(a)(2)(E) are a continuity of the business enterprise under the modified
corporate form and a continuity of interest in the corporation surviving the
merger on the part of those persons who directly or indirectly were the
owners of the merged corporation prior to the reorganization. See Reg.
Section 1.368-1(b). The term reorganization does not embrace the mere
purchase by one corporation of the properties of another. See Reg. Section
1.368-2(a).

Continuity of business enterprise requires that the transferee corporation
either continue the transferor corporation's historic business or use a
significant portion of the transferor's historic business assets. See Reg.
Section 1.368-1(d).

The Regulations under Section 368(a) do not establish the amount of
qualifying consideration necessary to satisfy the continuity of interest
requirement. Prior to its adoption of its current policy that it will not
issue "comfort rulings" regarding certain corporate reorganizations, the
Service promulgated a definite test as to the amount of consideration
necessary to satisfy the continuity of interest requirement for purposes of
obtaining a private letter ruling. Under Rev. Proc. 77-37, 1977-2 C.B. 568,
the continuity of interest requirement of Reg. Section 1.368-1(b) was
satisfied if:

[T]here is continuing interest through stock ownership in
the acquiring or transferee corporation . . . on the part
of the former shareholders of the acquired or transferor
corporation which is equal in value, as of the effective
date of the reorganization, to at least 50 percent of the
value of all the formerly outstanding stock of the acquired
or transferor corporations as of the same date. It is not

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KPMG Peat Marwick LLP

Board of Directors
June 10, 1997
Page 10

necessary that each shareholder of the acquired or transferor
corporation receive in the exchange, stock of the acquiring or
transferor corporation . . . , which is equal in value to at
least 50 percent of the value of his former stock interest in
the acquired or transferor corporation, so long as one or more
of the shareholders of the acquired transferor corporation have
a continuing interest through stock ownership in the acquiring
or transferee corporation . . . which is, in the aggregate, equal
in value to at least 50 percent of the value of all of the formerly
outstanding stock of the acquired or transferor corporation.

The 50 percent test of Rev. Proc. 77-37, supra., does not as a matter of law
establish the amount of qualifying consideration necessary to meet the
continuity of interest requirement of Reg. Section 1.368-1(b). In other
words, the surrender of a capital stock ownership of less than 50 percent of
the stock of the acquired corporation does not in itself mark a discontinuity
of interest. The Supreme Court in JOHN A. NELSON CO. V. HELVERING, 296 U.S.
374 (1935), 36-1 U.S.T.C. para. 9019, held that there was a reorganization
even though the shareholders of the acquired corporation received less than
half of their total consideration in the form of stock of the acquiring
corporation and received nonvoting preferred stock. It is only necessary
that the shareholders continue to have a definite and substantial equity
interest in the assets of the acquiring corporation. See Rev. Rul 61-156,
1961-2 C.B. 62.

In the present merger, it appears that the continuity of interest test should
be met, even under the guidelines of Rev. Proc. 77-37. See Representations
(d), (e) and (r).

The WIB common stock being acquired from dissenting shareholders with
consideration furnished by WIB as the surviving corporation will not be
considered as outstanding WIB common shares immediately before the
transaction and will not be included for purposes of determining control as
defined in Section 368(c). See Reg. Section 1.368-2(j)(3)(i) and (j)(7),
example 2.

Section 354(a)(1) provides, in part, that no gain or loss will be recognized
if stock in a corporation a party to a reorganization is, in pursuance of the
plan of reorganization, exchanged solely for stock in such corporation or in
another corporation a party to the reorganization. For purposes of Section
354, stock rights or warrants are not included in the term "stock." See Reg.
Section 1.354-1(e).

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June 10, 1997
Page 11

Section 356(a)(1) in relevant part provides that if money or other property
is received in an exchange to which Section 354 would otherwise apply, then
gain, if any, to the recipient will be recognized to the extent of the sum of
the money and fair market value of the other property received. If the
exchange has the effect of the distribution of a dividend, then the amount of
gain recognized that is not in excess of each distributee shareholder's
ratable share of the undistributed earnings and profits of WIB will be
treated as a dividend. See Section 356(a)(2). No loss will be recognized on
the exchange. See Section 356(c).

Any dissenting shareholder of WIB who receives only cash in exchange for the
WIB stock, and who, as a result of the transaction, owns no FPFG common stock
directly, indirectly, or constructively, is treated as having received such
cash as a redemption in complete termination of his or her interest within
the meaning of Section 302(a), as a distribution in full payment in exchange
for the WIB stock.

Under the provisions of Section 358(a)(1) and 1223(1), the shareholders of
WIB will have a basis and holding period for the FPFG stock received in the
merger that will be the same as the basis and holding period of the WIB stock
surrendered, provided in the case of the holding period, that the stock
surrendered was held as a capital asset on the date of the merger.

Under the provisions of Section 362(b) and 1223(2), the basis and holding
period of the assets of WIA in the hands of WIB will be the same as the basis
and holding period of the assets in the hands of WIA immediately prior to the
merger. Additionally, no gain or loss will be recognized by WIA on the
transfer of its assets to WIB in exchange for the WIB stock. See Sections
361(a) and 357(a).

Pursuant to Section 381(a)(2), WIB will succeed to and take into account the
earnings and profits, or deficit in earnings and profits, as the case may be,
of WIA and any deficit in earnings and profits of WIA or WIB shall be used
only to offset earnings and profits accumulated after the date of transfer
pursuant to Section 381(c)(2).

This transaction should not result in any additional net income taxes for
purposes of California, where WIB is incorporated and conducts its business,
and Nevada, where FPFG is incorporated.

California Revenue and Taxation Code Sections 17321, 18151, 24451 and 24990
incorporate the relevant sections of the Internal Revenue Code discussed in
this opinion letter. Thus, as provided by the federal code as discussed
above, the basis and the holding period will carryover, and there will be no
gain or loss on the receipt by the WIB

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KPMG Peat Marwick LLP

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June 10, 1997
Page 12

shareholders of FPFG stock in exchange for the surrender and cancellation of
their respective stock interests in WIB.

From a California corporate taxation standpoint, WIB is taxed under the
provisions of Section 23181 of the California Revenue and Taxation Code.
Thus, WIB both before and after the merger will be subject to a franchise tax
principally determined under generally accepted accounting principles
("GAAP").

From a Nevada corporate taxation standpoint, Nevada does not have a corporate
income or franchise tax. Thus, there will be no additional Nevada income
taxation as a result of this transaction.

Based solely upon the foregoing facts and representations, as well as the
Plan, KPMG renders the following opinions with respect to the Federal income
and California franchise and income tax consequences of the proposed
transaction:

1. The form and substance of the merger of WIA with and into WIB will
constitute a tax-free reorganization under Section 368(a)(1)(A) and
Section 368(a)(2)(E) of the Code.

2. WIA will not recognize any gain or loss upon the transfer of its assets to
WIB in exchange for WIB stock and the assumption by WIB of the liabilities,
if any, of WIA.

3. WIB will not recognize any gain or loss on the receipt by it of the assets
of WIA solely in exchange for WIB stock.

4. No gain or loss will be recognized to FPFG on the exchange of WIA stock
solely for WIB stock.

5. The basis of the assets of WIA in the hands of WIB will be the same as the
basis of those assets in the hands of WIA immediately prior to the merger.

6. The holding period of the assets of WIA acquired by WIB in the merger will
include the holding period of those assets in the hands of WIA immediately
prior to the exchange.

7. Based on Regulation Section 1.358-6(c), after the proposed transaction, the
basis of the stock of WIB owned by FPFG will equal the sum of (i) FPFG's
basis in the stock of WIA immediately before the merger, plus (ii) WIB's
net basis in its assets immediately before the merger, or at the election
of FPFG, the basis in the stock of

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KPMG Peat Marwick LLP

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Page 13

WIB in the hands of the WIB shareholders immediately before the proposed
transaction.

9. No gain or loss will be recognized to shareholders of WIB upon the exchange
of WIB stock solely for the FPFG voting common stock pursuant to the
merger.

10. The basis of the FPFG Common Stock received by the shareholders of WIB in
the merger will be the same as the basis of the WIB stock surrendered in
exchange therefor.

13. Any dissenting shareholders who receive cash in exchange for their WIB
Common Stock and who directly, indirectly, or constructively own FPFG
common stock as a result of the transaction shall have gain or income,
if any, in an amount not in excess of the cash received. As stated in
number 12 above, cash received by a dissenting WIB shareholder is
treated as having been received in redemption of WIB shares. Whether
such redemption transaction qualifies for sale or exchange treatment or
is treated as a dividend is determined on a shareholder by shareholder
basis applying the rules of Section 302, including, apparently, the
attribution rules of Section 318. Such WIB shareholders should consult
their own tax advisors.

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KPMG Peat Marwick LLP

Board of Directors
June 10, 1997
Page 14

THE OPINIONS EXPRESSED IN THIS LETTER ARE RENDERED ONLY WITH RESPECT TO THE
SPECIFIC MATTERS DISCUSSED HEREIN, AND WE EXPRESS NO OPINION WITH RESPECT TO ANY
OTHER FEDERAL OR STATE INCOME TAX ASPECT OR LEGAL ASPECT OF THIS TRANSACTION.
IF ANY OF THE ABOVE-STATED FACTS, CIRCUMSTANCES, OR REPRESENTATIONS ARE NOT
ENTIRELY COMPLETE OR ACCURATE, IT IS IMPERATIVE THAT WE BE INFORMED IMMEDIATELY,
AS THE INACCURACY OR INCOMPLETENESS COULD HAVE A MATERIAL EFFECT ON OUR
CONCLUSIONS.

IN RENDERING OUR OPINION, WE ARE RELYING UPON THE RELEVANT PROVISIONS OF THE
NEVADA CODE AS AMENDED TO DATE, THE CALIFORNIA REVENUE AND TAXATION CODE AS
AMENDED TO DATE, THE INTERNAL REVENUE CODE OF 1986 AS AMENDED, THE REGULATIONS
THEREUNDER, AND JUDICIAL AND ADMINISTRATIVE INTERPRETATIONS THEREOF, ALL OF
WHICH ARE SUBJECT TO CHANGE OR MODIFICATION BY SUBSEQUENT LEGISLATIVE,
REGULATORY, ADMINISTRATIVE, OR JUDICIAL DECISIONS. ANY SUCH CHANGE OR
MODIFICATION COULD ALSO HAVE AN EFFECT ON THE VALIDITY OF OUR OPINION. UNLESS
SPECIFICALLY REQUESTED OTHERWISE, KPMG WILL NOT UPDATE THESE OPINIONS FOR ANY
SUBSEQUENT CHANGES OR MODIFICATIONS TO ANY LAW OR REGULATION OR TO THE JUDICIAL
OR ADMINISTRATIVE INTERPRETATIONS THEREOF. THE OPINIONS CONTAINED HEREIN ARE
NOT BINDING UPON THE INTERNAL REVENUE SERVICE, ANY OTHER TAX AUTHORITY OR ANY
COURT, AND NO ASSURANCE CAN BE GIVEN THAT A POSITION CONTRARY TO THAT EXPRESSED
HEREIN WILL NOT BE ASSERTED BY A TAX AUTHORITY.

----------------------------------------
KPMG Peat Marwick LLP

<PAGE>

Exhibit 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Summary --
Conditions to the Merger; Termination of the Merger Agreement," "Summary --
Accounting Treatment," "The Merger -- Accounting Treatment" and "Experts"
in Amendment No. 1 to the Registration Statement (Form S-4 No. 333-25715) and
related Prospectus of FIRSTPLUS Financial Group, Inc. for the registration of
1,243,134 shares of its common stock and to the incorporation by reference
therein of our report dated October 25, 1996, with respect to the consolidated
financial statements of FIRSTPLUS Financial Group, Inc., formerly RAC Financial
Group, Inc., included in its Annual Report (Form 10-K) for the year ended
September 30, 1996, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Dallas, Texas

July 2, 1997

<PAGE>

Exhibit 23.3

The Board of Directors of
Western Interstate Bancorp:

We consent to the use of our report included herein and to the reference to
our firm under the headings "Summary-Conditions to the Merger; Termination of
the Merger Agreement", "Summary -- Certain Federal Income Tax Consequences",
"The Merger -- The Merger Agreement -- Conditions to the Merger", "The
Merger -- Certain Federal Income Tax Consequences", "Selected Financial Data
of WIB", "Legal and Tax Matters" and "Experts" in the prospectus.

/s/ KPMG PEAT MARWICK LLP
-------------------------
KPMG Peat Marwick LLP

Orange County, California

July 2, 1997

<PAGE>

EXHIBIT 23.4

July 2, 1997

Board of Directors
Western Interstate Bancorp
5000 Birch, Suite 2500
Newport Beach, CA 92660

Re: Consent of Seapower Carpenter Capital, Inc.
d/b/a Carpenter & Company

Gentlemen:

We hereby consent to the inclusion in the Proxy Statement/Prospectus
forming part of this Amendment No. 1 to Registration Statement on Form S-4 of
Firstplus Financial Group, Inc. of our opinion attached as Appendix B thereto
and to the reference to such opinion and to our firm therein. We also confirm
the accuracy in all material respects of the description and summary of such
fairness opinion, the description and summary of our analyses, observations,
beliefs and conclusions relating thereto set forth under the heading "The
Merger--Opinion of WIB's Financial Advisor" therein. In giving such consent,
we do not admit that (i) we come within the category of persons whose consent
is required under Section 7 of the Securities Act of 1933 and the rules and
regulations of the Securities and Exchange Commission issued thereunder or (ii)
that we are experts with respect to any part of the Proxy Statement/Prospectus
within the meaning of the term "experts" as used in the Securities Act and the
rules and regulations of the Securities and Exchange Commission promulgated
herein.

Seapower Carpenter Capital, Inc.
d/b/a/ Carpenter & Company

By: /s/ John Fleming
--------------------------
Name: John Fleming
------------------------
Title: E.V.P.
------------------------

Dated: 7-2-97
------------------------

<PAGE>

Exhibit 99.1

<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
PROXY Revoking any such prior appointment, the undersigned, a shareholder of Western
Interstate Bancorp ("WIB"), hereby appoints David B. Kagnoff, James E. Rich and
WESTERN INTERSTATE BANCORP Barry K. Williams, and each of them, attorneys and agents of the undersigned, with
18302 Irvine Boulevard full power of substitution, to vote all shares of the Common Stock of the
Suite 300 undersigned in WIB at the Special Meeting of Shareholders of WIB to be held at 18302
Tustin, CA 926780 Irvine Boulevard, Suite 300, Tustin, CA 92780 on Thursday, August 7, 1997 at 12:00 noon
local time and at any adjournments thereof, as fully and effectually as the undersigned
could do if personally present and voting, hereby approving, ratifying and confirming
all that said attorneys and agents or their substitutes may lawfully do in place of the
undersigned as indicated below.
- ------------------------------------------------------------------------------------------------------------------------------
FOR THE SPECIAL MEETING
TO BE HELD THURSDAY, AUGUST 7, 1997
- ------------------------------------------------------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF WESTERN INTERSTATE BANCORP.
- ------------------------------------------------------------------------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED AND DATED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2 AND THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTERS REFERRED TO IN PROPOSAL 3.
- ------------------------------------------------------------------------------------------------------------------------------
1. Approval of the Agreement and Plan of Merger, as described in the accompanying Proxy Statement/Prospectus.

FOR / / AGAINST / / WITHHOLD VOTE / /
- ------------------------------------------------------------------------------------------------------------------------------
2. Approval of the proposal to give authority to the Proxies to adjourn the Special Meeting in order to permit further
solicitation of proxies.

FOR / / AGAINST / / WITHHOLD VOTE / /
- ------------------------------------------------------------------------------------------------------------------------------
3. With respect to the transaction of such other business as may properly come before the Special Meeting or any adjournments
thereof, as the Proxies, in their sole discretion, may see fit.

FOR / / AGAINST / / WITHHOLD VOTE / /
- ------------------------------------------------------------------------------------------------------------------------------
Please sign exactly as name appears. When shares are held by joint tenants, both should sign. When signing as attorney,
as executor, administrator, trustee or guardian, please give full title as such; if
Dated __________________, 1997 a corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
- ----------------------------------
Signature

- ----------------------------------
Signature if held jointly
- ------------------------------------------------------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>

<PAGE>

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this 1st day of January, 1996, by and among WESTERN INTERSTATE BANCORP, a
California corporation, with executive offices located at 5000 Birch Street,
West Tower, Suite 2500, Newport Beach, California 92660 ("WIB"), CITIZENS
THRIFT & LOAN ASSOCIATION, a California industrial loan company, located at
18302 Irvine Boulevard, Tustin, California 92680 (the "Employer"), and MICHAEL
W. MCGUIRE, an individual whose residence is located at 6738 East Canyon
Ridge, Orange, California 92669-2435 (the "Employee").

WHEREAS, the Employee is and has been employed as the President of WIB and
as the President and Chief Executive Officer of the Employer and has been
employed by the Employer and/or WIB for more than ten years in various
capacities;

WHEREAS, the Board of Directors of the Employer and the Board of Directors
of WIB believes it is in the best interests of the Employer and WIB to enter
into this Agreement with the Employee in order to assure continuity of
management and to reinforce and encourage the continued attention and dedication
of the Employee to his assigned duties; and

WHEREAS, the Board of Directors of the Employer and the Board of Directors
of WIB have approved and authorized the execution of this Agreement with the
Employee;

NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is AGREED as
follows:

1. EMPLOYMENT.

(a) The Employee is employed as the President and Chief Executive Officer
of the Employer with supervision and control over strategic planning and the
daily operations of the Employer and of its wholly-owned subsidiary, Citizens
Group, Inc. ("CGI"). As such, the Employee

<PAGE>

shall have such duties and responsibilities as are prescribed for the
President in the by-laws of the Employer and of CGI. At the request of the
Board of Directors of WIB, the Employee serves as President of WIB, with such
duties and responsibilities as are prescribed by the by-laws of WIB. At the
request of the Board of Directors of the Employer or of WIB, the Employee
shall serve also as an officer and/or director of any company or companies
which are subsidiaries, directly or indirectly, of the Employer or of WIB
(such subsidiaries and WIB are hereafter referred to individually as an
"Affiliated Company" and collectively as "Affiliated Companies"). The
Employee shall have such other powers and duties as may be prescribed from
time to time by the Board of Directors of each such entity, PROVIDED THAT such
duties are consistent with the Employee's position as the President and Chief
Executive Officer of the Employer. The Employee shall devote his best efforts
and all his business time and attention to the businesses and affairs of the
Employer and the Affiliated Companies. Employee shall not, directly or
indirectly, acquire, hold or retain any interest in any business competing
with or similar in nature to the business of the Employer and the Affiliated
Companies; PROVIDED that the Employee may purchase, solely for investment, not
more than five percent (5%) of the outstanding stock or other securities of a
financial institution of a class which is traded on any national or regional
securities exchange or is actively traded in the over-the-counter market and
registered under Section 12(g) of the Securities Exchange Act of 1934 (the
"Exchange Act"). The Employee shall not, without specific approval of the
Board of Directors of the Employer, or in the case of an Affiliated Company,
the Board of Directors of such Affiliated Company, do or contract to do any of
the following:

(1) Except in conformance with the policies established by the Board
of Directors of the Employer or such Affiliated Company, as in effect from
time to time, permit such entity to borrow funds without the prior approval
of the Board of Directors of such entity;

2
<PAGE>

(2) Without the prior approval of the Loan Committee of the Board of
Directors of Employer or such Affiliated Company, permit any customer of
the Employer or the Affiliated Company to become indebted to the Employer
or the Affiliated Company in an aggregate amount in excess of the amount
permitted under the policies established by the Loan Committee of the Board
of Directors of the Employer or the Affiliated Company as in effect from
time to time; and

(3) Without the prior approval of the Board of Directors of the
Employer or such Affiliated Company, permit such entity to purchase capital
equipment for amounts in excess of the amounts budgeted for expenditure by
each such entity.

(b) Except as limited by Section 1(a) of this Agreement and by this
Section 1(b), the Employee may, without the prior consent of the Employer or
WIB, engage in any other business, investment, professional, educational,
charitable or other activities, PROVIDED THAT such activities do not
materially interfere with the services required under this Agreement or create
a conflict of interest where the Employee's loyalties are divided between two
or more competing or adverse parties. The Employee shall notify the Employer
in writing of any potential conflict of interest. In the event that a
conflict of interest is deemed by the Board of Directors of the Employer to
exist, the Board of Directors of the Employer may immediately demand that
Employee cease engaging in the business or activities which are creating the
conflict. Refusal by the Employee to remedy the conflict of interest
situation shall be grounds for termination for cause as defined in Section 7
of this Agreement.

2. COMPENSATION.

(a) SALARY. The Employer agrees to pay the Employee during the term of
this Agreement a salary established by its Board of Directors. The Employee
shall not receive a salary from any Affiliated Company. The per annum salary
hereunder as of January 1, 1996 shall be one hundred

3
<PAGE>

eighty-five thousand dollars ($185,000). The Employee's salary shall be
payable not less frequently than twice each month. The amount of the
Employee's salary shall be reviewed by the Board of Directors of the Employer
not less often than annually. Any adjustments in such salary or other
compensation shall in no way limit or reduce any other obligation of the
Employer hereunder. The Employee's per annum salary in effect hereunder may
be reduced from time to time during the term of this Agreement, PROVIDED THAT
the amount of the Employee's per annum salary hereunder shall not be less than
one hundred sixty-six thousand five hundred dollars ($166,500).

(b) BONUS PLAN. The Employee shall be paid an annual bonus based on the
return on average equity ("ROAE") and a return on average assets ("ROAA") of
the Employer and other subsidiaries of WIB managed by the Employee as
determined by WIB's independent certified public accounting firm based upon
its audit of WIB's financial statements for each fiscal year during the term
of this Agreement, beginning with the fiscal year ended December 31, 1996.

The bonus shall be an amount equal to the percentage of the Employee's
salary (not to exceed 100%) for such fiscal year that is the sum of the
percentage of salary based on ROAA and the percentage of salary based on ROAE as
set forth below:

(i)(a) if ROAA is at least .70%, the percentage of salary based on
ROAA shall be 15%; or

(b) if ROAA is at least .80%, the percentage of salary based on ROAA
shall be 20%; or

(d) if ROAA is at least 1.00%, the percentage of salary based on ROAA
shall be 40%; or

4
<PAGE>

(e) if ROAA is at least 1.25%, the percentage of salary based on ROAA
shall be 50%; and

(ii)(a) if ROAE is at least 7.50%, the percentage of salary based on
ROAE shall be 15%; or

(b) if ROAE is at least 9.00%, the percentage of salary based on ROAE
shall be 20%; or

(d) if ROAE is at least 12.50%, the percentage of salary based on
ROAE shall be 40%; or

(e) if ROAE is at least 15.00%, the percentage of salary based on
ROAE shall be 50%.

The bonus will be paid within 30 days following completion of the audited
financial statements for such fiscal year.

(c) EXPENSES. During the term of his employment hereunder, the Employee
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by him in performing services hereunder in accordance with the
policies and procedures established by the Board of Directors of the Employer
and by the Boards of Directors of the Affiliated Companies as in effect from
time to time, PROVIDED that the Employee properly accounts therefor in
accordance with such policies. In that event that the Employer reimburses the
Employee for expenses pursuant to this Section 2(c) or an Affiliated Company
reimburses the Employee for expenses and it is subsequently determined that
any of such expenses or any portion thereof is not reimbursable in accordance
with such policies, then, except to the extent that the Board of Directors of
the Employer or such Affiliated

5
<PAGE>

Company determines otherwise in its discretion, the Employee shall pay to the
Employer or to the appropriate Affiliated Company the amount of such expenses
previously reimbursed to him.

3. BENEFITS.

(a) PARTICIPATION IN RETIREMENT AND EMPLOYEE BENEFIT PLANS. The Employee
shall be entitled while employed hereunder to participate in, and receive
benefits under, all plans relating to pension, thrift, profit-sharing, group
life insurance, medical coverage, education, incentive stock options,
non-qualified stock options, restricted sock plans, stock appreciation rights,
and other retirement or employee benefits or combinations thereof, that are
maintained for the benefit of the Employer's or any Affiliated Company's
executive employees or employees generally, PROVIDED THAT the Board of
Directors of Employer in its discretion may make different provisions for
bonuses and bonus programs for the Employee than those for other executive
employees, and PROVIDED FURTHER THAT the Employee's benefits shall not be less
favorable than the benefits of other executives of WIB or the Employer.

(b) DISABILITY AND SPLIT DOLLAR LIFE INSURANCE. During the term of the
Employee's employment under this Agreement, the Employer shall (i) provide
disability insurance covering the Employee on terms and conditions no less
favorable than those in effect at the date of this Agreement, which in any
event shall pay the Employee not less than five thousand five hundred dollars
($5,500.00) per month and (ii) maintain on a split dollar basis a whole life
insurance policy on the life of Employee in the face amount of two hundred
fifty thousand dollars ($250,000.00) payable to the beneficiary or
beneficiaries designated by Employee. The Employer agrees to pay all premiums
on the disability and the whole life policy during the term of employment
provided herein. Upon any termination of employment of the Employee hereunder
(other than death), the Employee shall have the right to purchase from the
Employer the whole life insurance policy referred to above for a cash

6
<PAGE>

purchase price equal to the cash surrender value of the policy as of the end
of the calendar month next preceding such termination. Any such election by
the Employee shall be made in writing within thirty (30) days after the date
of his termination of employment and settlement thereon shall take place at
the offices of the Employer within thirty (30) days thereafter. Employee
agrees to submit to a physical examination and other reasonable requests made
at any time by Employer for the purpose of Employer's obtaining and
maintaining life insurance on the life of Employee, PROVIDED, HOWEVER, THAT
Employer shall bear the entire cost of any requested examination.

To the extent permitted by their respective articles of incorporation and
by-laws and by applicable law, WIB and the Employer jointly and severally shall
indemnify, defend, save, hold harmless and protect Employee from and against all
suits, proceedings, claims, demands, liabilities, obligations ("liabilities"),
losses, damages, interest, penalties, costs and expenses, including but not
limited to attorneys' fees, court costs and settlements ("losses"), which
Employee may actually and reasonably sustain or incur, directly or indirectly,
by reason of or arising from his employment with the Employer hereunder, as long
as Employee acted in good faith and in a manner he reasonably believed was in
the best interest of the Employer and its Affiliated Companies. This
indemnification shall not extend to liabilities or losses which are caused by
the Employee willfully or by the Employee's gross negligence.

(d) AUTOMOBILE.

(1) While the Employee is employed under this Agreement, the Employer
shall provide the Employee with the exclusive use of a Mercedes 320 or a
comparable automobile, with optional equipment of Employee's selection.
The automobile shall be used primarily for

7
<PAGE>

business purposes. The automobile shall be new when first provided and
shall be replaced after three years.

(2) The Employer shall pay all operating expenses of the automobile.

(3) The Employer shall procure and maintain an automobile liability
insurance policy on the automobile, with coverage including the Employee
and the Employee's spouse, in the minimum amounts of three million dollars
($3,000,000) for bodily injury or death to any one person in any one
accident, and one million dollars ($1,000,000) for property damage in any
one accident.

(4) In accordance with the policies of the Employer's Board of
Directors as in effect from time to time, the Employee shall (i) keep
records of personal and business use of the automobile, and (ii) reimburse
the Employer for expenses connected with the personal use of the automobile
by the Employee or his spouse, and/or realize such expenses as taxable
income to the Employee in accordance with such policies.

4. TERM. The term of employment under this Agreement shall be a period
of five (5) years commencing on January 1, 1996.

5. VACATIONS. The Employee shall be entitled, without loss of pay, to
absent himself voluntarily from the performance of his employment under this
Agreement, all such voluntary absences to count as vacation time, PROVIDED
that:

(a) During the term of employment under this Agreement, the Employee shall
be entitled to not less than twenty (20) days of paid vacation per year; and

(b) During each calendar year, the Employee shall take at least two (2)
consecutive weeks of vacation. The timing of vacations shall be scheduled in
a reasonable manner by the Employee.

8
<PAGE>

6. INVOLUNTARY TERMINATION OF EMPLOYMENT IN THE ABSENCE OF A CHANGE IN
CONTROL.

(a) The terms "involuntarily terminated" or "involuntary termination" in
this Agreement shall refer to the termination of the employment of Employee
without his express written consent. In addition, a diminution of or
interference with the Employee's duties, responsibilities and benefits as
President and Chief Executive Officer of the Employer shall be deemed and
shall constitute an involuntary termination of employment without cause to the
same extent as express notice of such involuntary termination. Any of the
following actions shall constitute such diminution or interference unless
consented to in writing by the Employee: (1) a change in the principal
workplace of the Employee to a location outside of a thirty-five (35) mile
radius from the Employer's headquarters office as of the date hereof; (2) a
demotion of the Employee, a material reduction in the number or seniority of
other personnel of the Employer reporting to the Employee, or a material
reduction in the frequency with which, or in the nature of the matters with
respect to which, such personnel are to report to the Employee, other than as
part of an Employer-wide reduction in staff; (3) a material reduction or
adverse change in the salary, perquisites, benefits, contingent benefits or
vacation time which had theretofore been provided to the Employee, other than
as permitted under Section 2(a) of this Agreement or as part of an overall
program applied uniformly and with equitable effect to all members of the
senior management of the Employer; and (4) a material permanent increase in
the required hours of work or the workload of the Employee.

(b) The Board of Directors of the Employer may terminate the Employee's
employment at any time, but any such termination other than termination for
cause (as defined below) shall not prejudice the Employee's right to
compensation or other benefits and rights under this Agreement. If during the
term of this Agreement, the employment of the Employee is involuntarily
terminated other than for cause (as defined below) and not in connection with
or within one hundred eighty days

9
<PAGE>

(180) days following a Change in Control (as defined below), the Employer shall
(i) within five (5) business days after the date of termination of employment,
pay to the Employee in a lump sum the amount of his annual salary at the rate in
effect immediately prior to the date on which his employment terminates, (ii)
for a period of one year immediately following such date, provide him with
substantially the same medical and, if applicable, dental insurance benefits, at
the same cost, if any, to the Employee, as he was receiving immediately before
such date, and (iii) at the time when a bonus would next be payable pursuant to
Section 2(b) of this Agreement, pay to the Employee in cash an amount equal to
the product of (a) the amount of the bonus which would have been payable then
had he continued to be employed, multiplied by (b) a fraction the numerator of
which is the number of days in the period commencing on January 1 of the fiscal
year in which his employment was terminated and concluding on the date on which
his employment was terminated and the denominator of which is 365.

7. TERMINATION FOR CAUSE.

(a) For purposes of this Agreement, termination for cause shall include
termination for personal dishonesty, incompetence, willful misconduct, breach
of a fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation (other than
traffic violations or similar offenses) or final cease-and-desist order
against the Employee, refusal to remedy a conflict of interest as provided in
Section 1(b) of this Agreement, or material breach of any provision of this
Agreement.

(b) In case of termination of the Employee's employment for cause, the
Employer shall pay the Employee his salary and provide him with his benefits
through the date of termination, and the Employer and WIB shall have no
further obligation to the Employee under this Agreement, except

10
<PAGE>

relating to the right of the Employee to purchase the whole life insurance
policy as described in Section 3(b)(ii) above.

8. VOLUNTARY TERMINATION OF EMPLOYMENT. The Employee's employment may be
voluntarily terminated by the Employee at any time upon one hundred twenty
(120) days' written notice to the Employer or upon such shorter period as may
be agreed upon between the Employee and the Board of Directors of the
Employer. In the event of such voluntary termination (except in the case of
voluntary termination on account of a diminution of or interference with the
Employee's duties, responsibilities or benefits which shall constitute an
involuntary termination without cause), the Employer shall be obligated to
continue to pay the Employee his salary and benefits only through the date of
termination, and the Employer and WIB shall have no further obligation to the
Employee under this Agreement, except relating to the right of the Employee to
purchase the whole life insurance policy as described in Section 3(b)(ii)
above.

9. DEATH OF THE EMPLOYEE. In the event of the death of the Employee
during the term of employment under this Agreement and prior to any
termination hereunder, the Employee's estate, or such person as the Employee
may have previously designated in writing, shall be entitled to receive from
the Employer in cash in a lump sum the amount of the Employee's per annum
salary at the time of his death. In addition, his surviving spouse, if any,
shall be entitled to receive for a period of one year from the date of the
Employee's death (i) substantially the same medical, and, if applicable,
dental benefits as the spouse received in connection with the Employee's
employment immediately prior to his death, at the same cost to the spouse as
the Employee paid, if any, immediately prior to his death for such insurance
coverage for the spouse, such coverage to be secondary coverage so long as the
spouse has other medical and dental benefits, and (ii) the use of the same
automobile as the Employer provided to the Employee pursuant to Section
3(d)(1) on the date of his death. During

11
<PAGE>

such one year period, the Employer shall pay the operating expenses of the
automobile and maintain insurance on the automobile with coverage for the
Employee's spouse in the minimum amounts specified in Section 2(d)(3) of this
Agreement, and the Employee's spouse shall maintain records of her use of the
automobile and reimburse the Employer in accordance with Section 3(d)(4) of
this Agreement.

10. INVOLUNTARY TERMINATION OF EMPLOYMENT IN CONNECTION WITH CHANGE IN
CONTROL.

(a) For purposes of this Agreement, the term "Change in Control" shall
mean (1) that any person (as defined below) other than persons who are holders
of record of the common stock of WIB as of the date of this Agreement is or
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly of securities issued by the Employer or by WIB
representing 50% or more of the Employer's or WIB's outstanding securities; or
(2) a reorganization, merger, consolidation, sale of all or substantially all
of the assets of the Employer or WIB or a similar transaction in which the
Employer or WIB is not the resulting entity. The term "Change in Control"
shall not include an acquisition of securities by an employee benefit plan of
the Employer or WIB. The term "person" shall have the meaning assigned under
Sections 3(a)(9) and 13(d)(3) of the Exchange Act and regulations thereunder.

(b) If during the term of this Agreement, the employment of the Employee is
involuntarily terminated (other than for cause as defined in Section 7 of this
Agreement) in connection with or within one hundred eighty (180) days following
a Change in Control, the Employer shall (i) within five (5) business days after
the date of termination of employment, pay to the Employee in a lump sum twice
the amount of his annual salary at the rate in effect immediately prior to the
date on which his employment terminates, and (ii) for a period of two years
immediately following such date,

12
<PAGE>

provide him with substantially the same medical and, if applicable, dental
insurance benefits, at the same cost, if any, to the Employee, as he was
receiving immediately before such date.

11. EFFECT OF CERTAIN FDIC ACTIONS.

(a) If the Employee is suspended and/or temporarily prohibited from
participating in the conduct of the Employer's affairs by a notice served
under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act ("FDIA"),
12 U.S.C. Section 1818(e)(3) and (g)(1), the Employer's obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, or the
temporary suspension or prohibition terminates without imposition of a
permanent suspension or prohibition, the Employer shall (i) pay the Employee
all or part of the compensation withheld while its obligations under this
Agreement were suspended and (ii) reinstate all of its obligations which were
suspended.

(b) If the Employee is removed and/or permanently prohibited from
participating in the conduct of the Employer's affairs by an order issued
under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. Section 1818(e)(4) and
(g)(1), all obligations of the Employer and WIB under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.

(c) If the Employer is in default (as defined in Section 3(x)(1)) of the
FDIA, 12 U.S.C. Section 18183(x)(1)) all obligations under this Agreement
shall terminate as of the date of default, but this provision shall not affect
any vested rights of the contracting parties.

(d) All obligations under this Agreement shall be terminable, except to
the extent that continuation of this Agreement is determined necessary for the
continued operation of the Employer: (i) by the Federal Deposit Insurance
Corporation ("FDIC") at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Employer under the authority contained in

13
<PAGE>

Section 13(c) of the FDIA; or (ii) by FDIC at the time it approves a
supervisory merger to resolve problems related to operation of the Employer.
Any rights of the parties that have already vested, however, shall not be
affected by any such action.

12. CERTAIN REDUCTION IN PAYMENTS AND BENEFITS IN THE EVENT OF A CHANGE
IN CONTROL. Notwithstanding any other provision of this Agreement, if the
amounts and the value of benefits to be received under this Agreement,
together with any other amounts and the value of benefits received or to be
received by the Employee in connection with a change in ownership or control,
as defined in Section 280G of the Internal Revenue Code of 1986, as amended,
and regulations thereunder ("Section 280G"), would cause any amount to be
nondeductible by the Employer or WIB for federal income tax purposes pursuant
to or by reason of Section 280G, then payments and benefits under this
Agreement shall be reduced (not less than zero) to the extent necessary so as
to maximize amounts and the value of benefits to be received by the Employee
without causing any amount to become nondeductible pursuant to or by reason of
Section 280G. The Employee shall determine the allocation of such reduction
among payments and benefits to the Employee.

13. PAYMENTS BY WIB. To the extent, if any, that WIB pays to the
Employee a bonus pursuant to the bonus plan referred to in Section 2(b) of
this Agreement, or otherwise makes a payment or provides a benefit to the
Employee which is an obligation of the Employer hereunder, such obligation of
the Employer shall be deemed to be satisfied.

14. NO ASSIGNMENTS.

(a) This Agreement is personal to each of the parties hereto, and neither
party may assign or delegate any of its rights or obligations hereunder
without first obtaining the written consent of the other party.

14
<PAGE>

(b) This Agreement and all rights of the Employee hereunder shall inure to
the benefit of and be enforceable by the Employee's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Employee should die while any amounts would
still be payable to the Employee hereunder if the Employee had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Employee's devisee, legatee
or other designee or if there is no such designee, to the Employee's estate.

15. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth on the first page of this Agreement (PROVIDED that all
notices to the Employer or to WIB shall be directed to the attention of the
Board of Directors with a copy to the Secretary of such entity), or to such
other address as any party may have previously furnished to the others in
writing. Notices delivered personally shall be deemed communicated as of the
date of actual receipt; mailed notices shall be deemed communicated as of the
date of mailing by certified mail, return receipt requested.

16. EFFECT OF WAIVER. The failure of either party to insist on strict
compliance with any of the terms, covenants or conditions of this Agreement by
the other party shall not be deemed a waiver of that term, covenant or
condition, nor shall any waiver or relinquishment of that right or power at
any one time or times be deemed a waiver or relinquishment of that right or
power for all or any other times.

17. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Employee by the

15
<PAGE>

Employer and Affiliated Companies, and contains all of the covenants and
agreements between the parties with respect to that employment in any manner
whatsoever. Each party to this Agreement acknowledges that no representation,
inducements, promises or agreements, orally or otherwise, have been made by
any party or anyone acting on behalf of any party, which are not embodied
herein, and that no other agreement, statement or promise contained in this
Agreement shall be valid or binding on either party.

18. AMENDMENTS. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein
otherwise provided.

19. PARAGRAPH HEADINGS. The paragraph headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.

20. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

21. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California and venue for any action
brought to enforce or interpret the terms of this Agreement shall be
exclusively Orange County, California.

22. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or the performance thereof shall be settled by final and
binding arbitration in accordance with the then obtaining Seven Step Rules of
Practice and Procedure (Rules of Practice and Procedure for the Arbitration of
Commercial Disputes) of Judicial Arbitration and Mediation Services, Inc. The
Employee hereby places his initials (________) to indicate that he has read
this provision requiring arbitration of disputes under this Agreement.

16
<PAGE>

23. PREVAILING PARTY'S ATTORNEYS FEES. In the event that a dispute under
this Agreement is resolved by arbitration pursuant to Section 22 of this
Agreement or by a court of competent jurisdiction, the party or parties which
do not prevail party shall reimburse the prevailing party or parties for the
amount of all of the prevailing party's or parties' reasonable costs incurred
in connection with such arbitration or court proceeding, including without
limitation fees for attorneys and expert witnesses.

24. EMPLOYEE'S COUNSEL. The Employee hereby acknowledges that he has
obtained the advice of his own legal counsel in connection with the
negotiation and drafting of this Agreement.

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

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.

WESTERN INTERSTATE BANCORP

By: /s/ JAMES T. CAPRETZ
--------------------------------
James T. Capretz, Chairman of
the Board

CITIZENS THRIFT & LOAN ASSOCIATION

By: /s/ JAMES T. CAPRETZ
--------------------------------
James T. Capretz, Chairman of
the Board

EMPLOYEE

/s/ MICHAEL W. McGUIRE
------------------------------------
Michael W. McGuire

17
<PAGE>

AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT ("Amendment") is made and
entered into as of the __ day of ________ 1997, by and among RAC FINANCIAL
GROUP, INC., a Nevada corporation ("RAC"), CITIZENS THRIFT & LOAN ASSOCIATION, a
California industrial loan company (the "Employer") and MICHAEL W. McGUIRE, an
individual resident of California (the "Employee").

WHEREAS, the Employee is employed by the Employer in an executive capacity
pursuant to the terms of that certain Employment Agreement, dated as of January
1, 1996 (the "Employment Agreement"), by and among WESTERN INTERSTATE BANCORP, a
California corporation ("Western"), and the Employer; and

WHEREAS, Western, RAC and its subsidiary have entered into that certain
Agreement and Plan of Merger, dated as February__, 1997 (the "Merger
Agreement"), pursuant to which such subsidiary is merging with and into Western;
and

WHEREAS, the Employer desires that the Employee continue as an employee of
the Employer pursuant to the terms and provisions of the Employment Agreement,
with such changes and modifications thereto as provided in this Amendment, and
the Employee desires to be so employed;

NOW, THEREFORE, in consideration of the Employee's continued employment by
the Employer and the mutual promises and benefits contained herein and in the
Employment Agreement, the parties hereto, intending to be legally bound, hereby
agree as follows:

1. Section 2(a) of the Employment Agreement is hereby amended to add a
new fourth sentence thereto as follows:

"Upon the closing date of the transactions provided for in the Merger
Agreement (the "Effective Date"), the per annum salary of the Employee
shall be Two Hundred Twenty-five Thousand Dollars ($225,000)."

2. Section 2(a) is further amended hereby to amend and restate the seventh
sentence thereof as follows:

"The Employee's per annum salary in effect hereunder may not be
reduced below Two Hundred Twenty-five Thousand Dollars ($225,000)
during the term of this Agreement."

3. Section 2(b) of the Employment Agreement is hereby deleted and a new
Section 2(b) is hereby added as follows:

<PAGE>

"(b) BONUS PLAN. The Employee shall be paid an annual bonus by RAC of
One Hundred Eighty-Five Thousand Dollars ($185,000) within 30 days
following the end of each fiscal year of RAC during the term of this
Agreenment. In addition, following the end of each fiscal year of
RAC, the Board of Directors of RAC, or any duly authorized committee
or officer thereof, in their sole discretion, may elect to cause RAC
to award to Executive an additional cash bonus. In addition, the
Employee shall be entitled to receive a bonus within 90 days of the
Effective Date for the period commencing January 1, 1997 and ending on
the Effective Date (the "Interim Bonus Period") equal to the bonus
that the Employee would have been entitled to receive had the Interim
Bonus Period consisted of an entire fiscal year under Section 2(b) of
this Agreement, prior to the Amendment, based upon the unaudited
financial statements of the Employer for the Interim Bonus Period.
Provided, however, that the amount of the bonus paid to the Employee
for the Interim Bonus Period shall be subtracted from the bonus
payable under Section 2(b) as amended by the Amendment."

4. The following language is hereby added to the end of Section 3(a):

"Notwithstanding the foregoing, effective February 7, 1997, the
Employee and the Employer have entered into a Stock Option Agreement
providing the Employee with an option to purchase 50,000 shares of
common stock of RAC at a price equal to $28.50 per share (the "Initial
Options"). The Initial Options shall be vested as to 16,666 shares on
the Effective Date, an additional 16,666 shares on the first
anniversary of the Effective Date, and as to the remaining balance on
the second anniversary of the Effective Date. In addition, during
each year of the term of this Agreement, the Employer shall pay up to
$5,000 of the Employee's legal and accounting expenses related to tax
or estate planning."

5. Except as modified hereby, the provisions of the Employment Agreement
shall remain in full force and effect.

6. This Amendment shall be governed by and construed in accordance with
the laws of the State of California, without regard to principals of conflicts
of laws.

7. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

2
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.

RAC FINANCIAL GROUP, INC.

By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------

CITIZENS THRIFT & LOAN ASSOCIATION

------------------------------------
James T. Capretz, Chairman of
the Board

EMPLOYEE

By:
--------------------------------
Michael W. McGuire