WESTERN BANCORP, S-4/A, 1998-08-14

WESTERN BANCORP
S-4/A, 1998-08-14
STATE COMMERCIAL BANKS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 13, 1998

REGISTRATION NO. 333-57759

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

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

FORM S-4/A

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

WESTERN BANCORP
(Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S> <C> <C>
CALIFORNIA 6712 95-3863296
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

4100 NEWPORT PLACE, SUITE 900 NEWPORT BEACH, CALIFORNIA 92660
(949) 863-2444

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

JULIUS G. CHRISTENSEN, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
WESTERN BANCORP
4100 NEWPORT PLACE, SUITE 900
NEWPORT BEACH, CALIFORNIA 92660
(949) 863-2459

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

WITH COPIES TO:

STANLEY F. FARRAR, ESQ. ARTHUR COREN, ESQ.
Sullivan & Cromwell Horgan Rosen Beckham & Coren LLP
1888 Century Park East 21700 Oxnard St., Suite 1400
Los Angeles, CA 90067 Woodland Hills, CA 91367
(310) 712-6600 (818) 340-6100

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES 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 described
in the 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 this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2)
<S> <C> <C> <C>
Common Stock, no par value............................. 2,425,033 shares $17.00 $97,598,360

TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE
<S> <C>
Common Stock, no par value............................. $28,792
</TABLE>

(1) Represents the estimated maximum number of shares of Common Stock, no par
value, of Western Bancorp ("Western Common Stock") that are issuable upon
consummation of the merger of Bank of Los Angeles ("BKLA") with Santa Monica
Bank, a wholly-owned subsidiary of Western Bancorp (the "Merger").

(2) Pursuant to Rule 457(f)(1), the registration fee is based on the average of
the high and low sale prices on June 23, 1998 of the Common Stock, no par
value ("BKLA Common Stock"), of BKLA on the Nasdaq National
Market-Registered Trademark- and computed based on the estimated maximum
number of shares of BKLA Common Stock that may be converted into the shares
of Western Common Stock to be registered.
------------------------

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 WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT BECOMES EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.

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- --------------------------------------------------------------------------------
<PAGE>

<TABLE>
<S> <C>
CORPORATE HEADQUARTERS
8901 SANTA MONICA BOULEVARD
BANK OF LOS ANGELES WEST HOLLYWOOD, CALIFORNIA 90069-4901
310-550-8900
FAX 310-843-1498
</TABLE>

August 18, 1998

Dear Shareholder:

You are cordially invited to attend a special meeting of shareholders of
Bank of Los Angeles ("BKLA") to be held on September 23, 1998, at 5:30 p.m. (the
"Special Meeting" or the "BKLA Meeting") which is being held in lieu of an
annual meeting. At such time you will be asked to consider and vote on a
proposal to approve the principal terms of a proposed merger (the "Merger") of
BKLA with and into Santa Monica Bank, a wholly-owned subsidiary of Western
Bancorp ("Western"), pursuant to an Agreement and Plan of Merger (the "Merger
Agreement"), dated as of April 16, 1998, and amended and restated as of June 24,
1998 and July 16, 1998, by and among Western, Santa Monica Bank and BKLA. Upon
the Merger becoming effective, each outstanding share of common stock, no par
value, of BKLA ("BKLA Common Stock") (other than as provided in the Merger
Agreement) will be converted into 0.4224 shares of common stock, no par value
per share, of Western (the "Consideration"). For a more detailed description of
the terms and conditions of the Merger see "THE MERGER AGREEMENT" in the
attached Proxy Statement-Prospectus and a copy of the Merger Agreement, which is
reproduced as Appendix A thereto. Additional information about the Merger, Santa
Monica Bank and Western are contained in the accompanying Proxy
Statement-Prospectus and the appendices thereto, all of which should be
carefully reviewed.

THE BOARD OF DIRECTORS OF BKLA HAS CONCLUDED THAT THE MERGER IS IN THE BEST
INTERESTS OF BKLA AND THE BKLA SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT THE
BKLA SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE PRINCIPAL TERMS OF THE MERGER.
Wedbush Morgan Securities, BKLA's financial advisor, has delivered to the BKLA
Board its opinion, dated April 15, 1998 and updated on August 17, 1998, that the
Consideration received by the BKLA shareholders pursuant to the Merger is fair
to the shareholders from a financial point of view. The opinion of Wedbush
Morgan Securities, dated August 17, 1998 (and certain assumptions and
qualifications therein), is described in the accompanying Proxy
Statement-Prospectus and reproduced in Appendix B thereto.

At the Special Meeting, each BKLA shareholder will also be asked to set the
number of directors at nine, and consider and approve the election of nine
directors to hold office until the Merger is consummated or, if the Merger is
not consummated, until the next annual meeting of BKLA and until their
successors have been elected and duly qualified.

It is important that your shares be represented and voted at the Special
Meeting regardless of the number of shares you own and whether or not you plan
to attend the Special Meeting. The affirmative vote of the holders of a majority
of BKLA Common Stock entitled to vote at the Special Meeting is required for
approval of the principal terms of the Merger. Your failure to vote for approval
of the principal terms of the Merger has the same effect as voting against the
Merger. Therefore, we urge you to sign, date and mail the enclosed proxy. If you
decide to attend the Special Meeting and wish to vote in person, you may
withdraw your proxy at that time.

YOU SHOULD NOT SEND IN SHARE CERTIFICATES AT THIS TIME.

Sincerely,

[LOGO]

Adriana M. Boeka
CHAIRMAN OF THE BOARD

[LOGO]

John J. Feldman
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF BANK OF LOS ANGELES
TO BE HELD AT BEVERLY HILLS, CALIFORNIA, ON SEPTEMBER 23, 1998
------------------------

TO THE SHAREHOLDERS
OF BANK OF LOS ANGELES:

Notice is hereby given that a special meeting ("Special Meeting") of
shareholders of Bank of Los Angeles ("BKLA") will be held in lieu of an annual
meeting at 9601 Wilshire Boulevard, Beverly Hills, California 90210, on
Wednesday, September 23, 1998, at 5:30 p.m. for the following purposes:

1. To consider and vote on a proposal to approve the principal terms of the
proposed merger of BKLA with and into Santa Monica Bank, a wholly-owned
subsidiary of Western Bancorp ("Western") pursuant to the Agreement and
Plan of Merger dated as of April 16, 1998, and amended and restated as of
June 24, 1998 and July 16, 1998 (the "Merger Agreement");

<TABLE>
<S> <C> <C>
Adriana M. Boeka John J. Feldman James V. Reimann
Mary Anne Chalker Rickey M. Gelb Melvin F. Shaw
Roy Doumani John R. Newhouse Burton N. Sterman
</TABLE>

The bylaws of BKLA currently provide that nominations for election of
members of the BKLA Board may be made by the BKLA Board or by any
shareholder of any outstanding class of voting stock of BKLA entitled to
vote for the election of directors. Notice of intention to make any
nominations, other than by the BKLA Board, shall be made in writing and
shall be received by the President and Chief Executive Officer of BKLA no
more than 60 days prior to any meeting of shareholders called for the
election of directors, no more than ten days after the date the notice of
such meeting is sent to shareholders pursuant to Section 2.2 of BKLA's
bylaws, and no later than the time fixed in the notice of the BKLA
Meeting for the opening of the Meeting. Notification shall contain the
following information to the extent known to the notifying shareholder:
(a) the name and address of each proposed nominee; (b) the principal
occupation of each proposed nominee; (c) the number of shares of voting
stock of BKLA owned by each proposed nominee; (d) the name and residence
address of the notifying shareholder; and (e) the number of shares of
voting stock of BKLA owned by the notifying shareholder. Nominations made
without nominee information may be disregarded by the Chairman of the
Meeting, and the election inspectors shall disregard all votes cast for
each nominee; and

3. To ratify the appointment of Vavrinek, Trine, Day & Co. ("Vavrinek") as
BKLA's independent public accountants, for the fiscal year ending
December 31, 1998 should the Merger not be consummated. The appointment
was recommended by BKLA's audit committee. Vavrinek has been BKLA's
accountants since 1994 and performed audit services which included the
examination of consolidated financial statements and services related to
filings with the Federal Deposit Insurance Corporation. All professional
services rendered by Vavrinek during 1997 were furnished at customary
rates and terms. Vavrinek representatives will not be present at the
Special Meeting.

4. To transact such other business as may properly come before the Special
Meeting or any postponement or adjournment thereof.

Under the terms of the Merger Agreement, Adriana M. Boeka will be appointed
to the Board of Directors of Western, effective immediately following the
Merger.

The Board of Directors has fixed the close of business on July 27, 1998 as
the record date for determination of the shareholders entitled to notice of and
to vote at the Special Meeting or any
<PAGE>
adjournment thereof. Approval of the matters to be voted upon in connection with
the Merger requires the affirmative vote of a majority of the outstanding shares
of common stock, no par value, of BKLA (the "BKLA Common Stock").

THE BOARD OF DIRECTORS HAS CONCLUDED THAT THE MERGER IS IN THE BEST
INTERESTS OF BKLA AND ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" APPROVAL OF THE PRINCIPAL TERMS OF THE MERGER.

Shareholders may exercise dissenters' rights as provided in the California
General Corporation Code (the "CGCL") and, if all requirements of the CGCL are
met, may receive cash in the amount equal to the fair market value of their
shares of BKLA Common Stock as of April 16, 1998 in lieu of receiving the
Consideration provided in the Merger Agreement by complying with certain
procedures specified by the CGCL. See "THE MERGER--Dissenters' Rights" in the
accompanying Proxy Statement-Prospectus.

The accompanying Proxy Statement-Prospectus and the Appendices thereto
(including the Merger Agreement attached as Appendix A thereto and certain of
the Annexes to the Merger Agreement) form a part of this Notice.

By Order of the Board of Directors

[LOGO]

Beverly A. Dyck,
CORPORATE SECRETARY

Dated: August 18, 1998

YOUR VOTE IS IMPORTANT. THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND THE
SPECIAL MEETING, YOU SHOULD DATE, SIGN AND RETURN THE ENCLOSED PROXY. IF YOU
ATTEND THE SPECIAL MEETING, YOU WILL BE ENTITLED TO VOTE IN PERSON, IF YOU WISH.
YOU SHOULD NOT FORWARD SHARE CERTIFICATES AT THIS TIME.
<PAGE>
BANK OF LOS ANGELES
PROXY STATEMENT
---------------------

WESTERN BANCORP
PROSPECTUS
---------------------

This Proxy Statement-Prospectus is being furnished to the shareholders of
the Bank of Los Angeles ("BKLA"), a California corporation, in connection with
the solicitation of proxies by the Board of Directors of BKLA (the "BKLA Board")
from holders of outstanding shares of common stock, no par value ("BKLA Common
Stock"), of BKLA, for use at the special meeting of shareholders of BKLA ("BKLA
Shareholders") in lieu of an annual meeting to be held on September 23, 1998, at
5:30 p.m. (the "Special Meeting" or the "BKLA Meeting") and at any adjournments
and postponements thereof.

At the BKLA Meeting, the BKLA Shareholders will be asked to consider and
vote upon, among other things, a proposal to approve the principal terms of the
merger (the "Merger") of BKLA with Santa Monica Bank, a California banking
corporation ("SMB") and a wholly-owned subsidiary of Western Bancorp
("Western"), pursuant to an Agreement and Plan of Merger dated as of April 16,
1998, and amended and restated as of June 24, 1998 and July 16, 1998 (the
"Merger Agreement"), by and among Western, Santa Monica Bank and BKLA, which is
attached as Appendix A to this Proxy Statement-Prospectus and is incorporated
herein by reference. Pursuant to the Merger Agreement, BKLA will merge with and
into SMB, with SMB being the surviving bank (the "Surviving Corporation") and
operating under the name "Santa Monica Bank". Upon the Merger becoming
effective, each share of BKLA Common Stock issued and outstanding at the
Effective Time (as defined herein) (other than (a) shares that have not been
voted in favor of the approval of the principal terms of the Merger and with
respect to which Dissenters' Rights (as defined herein) shall have been
perfected in accordance with the California General Corporation Code ("CGCL")
and (b) shares held directly or indirectly by Western, or any of its
subsidiaries, in each case other than in a fiduciary (including custodial or
agency) capacity or as a result of debts previously contracted in good faith),
will be converted automatically into, subject to certain limitations set forth
in the Merger Agreement with respect to proration and fractional shares, 0.4224
shares of common stock, no par value, of Western ("Western Common Stock"). Based
on the closing price per share of Western Common Stock on the BKLA Record Date
(as defined herein), as reported on the Nasdaq National
Market-Registered Trademark- ("Nasdaq"), the per share equivalent price of BKLA
Common Stock based on the 0.4224 conversion number was $17.66. Because the
0.4224 conversion number is fixed pursuant to the Merger Agreement, a change in
the trading price of Western Common Stock before the Effective Time will affect
the implied market value of Western Common Stock to be received in the Merger by
BKLA Shareholders. See "RISK FACTORS--Limited Market for Western Common Stock",
"INFORMATION REGARDING WESTERN" and "SUMMARY--Markets and Market Prices".

Based upon the 4,911,256 shares of BKLA Common Stock outstanding on the BKLA
Record Date, it is expected that 2,156,468 shares of Western Common Stock would
be issued in the Merger (or, if all of the 322,850 shares of BKLA Common Stock
reserved for issuance upon exercise of employee and director stock options
outstanding on the BKLA Record Date were issued and outstanding at the Effective
Time and if all of the 506,974 shares of BKLA Common Stock reserved for issuance
upon exercise of warrants outstanding on the BKLA Record Date were issued and
outstanding at the Effective Time, it is expected that 2,425,033 shares of
Western Common Stock would be issued in the Merger), assuming (i) no Dissenters'
Rights are perfected by BKLA Shareholders and (ii) no cash is paid in lieu of
fractional shares.

In order for any BKLA Shareholder to exercise Dissenters' Rights, a notice
must be sent by such Shareholder and received by BKLA on or before September 23,
1998, the date of the BKLA Meeting, and any such Shareholder must vote against
the approval of the principal terms of the Merger. See "SUMMARY--Dissenters'
Rights" and "THE MERGER--Dissenters' Rights".

Western Common Stock is designated for quotation on Nasdaq under the symbol
"WEBC".

SEE "RISK FACTORS" ON PAGE 33 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHAREHOLDERS SHOULD CONSIDER WITH RESPECT TO THE MERGER.

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, THE FEDERAL DEPOSIT INSURANCE CORPORATION 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.
--------------------------
THE SHARES OF WESTERN COMMON STOCK OFFERED HEREBY ARE NOT DEPOSITS AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION. WESTERN AND BKLA DO
NOT GUARANTEE THE INVESTMENT VALUE OF THE TRANSACTION DESCRIBED IN THIS
PROXY STATEMENT-PROSPECTUS. AN INVESTMENT IN WESTERN COMMON STOCK
MAY LOSE VALUE BEFORE OR AFTER THE EFFECTIVE DATE OF THE MERGER.
--------------------------

THE SECURITIES ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL INVESTED.

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

THE DATE OF THIS PROXY STATEMENT-PROSPECTUS IS AUGUST 18, 1998.

1
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS IN
CONNECTION WITH THE SOLICITATION OF PROXIES OR THE OFFERING OF SECURITIES MADE
HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY STATEMENT-PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, THE
SECURITIES OFFERED BY THIS PROXY STATEMENT-PROSPECTUS, OR THE SOLICITATION OF A
PROXY, BY ANY PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN
OFFER, OR SOLICITATION OF AN OFFER, OR PROXY SOLICITATION. NEITHER DELIVERY OF
THIS PROXY STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES BEING
OFFERED PURSUANT TO THIS PROXY STATEMENT-PROSPECTUS SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION SET FORTH HEREIN SINCE THE DATE OF THIS PROXY STATEMENT-PROSPECTUS.

AVAILABLE INFORMATION

Each of Western and BKLA is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
therewith, Western files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission") and BKLA files
reports, proxy statements and other information with the Federal Deposit
Insurance Corporation (the "FDIC"). The reports, proxy statements and other
information filed by BKLA with the FDIC may be inspected and copied at the
offices of the FDIC, Registration, Disclosure and Securities Operations Unit,
550 17th Street N.W., Washington, D.C. 20429, Room F-6043. The voice phone
numbers are 202/898-8911 and 202/898-8913. The facsimile number is 202/898-3909.
The reports, proxy statements and other information filed by Western with the
Commission may be inspected and copied at the public reference facilities of the
Commission located at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices at 7 World Trade Center, New York, New York 10048,
and Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661, at
prescribed rates. Such material may also be accessed electronically by means of
the Commission's home page on the Internet at http://www.sec.gov. Shares of
Western Common Stock are designated for quotation on Nasdaq. Material filed by
Western can be inspected at the offices of the National Association of
Securities Dealers, Inc., Reports Section, 1735 K Street, N.W., Washington, D.C.
20006. The reports, proxy statements and other information filed by BKLA with
the FDIC during the 12 calendar months immediately preceding the filing of
Western's Registration Statement (as defined below) have been filed with the
Commission as part of the Current Reports on Form 8-K filed by Western on June
25, 1998, and may be inspected and copied at the public reference facilities of
the Commission and at the Commission's regional offices at the addresses listed
above, and accessed electronically at the Commission's home page listed above.

Western has filed with the Commission a registration statement on Form S-4
(including exhibits thereto, the "Registration Statement") pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), covering the shares
of Western Common Stock issuable in the Merger. This Proxy Statement-Prospectus
does not contain all the information set forth in the Registration Statement.
Such additional information may be obtained from the Commission's principal
office in Washington, D.C. Statements contained in this Proxy
Statement-Prospectus as to the contents of any contract or other document
referred to herein 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.

This Proxy Statement-Prospectus constitutes the proxy statement of BKLA
relating to the solicitation of proxies for its use at the BKLA Meeting as well
as the Prospectus filed as part of the Registration Statement. This Proxy
Statement-Prospectus and the related proxy and other materials are first being
provided to the shareholders of BKLA on or about August 17, 1998. BKLA
Shareholders may request a copy of BKLA's annual report from Beverly A. Dyck,
the Secretary of BKLA, by phone on (310) 843-1455.

2
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

THIS PROXY STATEMENT-PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS NOT
INCLUDED HEREIN. DOCUMENTS RELATING TO WESTERN, EXCLUDING EXHIBITS UNLESS
SPECIFICALLY INCORPORATED HEREIN, ARE AVAILABLE WITHOUT CHARGE UPON REQUEST TO
JULIUS G. CHRISTENSEN, EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY,
WESTERN BANCORP, 4100 NEWPORT PLACE, SUITE 900, NEWPORT BEACH, CALIFORNIA 92660.
TELEPHONE REQUESTS MAY BE DIRECTED TO JULIUS G. CHRISTENSEN, AT (949) 863-2459.
DOCUMENTS RELATING TO BKLA, EXCLUDING EXHIBITS UNLESS SPECIFICALLY INCORPORATED
HEREIN, ARE AVAILABLE WITHOUT CHARGE UPON REQUEST TO BEVERLY A. DYCK, VICE
PRESIDENT AND CORPORATE SECRETARY, BANK OF LOS ANGELES, 8901 SANTA MONICA
BOULEVARD, WEST HOLLYWOOD, CALIFORNIA 90069. TELEPHONE REQUESTS MAY BE DIRECTED
TO BEVERLY A. DYCK, AT (310) 843-1455. IN ORDER TO ENSURE TIMELY DELIVERY OF
DOCUMENTS, ANY REQUESTS SHOULD BE MADE BY SEPTEMBER 1, 1998.

The following documents filed with the Commission by Western are
incorporated herein by reference:

(a) Western's Annual Report on Form 10-K for the year ended December 31,
1997 (the "Western Annual Report");

(b) Western's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1998 and June 30, 1998;

(c) Western's Current Reports on Form 8-K dated February 11, 1998, April 30,
1998, June 18, 1998 and August 6, 1998 and on Form 8-K/A dated April 9,
1998.

(d) The description of Western's Common Stock contained in Western's
Registration Statement on Form 10 (File No. 2-85442).

(e) The following documents filed with the FDIC by BKLA, which have been
filed as part of the Current Reports on Forms 8-K filed by Western on June
24, 1998 and August 7, 1998:

(i) BKLA's Annual Report on Form 10-K for the fiscal year ended December
31, 1997 (the "BKLA Annual Report");

(ii) BKLA's Current Reports on Form 8-K, dated April 30, 1998 and May 6,
1998; and

(iii) BKLA's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1998 and June 30, 1998.

Such incorporation by reference shall not be deemed to incorporate by
reference the information referred to in Item 402(a)(8) of Regulation S-K.

All documents and reports filed by Western pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
BKLA Meeting shall be deemed to be incorporated herein by reference and to be a
part hereof from the date of such filing and all documents and reports filed by
BKLA pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date hereof and prior to the BKLA Meeting shall be filed by
Western with the Commission and shall be deemed to be incorporated by reference
and to be a part hereof from the date of such filing with the Commission and any
statement contained herein or in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein or in any
other subsequently filed document that also is, or is deemed to be, incorporated
herein by reference, modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed to constitute a part hereof,
except as so modified or superseded.

3
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TABLE OF CONTENTS

<TABLE>
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PAGE
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<S> <C>
AVAILABLE INFORMATION..................................................... 2

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE......................... 3

TABLE OF CONTENTS......................................................... 4

TABLE OF DEFINED TERMS.................................................... 7

COMMON QUESTIONS AND ANSWERS ABOUT THE MERGER............................. 10

SUMMARY................................................................... 12
The Companies........................................................... 12
Additional Information.................................................. 13
The Merger.............................................................. 13
The BKLA Meeting........................................................ 14
Votes Required.......................................................... 14
Revocability of Proxies................................................. 15
Recommendations of the Boards of Directors.............................. 15
Opinion of Wedbush...................................................... 15
Effective Time.......................................................... 15
Conditions to the Merger................................................ 16
Waiver and Amendment.................................................... 16
Termination............................................................. 16
Stock Option Agreement.................................................. 17
Regulatory Approvals.................................................... 17
Operations and Management After the Merger.............................. 17
Interests of Certain Persons in the Merger.............................. 18
Certain Federal Income Tax Consequences................................. 18
Accounting Treatment.................................................... 19
Dissenters' Rights...................................................... 19
Risk Factors............................................................ 19
Proposed Peninsula Acquisition.......................................... 19
Markets and Market Prices............................................... 19
Summary Historical Financial Data....................................... 22
Summary Unaudited Pro Forma Combined Financial Data..................... 26
Selected Historical and Pro Forma per Share Data........................ 28
Summary Financial Data Regarding Peninsula.............................. 29

RISK FACTORS.............................................................. 33
Forward-Looking Statements May Not Prove Accurate....................... 33
Competition............................................................. 33
Ability to Integrate the Operations of Western and BKLA; Rapid Growth... 33
General Business Risk................................................... 34
Concentration of Operations; Recessionary Environments; Decline in Real
Estate Values......................................................... 34
Interest Rate Risk...................................................... 35
Shares Eligible for Future Sale; Dilution............................... 35
Regulation.............................................................. 36
Limited Market for Western Common Stock................................. 36
Year 2000 Risks and Preparedness........................................ 36

INFORMATION REGARDING WESTERN............................................. 38
Business of Western..................................................... 38
</TABLE>

4
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<S> <C>
Quarterly Dividend...................................................... 38
Incorporation of Certain Information By Reference....................... 38

INFORMATION REGARDING BKLA................................................ 39
Business of BKLA........................................................ 39
Incorporation of Certain Information by Reference....................... 39

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA..................... 40

NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA............ 48

WESTERN--BKLA--PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL
DATA.................................................................... 50

NOTES TO WESTERN--BKLA--PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL DATA.......................................................... 58

THE SPECIAL MEETING OF BKLA SHAREHOLDERS.................................. 59
General................................................................. 59
Matters To Be Considered at the BKLA Special Meeting.................... 59
The BKLA Record Date.................................................... 60
Votes Required and Voting of Proxies.................................... 60
Solicitation of Proxies................................................. 61
Revocability of Proxies................................................. 61
Security Ownership of Certain Beneficial Owners and Management of
BKLA.................................................................. 61
Dissenters' Rights...................................................... 63
Election of BKLA Directors.............................................. 64
Certain Committees of the BKLA Board.................................... 65
BKLA Director Compensation.............................................. 65
BKLA Executive Officers................................................. 66
Compensation of BKLA Executive Officers................................. 66
BKLA Aggregated Option Exercise and Option Values as of December 31,
1997.................................................................. 67
BKLA Options Granted for the Year Ending December 31, 1997.............. 67
Certain BKLA Transactions............................................... 67
BKLA Compensation/Stock Option Committee Report......................... 68
BKLA Performance Graph.................................................. 68

THE MERGER................................................................ 70
Background and Reasons for the Merger................................... 70
Structure of the Merger................................................. 72
Reasons for the Merger; Recommendations of the BKLA Board of
Directors............................................................. 73
Opinion of Wedbush...................................................... 73
Wedbush Fee............................................................. 79
Certain Federal Income Tax Consequences................................. 79
Regulatory Approvals.................................................... 80
Resale of Western Common Stock.......................................... 82
Certain Effects of the Merger........................................... 82
Interests of Certain Persons in the Merger.............................. 83
Submission of Shareholders' Proposals for BKLA's 1999 Annual Meeting.... 85
Dissenters' Rights...................................................... 85
Accounting Treatment.................................................... 87

THE MERGER AGREEMENT...................................................... 88
The Merger.............................................................. 88
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Effective Time and Effective Date....................................... 88
Exchange of Stock Certificates; Dividends............................... 89
No Fractional Shares.................................................... 89
Conduct of the Business of BKLA and Western Prior to the Merger......... 89
Representations and Warranties.......................................... 90
Certain Covenants....................................................... 91
Conditions.............................................................. 93
Termination............................................................. 94
Termination Payment..................................................... 94
Expenses................................................................ 94

THE STOCK OPTION AGREEMENT................................................ 95
General................................................................. 95
The Stock Option........................................................ 95
Termination............................................................. 96

THE SHAREHOLDER AGREEMENTS................................................ 96

COMPARISON OF SHAREHOLDER RIGHTS.......................................... 97
Comparison of Corporate Structure....................................... 97
Dividends and Dividend Policy........................................... 97
Number of Directors..................................................... 98
Indemnification of Directors and Officers............................... 98

VALIDITY OF WESTERN COMMON STOCK.......................................... 98

EXPERTS................................................................... 98
</TABLE>

LIST OF APPENDICES

Appendix A-- Agreement and Plan of Merger, dated as of April 16, 1998, and
amended and restated as of June 24, 1998 and July 16, 1998 by and
among Western, SMB and BKLA.

Appendix B--Fairness Opinion of Wedbush Morgan Securities.

Appendix C--Chapter 13 of the CGCL.

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TABLE OF DEFINED TERMS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Acquisition Premium....................................................... 77
Acquisition Proposal...................................................... 91
Acquisition Transaction................................................... 96
AWB....................................................................... 13
Beneficial Owner.......................................................... 63
BHCA...................................................................... 12
BKLA...................................................................... 1
BKLA Affiliates........................................................... 82
BKLA Annual Report........................................................ 3
BKLA Board................................................................ 1
BKLA Common Stock......................................................... 1
BKLA Management........................................................... 17
BKLA Meeting.............................................................. 1
BKLA Record Date.......................................................... 14
BKLA Shareholders......................................................... 1
BKLA Stock Option......................................................... 48
BKLA Subsidiary........................................................... 95
BKLA Warrant.............................................................. 48
BKX Index Percentage...................................................... 94
BMA....................................................................... 81
Book Value Multiple....................................................... 77
Cash Net Income........................................................... 77
CCB....................................................................... 12
CCB Merger................................................................ 12
CGCL...................................................................... 1
CNB....................................................................... 13
Code...................................................................... 18
Commission................................................................ 2
Comparable Banks.......................................................... 77
Comparison Merger Transactions............................................ 76
Consideration............................................................. 13
Conversion Number......................................................... 14
Costs..................................................................... 91
CRA....................................................................... 81
Demand.................................................................... 85
Diluted EPS............................................................... 76
Dissenters' Rights........................................................ 19
Dissenting Shareholder.................................................... 86
Dissenting Shares......................................................... 86
Dividendable Net Income................................................... 77
Effective Date............................................................ 88
Effective Time............................................................ 88
Equivalent Per Share Price................................................ 20
Exchange Act.............................................................. 2
Exchange Agent............................................................ 89
FDIC...................................................................... 2
Federal Reserve Board..................................................... 16
FIP....................................................................... 36
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PAGE
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<S> <C>
FIRREA.................................................................... 83
GAAP...................................................................... 75
Grantee................................................................... 17
Holding Period............................................................ 80
Indemnified Parties....................................................... 91
IRS....................................................................... 79
Issuer.................................................................... 17
Letter of Transmittal..................................................... 89
LTM Multiple.............................................................. 76
Maximum Amount............................................................ 92
Merger.................................................................... 1
Merger Agreement.......................................................... 1
Merger Sub................................................................ 19
Nasdaq.................................................................... 1
NBSC...................................................................... 12
New Certificates.......................................................... 89
Old Certificates.......................................................... 89
Option.................................................................... 17
Party Shareholders........................................................ 96
Peninsula................................................................. 19
Peninsula Acquisition..................................................... 19
Peninsula Common Stock.................................................... 19
Peninsula Merger Agreement................................................ 19
Pooling Condition......................................................... 87
Preliminary Purchase Event................................................ 95
Purchase Event............................................................ 95
Registration Rights....................................................... 96
Registration Statement.................................................... 2
Reorganization............................................................ 18
Replacement Shares........................................................ 48
Replacement Warrant....................................................... 48
SCB....................................................................... 12
SCB Merger................................................................ 12
Securities Act............................................................ 2
Shareholder Agreements.................................................... 15
SMB....................................................................... 1
SMB Acquisition........................................................... 12
SMB Board................................................................. 13
Special Meeting........................................................... 1
Spread.................................................................... 48
State Commissioner........................................................ 13
Stock Option Agreement.................................................... 17
Surviving Corporation..................................................... 1
Tangible Book Value Multiple.............................................. 77
Tax Opinions.............................................................. 18
Ten Day Average Price..................................................... 94
Ten Day Period............................................................ 94
Vavrinek.................................................................. 16
Wedbush................................................................... 15
Wedbush Agreement......................................................... 73
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Wedbush Opinion........................................................... 73
Wedbush Reconfirming Opinion.............................................. 73
Western................................................................... 1
Western Annual Report..................................................... 3
Western Board............................................................. 13
Western Common Stock...................................................... 1
Western Common Stock Price Percentage..................................... 94
Western Management........................................................ 22
Western Subsidiary........................................................ 95
WTB....................................................................... 13
Year 2000 Plan............................................................ 37
</TABLE>

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COMMON QUESTIONS AND ANSWERS ABOUT THE MERGER

THIS QUESTION AND ANSWER SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS
DOCUMENT AND MAY NOT CONTAIN ALL OR ANY INFORMATION THAT IS IMPORTANT TO YOU.
FOR A MORE COMPLETE UNDERSTANDING OF THE MERGER AND FOR A MORE COMPLETE
DESCRIPTION OF THE LEGAL TERMS OF THE MERGER, YOU SHOULD READ THIS ENTIRE
DOCUMENT CAREFULLY, AS WELL AS ANY ADDITIONAL DOCUMENTS TO WHICH WE REFER IN
THIS DOCUMENT.

Q: WHO ARE THE PARTIES TO THIS MERGER?

A: Bank of Los Angeles, which we sometimes call "BKLA", will merge into Santa
Monica Bank. The combined bank name will be Santa Monica Bank, which we
sometimes refer to as "SMB". Santa Monica Bank is owned by Western Bancorp,
which we sometimes call "Western".

Q: WHY HAS BKLA PROPOSED TO MERGE INTO SMB?

A: The Board of Directors of BKLA recommends that you vote for this merger
because the Board members believe that it:

- allows the combined company to compete more effectively with the larger
financial institutions that currently exist or will likely result from the
various consolidations and mergers in the industry nationwide and locally;

- provides shareholders with potential benefits of a larger organization
with greater resources, increased operating efficiencies, the ability to
utilize a trust department, increased lending limits and a stronger market
position in western Los Angeles County; and

- offers increased long-term value, stability and liquidity to current BKLA
shareholders by converting their shares into shares of common stock of
Western.

More information regarding the BKLA Board's recommendations is available
on page 73.

Q: HOW WILL I BE AFFECTED IN THE MERGER?

A: Each shareholder of BKLA will have each of their shares converted into 0.4224
shares of Western common stock. Any remaining fractional share will be
converted into cash. For example, if a BKLA shareholder owns 100 shares of
BKLA stock, after the merger, the shareholder will own 42 shares of Western
common stock and will receive a check for the market value of a 0.24 share of
Western common stock which on August 5, 1998, was approximately $9.45.

In the proposed merger, current BKLA shareholders will receive shares
representing ownership of between 12.1 - 13.0% of Western after the proposed
merger, and the shares held by Western's current shareholders will represent
ownership of approximately 87.0 - 87.9% of Western after the proposed merger
is completed depending on whether outstanding options and warrants are
exercised prior to the merger. Each share owned by existing shareholders of
BKLA will represent an ownership interest in a much larger company.

Q: WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO ME?

A: We expect that the exchange of shares will be a tax-free transaction for
federal income tax purposes for BKLA shareholders. However, BKLA shareholders
will have to pay taxes on cash received for fractional shares. To review the
tax consequences to shareholders in greater detail, see page 80. The tax
consequences of the merger to you will depend on your own situation. You
should consult your tax advisors for a full understanding of the tax
consequences of the merger to you.

Q: WHY IS BKLA MERGING INTO SMB, WHICH IS A SUBSIDIARY OF WESTERN?

A: The merger was structured so that Western can remain a bank holding company
under the Bank Holding Company Act. The merger structure simplifies certain
aspects of the regulatory process relating to the merger and results in
certain funding advantages.

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Q: WILL BKLA BE ALLOWED TO HAVE A DIRECTOR ON THE WESTERN BOARD OF DIRECTORS?

A: Yes. Adriana M. Boeka, who is currently the Chairman of the Board of
Directors for BKLA, will be appointed to the Board of Directors of Western,
effective immediately following the merger.

Q: WHAT REGULATORY APPROVALS ARE REQUIRED?

A: The merger must be approved by the Federal Deposit Insurance Corporation as
well as the California Department of Financial Institutions. Further
information on the required regulatory approvals can be found on pages 80 and
82.

Q: WHAT RISKS SHOULD I CONSIDER?

A: You should review the "RISK FACTORS" section on pages 33 through 37.

Q: WHEN WILL THE MERGER TAKE EFFECT?

A: We expect the merger to become effective in late September or early October
of 1998.

Q: WHAT DO I NEED TO DO NOW?

A: Please read this document carefully and then mail your signed proxy card
approving or disapproving the items listed on the proxy card as soon as
possible so that your shares may be represented at the special meeting of
BKLA shareholders. The special meeting will take place on September 23, 1998.

Q: CAN I CHANGE MY VOTE AFTER I HAVE MAILED IN MY SIGNED PROXY CARD?

A: Yes. After you have mailed your signed proxy card you can change your vote at
any time before we vote your proxy at the special meeting. You can do so in
one of three ways prior to the special meeting. First, you can send a written
notice stating that you would like to revoke your proxy to the Secretary of
BKLA at the address given below. Second, you can complete a new proxy card
and send it to the Secretary of BKLA at the address given below. Third, you
can attend the special meeting and vote in person. You should send any
written notice or new proxy card to the Secretary of BKLA at 8901 Santa
Monica Boulevard, West Hollywood, California 90069. You may request a new
proxy card by calling Beverly A. Dyck, the Secretary of BKLA, on (310)
843-1455.

Q: WHAT IF I DO NOT APPROVE OF THE PROPOSED MERGER AND DO NOT WANT MY SHARES
CONVERTED IF THE MERGER IS APPROVED?

A: You may obtain dissenting shareholders rights by complying with the
requirements of Chapter 13 of the California General Corporation Code. If all
of the requirements of Chapter 13 are met and the merger is approved, you
will receive cash for the fair market value of your shares in lieu of Western
common stock. See pages 85 through 87 for details.

Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW?

A: No. After the merger is completed we will send you written instructions for
exchanging your BKLA stock certificates for Western common stock
certificates.

Q: WHERE CAN I FIND MORE INFORMATION?

A: You may obtain more information in this document and in other sources which
are listed under "AVAILABLE INFORMATION" on page 2.

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SUMMARY

THE FOLLOWING SUMMARY IS NOT INTENDED TO BE COMPLETE AND IS QUALIFIED IN ALL
RESPECTS BY THE MORE DETAILED INFORMATION INCLUDED IN THIS PROXY
STATEMENT-PROSPECTUS, THE APPENDICES HERETO AND THE DOCUMENTS INCORPORATED
HEREIN BY REFERENCE. SHAREHOLDERS ARE URGED TO READ CAREFULLY THIS PROXY
STATEMENT-PROSPECTUS, INCLUDING THE APPENDICES HERETO AND THE DOCUMENTS
INCORPORATED HEREIN BY REFERENCE, IN THEIR ENTIRETY.

ALL INFORMATION CONCERNING WESTERN, SOUTHERN CALIFORNIA BANK ("SCB") AND
SANTA MONICA BANK INCLUDED IN THIS PROXY STATEMENT-PROSPECTUS, THE APPENDICES
HERETO AND THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE HAS BEEN FURNISHED BY
WESTERN, AND ALL INFORMATION CONCERNING BKLA INCLUDED IN THIS PROXY
STATEMENT-PROSPECTUS, THE APPENDICES HERETO AND THE DOCUMENTS INCORPORATED
HEREIN BY REFERENCE HAS BEEN FURNISHED BY BKLA. UNLESS THE CONTEXT OTHERWISE
REQUIRES, REFERENCES TO "WESTERN" HEREIN SHALL BE TO WESTERN AND ITS
SUBSIDIARIES, INCLUDING SCB AND SMB.

THIS PROXY STATEMENT-PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN
THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE
ACT. ALTHOUGH EACH OF WESTERN AND BKLA BELIEVES THAT ITS PLANS, INTENTIONS AND
EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE,
NEITHER CAN GIVE ANY ASSURANCE THAT SUCH PLANS, INTENTIONS OR EXPECTATIONS WILL
BE ACHIEVED. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM WESTERN'S AND BKLA'S FORWARD-LOOKING STATEMENTS ARE SET FORTH
BELOW AND ELSEWHERE IN THIS PROXY STATEMENT-PROSPECTUS. FURTHERMORE, WESTERN AND
BKLA DO NOT INTEND TO UPDATE OR REVISE THE FORWARD-LOOKING STATEMENTS TO REFLECT
EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF
UNANTICIPATED EVENTS. SHAREHOLDERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON
ANY OF THE FORWARD-LOOKING STATEMENTS INCLUDED HEREIN. ALL FORWARD-LOOKING
STATEMENTS ATTRIBUTABLE TO WESTERN, BKLA OR PERSONS ACTING ON EITHER OF THEIR
BEHALVES ARE QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS SET FORTH
HEREIN. SEE "RISK FACTORS--FORWARD-LOOKING STATEMENTS MAY NOT PROVE ACCURATE".

THE COMPANIES

WESTERN

Western is a bank holding company registered under the Bank Holding Company
Act of 1956, as amended (the "BHCA"), and its principal business is to serve as
a holding company for its banking subsidiaries, SCB and SMB. Western was
organized on May 20, 1983 as a California corporation and commenced operation as
a bank holding company on June 18, 1984. Western Bank was acquired by Western on
September 30, 1996. On June 4, 1997, Western consummated its merger (the "CCB
Merger") with California Commercial Bankshares ("CCB") pursuant to which CCB
merged with and into Western. Also on June 4, 1997, Monarch Bank, a wholly-owned
subsidiary of Western prior to the CCB Merger, merged with and into National
Bank of Southern California ("NBSC"), a wholly-owned subsidiary of CCB prior to
the CCB Merger. The banking operations of NBSC and Monarch Bank were combined in
June 1997. On October 10, 1997, Western consummated its merger with SC Bancorp
(the "SCB Merger") pursuant to which SC Bancorp merged with and into Western. On
December 15, 1997, Western merged NBSC with and into SCB, a wholly-owned
subsidiary of SC Bancorp prior to the SCB Merger, with SCB being the surviving
bank. The operations of NBSC and SCB were combined in March 1998. On January 27,
1998, Western acquired Santa Monica Bank through the merger of Santa Monica Bank
with and into Western Bank (the "SMB Acquisition"). As part of the SMB
Acquisition, the name of Western Bank was changed to "Santa Monica Bank". As
used hereafter, "SMB" refers to the surviving entity in the merger of Santa
Monica Bank with and into Western Bank.

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banking products and services, including many types of business and personal
savings and checking accounts and other consumer banking services.

Western's principal executive offices are located at 4100 Newport Place,
Suite 900, Newport Beach, California 92660, and its telephone number is (949)
863-2444.

BKLA

BKLA was organized on May 8, 1981 as a California corporation and commenced
operations pursuant to a charter issued by the predecessor to the California
Commissioner of Financial Institutions (the "State Commissioner"), on May 6,
1982. On November 15, 1995, BKLA acquired World Trade Bank ("WTB"), with total
assets of approximately $42,487,000 and one banking office. Effective April 1,
1997, BKLA consummated a merger with American West Bank ("AWB"), with
approximately $67,291,000 in assets and two banking offices with BKLA being the
surviving bank. On December 31, 1997, BKLA consummated its merger with Culver
National Bank ("CNB"), a national banking corporation with approximately
$60,277,000 in total assets and one branch office, with BKLA being the surviving
bank.

BKLA is a full-service community bank which engages in general commercial
banking in Los Angeles County, California. BKLA's main office and its executive
offices are located in West Hollywood, California. As of June 15, 1998 BKLA had
six branch offices in the cities of Beverly Hills, West Hollywood, Encino,
Culver City and Glendale. Services include those traditionally offered by
commercial banks, such as checking and saving accounts and commercial and real
estate loans, and, for its business customers, personal, home improvement,
automobile and other installment loans. The vast majority of BKLA's loans are
direct loans made to individuals, professionals, real estate developers, and
small and medium sized businesses within BKLA's marketing area.

BKLA's principal executive offices are located at 8901 Santa Monica
Boulevard, West Hollywood, California 90069 and its telephone number is (310)
550-8900.

ADDITIONAL INFORMATION

For additional information regarding the business of Western and BKLA, see
"AVAILABLE INFORMATION", "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE",
"UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA", "INFORMATION REGARDING
BKLA" and "INFORMATION REGARDING WESTERN".

THE MERGER

On April 16, 1998 the BKLA Board, on April 7, 1998 the Board of Directors of
Western (the "Western Board"), and on April 16, 1998 the Board of Directors of
Santa Monica Bank (the "SMB Board"), each respectively approved the Merger
Agreement, and the Merger Agreement was executed and delivered on April 16,
1998, and amended and restated on June 24, 1998 and July 16, 1998, by Western,
Santa Monica Bank and BKLA. The Merger Agreement provides for the merger of BKLA
with and into Santa Monica Bank with Santa Monica Bank being the surviving bank.
In connection with the Merger, each share of BKLA Common Stock issued and
outstanding at the Effective Time (other than (a) shares that have not been
voted in favor of approval of the principal terms of the Merger and with respect
to which Dissenters' Rights have been perfected in accordance with the CGCL and
(b) shares held by any of BKLA's subsidiaries or by Western or any of its
subsidiaries, in each case other than in a fiduciary (including custodial or
agency) capacity or as a result of debts previously contracted in good faith)
will be converted automatically into, subject to the limitations set forth in
the Merger Agreement with respect to proration and fractional shares, 0.4224
shares of Western Common Stock (the "Consideration"). Each share of Western
Common Stock outstanding immediately prior to the Effective Time will remain

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outstanding after the Merger as one share of Western Common Stock. See "THE
MERGER--Background and Reasons for the Merger", "--Reasons for the Merger;
Recommendations of the BKLA Board of Directors" and "--Dissenters' Rights".

The Merger Agreement provides that, if the BKLA Shareholders approve the
principal terms of the Merger, and subject to receipt of regulatory approvals
and other customary closing conditions as more fully set forth below, then BKLA
will merge into Santa Monica Bank, with Santa Monica Bank being the Surviving
Corporation. At the Effective Time, shares of BKLA Common Stock will be
converted into 0.4224 shares (the "Conversion Number") of Western Common Stock,
subject to the limitations described above and elsewhere herein. See "THE
MERGER--Certain Federal Income Tax Consequences" and "THE MERGER AGREEMENT--The
Merger".

All BKLA Stock Options (as defined herein), unless otherwise exercised
pursuant to BKLA's stock option plan, shall be converted into the right to
receive for each share of BKLA Common Stock otherwise issuable upon exercise
thereof, a number of shares of Western Common Stock equal to the quotient
obtained by dividing the Spread (as defined herein) by $42.61. At the Effective
Time, each BKLA Warrant (as defined herein), shall be converted into a warrant
to acquire, on the same terms and conditions as were applicable under such BKLA
warrant agreement, the number of shares of Western Common Stock equal to (a) the
number of shares of BKLA Common Stock subject to the BKLA Warrant, multiplied by
(b) the Conversion Number (such product rounded down to the nearest whole
number), at an exercise price per share (rounded up to the nearest whole cent)
equal to (y) the aggregate exercise price for the shares of BKLA Common Stock
which were purchasable pursuant to such BKLA Warrant divided by (z) the number
of full shares of Western Common Stock subject to such Replacement Warrants (as
defined herein). See "THE MERGER--Structure of the Merger".

THE BKLA MEETING

The BKLA Meeting to consider and vote on, among other things, approval of
the principal terms of the Merger will be held on Wednesday, September 23, 1998
at 5:30 p.m. local time, at the Beverly Hills Branch of BKLA, 9601 Wilshire
Boulevard, Beverly Hills, California 90210. Only holders of record of BKLA
Common Stock at the close of business on July 27, 1998 (the "BKLA Record Date")
will be entitled to vote at the BKLA Meeting. At such date, there were
outstanding and entitled to vote 4,911,256 shares of BKLA Common Stock. Each
share of BKLA Common Stock is entitled to one vote for each share held of record
upon each matter properly submitted at the BKLA Meeting except that under
certain circumstances, BKLA shareholders will have cumulative voting rights in
connection with the election of directors as described more fully below in "THE
SPECIAL MEETING OF BKLA SHAREHOLDERS--Votes Required and Voting of Proxies".

For additional information relating to the BKLA Meeting, see "THE SPECIAL
MEETING OF BKLA SHAREHOLDERS".

VOTES REQUIRED

Approval of the matters to be voted upon in connection with the Merger by
the BKLA Shareholders requires the affirmative vote of the holders of a majority
of the outstanding shares of BKLA Common Stock entitled to vote. As a result,
the failure to vote in person or by proxy on any such proposal at the BKLA
Meeting or abstaining on any proposal has the same effect as voting against the
applicable proposal. In the election of directors at the BKLA Meeting, the
candidates receiving the highest number of affirmative votes of the shares
entitled to vote for them up to the number of directors to be elected by such
shares will be elected, assuming a quorum is present. In addition, BKLA
Shareholders will have cumulative voting rights with respect to the election of
directors if certain conditions are met. See "THE SPECIAL MEETING OF BKLA
SHAREHOLDERS--Votes Required and Voting of Proxies".

As of the BKLA Record Date, BKLA's directors and officers beneficially held,
in the aggregate, the ability to direct the voting with respect to approximately
14.3% of the outstanding BKLA Common Stock entitled to vote at the BKLA Meeting.
BKLA Shareholders (who are also directors, or the estate of a

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former director, of BKLA) holding approximately 18.0% of BKLA Common Stock
outstanding on the BKLA Record Date have entered into agreements (the
"Shareholder Agreements") pursuant to which they have agreed, among other
things, to vote "FOR" the adoption and approval of the Merger Agreement and the
Merger. However, the shareholder/directors are bound by the Shareholder
Agreements only in their capacity as shareholders. As directors, they are bound
by their fiduciary duties to act in the best interest of BKLA when they decide
whether to approve the Merger. See "THE SHAREHOLDER AGREEMENTS".

REVOCABILITY OF PROXIES

The presence of a BKLA Shareholder at the BKLA Meeting (or at any
postponement or adjournment thereof) will not automatically revoke such
shareholder's proxy. However, a BKLA Shareholder may revoke a proxy at any time
prior to its exercise by (a) delivery to the Secretary of BKLA of a written
notice of revocation prior to or at the BKLA Meeting (or, if such BKLA Meeting
is adjourned or postponed, prior to or at the time the adjourned or postponed
meeting is actually held); (b) delivery to the Secretary of BKLA prior to or at
the BKLA Meeting of a duly executed proxy bearing a later date; or (c) attending
the BKLA Meeting (or, if such BKLA Meeting is adjourned or postponed, by
attending the adjourned or postponed meeting) and voting in person thereat. Any
written revocation of proxy or other related communications should be addressed
to Beverly A. Dyck, Corporate Secretary of Bank of Los Angeles, 8901 Santa
Monica Boulevard, West Hollywood, California 90069.

RECOMMENDATIONS OF THE BOARDS OF DIRECTORS

The BKLA Board unanimously approved the Merger Agreement and the
transactions contemplated thereby. The members of the BKLA Board unanimously
believe that the Merger and the transactions contemplated by the Merger
Agreement are fair to, and in the best interests of, the BKLA Shareholders and
unanimously recommend a vote "FOR" the matters to be voted upon by such
shareholders in connection with the Merger. The conclusions of the BKLA Board
with respect to the Merger are based upon a number of factors. See "THE
MERGER--Background and Reasons for the Merger", "--Structure of the Merger",
"--Reasons for the Merger; Recommendations of the Board of Directors" and
"--Opinion of Wedbush".

OPINION OF WEDBUSH

Wedbush Morgan Securities ("Wedbush") delivered to the BKLA Board its
opinions, dated April 15, 1998 and the date hereof, to the effect that, as of
each of such dates, the Conversion Number to be paid by Western in the Merger is
fair to the BKLA Shareholders from a financial point of view. The written
opinion of Wedbush, dated as of the date hereof, is attached to this Proxy
Statement-Prospectus as Appendix B and should be read in its entirety. See "THE
MERGER--Opinion of Wedbush".

EFFECTIVE TIME

The Merger will become effective on the date and at the time that an
agreement of merger and related documents are filed with the State Commissioner
in accordance with the California Financial Code after filing with the
California Secretary of State, provided that the State Commissioner accepts such
agreement and documents for filing as of such date, or such later date as may be
specified in such agreement of merger or as may be required by the State
Commissioner or California Secretary of State. Subject to conditions specified
in the Merger Agreement, the parties expect the Merger to become effective on or
about September 30, 1998, although there can be no assurance as to whether or
when the Merger will become effective. See "THE MERGER AGREEMENT--Effective Time
and Effective Date" and "--Conditions".

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CONDITIONS TO THE MERGER

The respective obligations of Western and BKLA to consummate the Merger are
subject to certain conditions, including: (a) the approval by the BKLA
Shareholders of the principal terms of the Merger; (b) receipt of approvals,
consents and waivers required by law in connection with the Merger and the other
transactions contemplated by the Merger Agreement, including approval or waiver
by the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), the FDIC and the State Commissioner; (c) the absence of any statute,
rule, regulation, order, injunction or decree being in effect and prohibiting
the consummation of the Merger or any other transaction contemplated by the
Merger Agreement; and (d) the Registration Statement having become effective and
there having been issued no stop order suspending the effectiveness of the
Registration Statement and no proceedings for that purpose initiated or
threatened by the Commission.

The obligations of Western and Santa Monica Bank to consummate the Merger
also are subject to the fulfillment or waiver by Western prior to the Effective
Time of certain conditions, including the following: (a) the representations and
warranties of BKLA being true and correct unless the failure to be true and
correct is not likely to have a material adverse effect on BKLA; (b) the
performance by BKLA in all material respects of all obligations contained in the
Merger Agreement required to be performed by BKLA before the Effective Time; and
(c) receipt by Western of a customary "cold comfort" letter from Vavrinek,
Trine, Day & Co., LLP ("Vavrinek") with respect to certain financial statements
and data of BKLA.

In addition, the obligation of BKLA to consummate the Merger also is subject
to the fulfillment or waiver by BKLA prior to the Effective Time of certain
conditions, including the following: (a) the representations and warranties of
Western being true and correct unless the failure to be true and correct is not
likely to have a material adverse effect on Western; (b) the performance by
Western in all material respects of all obligations contained in the Merger
Agreement required to be performed before the Effective Time; (c) receipt by
BKLA of a customary "cold comfort" letter from KPMG Peat Marwick LLP with
respect to certain financial statements and data of Western; and (d) as of the
Effective Time, the appointment by Western of Adriana M. Boeka, the BKLA
Chairman of the Board, as a director to the Western Board.

WAIVER AND AMENDMENT

Prior to the Effective Time, the conditions to each party's obligation to
consummate the Merger may be waived by such party in whole or in part to the
extent permitted by applicable law. In addition, Western, Santa Monica Bank and
BKLA may amend the Merger Agreement at any time prior to the Effective Time by
written agreement, approved by their respective Boards, so long as the principal
terms of the Merger are not changed after approval by the BKLA Shareholders. See
"THE MERGER AGREEMENT-- Conditions".

TERMINATION

The Merger Agreement may be terminated and the Merger abandoned at any time
prior to the Merger, either prior to or subsequent to its approval by the
Shareholders: (a) by mutual consent of Western and BKLA, if so determined by
their respective Boards; (b) by either Western or BKLA, if so determined by its
Board, if (i) the shareholders of BKLA fail to approve the principal terms of
the Merger, (ii) the other party materially breaches any representation,
warranty, covenant or agreement contained in the Merger Agreement and such
breach is not cured or curable within a specified grace period, or (iii) the
Merger is not consummated by December 31, 1998; (c) by either Western or BKLA,
if the approval of a governmental authority required for consummation of the
Merger is not obtained; (d) by BKLA, if the Ten Day Average Price (as defined
herein) of the Western Common Stock shall be below a certain designated level;
(e) by Western, if the BKLA Board shall fail to recommend the Merger for
approval by the BKLA

16
<PAGE>
Shareholders; or (f) by BKLA, if the BKLA Board receives an Acquisition Proposal
(as defined herein) and determines, based upon the written advice of counsel, to
accept the proposal and that proceeding with the Merger would violate fiduciary
duties of the BKLA Board to the BKLA Shareholders. See "THE MERGER
AGREEMENT--Termination".

If the Merger Agreement is terminated by BKLA pursuant to a material breach
of any representation, warranty, covenant or agreement of Western therein that
is not cured or curable within 30 days after written notice of such breach,
Western will pay to BKLA all costs and expenses incurred by BKLA in connection
with the Merger, up to $500,000. If the Merger Agreement is terminated by
Western under the circumstances described in clauses b(ii), (e) or (f) of the
preceding paragraph, BKLA will pay to Western all costs and expenses incurred by
Western in connection with the Merger, up to $500,000. See "THE MERGER
AGREEMENT--Termination Payment".

STOCK OPTION AGREEMENT

As an inducement and condition to Western's entering into the Merger
Agreement, BKLA (as "Issuer") entered into a Stock Option Agreement with Western
(as "Grantee"), dated as of April 16, 1998 (the "Stock Option Agreement").
Pursuant to the Stock Option Agreement, BKLA granted to Western an irrevocable
option (the "Option"), exercisable only under certain limited and specifically
defined circumstances, none of which, to the best of BKLA's and Western's
knowledge, has occurred as of the date hereof, to purchase up to 945,585
authorized but theretofore unissued shares of BKLA Common Stock (but in no event
more than 19.9% of the shares of BKLA Common Stock outstanding at the time of
exercise), for a purchase price per share of $17.375 which is equal to the daily
average closing price of the BKLA Common Stock as reported on Nasdaq for the ten
trading days beginning April 10, 1998, subject to adjustment in certain
circumstances. The purchase of BKLA Common Stock pursuant to the Stock Option
Agreement is subject to compliance with applicable law, including receipt of any
necessary approvals under the BHCA. See "THE STOCK OPTION AGREEMENT".

The Stock Option Agreement and the Option are intended to increase the
likelihood that the Merger will be consummated on the terms set forth in the
Merger Agreement, and may be expected to discourage offers by third parties to
acquire BKLA prior to the Merger.

REGULATORY APPROVALS

The Merger is subject to prior approval by the Federal Reserve Board under
Section 3 of the BHCA, the FDIC under the Bank Merger Act and the State
Commissioner pursuant to the California Financial Code. Western and BKLA
submitted applications seeking approval of the Merger and related matters to the
FDIC and to the State Commissioner on or about June 30, 1998. Western and BKLA
also submitted a request for a waiver of jurisdiction from the Federal Reserve
Board on June 30, 1998. See "THE MERGER--Regulatory Approvals" and "THE MERGER
AGREEMENT--Conditions".

OPERATIONS AND MANAGEMENT AFTER THE MERGER

Pursuant to the Merger Agreement, BKLA has elected to nominate, and Western
has consented to appoint, Adriana M. Boeka to the Western Board. Prior to the
Effective Time, the Western Board will adopt resolutions increasing the exact
number of directors by one, and Adriana M. Boeka will be appointed to fill the
vacancy on the Western Board created thereby. See "THE MERGER
AGREEMENT--Conditions". In the event that the Merger is not consummated as
contemplated, all directors of BKLA will continue to serve as directors of BKLA
until the completion of their respective terms and until their successors have
been elected and duly qualified. See "THE MERGER--Certain Effects of the
Merger".

17
<PAGE>
INTERESTS OF CERTAIN PERSONS IN THE MERGER

In considering the recommendations of the BKLA Board, BKLA Shareholders
should be aware that certain members of management of BKLA ("BKLA Management")
and of the BKLA Board have certain interests in the transactions contemplated by
the Merger Agreement that are in addition to the interests of shareholders
generally and that may create potential conflicts of interest.

These interests include, among others, provisions in the Merger Agreement
relating to the indemnification of BKLA officers and directors, directors' and
officers' liability insurance and certain employee benefit plans. In addition,
Adriana M. Boeka will be appointed to the Western Board as of the Effective
Time. See "THE MERGER--Interests of Certain Persons in the Merger" and "THE
MERGER AGREEMENT--Certain Covenants--INDEMNIFICATION; DIRECTORS' AND OFFICERS'
INSURANCE".

In addition, as a result of the Merger, all unvested options under the
BKLA's stock option plan will vest at 30 days prior to the Effective Time. As of
the BKLA Record Date, John J. Feldman, Adriana M. Boeka, Robert G. Jacobsen and
Wendy R. Moskal held 56,250, 29,500, 17,750 and 19,000 unvested options,
respectively, which had values, based on the market value of Western Common
Stock at such date and the Conversion Number, as of such date, of $605,340,
$217,767, $181,640 and $187,870, respectively.

Additionally, Scott Burford, son of the late Maurice J. Burford, and
president of Burford Capital, provided consulting services to BKLA through GBS
Financial in connection with the Merger. Burford Capital is an independent
investment banking firm which acts as GBS Financial's investment banking
division. GBS Financial is a registered broker-dealer with the Commission. GBS
entered into an agreement pursuant to which it will receive a flat fee of 1% of
the value received by BKLA shareholders if BKLA is sold for between $15 per
share and $16.99 per share, or 1.5% of the value received if BKLA is sold for
$17 per share or more. GBS will receive approximately $1.5 million for its
services. GBS Financial will receive no compensation if BKLA sells for less than
$15 per share or if the Merger is not consummated.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

It is intended that the Merger will be treated as a reorganization (a
"Reorganization") under Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), so that BKLA Shareholders will not recognize any gain or
loss for tax purposes on the receipt of Western Common Stock in exchange for
their shares of BKLA Common Stock in the Merger (except to the extent such
shareholder receives cash in lieu of a fractional share interest in Western
Common Stock). Consummation of the Merger as a Reorganization is conditioned
upon receipt by Western of confirmation, immediately prior to the Effective
Time, of the opinion of Sullivan & Cromwell and receipt by BKLA of confirmation,
immediately prior to the Effective Time, of the opinion of Vavrinek, which
opinions will be dated as of the Effective Date (the "Tax Opinions"),
substantially to the effect that, for federal income tax purposes: (i) the
Merger will be treated as a reorganization within the meaning of Section 368(a)
of the Code and (ii) each of Western, Santa Monica Bank and BKLA will be a party
to that reorganization within the meaning of Section 368(b) of the Code. See
"THE MERGER--Certain Federal Income Tax Consequences".

Because of the complexity of the tax laws and the individual nature of
certain tax consequences of the Merger to each BKLA Shareholder, each BKLA
Shareholder should consult his or her own tax advisor concerning certain other
federal and all state, local and foreign tax consequences of the Merger that may
be applicable.

18
<PAGE>
ACCOUNTING TREATMENT

For accounting and financial reporting purposes, the Merger will be
accounted for as a pooling of interests in accordance with generally accepted
accounting principles. See "THE MERGER--Accounting Treatment".

DISSENTERS' RIGHTS

In connection with the Merger, the BKLA Shareholders may be entitled to
dissenters' rights under Chapter 13 of the CGCL ("Dissenters' Rights"), the text
of which is attached hereto as Appendix C. IN ORDER FOR ANY BKLA SHAREHOLDER TO
EXERCISE DISSENTERS' RIGHTS, A NOTICE OF SUCH SHAREHOLDER'S INTENTION TO
EXERCISE HIS OR HER DISSENTERS' RIGHTS AND DEMAND PAYMENT FOR HIS OR HER SHARES
AS PROVIDED IN THE CGCL MUST BE SENT BY SUCH SHAREHOLDER AND RECEIVED BY BKLA,
ON OR BEFORE THE DATE OF THE BKLA MEETING, AND ANY SUCH SHAREHOLDER MUST VOTE
AGAINST THE APPROVAL OF THE PRINCIPAL TERMS OF THE MERGER. FAILURE TO SEND SUCH
NOTICE TO BKLA, 8901 SANTA MONICA BOULEVARD, WEST HOLLYWOOD, CALIFORNIA 90069,
ATTN: BEVERLY A. DYCK, AND TO VOTE AGAINST THE PRINCIPAL TERMS OF THE MERGER
WILL RESULT IN A WAIVER OF SUCH SHAREHOLDER'S DISSENTERS' RIGHTS. SEE "THE
MERGER--DISSENTERS' RIGHTS".

RISK FACTORS

In deciding whether to vote for the approval of the principal terms of the
Merger, BKLA Shareholders should carefully evaluate the matters set forth under
"Risk Factors" herein in addition to the other matters described herein.

PROPOSED PENINSULA ACQUISITION

On July 24, 1998, Western executed an Agreement and Plan of Merger (the
"Peninsula Merger Agreement") with Portola Merger Sub ("Merger Sub") and
Peninsula Bank of San Diego ("Peninsula") pursuant to which Western will acquire
Peninsula through the merger of Merger Sub with and into Peninsula (the
"Peninsula Acquisition"). The Peninsula Merger Agreement provides for the
holders of common stock, no par value, of Peninsula ("Peninsula Common Stock")
to receive shares of Western Common Stock based on a purchase price of $45.75
(after giving effect to the 5% stock dividend on Peninsula Common Stock declared
by the Board of Directors of Peninsula on June 23, 1998 and payable on July 24,
1998) using a floating exchange ratio for Western Common Stock within a price
range of $38.813 to $47.438 per share. The Peninsula Merger Agreement is subject
to several conditions, including approval of the holders of Peninsula Common
Stock which is intended to be sought in the fourth quarter of 1998 and certain
regulatory approval. The offering of Western Common Stock to holders of
Peninsula Common Stock will be made only by means of a prospectus. Approval of
the principal terms of the Merger sought hereby is independent of and does not
constitute approval of the Peninsula Acquisition. See "INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE" and "WESTERN--BKLA-- PENINSULA UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL DATA.".

MARKETS AND MARKET PRICES

As of the BKLA Record Date, there were approximately 2,050 holders of record
of Western Common Stock. No shares of Western's Preferred Stock have been issued
or are outstanding. Western Common Stock is designated for quotation on Nasdaq
under the symbol "WEBC".

As of the BKLA Record Date, there were approximately 1,700 holders of record
of BKLA Common Stock. BKLA Common Stock is designated for quotation on Nasdaq
under the symbol "BKLA".

19
<PAGE>

The following table summarizes the approximate high and low sales prices on
a per share basis for Western Common Stock and BKLA Common Stock for the periods
indicated.

<TABLE>
<CAPTION>
HIGH LOW HIGH LOW
--------- --------- --------- ---------
WESTERN COMMON BKLA COMMON STOCK(2)
STOCK(1) --------------------
--------------------
<S> <C> <C> <C> <C>
1996
First Quarter........................................ 11.05 8.93 6.00 4.00
Second Quarter....................................... 17.00 8.50 6.75 5.75
Third Quarter........................................ 14.88 8.50 6.63 5.75
Fourth Quarter....................................... 29.75 13.86 6.75 5.75
1997
First Quarter........................................ 34.00 19.13 8.38 6.38
Second Quarter....................................... 37.19 28.63 8.00 6.63
Third Quarter........................................ 33.25 28.63 12.00 7.50
Fourth Quarter....................................... 33.88 29.88 15.63 10.75
1998
First Quarter........................................ 43.50 30.75 14.63 11.03
Second Quarter....................................... 47.88 39.50 18.68 14.00
--------- --------- --------- ---------
</TABLE>

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

(1) Prior to June 3, 1997, Western Common Stock was traded solely "over the
counter". Consequently, the prices listed before that date represent
quotations by dealers making a market in Western Common Stock and reflect
inter-dealer prices, without adjustments for mark-ups, mark-downs or
commissions, and may not necessarily represent actual transactions. Prior to
June 3, 1997, trading in Western Common Stock was limited in volume and may
not be a reliable indicator of its market value. On June 3, 1997, Western
Common Stock was designated for quotation on Nasdaq and on that date Western
effected a 1.0 for 8.5 reverse stock split. The prices of Western Common
Stock prior to June 3, 1997 in the preceding table have been adjusted for
the Reverse Stock Split. The prices listed above for periods subsequent to
June 3, 1997 are as reported by Nasdaq.

(2) Prior to July 29, 1996, BKLA Common Stock was traded on a very limited basis
on the over-the-counter market through various brokerage firms.
Consequently, the prices listed before that date represent quotations by
dealers making a market in BKLA Common Stock and reflect inter-dealer
prices, without adjustments for mark-ups, mark-downs or commissions, and may
not necessarily represent actual transactions. Prior to July 29, 1996,
trading in BKLA Common Stock was limited in volume and may not be a reliable
indicator of its market value. The prices listed above for periods
subsequent to July 29, 1996 are as reported by Nasdaq.

The following table sets forth the closing price per share of Western Common
Stock as reported by Nasdaq, the closing price per share of BKLA Common Stock as
reported by Nasdaq and the "Equivalent Per Share Price" (as defined below) of
BKLA Common Stock as of April 16, 1998, the last trading day before the date on
which Western and BKLA announced the execution of the Merger Agreement and as of
August 5, 1998, the last practicable date prior to the date of this Proxy
Statement-Prospectus. The "Equivalent Per Share Price" of BKLA Common Stock on
any date equals the closing price of the Western Common Stock on such date, as
reported on Nasdaq, multiplied by the Conversion Number.

<TABLE>
<CAPTION>
WESTERN COMMON BKLA COMMON EQUIVALENT PER
MARKET PRICE PER SHARE AS OF STOCK STOCK SHARE PRICE
- ------------------------------------------- ---------------- --------------- ---------------
<S> <C> <C> <C>
April 16, 1998............................. $ 47.88 $ 16.50 $ 20.22
August 5, 1998............................. $ 39.375 $ 16.00 $ 16.63
</TABLE>

20
<PAGE>
Because the Conversion Number is fixed pursuant to the Merger Agreement, a
change in the trading price of Western Common Stock before the Effective Time
will affect the implied market value of the Western Common Stock to be received
in the Merger by BKLA Shareholders. See "RISK FACTORS-- Limited Market for
Western Common Stock". THERE CAN BE NO ASSURANCE AS TO THE MARKET PRICE OF
WESTERN COMMON STOCK AT ANY TIME BEFORE, AT OR AFTER THE EFFECTIVE TIME.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR WESTERN COMMON
STOCK AND BKLA COMMON STOCK.

Upon consummation of the Merger, it is expected that there will be up to
approximately 3,750 holders of record of Western Common Stock.

21
<PAGE>
SUMMARY HISTORICAL FINANCIAL DATA

WESTERN

The following summary historical financial data for the six months ended
June 30, 1998 and 1997 are derived from unaudited consolidated financial
statements of Western and include, in the opinion of the management of Western
("Western Management"), all adjustments (consisting only of normal accruals)
necessary to present fairly the data for such periods. The results for the six
month period ended June 30, 1998 are not necessarily indicative of the results
to be expected for the full fiscal year. The following summary historical
financial data for the five years ended December 31, 1997 are derived from the
audited consolidated financial statements of Western. The data should be read in
conjunction with the consolidated financial statements, related notes, and other
financial information included or incorporated by reference in this Proxy
Statement-Prospectus.

<TABLE>
<CAPTION>
AT OR FOR THE SIX MONTHS
ENDED JUNE 30,(1) AT OR FOR THE YEARS ENDED DECEMBER 31,
------------------------ ---------------------------------------------------------
1998 1997 1997 1996(2) 1995(3) 1994 1993
----------- ----------- ----------- ----------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Interest income..................... $ 68,922 $ 48,758 $ 101,034 $ 74,237 $ 62,629 $ 53,079 $ 57,722
Interest expense.................... 18,318 14,330 29,358 22,311 19,804 13,388 18,677
----------- ----------- ----------- ----------- --------- --------- ---------
NET INTEREST INCOME............... 50,604 34,428 71,676 51,926 42,825 39,691 39,045
Provision for loan and lease
losses............................ 300 1,400 2,800 1,018 8,564 3,510 17,919
----------- ----------- ----------- ----------- --------- --------- ---------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN AND LEASE
LOSSES.......................... 50,304 33,028 68,876 50,908 34,261 36,181 21,126
Non-interest income................. 7,858 5,028 9,686 9,875 7,826 8,447 15,871
Non-interest expense................ 35,513 29,800 65,757 48,138 45,609 41,235 45,825
----------- ----------- ----------- ----------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME
TAXES........................... 22,649 8,256 12,805 12,645 (3,522) 3,393 (8,828)
Income tax expense (benefit)........ 11,142 4,811 9,643 3,656 (1,733) 1,680 (1,979)
----------- ----------- ----------- ----------- --------- --------- ---------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE....................... 11,507 3,445 3,162 8,989 (1,789) 1,713 (6,849)
Cumulative effect of change in
accounting principle.............. (41)
----------- ----------- ----------- ----------- --------- --------- ---------
NET INCOME (LOSS)................. $ 11,507 $ 3,445 $ 3,162 $ 8,989 $ (1,789) $ 1,713 $ (6,890)
----------- ----------- ----------- ----------- --------- --------- ---------
----------- ----------- ----------- ----------- --------- --------- ---------
COMPREHENSIVE INCOME (LOSS)....... $ 11,671 $ 3,484 $ 3,930 $ 8,666 $ 2,876 $ (3,544) $ (6,837)
----------- ----------- ----------- ----------- --------- --------- ---------
----------- ----------- ----------- ----------- --------- --------- ---------
ENDING BALANCE SHEET DATA:
Assets.............................. $ 2,016,749 $ 1,367,665 $ 1,383,510 $ 1,338,913 $ 866,385 $ 759,194 $ 799,558
Securities.......................... 224,135 284,191 207,514 332,818 184,978 220,905 248,879
Loans and leases, net of deferred
fees and unearned income.......... 1,274,611 849,141 880,734 817,358 543,042 439,241 460,975
Allowance for loan and lease
losses............................ 24,681 15,345 15,894 15,757 13,130 12,115 19,077
Goodwill............................ 145,525 31,699 30,430 32,968 4,131 2,464 2,616
Deposits............................ 1,697,352 1,207,714 1,226,793 1,177,014 774,057 675,971 731,829
Borrowed funds...................... 15,756 18,194 12,751 20,290 7,366 15,161 10,168
Common shareholders' equity......... 289,146 131,642 129,655 129,047 77,628 62,274 51,572
</TABLE>

22
<PAGE>

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

(1) On January 27, 1998, Western acquired Santa Monica Bank in a transaction
accounted for as a purchase. At January 31, 1998, Santa Monica Bank had
approximately $671 million in assets, $388 million in net loans and $584
million in deposits. At the time of the SMB Acquisition, Western issued
approximately 2,653,000 shares of Western Common Stock to certain former
shareholders of Santa Monica Bank and also paid approximately $114 million
to the other former shareholders of Santa Monica Bank. Western also raised
approximately $65 million in additional equity in a private placement by
issuing 2,327,550 shares of Western Common Stock. Santa Monica Bank's
results of operations are included only since January 27, 1998. Due to the
relatively large size of this transaction, any comparison of data as of and
for the six months ended June 30, 1998 to data as of or for prior dates or
periods may not be meaningful.

(2) On September 30, 1996, Western acquired Western Bank in a transaction
accounted for as a purchase. At September 30, 1996, Western Bank had
approximately $410 million in assets, $198 million in net loans and $353
million in deposits. At the time of such acquisition, Western also raised
approximately $42 million in additional equity in a private placement by
issuing 3,076,045 shares of Western Common Stock. Western Bank's results of
operations are included only since the fourth quarter of fiscal 1996. Due to
the relatively large size of this transaction, any comparison of data as of
and for the year ended December 31, 1996 to data as of or for prior dates or
periods may not be meaningful.

(3) In 1995, Western, through a private placement and a separate shareholders'
rights and public offering, raised approximately $9 million in additional
equity, net of approximately $470,000 in offering costs, in connection with
the issuance of 874,589 shares of Western Common Stock. Also in 1995
Western, through a private placement of 474,000 shares, raised approximately
$3 million in additional equity in connection with the issuance of shares of
Western Common Stock.

(4) A $0.15 per share dividend was declared in the fourth quarter of 1997 and
was paid in the first quarter of 1998.

23
<PAGE>
BKLA

The following summary historical financial data for the six months ended
June 30, 1998 and 1997 are derived from unaudited financial statements of BKLA
and include, in the opinion of BKLA Management, all adjustments (consisting only
of normal accruals) necessary to present fairly the data for such periods. The
results for the six month period ended June 30, 1998 are not necessarily
indicative of the results to be expected for the full fiscal year. The following
summary historical financial data for the five years ended December 31, 1997 are
derived from the audited financial statements of BKLA. The data should be read
in conjunction with the consolidated financial statements, related notes, and
other financial information included or incorporated by reference in this Proxy
Statement-Prospectus.

<TABLE>
<CAPTION>
AT OR FOR THE SIX
MONTHS ENDED JUNE
30,(1,2) AT OR FOR THE YEARS ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1998 1997 1997(2) 1996 1995(3,4) 1994 1993
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Interest income.............................. $ 10,505 $ 6,651 $ 14,854 $ 10,561 $ 6,819 $ 5,794 $ 7,092
Interest expense............................. 3,008 1,746 3,931 3,087 1,852 1,758 2,262
--------- --------- --------- --------- --------- --------- ---------
NET INTEREST INCOME........................ 7,497 4,905 10,923 7,474 4,967 4,036 4,830
Provision for (recovery of) loan and lease
losses..................................... -- 410 410 750 (311) -- 1,953
--------- --------- --------- --------- --------- --------- ---------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN AND LEASE LOSSES.................... 7,497 4,495 10,513 6,724 5,278 4,036 2,877
Non-interest income.......................... 1,030 629 1,388 1,037 878 923 1,725
Non-interest expense......................... 5,274 4,089 8,542 6,760 5,510 6,171 6,915
--------- --------- --------- --------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES.......... 3,253 1,035 3,359 1,001 646 (1,212) (2,313)
Income tax expense (benefit)................. 1,216 -- (372) -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
NET INCOME (LOSS).......................... $ 2,037 $ 1,035 $ 3,731 $ 1,001 $ 646 $ (1,212) $ (2,313)
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
COMPREHENSIVE INCOME (LOSS)................ $ 2,085 $ 1,030 $ 3,903 $ 641 $ 1,259 $ (1,685) $ (2,313)
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
ENDING BALANCE SHEET DATA:
Assets....................................... $ 289,768 $ 193,276 $ 272,033 $ 130,705 $ 129,745 $ 80,507 $ 98,992
Securities................................... 88,679 49,493 60,433 22,126 33,322 30,602 28,420
Loans and leases, net of deferred fees and
unearned income............................ 153,645 110,409 142,633 72,266 66,021 38,114 50,760
Allowance for loan and lease losses.......... 2,683 1,829 2,819 1,682 2,358 1,633 2,478
Goodwill..................................... 5,504 2,129 5,939 1,662 1,733 -- --
Deposits..................................... 242,552 171,308 238,012 115,596 114,850 74,471 91,388
Borrowed funds............................... 12,873 1,846 1,849 1,842 1,836 1,830 1,827
Common shareholders' equity.................. 33,551 19,591 31,054 12,632 11,991 3,817 5,502
PER SHARE DATA AND OTHER SELECTED RATIOS:
Earnings (loss) per common and common
equivalent share
Basic...................................... $ 0.43 $ 0.36 $ 1.16 $ 0.46 $ 0.63 $ (4.85) $ (9.25)
Diluted.................................... 0.38 0.32 1.00 0.40 0.51 (4.85) (9.25)
Dividends declared per share................. -- -- -- -- -- -- --
Book value per share......................... 6.91 5.50 6.54 5.75 5.46 15.25 22.00
Tangible book value per share................ 5.78 4.90 5.29 5.00 4.67 15.25 22.00
Shareholders' equity to assets at period
end........................................ 11.58% 10.14% 11.42% 9.66% 9.24% 4.74% 5.56%
Tangible shareholders' equity to assets at
period end................................. 9.87 9.14 9.44 8.50 8.01 4.74 5.56
Return on average assets..................... 1.48 1.29 2.05 0.79 0.77 (1.36) (2.08)
Return on average equity..................... 12.78 13.02 21.10 8.13 8.71 (26.01) (32.30)
Average equity/average assets................ 11.59 9.88 9.72 9.72 8.89 5.24 6.44
Net interest margin.......................... 6.19 6.77 6.67 6.47 6.63 5.04 4.82
</TABLE>

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

(1) On December 31, 1997, BKLA acquired CNB in a transaction accounted for as a
purchase. At December 31, 1997, CNB had approximately $60 million in assets,
$26 million in net loans and $51 million in deposits. At the

24
<PAGE>

time of such acquisition, BKLA issued 1,155,326 shares of BKLA Common Stock
to former shareholders of CNB. CNB's results of operations are included only
since January 1998. Due to the relatively large size of this transaction,
any comparison of data as of and for the six months ended June 30, 1998 to
data as of or for prior dates or periods may not be meaningful.

(2) On April 1, 1997, BKLA acquired AWB in a transaction accounted for as a
purchase. At April 1, 1997, AWB had approximately $67 million in assets, $37
million in net loans and $61 million in deposits. At the time of such
acquisition, BKLA issued 1,367,493 shares of BKLA Common Stock to former
shareholders of AWB. AWB's results of operations are included only since
April 1997. Due to the relatively large size of this transaction, any
comparison of data as of and for the six months ended June 30, 1998 and the
year ended December 31, 1997 to data as of or for prior dates or periods may
not be meaningful.

(3) On November 15, 1995, BKLA acquired WTB in a transaction accounted for as a
purchase. At November 15, 1995, WTB had approximately $42 million in assets,
$21 million in net loans and $40 million in deposits. At the time of such
acquisition, BKLA issued 346,325 shares of BKLA Common Stock to former
shareholders of WTB. WTB's results of operations are included only since
November 1995.

(4) On March 31, 1995, BKLA received a capital infusion of approximately $3.4
million for 946,352 shares of BKLA Common Stock and 473,176 warrants. On
November 30, 1995 as a result of a rights offering to all shareholders of
record at October 24, 1995, 651,325 shares of BKLA Common Stock and 217,160
warrants were issued for net proceeds of approximately $2.1 million. Each
warrant issued in both the capital infusion and the rights offering entitled
the holder thereof to purchase one share of BKLA Common Stock for $3.75 and
will expire on December 1, 1998.

25
<PAGE>
SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The following table sets forth certain summary unaudited pro forma combined
financial data for Western after giving effect to the Merger, as if it had
occurred as of the beginning of each of the periods presented, using the
Conversion Number of 0.4224 and accounting for the Merger as a pooling of
interests. See "THE MERGER--Accounting Treatment". This information should be
read in conjunction with the historical consolidated financial statements of
Western and BKLA including the notes thereto, appearing elsewhere in this Proxy
Statement-Prospectus or incorporated herein by reference. See "UNAUDITED PRO
FORMA COMBINED CONDENSED FINANCIAL DATA".

The unaudited pro forma combined condensed balance sheets are not
necessarily indicative of the actual financial position that would have existed
had the Merger been consummated on the dates indicated, or that may exist in the
future. The unaudited pro forma combined condensed results of operations are not
necessarily indicative of the results that would have occurred had the Merger
been consummated on the dates indicated or that may be achieved in the future.
Assuming the consummation of the Merger, the actual financial position and
results of operations will differ, perhaps significantly, from the pro forma
amounts reflected herein because of a variety of factors, including changes in
value and changes in operating results between the dates of the unaudited pro
forma financial data and the date on which the Merger takes place.

<TABLE>
<CAPTION>
AT OR FOR THE SIX MONTHS AT OR FOR THE YEARS ENDED DECEMBER
ENDED JUNE 30,(1,4,5) 31,
------------------------ -------------------------------------
1998 1997 1997(5) 1996(2) 1995(3,6,7)
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Interest income................................ $ 83,358 $ 77,817 $ 162,440 $ 84,798 $ 69,448
Interest expense............................... 22,522 23,072 48,060 25,398 21,656
----------- ----------- ----------- ----------- -----------
Net interest income.......................... 60,836 54,745 114,380 59,400 47,792
Provision for loan and lease losses............ 380 1,810 3,210 1,768 8,253
----------- ----------- ----------- ----------- -----------
Net interest income after provision for loan
and lease losses........................... 60,456 52,935 111,170 57,632 39,539
Non-interest income............................ 9,502 9,191 18,348 10,912 8,704
Non-interest expense........................... 43,814 49,635 107,478 54,898 51,119
----------- ----------- ----------- ----------- -----------
Income (loss) before income taxes............ 26,144 12,491 22,040 13,646 (2,876)
Income tax expense (benefit)................... 12,719 7,201 13,948 3,656 (1,733)
----------- ----------- ----------- ----------- -----------
Net income (loss)............................ $ 13,425 $ 5,290 $ 8,092 $ 9,990 $ (1,143)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
COMPREHENSIVE INCOME (LOSS).................. $ 13,756 $ 4,514 $ 7,833 $ 9,307 $ 4,135
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
ENDING BALANCE SHEET DATA:
Assets......................................... $ 2,308,917 $ 1,560,941 $ 1,657,223 $ 1,469,618 $ 996,130
Securities..................................... 312,814 333,684 267,947 354,944 218,300
Loans and leases, net of deferred fees and
unearned income.............................. 1,428,256 959,550 1,023,367 889,624 609,063
Allowance for loan and lease losses............ 27,364 17,174 18,713 17,439 15,488
Goodwill....................................... 151,029 33,828 36,369 34,630 5,864
Deposits....................................... 1,939,904 1,379,022 1,464,805 1,292,610 888,907
Borrowed funds................................. 28,629 20,040 14,600 22,132 9,202
Common shareholders' equity.................... 317,297 151,233 155,309 141,679 89,619
</TABLE>

26
<PAGE>

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

(4) On December 31, 1997, BKLA acquired CNB in a transaction accounted for as a
purchase. At December 31, 1997, CNB had approximately $60 million in assets,
$26 million in net loans and $51 million in deposits. At the time of such
acquisition, BKLA issued 1,155,326 shares of BKLA Common Stock to former
shareholders of CNB. CNB's results of operations are included only since
January of fiscal 1998. Due to the relatively large size of this
transaction, any comparison of data as of and for the six months ended June
30, 1998 to data as of or for prior dates or periods may not be meaningful.

(5) On April 1, 1997, BKLA acquired AWB in a transaction accounted for as a
purchase. At April 1, 1997, AWB had approximately $67 million in assets, $37
million in net loans and $61 million in deposits. At the time of such
acquisition, BKLA issued 1,367,493 shares of BKLA Common Stock to former
shareholders of AWB. AWB's results of operations are included only since
April of fiscal 1997. Due to the relatively large size of this transaction,
any comparison of data as of and for the six months ended June 30, 1998 and
the year ended December 31, 1997 to data as of or for prior dates or periods
may not be meaningful.

(6) On November 15, 1995, BKLA acquired WTB in a transaction accounted for as a
purchase. At November 15, 1995, WTB had approximately $42 million in assets,
$21 million in net loans and $40 million in deposits. At the time of such
acquisition, BKLA issued 346,325 shares of BKLA Common Stock to former
shareholders of WTB. WTB's results of operations are included only since
November of fiscal 1995.

(7) On March 31, 1995, BKLA received a capital infusion of approximately $3.4
million for 946,352 shares of BKLA Common Stock and 473,176 warrants. On
November 30, 1995 as a result of a rights offering to all shareholders of
record at October 24, 1995, 651,325 shares of BKLA Common Stock and 217,160
warrants were issued for net proceeds of approximately $2.1 million. Each
warrant issued in both the capital infusion and the rights offering entitled
the holder to purchase one share of BKLA Common Stock for $3.75 and will
expire on December 1, 1998.

(8) A $0.15 dividend was declared in the fourth quarter of 1997 and was paid in
the first quarter of 1998.

27
<PAGE>
SELECTED HISTORICAL AND PRO FORMA PER SHARE DATA

The following table sets forth for Western Common Stock and BKLA Common
Stock certain selected historical and unaudited pro forma equivalent per share
data at June 30, 1998 and 1997 and for the six months ended June 30, 1998 and
1997, and at the end of and for each of the three years ended December 31, 1997,
giving effect to the Merger using the pooling-of-interests method of accounting.
The information is derived from the historical consolidated financial statements
of Western and the historical financial statements of BKLA, including the
related notes thereto, and the pro forma combined financial information giving
effect to the Merger, including the related notes thereto, appearing elsewhere
herein. The information below should be read in conjunction with the historical
and pro forma combined financial information of Western and BKLA, including the
notes thereto, appearing elsewhere in this Proxy Statement-Prospectus or
incorporated herein by reference. See "UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL DATA" and "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE".

<TABLE>
<CAPTION>
FOR THE SIX MONTHS
FOR THE YEARS ENDED DECEMBER
ENDED JUNE 30, 31,
-------------------- -------------------------------
1998 1997 1997 1996 1995
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
BASIC EARNINGS (LOSS) PER SHARE(1):
Western................................................................ $ 0.78 $ 0.33 $ 0.30 $ 1.11 $ (0.28)
BKLA................................................................... 0.43 0.36 1.16 0.46 0.63
Western combined pro forma............................................. 0.76 0.32 0.48 1.11 (0.17)
BKLA equivalent pro forma.............................................. 0.32 0.13 0.20 0.47 (0.07)
DILUTED EARNINGS (LOSS) PER SHARE(1):
Western................................................................ $ 0.77 $ 0.32 $ 0.29 $ 1.09 $ (0.28)
BKLA................................................................... 0.38 0.32 1.00 0.40 0.51
Western combined pro forma............................................. 0.74 0.31 0.47 1.07 (0.17)
BKLA equivalent pro forma.............................................. 0.31 0.13 0.20 0.45 (0.07)
DIVIDENDS PER SHARE(2):
Western dividends declared per share(3)................................ 0.15 -- 0.30 -- --
BKLA dividends declared per share...................................... -- -- -- -- --
BKLA equivalent pro forma dividends declared per share................. 0.06 -- 0.13 -- --
</TABLE>

<TABLE>
<CAPTION>
AT JUNE 30, AT DEC 31,
1998 1997
------------- -----------
<S> <C> <C>
BOOK VALUE PER SHARE(4):
Western............................................................................... $ 18.41 $ 12.18
BKLA.................................................................................. 6.91 6.54
Western combined pro forma............................................................ 17.78 12.19
BKLA equivalent pro forma............................................................. 7.51 5.15
TANGIBLE BOOK VALUE PER SHARE(4):
Western............................................................................... $ 9.15 $ 9.32
BKLA.................................................................................. 5.78 5.29
Western combined pro forma............................................................ 9.32 9.33
BKLA equivalent pro forma............................................................. 3.94 3.94
</TABLE>

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

(1) The Western combined pro forma earnings (loss) per share amounts were
calculated by using aggregate historical income (loss) information divided
by the average pro forma shares outstanding of the combined entity. The
average pro forma shares outstanding of the combined entity were calculated
by combining the Western historical shares outstanding with the historical
shares outstanding of BKLA as adjusted by the Conversion Number of 0.4224.
See "THE MERGER AGREEMENT--Exchange of Stock Certificates; Dividends". The
BKLA equivalent pro forma earnings (loss) per share amounts were computed by
multiplying the Western combined pro forma amounts by the Conversion Number
of 0.4224.

(2) The BKLA equivalent pro forma dividends declared per share amounts were
computed by multiplying the Western dividends declared per share by the
Conversion Number of 0.4224.

(3) A $0.15 dividend was declared in the fourth quarter of 1997 and was paid in
the first quarter of 1998.

(4) The Western combined pro forma book value per share and tangible book value
per share amounts are based on the aggregate historical common shareholders'
equity of BKLA and Western divided by the total pro forma common shares
outstanding of the combined entity based on the Conversion Number of 0.4224.
The BKLA equivalent pro forma book value per share and tangible book value
per share amounts at period end represent the Western pro forma amounts
multiplied by the Conversion Number of 0.4224. See "THE MERGER
AGREEMENT--Exchange of Stock Certificates; Dividends".

28
<PAGE>

SUMMARY FINANCIAL DATA REGARDING PENINSULA

SUMMARY HISTORICAL FINANCIAL DATA

The following summary historical financial data for the six months ended
June 30, 1998 and 1997 are derived from unaudited consolidated financial
statements of Peninsula and include, in the opinion of Peninsula Management, all
adjustments (consisting only of normal accruals) necessary to present fairly the
data for such periods. The results for the six month period ended June 30, 1998
are not necessarily indicative of the results to be expected for the full fiscal
year. The following summary historical financial data for the five years ended
December 31, 1997 are derived from the audited consolidated financial statements
of Peninsula. The data should be read in conjunction with the consolidated
financial statements, related notes, and other financial information included or
incorporated by reference in this Proxy Statement-Prospectus.

<TABLE>
<CAPTION>
AT OR FOR THE SIX
MONTHS ENDED JUNE
30, AT OR FOR THE YEARS ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1998 1997 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- --------- ---------

<CAPTION>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Interest Income............................ $ 14,625 $ 12,699 $ 27,033 $ 24,045 $ 21,743 $ 17,911 $ 16,989
Interest Expense........................... 4,429 3,992 8,600 7,766 7,095 5,009 5,274
--------- --------- --------- --------- --------- --------- ---------
NET INTEREST INCOME.................... 10,196 8,707 18,433 16,279 14,648 12,902 11,715
Provision for loan and lease losses........ 139 325 498 566 470 795 1,083
--------- --------- --------- --------- --------- --------- ---------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN AND LEASE LOSSES................ 10,057 8,382 17,935 15,713 14,178 12,107 10,632
Non-interest income........................ 2,467 2,059 4,154 3,691 3,165 2,818 2,809
Non-interest expense....................... 8,958 7,724 16,780 14,473 13,380 12,300 11,411
--------- --------- --------- --------- --------- --------- ---------
NET INCOME BEFORE TAXES................ 3,566 2,717 5,309 4,931 3,963 2,625 2,030
Income tax expense......................... 1,337 1,044 1,708 1,877 1,421 745 69
--------- --------- --------- --------- --------- --------- ---------
NET INCOME............................. $ 2,229 $ 1,673 $ 3,601 $ 3,054 $ 2,542 $ 1,880 $ 1,961
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
COMPREHENSIVE INCOME................... $ 2,269 $ 1,679 $ 3,646 $ 3,059 $ 3,040 $ 1,264 $ 1,961
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------

ENDING BALANCE SHEET DATA:
Assets..................................... $ 428,272 $ 368,434 $ 418,245 $ 343,820 $ 318,874 $ 267,850 $ 262,064
Securities................................. 111,618 97,079 125,041 84,980 84,707 56,810 65,019
Loans and leases, net of deferred fees and
unearned income.......................... 243,227 222,880 234,556 212,602 190,833 175,352 164,567
Allowance for loan and lease losses........ 2,442 2,235 2,358 2,150 1,853 1,898 1,585
Goodwill................................... -- -- -- -- -- -- --
Deposits................................... 397,055 341,384 389,232 318,709 296,970 248,484 243,414
Borrowed funds............................. 600 600 600 600 466 600 600
Common shareholders' equity................ 27,258 23,754 25,356 22,414 19,998 17,551 16,954

PER SHARE DATA AND OTHER SELECTED RATIOS:
Earnings per common and common equivalent
share
Basic.................................... $ 0.90 $ 0.67 $ 1.45 $ 1.23 $ 1.02 $ 0.76 $ 0.79
Diluted.................................. 0.90 0.67 1.45 1.23 1.02 0.76 0.79
Dividends declared per share............... 0.23 0.14 0.28 0.26 0.24 0.22 0.22
Book value per share....................... 10.96 9.55 10.20 9.01 8.04 7.06 6.82
Tangible book value per share.............. 10.96 9.55 10.20 9.01 8.04 7.06 6.82
Shareholders' equity to assets at period
end...................................... 6.36% 6.45% 6.06% 6.52% 6.27% 6.55% 6.47%
Tangible shareholders' equity to assets at
period end............................... 6.36 6.45 6.06 6.52 6.27 6.55 6.47
Return on average assets................... 1.06 0.95 0.95 0.92 0.87 0.71 0.76
Return on average equity................... 17.09 14.62 15.07 14.40 13.54 10.90 12.08
Average equity/average assets.............. 6.21 6.48 6.27 6.40 6.40 6.51 6.33
Net interest margin........................ 5.54 5.59 5.51 5.56 5.68 5.51 5.21
</TABLE>

29
<PAGE>

SUMMARY WESTERN-BKLA-PENINSULA UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The following table sets forth certain summary Western-BKLA-Peninsula
unaudited pro forma combined financial data for Western (after giving effect to
the Merger) and Peninsula, as if the Merger and the Peninsula Merger had
occurred as of the beginning of each of the periods presented. See
"SUMMARY--Proposed Peninsula Acquisition". This information should be read in
conjunction with the historical consolidated financial statements of Western,
BKLA and Peninsula including the notes thereto, appearing elsewhere in this
Proxy Statement-Prospectus or incorporated herein by reference. See
"WESTERN--BKLA--PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA"
and "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE".

The unaudited pro forma combined condensed balance sheets are not
necessarily indicative of the actual financial position that would have existed
had the Merger and the Peninsula Merger been consummated on the dates indicated,
or that may exist in the future. The unaudited pro forma combined condensed
results of operations are not necessarily indicative of the results that would
have occurred had the Merger and the Peninsula Merger been consummated on the
dates indicated or that may be achieved in the future. Assuming the consummation
of the Merger and the Peninsula Merger, the actual financial position and
results of operations will differ, perhaps significantly, from the pro forma
amounts reflected herein because of a variety of factors, including changes in
value and changes in operating results between the dates of the unaudited pro
forma financial data and the dates on which the Merger and the Peninsula Merger
take place.

<TABLE>
<CAPTION>
AT OR FOR THE SIX
MONTHS ENDED AT OR FOR THE
JUNE 30, (1,4,5) YEARS ENDED DECEMBER 31,
---------------------- --------------------------------------
<S> <C> <C> <C> <C> <C>
1998 1997 1997(5) 1996(2) 1995(3,6,7)
---------- ---------- ---------- ---------- -------------

<CAPTION>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Interest income....................... $ 97,983 $ 90,516 $ 189,473 $ 108,843 $ 91,191
Interest expense...................... 26,951 27,064 56,660 33,164 28,751
---------- ---------- ---------- ---------- -------------
Net interest income............... 71,032 63,452 132,813 75,679 62,440
Provision for loan and lease losses... 519 2,135 3,708 2,334 8,723
---------- ---------- ---------- ---------- -------------
Net interest income after
provision for loan and lease
losses.......................... 70,513 61,317 129,105 73,345 53,717
Non-interest income................... 11,969 11,250 22,502 14,603 11,869
Non-interest expense.................. 52,772 57,359 124,258 69,371 64,499
---------- ---------- ---------- ---------- -------------
Income before income taxes........ 29,710 15,208 27,349 18,577 1,087
Income tax expense (benefit).......... 14,056 8,245 15,656 5,533 (312)
---------- ---------- ---------- ---------- -------------
Net income........................ $ 15,654 $ 6,963 $ 11,693 $ 13,044 $ 1,399
---------- ---------- ---------- ---------- -------------
---------- ---------- ---------- ---------- -------------
Comprehensive income.............. $ 16,025 $ 6,193 $ 11,479 $ 12,366 $ 7,175
---------- ---------- ---------- ---------- -------------
---------- ---------- ---------- ---------- -------------

ENDING BALANCE SHEET DATA:
Assets................................ $2,738,869 $1,929,375 $2,077,868 $1,813,438 $1,315,004
Securities............................ 424,432 430,763 392,988 439,924 303,007
Loans and leases, net of deferred fees
and unearned income................. 1,671,483 1,182,430 1,257,923 1,102,226 799,896
Allowance for loan and lease losses... 29,806 19,409 21,071 19,589 17,341
Goodwill.............................. 151,029 33,828 36,369 34,630 5,864
Deposits.............................. 2,336,959 1,720,406 1,854,037 1,611,319 1,185,877
Borrowed funds........................ 29,229 20,640 15,200 22,732 9,668
Common shareholders' equity........... 338,440 174,987 174,550 164,093 109,617
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
AT OR FOR THE SIX
MONTHS ENDED AT OR FOR THE
JUNE 30, (1,4,5) YEARS ENDED DECEMBER 31,
---------------------- --------------------------------------
1998 1997 1997(5) 1996(2) 1995(3,6,7)
---------- ---------- ---------- ---------- -------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
PER SHARE DATA AND OTHER SELECTED
RATIOS:
Earnings (loss) per common and common
equivalent share
Basic............................... $ 0.77 $ 0.36 $ 0.60 $ 1.12 $ 0.15
Diluted............................. 0.75 0.35 0.59 1.09 0.14
Dividends declared per share(8)....... 0.15 -- 0.30 -- --
Book value per share.................. 16.52 8.54 11.35 10.67 7.80
Tangible book value per share......... 9.15 6.89 8.98 8.42 7.39
Shareholders' equity to assets at
period end.......................... 12.36% 9.07% 8.40% 9.05% 8.34%
Tangible shareholders' equity to
assets at period end................ 7.24 7.45 6.77 7.28 7.93
Return on average assets.............. 1.15 0.55 0.44 0.90 0.12
Return on average equity.............. 9.23 4.38 3.60 10.40 1.47
Average equity/average assets......... 12.41 12.53 12.24 8.64 7.89
Net interest margin................... 6.11 5.96 5.95 5.86 5.82
</TABLE>

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

31
<PAGE>

(8) A $0.15 dividend was declared in the fourth quarter of 1997 and was paid in
the first quarter of 1998.

32
<PAGE>
RISK FACTORS

IN ADDITION TO THE INFORMATION CONTAINED ELSEWHERE IN THIS PROXY
STATEMENT-PROSPECTUS OR INCORPORATED HEREIN BY REFERENCE, BKLA SHAREHOLDERS
CONSIDERING THE PROPOSAL TO APPROVE THE PRINCIPAL TERMS OF THE MERGER SHOULD
CAREFULLY CONSIDER THE FOLLOWING FACTORS, AMONG OTHERS, BEFORE MAKING ANY FINAL
DECISION.

FORWARD-LOOKING STATEMENTS MAY NOT PROVE ACCURATE

When used or incorporated by reference in this Proxy Statement-Prospectus,
the words "anticipate", "estimate", "expect", "project", "believe" and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks, uncertainties and assumptions including those set
forth below. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, expected or projected. Several key
factors that have a direct bearing on Western's ability to attain its goals are
discussed below.

COMPETITION

The banking business in California generally, and in Western's and BKLA's
service areas in particular, is highly competitive with respect to both loans
and deposits and is dominated by a relatively small number of major financial
institutions that have many offices operating throughout wide geographic areas.
In addition, there are numerous other independent commercial banks and savings
associations within their primary service areas, many of which have greater
resources, greater capital and, in some cases, less stringent regulatory
limitations. Certain of Western's and BKLA's competitors may be better able to
respond to changing capital and other regulatory requirements and better able to
maintain or improve market share.

ABILITY TO INTEGRATE THE OPERATIONS OF WESTERN AND BKLA; RAPID GROWTH

Because the markets in which Western, Santa Monica Bank and BKLA operate are
highly competitive and because of the inherent uncertainties associated with
merging two companies, there can be no assurance that the Surviving Corporation
will be able to realize fully the operating efficiencies Western currently
expects to realize as a result of the Merger and the consolidation of the
administrative operations of BKLA and Santa Monica Bank or that such operating
efficiencies will be realized in the time frame currently anticipated. See "THE
MERGER--Background and Reasons for the Merger".

Western has experienced rapid growth in total assets, primarily due to
several recent, significant acquisitions. In the first of such acquisitions,
Western acquired Western Bank on September 30, 1996, thereby increasing its
total assets as of September 30, 1996, from approximately $80 million to
approximately $490 million, an increase of 513%. In June 1997, Western merged
with CCB, thereby acquiring NBSC and increasing Western's total assets from
approximately $512 million at December 31, 1996 to approximately $860 million at
June 30, 1997, an increase of 68%. As a result of the SCB Merger, which was
consummated on October 10, 1997, Western's total assets increased from
approximately $867 million at September 30, 1997 to $1.38 billion at December
31, 1997, an increase of 60%. Following the SMB Acquisition, as of March 31,
1998, Western's total assets increased to $2.08 billion, an increase of
approximately $700 million or 51% from $1.38 billion at December 31, 1997.
Assuming the consummation of the BKLA Acquisition, Western would add
approximately $280 million of additional assets. In addition, on July 24, 1998
Western entered into a definitive agreement with Peninsula pursuant to which
Western will, subject to the satisfaction of customary conditions, acquire
Peninsula in late fourth quarter 1998 or early first quarter 1999. Assuming
consummation of the Peninsula Acquisition, Western would add approximately $428
million in additional assets. The ability of Western to operate effectively
following this rapid growth will depend in part on its ability to integrate the
operations of the recently acquired entities and its ability to attract and
retain key personnel. If the integration of Western Bank, CCB, SCB, Santa

33
<PAGE>

Monica Bank, BKLA and Peninsula does not proceed as anticipated, the results of
operations of Western could be adversely affected. Also, there can be no
assurance that Western will be able to realize the operating efficiencies that
Western Management expects to achieve through the acquisition of Western Bank,
the CCB Merger, the SCB Merger, the SMB Acquisition, the Merger and the
Peninsula Acquisition.

In addition, due to the substantial size of these acquisitions, any
comparison of financial data as of and for the time periods prior to such
acquisitions may not be meaningful.

GENERAL BUSINESS RISK

The businesses of Western and BKLA are subject to various business risks.
The volume of loan originations is dependent upon demand for loans of the type
originated and serviced by Western and BKLA and the competition in the
marketplace for such loans. The level of consumer confidence, fluctuations in
real estate values, fluctuations in prevailing interest rates and fluctuations
in investment returns expected by the financial community could combine to make
loans of the type originated by Western and BKLA less attractive. In addition,
Western and BKLA may be adversely affected by other factors that could (a)
increase the cost to the borrower of loans originated by Western and BKLA, (b)
create alternative lending sources for such borrowers, or (c) increase the cost
of funds of Western and BKLA at rates faster than any increase in interest
income, thereby narrowing their net interest rate margins. Although both Western
and BKLA also have seen continued improvement in loan demand consistent with
overall market growth during the continued recovery of the Southern California
economy, the increase in demand to date has not been sufficient to permit either
Western or BKLA to utilize fully deposits to fund loans, and accordingly each
has maintained a significant portion of its funds in securities and federal
funds sold. In addition, competition for loans has increased and some lenders
have shown a willingness to lend on terms that Western and BKLA Managements are
unwilling to match due to their credit philosophies. Managements of both Western
and BKLA believe that loan demand will continue to improve, but there can be no
assurance that there will be sufficient loan demand in the future to keep pace
with the level of deposits such that the asset mix desired by Western and BKLA
can be achieved and maintained. Governmental interventions through elimination
of tax benefits for home equity loans, regulation of an increased scope of loans
or introduction of additional regulations aimed at mortgage loans could also
adversely affect the business in which Western and BKLA are engaged.

In the ordinary course of business, Western and BKLA are subject to claims
made against them by borrowers, depositors and investors arising from, among
other things, losses that are claimed to have been incurred as a result of (a)
alleged breaches of fiduciary obligation, (b) alleged misrepresentations, errors
or omissions by employees and officers (including appraisers), (c) alleged
incomplete documentation, or (d) alleged failure by Western or BKLA to comply
with applicable laws and regulations. Western believes that any liability with
respect to any currently asserted claims or legal actions against Western or
BKLA is not likely to be material to the consolidated financial position or
results of operations of Western or SMB; however, any claims asserted in the
future may result in legal expense or liabilities that could have a material
adverse effect on the financial positions and results of operations of Western
or SMB.

CONCENTRATION OF OPERATIONS; RECESSIONARY ENVIRONMENTS; DECLINE IN REAL ESTATE
VALUES

The business activities of Western and BKLA currently are focused in
Southern California, with the majority of their business concentrated in Los
Angeles and Orange counties. The business of Western after the Merger is
expected to continue to be concentrated in Southern California for the
foreseeable future. Although Western intends to expand within Southern
California, there can be no assurance when or if such expansion will take place.
Consequently, the results of operations and financial condition of Western and
BKLA are dependent upon general trends in the Los Angeles County, Orange County
and Southern California economies and residential and commercial real estate
markets. The risks to which the business of Western and BKLA is subject, and to
which the business of Western after the Merger will be subject, become more
acute during an economic slow-down or recession such as that experienced during
the recent

34
<PAGE>

California recession. During such periods, delinquencies and foreclosures
generally increase and can result in increased numbers of, and larger, claims
and legal actions and in a decline in demand for the services provided by
Western and BKLA. In addition, a significant decline in market values of
properties of the type that secure loans originated by Western and BKLA would
reduce homeowners' equity in their homes and businesses' equity in their
properties, thereby reducing their borrowing power and also weakening collateral
coverage on loans made previously by Western and BKLA. Such a decline could also
diminish the market for loans originated by Western and BKLA. Any of the
foregoing could have a material adverse effect on the financial position and
results of operations of Western and SMB, and could have a greater adverse
impact on Western and SMB than on certain competitors that may have greater
resources and capital. In addition, the concentration of Western's operations in
Los Angeles and Orange counties exposes it to greater risk than other banking
companies with a wider geographic base in the event of catastrophes, such as
earthquakes, fires and floods, in this region.

INTEREST RATE RISK

It is expected that Western, through its subsidiaries including SMB, will
continue to realize income primarily from the differential or "spread" between
the interest earned on loans, securities and other interest-earning assets, and
interest paid on deposits, borrowings and other interest-bearing liabilities.
Net interest spreads are affected by the difference between the maturities and
repricing characteristics of interest-earning assets and interest-bearing
liabilities. In addition, loan volume and yields are affected by market interest
rates on loans, and rising interest rates generally are associated with a lower
volume of loan originations. There can be no assurance that Western's interest
rate risk will be minimized or eliminated. In addition, an increase in the
general level of interest rates may adversely affect the ability of certain
borrowers to pay the interest on and principal of their obligations.
Accordingly, changes in levels of market interest rates could materially
adversely affect Western's net interest spread, asset quality, loan origination
volume and overall results of operation.

SHARES ELIGIBLE FOR FUTURE SALE; DILUTION

Shares of Western Common Stock eligible for future sale could have a
dilutive effect on the market for Western Common Stock and could adversely
affect market prices.

As of the BKLA Record Date, the Restated Articles of Incorporation of
Western authorized 100,000,000 shares of Western Common Stock, of which
15,704,753 shares were outstanding. Approximately 2,156,468 additional shares of
Western Common Stock will be issued in the Merger to BKLA Shareholders, assuming
(i) no shares of BKLA Common Stock reserved for issuance on the BKLA Record Date
are issued on or prior to the Effective Date; (ii) no Dissenters' Rights are
perfected by BKLA Shareholders; and (iii) no cash is paid in lieu of fractional
shares. Approximately 2,425,033 additional shares of BKLA Common Stock will be
issued in the Merger to BKLA Shareholders assuming (i) all shares of BKLA Common
Stock reserved for issuance on the BKLA Record Date are issued and outstanding
on the Effective Date; (ii) no Dissenters Rights are perfected by BKLA
Shareholders; and (iii) no cash is paid in lieu of fractional shares. Pursuant
to its stock option plans, Western had outstanding options to purchase an
additional 404,973 shares of Western Common Stock on the BKLA Record Date with
exercise prices of between $5.25 and $43.00. Western also had outstanding
warrants to purchase an additional 140,675 shares of Western Common Stock with
exercise prices of between $13.77 and $16.83. As of the BKLA Record Date, BKLA
had no additional options authorized under its stock option plan, and
outstanding options to purchase 322,850 shares of BKLA Common Stock with
exercise prices of between $3.75 and $44.30. BKLA also had outstanding warrants
to purchase an additional 506,974 shares of BKLA Common Stock with an exercise
price of $3.75.

It is Western's intention to pursue acquisitions of other financial
institutions from time to time where such acquisitions are believed by Western
to enhance shareholder value or satisfy other strategic objectives. Such
acquisitions, if any, could be accomplished by the issuance of additional shares
of Western Common

35
<PAGE>

Stock or other securities convertible into or exercisable for Western Common
Stock. See "UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA" and
"WESTERN--BKLA--PENINSULA PRO FORMA COMBINED CONDENSED FINANCIAL DATA".

In addition, in an action pending in the United States District Court for
the Central District of California, Financial Institution Partners, L.P. and
Hovde Capital, Inc., as a purported assignee of Financial Institution Partners,
L.P. (collectively "FIP"), have asserted an alleged contractual right to
purchase 266,659 additional shares of common stock of CCB at a price of $6.75
per share and to an ongoing right of first refusal to maintain FIP's beneficial
ownership interest in CCB and/or Western. In an order dated June 30, 1998, the
Court dismissed FIP's claims to an ongoing right of first refusal in CCB and/ or
Western stock. Western Management considers FIP's remaining claims for damages
based upon the 266,659 additional shares of CCB common stock that FIP did not
purchase to be without merit.

REGULATION

The operations of Western and BKLA are subject to extensive regulation by
federal, state and local governmental authorities and are subject to various
laws and judicial and administrative decisions imposing requirements and
restrictions on part or all of their respective operations. Western and BKLA
each believes that it is in substantial compliance in all material respects with
applicable federal, state and local laws, rules and regulations. Because the
business of each of Western and BKLA is highly regulated, the laws, rules and
regulations applicable to Western and BKLA are subject to regular modification
and change. There are currently proposed various laws, rules and regulations
that, if adopted, would impact Western and SMB. There can be no assurance that
these proposed laws, rules and regulations, or other such laws, rules or
regulations, will not be adopted in the future, which could make compliance much
more difficult or expensive, restrict Western and BKLA's ability to originate,
broker or sell loans, further limit or restrict the amount of commissions,
interest or other charges earned on loans originated or sold by Western or BKLA
or otherwise adversely affect the business or prospects of Western or BKLA.

LIMITED MARKET FOR WESTERN COMMON STOCK

There is currently only a limited trading market for Western Common Stock.
Western Common Stock was designated for quotation on Nasdaq on June 3, 1997.
There can be no assurance that an active trading market for Western Common Stock
will develop, or if developed, will continue, or that shareholders of Western
after the Merger will be able to resell their securities or otherwise liquidate
their investment, if at all, without considerable delay or considerable impact
on the sales price. See "SUMMARY--Markets and Market Prices".

There can be no assurance as to the market value of Western Common Stock,
which market value may be significantly affected by various factors, including
but not limited to announcements of expanded services by Western or its
competitors, acquisitions of related companies and variations in quarterly
operating results, as well as by the dilutive effects of the matters described
above in "--Shares Eligible for Future Sale; Dilution". The limited trading
market for Western Common Stock may cause fluctuations in the market value of
Western Common Stock to be exaggerated, leading to price volatility in excess of
that which would occur in a more active trading market.

YEAR 2000 RISKS AND PREPAREDNESS

Many existing computer programs use only two digits to identify a year in a
data field. These programs were designed and developed without considering the
impact of the upcoming change in the century. If not corrected, many computer
applications could fail or create erroneous results by or at the Year 2000 or
possibly earlier. The Year 2000 issue affects Western in that the financial
services business is highly dependent on computer applications in a variety of
ways, including the following: (i) Western relies on computer systems in almost
all aspects of its business, including the processing of deposits, loans and
other

36
<PAGE>

services and products offered to customers, the failure of which in connection
with the Year 2000 could cause systemic disruptions and failures in the products
and services offered by Western; (ii) other banks, clearing houses, and vendors
whose products and services Western uses are at risk of systemic disruptions and
potential failures in the event that such entities have not adequately addressed
their Year 2000 issues prior to the Year 2000; (iii) the creditworthiness of
borrowers of Western might be diminished by significant disruptions of their
business as a result of their own or others' failure to address adequately the
Year 2000 issue prior to the Year 2000; and (iv) federal banking agencies have
issued interagency guidance on the business-wide risk posed to financial
institutions by the Year 2000 problem pursuant to which the federal banking
agencies may take supervisory action against financial institutions that fail to
address appropriately Year 2000 issues prior to the Year 2000, including formal
and informal enforcement actions, denial of applications to the federal banking
agencies, civil money penalties, and a reduction in the management component
rating of the institution's composite rating.

In order to address the Year 2000 issues facing Western, Western Management
has initiated a program to prepare Western's computer systems and applications
for the Year 2000 (the "Year 2000 Plan"). The primary focus of the Year 2000
Plan is to convert each of Western's subsidiary banks to the target systems
identified and believed to be Year 2000 compliant. Western expects to incur
internal staff costs as well as consulting and other expenses related to
infrastructure and facilities enhancements necessary to prepare for conversion
and Year 2000 system preparations. Testing and conversion of primary system
applications and hardware is expected to cost approximately $1,100,000, to be
expended during fiscal years 1998 and 1999. This cost estimate does not include
costs associated with infrastructure and facilities enhancements required in
connection with operational consolidations due to the CCB Merger, the SCB
Merger, the SMB Acquisition, the Merger and the Peninsula Acquisition. A
significant portion of the cost to Western in connection with becoming Year 2000
compliant is expected to be the redeployment of existing technology and
operations resources rather than incremental costs to Western.

As a part of the Year 2000 Plan, Western is not only undertaking the
infrastructure and facilities enhancement and testing necessary to ensure that
Western is adequately prepared for the Year 2000, but also Western is
communicating with its vendors upon whose services Western relies to ensure Year
2000 compliance. Pursuant to the Year 2000 Plan, Western expects to
substantially complete testing of its mission-critical systems and the
computer-related interactive vendor systems by December 31, 1998 and to complete
all testing by June 1999. In addition, as part of the credit review process,
Western is communicating with its major borrowers in an effort to ensure that
such borrowers have taken appropriate steps to address their Year 2000 issues
and will not be materially affected by any Year 2000 problems. Western is
communicating with its major deposit customers as well. Western also is
preparing contingency plans to protect Western in the event that Western is
unable to attain Year 2000 compliance in certain applications according to the
Year 2000 Plan.

Although Western believes that its Year 2000 Plan and other steps being
taken are adequate to ensure that it will not be materially affected by the Year
2000 problem, there can be no assurance that the Year 2000 Plan and Western's
other Year 2000 remedial and contingency plans will fully protect Western from
the risks associated with the Year 2000. The analysis of, and preparation for,
the Year 2000 and related problems necessarily rely on a variety of assumptions
about future events, and there can be no assurance that Western Management has
accurately predicted such future events or that the remedial and contingency
plans of Western will adequately address such future events. In the event that
the business of any of Western, vendors of Western or customers of Western is
disrupted as a result of the Year 2000 problem, such disruption could have a
material adverse effect on Western.

37
<PAGE>
INFORMATION REGARDING WESTERN

BUSINESS OF WESTERN

Western is a bank holding company registered under the BHCA, and its
principal business is to serve as a holding company for its banking
subsidiaries, SCB and Santa Monica Bank. Western was organized on May 20, 1983
as a California corporation and commenced operation as a bank holding company on
June 18, 1984. Western Bank was acquired by Western on September 30, 1996. On
June 4, 1997, Western consummated the CCB Merger pursuant to which CCB merged
with and into Western. Also on June 4, 1997, Monarch Bank, a wholly-owned
subsidiary of Western prior to the CCB Merger, and merged with and into NBSC, a
wholly-owned subsidiary of CCB prior to the CCB Merger. On October 10, 1997,
Western consummated the SCB Merger pursuant to which SCB merged with and into
Western. On December 15, 1997, Western merged NBSC with and into SCB, a
wholly-owned subsidiary of SC Bancorp prior to the SCB Merger, with SCB being
the surviving bank. On January 27, 1998, Western consummated the SMB Acquisition
pursuant to which Santa Monica Bank merged with and into Western Bank with
Western Bank being the surviving bank. As part of the SMB Acquisition, the name
of Western Bank was changed to "Santa Monica Bank".

Santa Monica Bank's primary market area is the western part of Los Angeles
County. As of June 30, 1998 Santa Monica Bank had thirteen branch offices,
including branch offices in Santa Monica, Westwood, Malibu, Pacific Palisades,
Marina Del Rey, Beverly Hills, Century City and Encino. SCB's primary market
area includes southern Los Angeles County, Orange County and northern San Diego
County. As of June 30, 1998 SCB had six branch offices in southern Los Angeles
County, nine branch offices throughout Orange County and one in northern San
Diego County. Santa Monica Bank and SCB offer a broad range of banking products
and services, including many types of business and personal savings and checking
accounts and other consumer banking services. At June 30, 1998, Western had
consolidated total assets, total deposits and shareholders' equity of $2.0
billion, $1.7 billion and $289 million, respectively.

Western's principal executive offices are located at 4100 Newport Place,
Suite 900, Newport Beach, California 92660, and its telephone number is (949)
863-2444.

QUARTERLY DIVIDEND

On May 20, 1998, the Western Board declared a dividend of $0.15 per share of
Western Common Stock payable on June 26, 1998 to Western Shareholders of record
on June 5, 1998.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

Additional information relating to Western, including information relating
to the business, management, properties, financial condition and results of
operations of Western, is included in documents incorporated by reference into
this Proxy Statement-Prospectus. See "AVAILABLE INFORMATION" and "INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE".

38
<PAGE>
INFORMATION REGARDING BKLA

BUSINESS OF BKLA

BKLA was organized on May 8, 1981 as a California corporation and commenced
operations pursuant to a charter issued by the State Commissioner on May 6,
1982. On November 15, 1995, BKLA acquired WTB, with total assets of
approximately $42,487,000 and one banking office. Effective April 1, 1997, BKLA
consummated a merger with AWB, with approximately $67,291,000 in assets and two
banking offices. On December 31, 1997, BKLA consummated its merger with CNB, a
national banking corporation with approximately $60,277,000 in total assets and
one branch office, with BKLA being the surviving corporation.

BKLA is a full-service community bank which engages in general commercial
banking in Los Angeles County, California. As of June 30, 1998 BKLA had six
branch offices in the cities of Beverly Hills, West Hollywood, Encino, Culver
City and Glendale. Services include those traditionally offered by commercial
banks, such as checking and saving accounts and commercial and real estate
loans, and, for its business customers, personal, home improvement, automobile
and other installment loans. The vast majority of BKLA's loans are direct loans
made to individuals, professionals, real estate developers, and small and medium
sized businesses within BKLA's marketing area.

BKLA's principal executive offices are located at 8901 Santa Monica
Boulevard, West Hollywood, California 90069 and its telephone number is (310)
550-8900.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

Additional information relating to BKLA, including information relating to
the business, management, properties, financial condition and results of
operations of BKLA, is included in documents incorporated by reference into this
Proxy Statement-Prospectus. See "AVAILABLE INFORMATION" and "INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE".

39
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA

The following unaudited pro forma combined condensed financial data combines
the historical consolidated condensed financial statements of Western and the
historical consolidated condensed financial statements of BKLA, giving effect to
the Merger as if it had been effective on June 30, 1998 and December 31, 1997,
with respect to the Pro Forma Combined Condensed Balance Sheets, and as of the
beginning of the periods indicated, with respect to the Pro Forma Combined
Condensed Statements of Income. This information is presented under
pooling-of-interests accounting. The unaudited pro forma combined condensed
financial data also combines the historical condensed statements of income of
Santa Monica Bank, acquired by Western on January 27, 1998, in a merger
accounted for under the purchase method of accounting, for the year ended
December 31, 1997 and the six months ended June 30, 1998 and 1997, as if the SMB
Acquisition occurred at the beginning of such periods. The information for the
six months ended June 30, 1998 and 1997 is derived from the unaudited financial
statements of Western, BKLA and Santa Monica Bank which includes, in the opinion
of the managements of Western, BKLA and Santa Monica Bank, all adjustments
(consisting only of normal accruals) necessary to present fairly the data for
such periods. This information should be read in conjunction with the historical
consolidated financial statements of Western, BKLA and Santa Monica Bank,
including their respective notes thereto, which are included and incorporated by
reference into this Proxy Statement-Prospectus, and in conjunction with the
combined condensed historical selected financial data and other pro forma
combined financial information, including the notes thereto, appearing elsewhere
in this Proxy Statement-Prospectus. See "INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE". The effect of estimated merger and reorganization costs expected to
be incurred in connection with the Merger has been reflected in the Unaudited
Pro Forma Combined Condensed Balance Sheets; however, since the estimated costs
are nonrecurring, they have not been reflected in the Unaudited Pro Forma
Combined Condensed Statements of Income. See Note 2 to the UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL DATA. The unaudited pro forma combined condensed
data does not give effect to any anticipated operating efficiencies in
conjunction with the Merger. The Unaudited Pro Forma Combined Condensed Balance
Sheets are not necessarily indicative of the actual financial position that
would have existed had the Merger been consummated on June 30, 1998 or December
31, 1997, or that may exist in the future. The Unaudited Pro Forma Combined
Condensed Statements of Income are not necessarily indicative of the results
that would have occurred had the Merger been consummated on the dates indicated
or that may be achieved in the future. Assuming the consummation of the Merger,
the actual financial position and results of operations will differ, perhaps
significantly, from the pro forma amounts reflected herein because of a variety
of factors, including changes in value and changes in operating results between
the dates of the unaudited pro forma financial data and the date on which the
Merger takes place.

40
<PAGE>

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AT
JUNE 30, 1998

<TABLE>
<CAPTION>
WESTERN
WESTERN BKLA PRO FORMA AND BKLA
(HISTORICAL) (HISTORICAL)(1) ADJUSTMENTS(2) PRO FORMA
------------ ------------- -------------- ------------
<S> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
ASSETS:
Cash and due from banks............................... $ 155,940 $ 20,682 $ -- $ 176,622
Federal funds sold.................................... 177,329 14,000 -- 191,329
------------ ------------- ------- ------------
TOTAL CASH AND CASH EQUIVALENTS................... 333,269 34,682 -- 367,951

Federal Reserve Bank and Federal Home Loan Bank stock,
at cost............................................. 5,759 1,491 -- 7,250
Securities held to maturity........................... -- 87,188 -- 87,188
Securities available for sale......................... 218,376 -- -- 218,376
------------ ------------- ------- ------------
TOTAL SECURITIES.................................. 224,135 88,679 -- 312,814

Net loans............................................. 1,249,930 150,962 -- 1,400,892
Property, plant and equipment......................... 32,034 2,519 -- 34,553
Other real estate owned............................... 4,946 1,545 -- 6,491
Goodwill.............................................. 145,525 5,504 -- 151,029
Other assets.......................................... 26,910 5,877 1,680 34,467
------------ ------------- ------- ------------
TOTAL ASSETS...................................... $ 2,016,749 $ 289,768 $ 1,680 $ 2,308,197
------------ ------------- ------- ------------
------------ ------------- ------- ------------

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
Non-interest bearing deposits......................... $ 637,837 $ 86,876 $ -- $ 724,713
Interest bearing deposits............................. 1,059,515 155,676 -- 1,215,191
------------ ------------- ------- ------------
TOTAL DEPOSITS.................................... 1,697,352 242,552 -- 1,939,904
Borrowed funds........................................ 15,756 12,873 -- 28,629
Accrued interest payable and other liabilities........ 14,495 792 7,080 22,367
------------ ------------- ------- ------------
TOTAL LIABILITIES................................. 1,727,603 256,217 7,080 1,990,900

SHAREHOLDERS' EQUITY:
Preferred stock....................................... -- -- -- --
Common stock and additional paid in capital........... 263,257 31,042 -- 294,299
Retained earnings..................................... 25,819 2,509 (5,400) 22,928
Other comprehensive income............................ 70 -- -- 70
------------ ------------- ------- ------------
TOTAL SHAREHOLDERS' EQUITY........................ 289,146 33,551 (5,400) 317,297
------------ ------------- ------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........ $ 2,016,749 $ 289,768 $ 1,680 $ 2,308,197
------------ ------------- ------- ------------
------------ ------------- ------- ------------

Number of common shares outstanding(1)................ 15,703.8 4,856.2 17,843.4
Common shareholders' equity per share(1).............. $ 18.41 $ 6.91 $ 17.78
Tangible common shareholders' equity per share(1)..... $ 9.15 $ 5.78 $ 9.32
</TABLE>

See "NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA".

41
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AT
DECEMBER 31, 1997

<TABLE>
<CAPTION>
WESTERN AND
WESTERN BKLA PRO FORMA BKLA PRO
(HISTORICAL) (HISTORICAL)(1) ADJUSTMENTS(2) FORMA
------------ ------------- -------------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
ASSETS:

Cash and due from banks............................... $ 97,456 $ 22,646 $ -- $ 120,102
Federal funds sold.................................... 138,702 29,555 -- 168,257
------------ ------------- ------- ------------
TOTAL CASH AND CASH EQUIVALENTS..................... 236,158 52,201 -- 288,359

Federal Reserve Bank and Federal Home Loan
Bank stock, at cost................................. 5,610 801 -- 6,411
Securities held to maturity........................... -- 48,138 -- 48,138
Securities available for sale......................... 201,904 11,494 -- 213,398
------------ ------------- ------- ------------
TOTAL SECURITIES.................................... 207,514 60,433 -- 267,947

Net loans............................................. 864,840 139,814 -- 1,004,654
Property, plant and equipment......................... 13,685 2,650 -- 16,335
Other real estate owned............................... 6,261 1,475 -- 7,736
Goodwill.............................................. 30,430 5,939 -- 36,369
Other assets.......................................... 24,622 9,521 1,680 35,823
------------ ------------- ------- ------------
TOTAL ASSETS........................................ $ 1,383,510 $ 272,033 $ 1,680 $ 1,657,223
------------ ------------- ------- ------------
------------ ------------- ------- ------------

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
Non-interest bearing deposits......................... $ 457,503 $ 85,222 $ -- $ 542,725
Interest bearing deposits............................. 769,290 152,790 -- 922,080
------------ ------------- ------- ------------
TOTAL DEPOSITS...................................... 1,226,793 238,012 -- 1,464,805
Borrowed funds........................................ 12,751 1,849 -- 14,600
Accrued interest payable and other liabilities........ 14,311 1,118 7,080 22,509
------------ ------------- ------- ------------
TOTAL LIABILITIES................................... 1,253,855 240,979 7,080 1,501,914

SHAREHOLDERS' EQUITY:
Preferred stock....................................... -- -- -- --
Common stock.......................................... 112,947 30,630 -- 143,577
Retained earnings..................................... 16,802 472 (5,400) 11,874
Other comprehensive income (loss)..................... (94) (48) -- (142)
------------ ------------- ------- ------------
TOTAL SHAREHOLDERS' EQUITY.......................... 129,655 31,054 (5,400) 155,309
------------ ------------- ------- ------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY............ $ 1,383,510 $ 272,033 $ 1,680 $ 1,657,223
------------ ------------- ------- ------------
------------ ------------- ------- ------------

Number of common shares outstanding(1)................ 10,648.3 4,751.7 12,744.4
Common shareholders' equity per share(1).............. $ 12.18 $ 6.54 $ 12.19
Tangible book value per share(1)...................... $ 9.32 $ 5.29 $ 9.33
</TABLE>

See "NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA".

42
<PAGE>

UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE SIX MONTHS ENDED JUNE 30, 1998

<TABLE>
<CAPTION>
SANTA MONICA WESTERN
WESTERN BKLA WESTERN JANUARY PRO FORMA AND BKLA
(HISTORICAL) (HISTORICAL)(1) AND BKLA (HISTORICAL)(3) ADJUSTMENTS(3) PRO FORMA
----------- ------------- ----------- ------------- ----------------- -----------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INTEREST INCOME:
Interest and fees on loans and
leases............................ $ 56,671 $ 7,667 $ 64,338 $ 3,185 $ -- $ 67,523
Interest on interest bearing
deposits in other banks........... -- 38 38 -- -- 38
Interest on investment securities... 6,966 2,071 9,037 616 -- 9,653
Interest on federal funds sold...... 5,285 729 6,014 365 (235) 6,144
----------- ------------- ----------- ------------- ----- -----------
TOTAL INTEREST INCOME............. 68,922 10,505 79,427 4,166 (235) 83,358

INTEREST EXPENSE:
Interest expense on deposits........ 17,762 2,718 20,480 1,180 -- 21,660
Interest expense on borrowings...... 556 290 846 16 -- 862
----------- ------------- ----------- ------------- ----- -----------
TOTAL INTEREST EXPENSE............ 18,318 3,008 21,326 1,196 -- 22,522
----------- ------------- ----------- ------------- ----- -----------

NET INTEREST INCOME:.................. 50,604 7,497 58,101 2,970 (235) 60,836
Less: provision for loan and lease
losses............................ 300 -- 300 80 -- 380
----------- ------------- ----------- ------------- ----- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN AND LEASE
LOSSES.......................... 50,304 7,497 57,801 2,890 (235) 60,456

NON-INTEREST INCOME:
Service charges, commissions and
fees.............................. 7,250 955 8,205 595 -- 8,800
Securities gains.................... 155 49 204 -- -- 204
Other income........................ 453 26 479 19 -- 498
----------- ------------- ----------- ------------- ----- -----------
TOTAL NON-INTEREST INCOME......... 7,858 1,030 8,888 614 -- 9,502

NON-INTEREST EXPENSE:
Salaries and benefits............... 17,725 2,770 20,495 1,123 (11) 21,607
Occupancy, furniture and
equipment......................... 5,328 1,033 6,361 347 23 6,731
Advertising and business
development....................... 566 98 664 58 -- 722
Other real estate owned............. (205) 12 (193) 9 -- (184)
Professional services............... 1,657 362 2,019 73 -- 2,092
Telephone, stationery and
supplies.......................... 1,437 256 1,693 55 -- 1,748
Goodwill amortization............... 4,561 237 4,798 -- 665 5,463
Data processing..................... 1,126 -- 1,126 9 -- 1,135
Customer services cost.............. 842 -- 842 8 -- 850
Merger costs........................ -- -- -- 429 -- 429
Other............................... 2,476 506 2,982 239 -- 3,221
----------- ------------- ----------- ------------- ----- -----------
TOTAL NON-INTEREST EXPENSE........ 35,513 5,274 40,787 2,350 677 43,814
----------- ------------- ----------- ------------- ----- -----------
Income before income taxes............ 22,649 3,253 25,902 1,154 (912) 26,144
Income taxes.......................... 11,142 1,216 12,358 463 (102) 12,719
----------- ------------- ----------- ------------- ----- -----------
NET INCOME........................ $ 11,507 $ 2,037 $ 13,544 $ 691 $ (810) $ 13,425
----------- ------------- ----------- ------------- ----- -----------
----------- ------------- ----------- ------------- ----- -----------

PER SHARE INFORMATION(1):
Number of shares (weighted average)
Basic............................. 14,821.5 4,776.6 16,839.1 7,084.2 17,668.1
Diluted........................... 15,040.0 5,368.8 17,307.8 7,084.2 18,136.8
Income per share
Basic............................. $ 0.78 $ 0.43 $ 0.80 $ 0.10 $ 0.76
Diluted........................... $ 0.77 $ 0.38 $ 0.78 $ 0.10 $ 0.74
</TABLE>

See "NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA".

43
<PAGE>

UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE SIX MONTHS ENDED JUNE 30, 1997

<TABLE>
<CAPTION>
WESTERN
WESTERN BKLA WESTERN SANTA MONICA PRO FORMA AND BKLA
(HISTORICAL) (HISTORICAL)(1) AND BKLA (HISTORICAL)(3) ADJUSTMENTS(3) PRO FORMA
----------- ------------- ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INTEREST INCOME:
Interest and fees on loans and
leases............................. $ 38,605 $ 5,021 $ 43,626 $ 18,106 $ -- $ 61,732
Interest on interest bearing deposits
in other banks..................... -- 1 1 -- -- 1
Interest on investment securities.... 8,500 1,139 9,639 4,030 -- 13,669
Interest on federal funds sold....... 1,653 490 2,143 1,680 (1,408) 2,415
----------- ------------- ----------- ------------- ------- -----------
TOTAL INTEREST INCOME.............. 48,758 6,651 55,409 23,816 (1,408) 77,817

INTEREST EXPENSE:
Interest expense on deposits......... 13,736 1,617 15,353 6,898 -- 22,251
Interest expense on borrowings....... 594 129 723 98 -- 821
----------- ------------- ----------- ------------- ------- -----------
TOTAL INTEREST EXPENSE............. 14,330 1,746 16,076 6,996 -- 23,072
----------- ------------- ----------- ------------- ------- -----------

NET INTEREST INCOME:................... 34,428 4,905 39,333 16,820 (1,408) 54,745
Less: provision for loan and lease
losses............................. 1,400 410 1,810 -- -- 1,810
----------- ------------- ----------- ------------- ------- -----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN AND LEASE LOSSES........ 33,028 4,495 37,523 16,820 (1,408) 52,935

NON-INTEREST INCOME:
Service charges and fees............. 3,838 602 4,440 3,416 -- 7,856
Gain on sale of loans and other
assets............................. 78 -- 78 -- -- 78
Securities gains..................... 342 -- 342 -- -- 342
Other income......................... 770 27 797 118 -- 915
----------- ------------- ----------- ------------- ------- -----------
TOTAL NON-INTEREST INCOME.......... 5,028 629 5,657 3,534 -- 9,191

NON-INTEREST EXPENSE:
Salaries and benefits................ 12,715 2,269 14,984 7,064 (66) 21,982
Occupancy, furniture and equipment... 3,889 810 4,699 2,068 137 6,904
Advertising and business
development........................ 596 87 683 426 -- 1,109
Other real estate owned.............. 69 12 81 (517) -- (436)
Professional services................ 1,753 221 1,974 953 -- 2,927
Telephone, stationery and supplies... 1,420 166 1,586 327 -- 1,913
Goodwill amortization................ 1,270 102 1,372 -- 3,989 5,361
Data processing...................... 791 -- 791 61 -- 852
Customer services cost............... 559 -- 559 72 -- 631
Merger costs......................... 3,470 -- 3,470 -- -- 3,470
Other................................ 3,268 422 3,690 1,232 -- 4,922
----------- ------------- ----------- ------------- ------- -----------
TOTAL NON-INTEREST EXPENSE......... 29,800 4,089 33,889 11,686 4,060 49,635
----------- ------------- ----------- ------------- ------- -----------
Income before income taxes............. 8,256 1,035 9,291 8,668 (5,468) 12,491
Income taxes........................... 4,811 -- 4,811 3,004 (614) 7,201
----------- ------------- ----------- ------------- ------- -----------
NET INCOME......................... $ 3,445 $ 1,035 $ 4,480 $ 5,664 $ (4,854) $ 5,290
----------- ------------- ----------- ------------- ------- -----------
----------- ------------- ----------- ------------- ------- -----------

PER SHARE INFORMATION(1):
Number of shares (weighted average)
Basic.............................. 10,492.5 2,878.8 11,708.5 7,084.2 16,682.0
Diluted............................ 10,778.3 3,277.1 12,162.5 7,084.2 17,136.0
Income per share
Basic.............................. $ 0.33 $ 0.36 $ 0.38 $ 0.80 $ 0.32
Diluted............................ $ 0.32 $ 0.32 $ 0.37 $ 0.80 $ 0.31
</TABLE>

See "NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA".

44
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
WESTERN AND
WESTERN BKLA WESTERN AND SANTA MONICA PRO FORMA BKLA PRO
(HISTORICAL) (HISTORICAL)(1) BKLA (HISTORICAL)(3) ADJUSTMENTS(3) FORMA
----------- ------------- ----------- ------------- -------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans and
leases............................... $ 80,639 $ 11,229 $ 91,868 $ 36,794 $ -- $ 128,662
Interest on interest bearing deposits
in other banks....................... -- 1 1 -- -- 1
Interest on investment securities...... 15,714 2,731 18,445 8,922 -- 27,367
Interest on federal funds sold......... 4,681 893 5,574 3,652 (2,816) 6,410
----------- ------------- ----------- ------------- -------------- -----------
TOTAL INTEREST INCOME................ 101,034 14,854 115,888 49,368 (2,816) 162,440

INTEREST EXPENSE:
Interest expense on deposits........... 28,276 3,673 31,949 14,575 -- 46,524
Interest expense on borrowings......... 1,082 258 1,340 196 -- 1,536
----------- ------------- ----------- ------------- -------------- -----------
TOTAL INTEREST EXPENSE............... 29,358 3,931 33,289 14,771 -- 48,060
----------- ------------- ----------- ------------- -------------- -----------
NET INTEREST INCOME:..................... 71,676 10,923 82,599 34,597 (2,816) 114,380
Less: provision for loan and lease
losses............................... 2,800 410 3,210 -- -- 3,210
----------- ------------- ----------- ------------- -------------- -----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN AND LEASE LOSSES.......... 68,876 10,513 79,389 34,597 (2,816) 111,170

NON-INTEREST INCOME:
Service charges, commissions and
fees................................. 7,533 1,273 8,806 7,032 -- 15,838
Gain on sale of loans and other
assets............................... 78 -- 78 -- -- 78
Securities gains....................... 342 -- 342 13 -- 355
Other income........................... 1,733 115 1,848 229 -- 2,077
----------- ------------- ----------- ------------- -------------- -----------
TOTAL NON-INTEREST INCOME............ 9,686 1,388 11,074 7,274 -- 18,348

NON-INTEREST EXPENSE:
Salaries and benefits.................. 25,023 4,802 29,825 14,661 (131) 44,355
Occupancy, furniture and equipment..... 7,843 1,778 9,621 4,151 274 14,046
Advertising and business development... 1,225 155 1,380 844 -- 2,224
Other real estate owned................ 242 29 271 (547) -- (276)
Professional services.................. 3,706 382 4,088 1,444 -- 5,532
Telephone, stationery and supplies..... 2,735 347 3,082 632 -- 3,714
Goodwill amortization.................. 2,538 246 2,784 -- 7,977 10,761
Data processing........................ 1,667 -- 1,667 116 -- 1,783
Customer services cost................. 1,263 -- 1,263 265 -- 1,528
Merger related costs................... 14,201 -- 14,201 1,052 -- 15,253
Other.................................. 5,314 803 6,117 2,441 -- 8,558
----------- ------------- ----------- ------------- -------------- -----------
TOTAL NON-INTEREST EXPENSE........... 65,757 8,542 74,299 25,059 8,120 107,478
----------- ------------- ----------- ------------- -------------- -----------
Income before income taxes............... 12,805 3,359 16,164 16,812 (10,936) 22,040
Income taxes (benefits).................. 9,643 (372) 9,271 5,905 (1,228) 13,948
----------- ------------- ----------- ------------- -------------- -----------
NET INCOME........................... $ 3,162 $ 3,731 $ 6,893 $ 10,907 $ (9,708) $ 8,092
----------- ------------- ----------- ------------- -------------- -----------
----------- ------------- ----------- ------------- -------------- -----------
PER SHARE INFORMATION(1):
Number of shares (weighted average)
Basic................................ 10,523.9 3,226.0 11,886.6 7,084.2 16,860.1
Diluted.............................. 10,731.6 3,749.7 12,315.5 7,084.2 17,289.0
Income per share
Basic................................ $ 0.30 $ 1.16 $ 0.58 $ 1.54 $ 0.48
Diluted.............................. $ 0.29 $ 1.00 $ 0.56 $ 1.54 $ 0.47
</TABLE>

See "NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA".

45
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
WESTERN AND
WESTERN BKLA BKLA PRO
(HISTORICAL) (HISTORICAL)(1) FORMA
----------- ------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans and leases.................................. $ 58,374 $ 7,702 $ 66,076
Interest on interest bearing deposits in other banks................... 3 12 15
Interest on investment securities...................................... 12,862 2,008 14,870
Interest on federal funds sold......................................... 2,998 839 3,837
----------- ------------- -----------
TOTAL INTEREST INCOME................................................ 74,237 10,561 84,798

INTEREST EXPENSE:
Interest expense on deposits........................................... 21,382 2,830 24,212
Interest expense on borrowings......................................... 929 257 1,186
----------- ------------- -----------
TOTAL INTEREST EXPENSE............................................... 22,311 3,087 25,398
----------- ------------- -----------
NET INTEREST INCOME:..................................................... 51,926 7,474 59,400
Less: provision for loan and lease losses.............................. 1,018 750 1,768
----------- ------------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES........ 50,908 6,724 57,632

NON-INTEREST INCOME:
Service charges, commissions and fees.................................. 7,485 966 8,451
Gain on sale of loans and other assets................................. 665 -- 665
Securities gains (losses).............................................. 281 (5) 276
Other income........................................................... 1,444 76 1,520
----------- ------------- -----------
TOTAL NON-INTEREST INCOME............................................ 9,875 1,037 10,912

NON-INTEREST EXPENSE:
Salaries and benefits.................................................. 23,016 3,408 26,424
Occupancy, furniture and equipment..................................... 7,649 1,306 8,955
Advertising and business development................................... 1,342 137 1,479
Other real estate owned................................................ (134) 68 (66)
Professional services.................................................. 6,054 472 6,526
Telephone, stationery and supplies..................................... 2,201 346 2,547
Goodwill amortization.................................................. 1,004 119 1,123
Data processing........................................................ 1,064 -- 1,064
Customer services cost................................................. 510 -- 510
Other.................................................................. 5,432 904 6,336
----------- ------------- -----------
TOTAL NON-INTEREST EXPENSE........................................... 48,138 6,760 54,898
----------- ------------- -----------
Income before income taxes............................................... 12,645 1,001 13,646
Income taxes............................................................. 3,656 -- 3,656
----------- ------------- -----------
NET INCOME........................................................... $ 8,989 $ 1,001 $ 9,990
----------- ------------- -----------
----------- ------------- -----------
PER SHARE INFORMATION(1):
Number of shares (weighted average)
Basic................................................................ 8,095.7 2,195.1 9,022.9
Diluted.............................................................. 8,248.4 2,475.9 9,294.2
Income per share
Basic................................................................ $ 1.11 $ 0.46 $ 1.11
Diluted.............................................................. $ 1.09 $ 0.40 $ 1.07
</TABLE>

See "NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA".

46
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
WESTERN AND
WESTERN BKLA BKLA PRO
(HISTORICAL) (HISTORICAL)(1) FORMA
----------- ------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans and leases.................................. $ 49,014 $ 4,808 $ 53,822
Interest on interest bearing deposits in other banks................... 43 2 45
Interest on investment securities...................................... 10,726 1,575 12,301
Interest on federal funds sold......................................... 2,846 434 3,280
----------- ------------- -----------
TOTAL INTEREST INCOME................................................ 62,629 6,819 69,448

INTEREST EXPENSE:
Interest expense on deposits........................................... 19,167 1,542 20,709
Interest expense on borrowings......................................... 637 310 947
----------- ------------- -----------
TOTAL INTEREST EXPENSE............................................... 19,804 1,852 21,656
----------- ------------- -----------
NET INTEREST INCOME:..................................................... 42,825 4,967 47,792
Less: provision for (recovery of) loan and lease losses................ 8,564 (311) 8,253
----------- ------------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES........ 34,261 5,278 39,539

NON-INTEREST INCOME:
Service charges, commissions and fees.................................. 6,551 757 7,308
Gain on sale of loans and other assets................................. 145 118 263
Securities (losses).................................................... (692) (46) (738)
Other income........................................................... 1,822 49 1,871
----------- ------------- -----------
TOTAL NON-INTEREST INCOME............................................ 7,826 878 8,704

NON-INTEREST EXPENSE:
Salaries and benefits.................................................. 19,575 2,798 22,373
Occupancy, furniture and equipment..................................... 7,878 941 8,819
Advertising and business development................................... 1,199 128 1,327
Other real estate owned................................................ 3,080 24 3,104
Professional services.................................................. 3,176 547 3,723
Telephone, stationery and supplies..................................... 2,337 254 2,591
Goodwill amortization.................................................. 821 20 841
Lower of cost or market adjustment on loans available for sale......... 756 -- 756
Data processing........................................................ 822 -- 822
Customer services cost................................................. 184 -- 184
Other.................................................................. 5,781 798 6,579
----------- ------------- -----------
TOTAL NON-INTEREST EXPENSE........................................... 45,609 5,510 51,119
----------- ------------- -----------
Income (loss) before income taxes........................................ (3,522) 646 (2,876)
Income taxes (benefit)................................................... (1,733) -- (1,733)
----------- ------------- -----------
NET INCOME (LOSS).................................................... $ (1,789) $ 646 $ (1,143)
----------- ------------- -----------
----------- ------------- -----------
PER SHARE INFORMATION(1):
Number of shares (weighted average)
Basic................................................................ 6,486.9 1,017.5 6,916.7
Diluted.............................................................. 6,598.5 1,268.8 7,134.4
Income (loss) per share
Basic................................................................ $ (0.28) $ 0.63 $ (0.17)
Diluted.............................................................. $ (0.28) $ 0.51 $ (0.17)
</TABLE>

See "NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA".

47
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA

NOTE 1: BASIS OF PRESENTATION

Certain historical data of BKLA have been reclassified on a pro forma basis
to conform to Western's classifications. Transactions between Western and BKLA
are not material in relation to the unaudited pro forma combined financial
statements, and have not been eliminated from the pro forma combined amounts.
The unaudited pro forma number of common shares outstanding, common
shareholders' equity per share, number of shares (basic and diluted) and income
(loss) per share (basic and diluted) are based on the share amounts for Western
plus the historical share amounts for BKLA multiplied by the Conversion Number
of 0.4224. In addition, at the Effective Time, all outstanding options to
purchase shares of BKLA Common Stock under BKLA's stock option plan (each, a
"BKLA Stock Option"), unless otherwise exercised pursuant to Section 10 of
BKLA's stock option plan, shall be converted into the right to receive for each
share of BKLA Common Stock otherwise issuable upon exercise thereof a number of
shares of Western Common Stock equal to the quotient obtained by dividing the
Spread by $42.61 ("Replacement Shares"). As used herein, "Spread" means the
difference, if positive, obtained by subtracting the exercise price of such BKLA
Stock Option from $18.00. After accumulating all such Replacement Shares
issuable to any holder of BKLA Stock Options, any fractional Replacement Shares
issuable to any holder of BKLA Stock Options of 0.2 or above shall be rounded
upwards. Further, at the Effective Time, each outstanding warrant to purchase
shares of BKLA Common Stock under BKLA's warrant agreement (each, a "BKLA
Warrant"), shall be converted into a warrant to acquire, on the same terms and
conditions as were applicable under such BKLA warrant agreement, the number of
shares of Western Common Stock equal to (a) the number of shares of BKLA Common
Stock subject to the BKLA Warrant, multiplied by (b) the Conversion Number (such
product rounded down to the nearest whole number) (a "Replacement Warrant"), at
an exercise price per share (rounded up to the nearest whole cent) equal to (y)
the aggregate exercise price for the shares of BKLA Common Stock which were
purchasable pursuant to such BKLA Warrant divided by (z) the number of full
shares of Western Common Stock subject to such Replacement Warrant in accordance
with the foregoing.

NOTE 2: MERGER COSTS

The unaudited pro forma combined condensed financial data reflects Western
Management's current estimate, for purposes of pro forma presentation, of the
aggregate estimated merger costs of $7,080,000 ($5,400,000 net of taxes,
computed using the combined federal and state tax rate of 41.5%) expected to be
incurred in connection with the Merger. While a portion of these costs may be
required to be recognized over time, the current estimate of these costs has
been recorded in the pro forma combined balance sheets in order to disclose the
aggregate effect of these activities on Western's pro forma combined financial
position. The estimated aggregate costs include the following:

<TABLE>
<CAPTION>
(DOLLARS IN
THOUSANDS)
-----------
<S> <C>
Employee costs.................................................................... $ 1,500
Conversion costs.................................................................. 500
Other costs....................................................................... 2,050
-----------
4,050
Tax effects....................................................................... (1,680)
-----------
2,370
Investment banking and other professional fees.................................... 3,030
-----------
TOTAL ESTIMATED AGGREGATE COSTS............................................... $ 5,400
-----------
-----------
</TABLE>

48
<PAGE>
Western Management's cost estimates are forward-looking. While the costs
represent Western Management's current estimate of merger costs that will be
incurred, the ultimate level and timing of recognition of such costs will be
based on the final merger and integration plan to be completed prior to
consummation of the Merger, which will be developed by various of Western's and
BKLA's task forces and integration committees. Readers are cautioned that the
completion of the merger and integration plan and the resulting management plans
detailing actions to be undertaken to effect the Merger and resultant
integration of operations will impact these estimates; the type and amount of
actual costs incurred could vary materially from these estimates if future
developments differ from the underlying assumptions used by management in
determining the current estimate of these costs.

NOTE 3: PRO FORMA ADJUSTMENTS RELATED TO THE SMB ACQUISITION

The SMB Acquisition was accounted for as a purchase effective on January 27,
1998. Accordingly, Western's balance sheet as of June 30, 1998, reflects such
acquisition. Under this method of accounting, assets and liabilities of Santa
Monica Bank were adjusted to their estimated fair values and combined with the
recorded book values of the assets and liabilities of Western. Applicable income
tax effects of such adjustments are included as a component of Western's net
deferred tax asset with a corresponding offset to goodwill.

The unaudited pro forma combined condensed statements of income for the six
month periods ending June 30, 1998, June 30, 1997 and for the year ended
December 31, 1997 are presented as if the acquisition was consummated at the
beginning of each period. The pro forma combined statements of income for these
periods combine the individual pro forma results of operations of Western, BKLA
and Santa Monica Bank for each period after giving effect to the amortization of
purchase accounting adjustments, the additional equity which was raised by
Western and the reduced interest income resulting from the cash payments made as
part of the SMB Acquisition. The pro forma purchase accounting adjustments for
each period represent the amortization that would have taken place from the
beginning of the period.

For the purposes of the unaudited pro forma combined condensed statement of
income, it is estimated that Western would have earned 5.50% on the $51.2
million cash portion of the SMB Acquisition purchase price during each period,
resulting in approximately $235,000 less interest income for the six month
period ended June 30, 1998, $1,408,000 less interest income for the six month
period ended June 30, 1997 and $2.8 million less interest income for 1997.

Salaries and benefits expense is estimated to be reduced by approximately
$11,000, $66,000 and $131,000 for the six month period ended June 30, 1998, the
six month period ended June 30, 1997 and for the year ended December 31, 1997,
respectively, as a result of the write-off of the unrecognized transition
obligation related to post-retirement health care benefits.

For the year ended December 31, 1997, occupancy, furniture and equipment
expense increased by an estimated $194,000 of depreciation expense related to
the fair market value adjustment of Santa Monica Bank's property, plant and
equipment and by approximately $80,000 related to the amortization of favorable
lease assets, resulting in an approximately $274,000 additional expense. For the
six month periods ended June 30, 1998 and June 30, 1997, this additional expense
is $23,000 and $137,000, respectively.

Goodwill of approximately $119.7 million is amortized on a straight line
basis over 15 years.

Income taxes are estimated to be at a rate of 41.5% of pretax income before
goodwill amortization.

49
<PAGE>

WESTERN--BKLA--PENINSULA

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA

The following unaudited pro forma combined condensed financial data combines (i)
the pro forma consolidated condensed financial statements of Western and BKLA
giving effect to the Merger and (ii) the historical financial statements of
Peninsula, giving effect to the Peninsula Merger as if it had been effective on
June 30, 1998 and December 31, 1997, with respect to the Western-BKLA-Peninsula
Pro Forma Combined Condensed Balance Sheets, and as of the beginning of the
periods indicated, with respect to the Western-BKLA-Peninsula Pro Forma Combined
Condensed Statements of Income. This information is presented under
pooling-of-interests accounting. The unaudited pro forma combined condensed
financial data also combines the historical condensed statements of income of
Santa Monica Bank, acquired by Western on January 27, 1998, in a merger
accounted for under the purchase method of accounting, for the year ended
December 31, 1997 and the six months ended June 30, 1998 and 1997, as if the SMB
Acquisition occurred at the beginning of such periods. The information for the
six months ended June 30, 1998 and 1997 is derived from the unaudited financial
statements of Western, BKLA, Santa Monica Bank and Peninsula, which includes, in
the opinion of the managements of Western, BKLA, Santa Monica Bank and
Peninsula, respectively, all adjustments (consisting only of normal accruals)
necessary to present fairly the data for such periods. This information should
be read in conjunction with the historical consolidated financial statements of
Western, BKLA and Santa Monica Bank, including their respective notes thereto,
which are included or incorporated by reference into this Proxy
Statement-Prospectus, and in conjunction with the combined condensed historical
selected financial data and other pro forma combined financial information of
Western, BKLA, Santa Monica Bank and Peninsula including the notes thereto,
appearing elsewhere in this Proxy Statement-Prospectus. See "INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE". The effect of estimated merger and
reorganization costs expected to be incurred in connection with the Peninsula
Merger has been reflected in the Western-BKLA-Peninsula Unaudited Pro Forma
Combined Condensed Balance Sheets; however, since the estimated costs are
nonrecurring, they have not been reflected in the Western-BKLA-Peninsula
Unaudited Pro Forma Combined Condensed Statements of Income. See Note 2 to the
WESTERN-BKLA-PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA.
The unaudited pro forma combined condensed data does not give effect to any
anticipated operating efficiencies in conjunction with the Peninsula Merger. The
Western-BKLA-Peninsula Unaudited Pro Forma Combined Condensed Balance Sheets are
not necessarily indicative of the actual financial position that would have
existed had the Merger or the Peninsula Merger been consummated on June 30, 1998
or December 31, 1997, or that may exist in the future. The Western-
BKLA-Peninsula Unaudited Pro Forma Combined Condensed Statements of Income are
not necessarily indicative of the results that would have occurred had the
Merger and the Peninsula Merger been consummated on the dates indicated or that
may be achieved in the future. Assuming the consummation of the Merger and the
Peninsula Merger, the actual financial position and results of operations will
differ, perhaps significantly, from the pro forma amounts reflected herein
because of a variety of factors, including changes in value and changes in
operating results between the dates of the unaudited pro forma financial data
and the dates on which the Merger and the Peninsula Merger take place.

50
<PAGE>

WESTERN--BKLA--PENINSULA

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AT
JUNE 30, 1998

<TABLE>
<CAPTION>
WESTERN PENINSULA WESTERN, BKLA
AND BKLA PENINSULA PRO FORMA AND PENINSULA
PRO FORMA (HISTORICAL)(1) ADJUSTMENTS(2) PRO FORMA
------------ ------------- -------------- --------------
<S> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
ASSETS:
Cash and due from banks............................. $ 176,622 $ 33,093 $ -- $ 209,715
Federal funds sold.................................. 191,329 19,500 -- 210,829
------------ ------------- ------- --------------
TOTAL CASH AND CASH EQUIVALENTS................... 367,951 52,593 -- 420,544

Federal Reserve Bank and Federal Home Loan Bank
stock, at cost.................................... 7,250 1,254 -- 8,504
Securities held to maturity......................... 87,188 82,341 -- 169,529
Securities available for sale....................... 218,376 28,023 -- 246,399
------------ ------------- ------- --------------
TOTAL SECURITIES.................................. 312,814 111,618 -- 424,432

Net loans........................................... 1,400,892 240,785 -- 1,641,677
Property, plant and equipment....................... 34,553 11,939 -- 46,492
Other real estate owned............................. 6,491 -- -- 6,491
Goodwill............................................ 151,029 -- -- 151,029
Other assets........................................ 34,467 11,337 2,400 48,204
------------ ------------- ------- --------------
TOTAL ASSETS...................................... $ 2,308,197 $ 428,272 $ 2,400 $ 2,738,869
------------ ------------- ------- --------------
------------ ------------- ------- --------------

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
Non-interest bearing deposits....................... $ 724,713 $ 143,342 $ -- $ 868,055
Interest bearing deposits........................... 1,215,191 253,713 -- 1,468,904
------------ ------------- ------- --------------
TOTAL DEPOSITS.................................... 1,939,904 397,055 -- 2,336,959
Borrowed funds...................................... 28,629 600 -- 29,229
Accrued interest payable and other liabilities...... 22,367 3,359 8,515 34,241
------------ ------------- ------- --------------
TOTAL LIABILITIES................................. 1,990,900 401,014 8,515 2,400,429

SHAREHOLDERS' EQUITY:
Preferred stock..................................... -- -- -- --
Common stock and additional paid in capital......... 294,299 19,017 -- 313,316
Retained earnings................................... 22,928 8,269 (6,115) 25,082
Other comprehensive income (loss)................... 70 (28) -- 42
------------ ------------- ------- --------------
TOTAL SHAREHOLDERS' EQUITY........................ 317,297 27,258 (6,115) 338,440
------------ ------------- ------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........ $ 2,308,197 $ 428,272 $ 2,400 $ 2,738,869
------------ ------------- ------- --------------
------------ ------------- ------- --------------
Number of common shares outstanding(1).............. 17,843.4 2,487.1 20,482.0
Common shareholders' equity per share(1)............ $ 17.78 $ 10.96 $ 16.52
Tangible common shareholders' equity per share(1)... $ 9.32 $ 10.96 $ 9.15
</TABLE>

See "NOTES TO WESTERN-BKLA-PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL DATA".

51
<PAGE>

WESTERN--BKLA--PENINSULA

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AT
DECEMBER 31, 1997

<TABLE>
<CAPTION>
WESTERN PENINSULA PRO WESTERN, BKLA
AND BKLA PENINSULA FORMA AND PENINSULA
PRO FORMA (HISTORICAL)(1) ADJUSTMENTS(2) PRO FORMA
------------ ------------- -------------- --------------
<S> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
ASSETS:
Cash and due from banks............................. $ 120,102 $ 33,615 $ -- $ 153,717
Federal funds sold.................................. 168,257 6,000 -- 174,257
------------ ------------- ------- --------------
TOTAL CASH AND CASH EQUIVALENTS................... 288,359 39,615 -- 327,974

Federal Reserve Bank and Federal Home Loan Bank
stock, at cost.................................... 6,411 1,032 -- 7,443
Securities held to maturity......................... 48,138 86,050 -- 134,188
Securities available for sale....................... 213,398 37,959 -- 251,357
------------ ------------- ------- --------------
TOTAL SECURITIES.................................. 267,947 125,041 -- 392,988

Net loans........................................... 1,004,654 232,198 -- 1,236,852
Property, plant and equipment....................... 16,335 12,059 -- 28,394
Other real estate owned............................. 7,736 259 -- 7,995
Goodwill............................................ 36,369 -- -- 36,369
Other assets........................................ 35,823 9,073 2,400 47,296
------------ ------------- ------- --------------
TOTAL ASSETS...................................... $ 1,657,223 $ 418,245 $ 2,400 $ 2,077,868
------------ ------------- ------- --------------
------------ ------------- ------- --------------

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
Non-interest bearing deposits....................... $ 542,725 $ 121,657 $ -- $ 664,382
Interest bearing deposits........................... 922,080 267,575 -- 1,189,655
------------ ------------- ------- --------------
TOTAL DEPOSITS.................................... 1,464,805 389,232 -- 1,854,037
Borrowed funds...................................... 14,600 600 -- 15,200
Accrued interest payable and other liabilities...... 22,509 3,057 8,515 34,081
------------ ------------- ------- --------------
TOTAL LIABILITIES................................. 1,501,914 392,889 8,515 1,903,318

SHAREHOLDERS' EQUITY:
Preferred stock..................................... -- -- -- --
Common stock........................................ 143,577 19,017 -- 162,594
Retained earnings................................... 11,874 6,407 (6,115) 12,166
Other comprehensive income (loss)................... (142) (68) -- (210)
------------ ------------- ------- --------------
TOTAL SHAREHOLDERS' EQUITY........................ 155,309 25,356 (6,115) 174,550
------------ ------------- ------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........ $ 1,657,223 $ 418,245 $ 2,400 $ 2,077,868
------------ ------------- ------- --------------
------------ ------------- ------- --------------
Number of common shares outstanding(1).............. 12,744.4 2,487.1 15,383.0
Common shareholders' equity per share(1)............ $ 12.19 $ 10.20 $ 11.35
Tangible common shareholders' equity per share(1)... $ 9.33 $ 10.20 $ 8.98
</TABLE>

See "NOTES TO WESTERN-BKLA-PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL DATA".

52
<PAGE>

WESTERN--BKLA--PENINSULA

UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE SIX MONTHS ENDED JUNE 30, 1998

INTEREST EXPENSE:
Interest expense on deposits.......................................... 21,660 4,388 26,048
Interest expense on borrowings........................................ 862 41 903
----------- ------------- -----------
TOTAL INTEREST EXPENSE.............................................. 22,522 4,429 26,951
----------- ------------- -----------
NET INTEREST INCOME:.................................................... 60,836 10,196 71,032
Less: provision for loan and lease losses............................. 380 139 519
----------- ------------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES....... 60,456 10,057 70,513

NON-INTEREST INCOME:
Service charges, commissions and fees................................. 8,800 2,009 10,809
Securities gains...................................................... 204 30 234
Other income.......................................................... 498 428 926
----------- ------------- -----------
TOTAL NON-INTEREST INCOME........................................... 9,502 2,467 11,969

NON-INTEREST EXPENSE:
Salaries and benefits................................................. 21,607 5,106 26,713
Occupancy, furniture and equipment.................................... 6,731 1,301 8,032
Advertising and business development.................................. 722 316 1,038
Other real estate owned............................................... (184) 32 (152)
Professional services................................................. 2,092 133 2,225
Telephone, stationery and supplies.................................... 1,748 369 2,117
Goodwill amortization................................................. 5,463 -- 5,463
Data processing....................................................... 1,135 358 1,493
Customer services cost................................................ 850 648 1,498
Merger costs.......................................................... 429 -- 429
Other................................................................. 3,221 695 3,916
----------- ------------- -----------
TOTAL NON-INTEREST EXPENSE.......................................... 43,814 8,958 52,772
----------- ------------- -----------
Income before income taxes.............................................. 26,144 3,566 29,710
Income taxes............................................................ 12,719 1,337 14,056
----------- ------------- -----------
NET INCOME.......................................................... $ 13,425 $ 2,229 $ 15,654
----------- ------------- -----------
----------- ------------- -----------
PER SHARE INFORMATION(1):
Number of shares (weighted average)
Basic............................................................... 17,668.1 2,487.1 20,306.7
Diluted............................................................. 18,136.8 2,487.1 20,775.4
Income per share
Basic............................................................... $ 0.76 $ 0.90 $ 0.77
Diluted............................................................. $ 0.74 $ 0.90 $ 0.75
</TABLE>

See "NOTES TO WESTERN--BKLA--PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL DATA".

53
<PAGE>

WESTERN--BKLA--PENINSULA

UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE SIX MONTHS ENDED JUNE 30, 1997

INTEREST EXPENSE:
Interest expense on deposits.......................................... 22,251 3,963 26,214
Interest expense on borrowings........................................ 821 29 850
----------- ------------- -----------
TOTAL INTEREST EXPENSE.............................................. 23,072 3,992 27,064
----------- ------------- -----------
NET INTEREST INCOME:.................................................... 54,745 8,707 63,452
Less: provision for loan and lease losses............................. 1,810 325 2,135
----------- ------------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES....... 52,935 8,382 61,317

NON-INTEREST INCOME:
Service charges and fees.............................................. 7,856 1,620 9,476
Gain on sale of loans and other assets................................ 78 -- 78
Securities gains...................................................... 342 5 347
Other income.......................................................... 915 434 1,349
----------- ------------- -----------
TOTAL NON-INTEREST INCOME........................................... 9,191 2,059 11,250

NON-INTEREST EXPENSE:
Salaries and benefits................................................. 21,982 4,310 26,292
Occupancy, furniture and equipment.................................... 6,904 1,128 8,032
Advertising and business development.................................. 1,109 296 1,405
Other real estate owned............................................... (436) 61 (375)
Professional services................................................. 2,927 148 3,075
Telephone, stationery and supplies.................................... 1,913 334 2,247
Goodwill amortization................................................. 5,361 -- 5,361
Data processing....................................................... 852 343 1,195
Customer services cost................................................ 631 427 1,058
Merger costs.......................................................... 3,470 -- 3,470
Other................................................................. 4,922 677 5,599
----------- ------------- -----------
TOTAL NON-INTEREST EXPENSE.......................................... 49,635 7,724 57,359
----------- ------------- -----------
Income before income taxes.............................................. 12,491 2,717 15,208
Income taxes............................................................ 7,201 1,044 8,245
----------- ------------- -----------
NET INCOME.......................................................... $ 5,290 $ 1,673 $ 6,963
----------- ------------- -----------
----------- ------------- -----------
PER SHARE INFORMATION(1):
Number of shares (weighted average)
Basic............................................................... 16,682.0 2,487.1 19,320.6
Diluted............................................................. 17,136.0 2,487.1 19,774.6
Income per share
Basic............................................................... $ 0.32 $ 0.67 $ 0.36
Diluted............................................................. $ 0.31 $ 0.67 $ 0.35
</TABLE>

See "NOTES TO WESTERN--BKLA--PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL DATA".

54
<PAGE>

WESTERN--BKLA--PENINSULA

UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1997

INTEREST EXPENSE:
Interest expense on deposits.......................................... 46,524 8,527 55,051
Interest expense on borrowings........................................ 1,536 73 1,609
----------- ------------- -----------
TOTAL INTEREST EXPENSE.............................................. 48,060 8,600 56,660
----------- ------------- -----------
NET INTEREST INCOME:.................................................... 114,380 18,433 132,813
Less: provision for loan and lease losses............................. 3,210 498 3,708
----------- ------------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES....... 111,170 17,935 129,105

NON-INTEREST INCOME:
Service charges, commissions and fees................................. 15,838 3,296 19,134
Gain on sale of loans and other assets................................ 78 -- 78
Securities gains...................................................... 355 60 415
Other income.......................................................... 2,077 798 2,875
----------- ------------- -----------
TOTAL NON-INTEREST INCOME........................................... 18,348 4,154 22,502

NON-INTEREST EXPENSE:
Salaries and benefits................................................. 44,355 9,253 53,608
Occupancy, furniture and equipment.................................... 14,046 2,557 16,603
Advertising and business development.................................. 2,224 690 2,914
Other real estate owned............................................... (276) 114 (162)
Professional services................................................. 5,532 238 5,770
Telephone, stationery and supplies.................................... 3,714 685 4,399
Goodwill amortization................................................. 10,761 -- 10,761
Data processing....................................................... 1,783 705 2,488
Customer services cost................................................ 1,528 955 2,483
Merger related costs.................................................. 15,253 -- 15,253
Other................................................................. 8,558 1,583 10,141
----------- ------------- -----------
TOTAL NON-INTEREST EXPENSE.......................................... 107,478 16,780 124,258
----------- ------------- -----------
Income before income taxes.............................................. 22,040 5,309 27,349
Income taxes............................................................ 13,948 1,708 15,656
----------- ------------- -----------
NET INCOME.......................................................... $ 8,092 $ 3,601 $ 11,693
----------- ------------- -----------
----------- ------------- -----------
PER SHARE INFORMATION(1):
Number of shares (weighted average)
Basic............................................................... 16,860.1 2,487.1 19,498.7
Diluted............................................................. 17,289.0 2,487.1 19,927.6
Income per share
Basic............................................................... $ 0.48 $ 1.45 $ 0.60
Diluted............................................................. $ 0.47 $ 1.45 $ 0.59
</TABLE>

See "NOTES TO WESTERN--BKLA--PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL DATA".

55
<PAGE>

WESTERN--BKLA--PENINSULA

UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1996

INTEREST EXPENSE:
Interest expense on deposits.......................................... 24,212 7,689 31,901
Interest expense on borrowings........................................ 1,186 77 1,263
----------- ------------- -----------
TOTAL INTEREST EXPENSE.............................................. 25,398 7,766 33,164
----------- ------------- -----------
NET INTEREST INCOME:.................................................... 59,400 16,279 75,679
Less: provision for loan and lease losses............................. 1,768 566 2,334
----------- ------------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES....... 57,632 15,713 73,345

NON-INTEREST INCOME:
Service charges, commissions and fees................................. 8,451 3,149 11,600
Gain on sale of loans and other assets................................ 665 -- 665
Securities gains...................................................... 276 -- 276
Other income.......................................................... 1,520 542 2,062
----------- ------------- -----------
TOTAL NON-INTEREST INCOME........................................... 10,912 3,691 14,603

NON-INTEREST EXPENSE:
Salaries and benefits................................................. 26,424 8,247 34,671
Occupancy, furniture and equipment.................................... 8,955 2,223 11,178
Advertising and business development.................................. 1,479 559 2,038
Other real estate owned............................................... (66) 144 78
Professional services................................................. 6,526 210 6,736
Telephone, stationery and supplies.................................... 2,547 629 3,176
Goodwill amortization................................................. 1,123 -- 1,123
Data processing....................................................... 1,064 605 1,669
Customer services cost................................................ 510 894 1,404
Other................................................................. 6,336 962 7,298
----------- ------------- -----------
TOTAL NON-INTEREST EXPENSE.......................................... 54,898 14,473 69,371
----------- ------------- -----------
Income before income taxes.............................................. 13,646 4,931 18,577
Income taxes............................................................ 3,656 1,877 5,533
----------- ------------- -----------
NET INCOME.......................................................... $ 9,990 $ 3,054 $ 13,044
----------- ------------- -----------
----------- ------------- -----------
PER SHARE INFORMATION(1):
Number of shares (weighted average)
Basic............................................................... 9,022.9 2,487.1 11,661.5
Diluted............................................................. 9,294.2 2,487.1 11,932.8
Income per share
Basic............................................................... $ 1.11 $ 1.23 $ 1.12
Diluted............................................................. $ 1.07 $ 1.23 $ 1.09
</TABLE>

See "NOTES TO WESTERN--BKLA--PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL DATA".

56
<PAGE>

WESTERN--BKLA--PENINSULA

UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
WESTERN,
WESTERN AND BKLA AND
BKLA PENINSULA PENINSULA
PRO FORMA (HISTORICAL)(1) PRO FORMA
----------- ------------- -----------
<S> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INTEREST INCOME:
Interest and fees on loans and leases................................. $ 53,822 $ 17,505 $ 71,327
Interest on interest bearing deposits in other banks.................. 45 85 130
Interest on investment securities..................................... 12,301 3,805 16,106
Interest on federal funds sold........................................ 3,280 348 3,628
----------- ------------- -----------
TOTAL INTEREST INCOME............................................... 69,448 21,743 91,191
INTEREST EXPENSE:
Interest expense on deposits.......................................... 20,709 7,025 27,734
Interest expense on borrowings........................................ 947 70 1,017
----------- ------------- -----------
TOTAL INTEREST EXPENSE.............................................. 21,656 7,095 28,751
----------- ------------- -----------
NET INTEREST INCOME:.................................................... 47,792 14,648 62,440
Less: provision for loan and lease losses............................. 8,253 470 8,723
----------- ------------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES....... 39,539 14,178 53,717
NON-INTEREST INCOME:
Service charges, commissions and fees................................. 7,308 2,651 9,959
Gain on sale of loans and other assets................................ 263 -- 263
Securities gains (losses)............................................. (738) 32 (706)
Other income.......................................................... 1,871 482 2,353
----------- ------------- -----------
TOTAL NON-INTEREST INCOME........................................... 8,704 3,165 11,869
NON-INTEREST EXPENSE:
Salaries and benefits................................................. 22,373 7,240 29,613
Occupancy, furniture and equipment.................................... 8,819 2,005 10,824
Advertising and business development.................................. 1,327 452 1,779
Other real estate owned............................................... 3,104 450 3,554
Professional services................................................. 3,723 277 4,000
Telephone, stationery and supplies.................................... 2,591 512 3,103
Goodwill amortization................................................. 841 -- 841
Lower of cost or market adjustment on loans available for sale........ 756 -- 756
Data processing....................................................... 822 499 1,321
Customer services cost................................................ 184 690 874
Other................................................................. 6,579 1,255 7,834
----------- ------------- -----------
TOTAL NON-INTEREST EXPENSE.......................................... 51,119 13,380 64,499
----------- ------------- -----------
Income (loss) before income taxes....................................... (2,876) 3,963 1,087
Income taxes (benefits)................................................. (1,733) 1,421 (312)
----------- ------------- -----------
NET INCOME (LOSS)................................................... $ (1,143) $ 2,542 $ 1,399
----------- ------------- -----------
----------- ------------- -----------
PER SHARE INFORMATION(1):
Number of shares (weighted average)
Basic............................................................... 6,916.7 2,487.1 9,555.3
Diluted............................................................. 7,134.4 2,487.1 9,773.0
Income (loss) per share
Basic............................................................... $ (0.17) $ 1.02 $ 0.15
Diluted............................................................. $ (0.17) $ 1.02 $ 0.14
</TABLE>

See "NOTES TO WESTERN--BKLA--PENINSULA UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL DATA".

57
<PAGE>

NOTES TO WESTERN--BKLA--PENINSULA UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL DATA

NOTE 1: BASIS OF PRESENTATION

The accompanying Western--BKLA--Peninsula unaudited pro forma combined
condensed financial data combines (i) the pro forma consolidated condensed
financial statements of Western and BKLA giving effect to the Merger and (ii)
the historical financial statements of Peninsula giving effect to the Peninsula
Merger as if it had been effective on June 30, 1998 and December 31, 1997 with
respect to the Western-- BKLA--Peninsula Pro Forma Combined Condensed Balance
Sheets, and as of the beginning of the periods indicated with respect to the
Western--BKLA--Peninsula Pro Forma Combined Statements of Income. The
combination of the Western and BKLA pro forma financial statements with the
historical financial statements of Peninsula is presented under the
pooling-of-interests accounting method.

Certain historical data of Peninsula have been reclassified on a pro forma
basis to conform to Western's classifications. Transactions between Western and
Peninsula are not material in relation to the unaudited pro forma combined
financial statements and have not been eliminated from the pro forma combined
amounts. The unaudited pro forma number of common shares outstanding, common
shareholders' equity per share, number of shares (basic and diluted) and income
(loss) per share (basic and diluted) are based on the share amounts for Western
and BKLA pro forma plus the historical share amounts for Peninsula multiplied by
an estimated Peninsula Conversion Number of 1.061, the approximate mid point of
the price range used to determine the exchange ratio.

NOTE 2: MERGER COSTS

The Western--BKLA--Peninsula unaudited pro forma combined condensed
financial data reflects Western Management's current estimate, for purposes of
pro forma presentation, of the aggregate estimated merger costs of $8,515,000
($6,115,000 net of taxes, computed using the combined federal and state tax rate
of 41.5%) expected to be incurred in connection with the Peninsula Merger. While
a portion of these costs may be required to be recognized over time, the current
estimate of these costs has been recorded in the pro forma combined balance
sheets in order to disclose the aggregate effect of these activities on
Western's pro forma combined financial position. The estimated aggregate costs
include the following:

<TABLE>
<CAPTION>
(DOLLARS IN
THOUSANDS)
---------------------
<S> <C>
Employee costs.......................................................... $ 1,500
Conversion costs........................................................ 1,000
Other costs............................................................. 3,300
-------
5,800
Tax effects............................................................. (2,400)
-------
3,400
Investment banking and other professional fees.......................... 2,715
-------
TOTAL ESTIMATED AGGREGATE COSTS..................................... $ 6,115
-------
-------
</TABLE>

Western Management's cost estimates are forward-looking. While the costs
represent Western Management's current estimate of merger costs that will be
incurred, the ultimate level and timing of recognition of such costs will be
based on the final merger and integration plan to be completed prior to
consummation of the Peninsula Merger, which will be developed by various of
Western's and Peninsula's task forces and integration committees. Readers are
cautioned that the completion of the merger and integration plan and the
resulting management plans detailing actions to be undertaken to effect the
Merger and resultant integration of operations will impact these estimates; the
type and amount of actual costs incurred could vary materially from these
estimates if future developments differ from the underlying assumptions used by
management in determining the current estimate of these costs.

58
<PAGE>
THE SPECIAL MEETING OF BKLA SHAREHOLDERS

GENERAL

This Proxy Statement-Prospectus is furnished in connection with the
solicitation by the BKLA Board of proxies representing BKLA Common Stock to be
voted at the BKLA Meeting to be held on September 23, 1998, and at any
postponement or adjournment thereof. This Proxy Statement-Prospectus and
accompanying proxy card are first being mailed to BKLA Shareholders on or about
August 18, 1998.

MATTERS TO BE CONSIDERED AT THE BKLA SPECIAL MEETING

The purpose of the BKLA Meeting is to (a) consider and vote upon the
principal terms of the Merger; (b) set the number of directors at nine, and
consider and approve the election of nine directors to hold office until the
merger is consummated or, if the Merger is not consummated, until the next
annual meeting of BKLA and until their successors have been elected and duly
qualified; (c) ratify the appointment of Vavrinek as BKLA's independent public
accountants; and (d) transact such other business as may properly come before
the BKLA Meeting or any adjournments or postponements thereof.

Based upon (a) the 4,911,256 shares of BKLA Common Stock outstanding on the
BKLA Record Date, (b) the 322,850 shares of BKLA Common Stock reserved for
issuance upon exercise of employee and director stock options to acquire BKLA
Common Stock outstanding on the BKLA Record Date and (c) the 506,974 shares of
BKLA Common Stock reserved for issuance upon exercise of warrants to acquire
BKLA Common Stock outstanding on the BKLA Record Date and assuming no
Dissenters' Rights are perfected by BKLA Shareholders and no cash is paid in
lieu of fractional shares, (i) in the event that no options, warrants or other
rights outstanding are exercised prior to the Effective Date, 2,156,468 shares
of Western Common Stock would be issued in the Merger, and (ii) in the event
that all options, warrants and rights outstanding are exercised prior to the
Effective Date, 2,425,033 shares of Western Common Stock would be issued in the
Merger. Based upon the 15,704,753 shares of Western Common Stock outstanding on
the BKLA Record Date, the 404,973 shares of Western Common Stock reserved for
issuance upon the exercise of employee and director stock options to acquire
Western Common Stock on the BKLA Record Date and the 140,675 shares of Western
Common Stock reserved for issuance upon the exercise of warrants to acquire
Western Common Stock outstanding on the BKLA Record Date, and assuming no
Dissenters' Rights are perfected by BKLA Shareholders, and no cash is paid in
lieu of fractional shares: (i) in the event that no options, warrants or other
rights outstanding of BKLA and Western Common Stock are exercised prior to the
Effective Date, shares held by BKLA Shareholders after consummation of the
Merger would represent 12.1% of Western Common Stock, and (ii) in the event that
all options, warrants and rights outstanding of BKLA and Western Common Stock
are exercised prior to the Effective Date, shares held by BKLA Shareholders
after consummation of the Merger, would represent 13.0% of Western Common Stock.
Consummation of the Merger is subject to satisfaction of a number of conditions,
including the receipt of various regulatory approvals for the Merger, and the
approval of the principal terms of the Merger by BKLA Shareholders. See "MERGER
AGREEMENT--Conditions".

The Merger Agreement provides, among other things, that Adriana M. Boeka
will be appointed to the Western Board at the time the Merger is consummated.
Accordingly, at the Effective Time, the Western Board will adopt resolutions
increasing the number of Western directors by one and appoint Ms. Boeka to fill
the vacancy created thereby. The directors and certain officers of BKLA as
specified by Western will be required to resign, effective upon consummation of
the Merger. See "THE MERGER--Certain Effects of the Merger". In the event that
the Merger is not consummated as contemplated, all directors of BKLA elected at
the BKLA Meeting will continue to serve as directors of BKLA until the next
annual meeting of BKLA and until their successors have been elected and duly
qualified.

59
<PAGE>
THE BKLA RECORD DATE

The BKLA Board has fixed the close of business on July 27, 1998 as the BKLA
Record Date for the determination of the BKLA Shareholders entitled to receive
notice of, and to vote at, the BKLA Meeting. Only holders of record of shares of
BKLA Common Stock at the close of business on the BKLA Record Date will be
entitled to notice of, and to vote at, the BKLA Meeting and any postponements or
adjournments thereof. On the BKLA Record Date, 4,911,256 shares of BKLA Common
Stock were issued and outstanding.

VOTES REQUIRED AND VOTING OF PROXIES

In advance of the BKLA Meeting, the BKLA Board will appoint three persons,
other than nominees for office, as inspectors of the election, whose duties will
be those set forth in Section 707 of the CGCL, among which are determining the
shares represented at the meeting, determining the existence of a quorum,
determining the authenticity, validity and effect of proxies, and counting and
tabulating all votes or consents as to all matters presented to the BKLA
Shareholders. A majority of all shares of BKLA Common Stock entitled to vote,
represented in person or by proxy, constitutes a quorum. Abstentions will each
be included in the determination of the number of shares present; however, they
will not be counted as votes in favor of the principal terms of the Merger.
Subject to the cumulative voting rights described below with respect to the
election of directors, each share of BKLA Common Stock held of record will be
entitled to one vote upon each matter properly submitted to the BKLA
Shareholders at the BKLA Meeting and any postponement or adjournment thereof.

Under applicable California law, shareholders are not entitled to cumulate
votes for a candidate for election as director unless that candidate's name has
been placed in nomination prior to the voting and the shareholder has given
notice at the meeting, prior to the voting, of the shareholder's intention to
cumulate the shareholder's votes. Cumulative voting permits a shareholder to
give one candidate a number of votes equal to the number of directors to be
elected, multiplied by the number of votes to which the shareholder's shares are
entitled, or to distribute such votes on the same principle among as many
candidates as the shareholder thinks fit.

The affirmative vote of the holders of at least a majority of the total
number of outstanding shares of BKLA Common Stock entitled to vote at the BKLA
Meeting is required to approve the principal terms of the Merger. The failure to
vote, an abstention or a broker non-vote thus has the same effect as a vote
against the principal terms of the Merger.

Each share of BKLA Common Stock represented by a proxy properly executed and
received by BKLA in time to be voted at the BKLA Meeting and not revoked will be
voted in accordance with the instructions indicated on such proxy and, if no
instructions are indicated, will be voted "FOR" the proposal to approve the
principal terms of the Merger and, in the case of the election of directors of
BKLA, equally "FOR" each of the nine candidates for the office of director of
BKLA named in this Proxy Statement-Prospectus; however, if sufficient numbers of
BKLA Shareholders exercise cumulative voting rights to elect one or more
candidates, the named proxies will determine the number of directors they are
entitled to elect, such number from the named candidates, cumulate their votes,
and cast their votes for each candidate among the number they are entitled to
elect. All proxies voted "FOR" such matters, including proxies on which no
instructions are indicated, may, at the discretion of the proxy-holder, be voted
"FOR" a motion to adjourn or postpone the BKLA Meeting to another time and/or
place for the purpose of soliciting additional proxies or otherwise. Any proxy
that is voted against approval of the principal terms of the Merger or on which
the relevant BKLA Shareholder specifically abstains from voting with respect to
such approval will not be voted in favor of any such adjournment or
postponement.

The BKLA Board is not currently aware of any business to be acted upon at
the BKLA Meeting other than as described herein. If, however, other matters are
properly brought before the BKLA Meeting, persons appointed as proxies will have
discretion to vote or act thereon in their best judgment.

60
<PAGE>

Certain BKLA Shareholders, all of whom are directors or trustee for estates
of former directors of BKLA, holding approximately 18.0% of BKLA Common Stock
outstanding on the BKLA Record Date have agreed, among other things, to vote
"FOR" the adoption and approval of the Merger Agreement and the Merger. However,
the shareholder/directors are bound by the Shareholder Agreements only in their
capacity as shareholders. As directors, they are bound by their fiduciary duties
to act in the best interest of Peninsula when they decide whether to approve the
Merger. See "THE SHAREHOLDER AGREEMENTS".

If a quorum is not obtained, or fewer shares of BKLA Common Stock are voted
in favor of the principal terms of the Merger than the number required for
approval of the principal terms of the Merger, in accordance with Section 602 of
the CGCL, it is expected that the BKLA Meeting will be postponed or adjourned
for the purpose of allowing additional time to obtain additional proxies or
votes, and at any subsequent reconvening of the BKLA Meeting, all proxies will
be voted in the same manner as such proxies would have been voted at the
original convening of the BKLA Meeting (except for any proxies that have
theretofore effectively been revoked or withdrawn).

SOLICITATION OF PROXIES

The cost of soliciting proxies relating to the BKLA Meeting will be paid by
BKLA. In addition to solicitation of proxies by the use of mail, directors,
officers and employees of BKLA and its subsidiaries may solicit proxies from
BKLA Shareholders personally or by telephone or telegram without additional
remuneration therefor. BKLA also will provide persons, firms, banks and
corporations holding shares in their names or in the names of nominees, which in
any case are beneficially owned by others, with proxy materials for transmittal
to such beneficial owners and will reimburse such record owners for their
expenses of doing so.

REVOCABILITY OF PROXIES

The presence of a BKLA Shareholder at the BKLA Meeting (or at any
postponement or adjournment thereof) will not automatically revoke such BKLA
Shareholder's proxy. However, a BKLA Shareholder may revoke a proxy at any time
prior to its exercise by (a) delivery to the Secretary of BKLA of a written
notice of revocation prior to or at the BKLA Meeting (or, if the BKLA Meeting is
adjourned or postponed, prior to or at the time the adjourned or postponed
meeting is actually held); (b) delivery to the Secretary of BKLA prior to or at
the BKLA Meeting (or, if the BKLA Meeting is adjourned or postponed, prior to or
at the time the adjourned or postponed meeting is actually held) of a duly
executed proxy bearing a later date; or (c) attending the BKLA Meeting (or, if
the BKLA Meeting is adjourned or postponed, by attending the adjourned or
postponed meeting) and voting in person thereat. Any written revocation of proxy
or other related communications should be addressed to Beverly A. Dyck, Vice
President and Corporate Secretary, 8901 Santa Monica Boulevard, West Hollywood,
California 90069.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF BKLA

As of the BKLA Record Date, the directors and officers of BKLA beneficially
held, in the aggregate, the ability to direct the voting with respect to 703,520
shares of BKLA Common Stock, comprising approximately 14.3% of the voting power
of the BKLA Common Stock outstanding. The directors and executive officers of
BKLA have informed BKLA that they intend to vote their shares of BKLA Common
Stock for the approval of the principal terms of the Merger.

The following table reflects as of the BKLA Record Date the beneficial
ownership of BKLA Common Stock, including stock options that will become
exercisable within 60 days, by BKLA's directors, executive officers and
shareholders known to BKLA to be holding more than 5% of such stock, and by
BKLA's directors and officers as a group.

61
<PAGE>

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENTAGE OF CLASS
NAME AND TITLE OWNERSHIP(1) BENEFICIALLY OWNED(2)
- -------------------------------------------------------------------- ---------------------- -----------------------
<S> <C> <C>
Adriana M. Boeka.................................................... Shares 39,175 1.8%
Chairman of the Board of Directors Warrants 17,365
Options 31,000
Total 87,540

Alix Truax, as Trustee for the...................................... Shares 181,091 5.9%
1998 Morry J. Burford Revocable Trust(3) Warrants 79,842
3050 Crestview Drive South Options 37,500
Salem, Oregon 97302 Total 298,433

Mary Anne Chalker................................................... Shares 12,585 0.4%
Director Warrants 500
Options 7,800
Total 20,885

Roy Doumani......................................................... Shares 97,913 2.1%
Director Options 6,000
Total 103,913

John J. Feldman..................................................... Shares 81,750 3.1%
Director, President and Chief Executive Officer Options 75,000
Total 156,750

Rickey M. Gelb...................................................... Shares 73,000 1.6%
Director Options 6,000
Total 79,000

John R. Newhouse.................................................... Shares 144,883 3.1%
Director and Senior Vice President, Business Development Options 6,000
Total 150,883

James V. Reimann(4)................................................. Shares 97,239 2.9%
Director Warrants 42,967
Options 6,000
Total 146,206

Melvin F. Shaw...................................................... Shares 76,475 1.7%
Director Options 6,000
Total 82,475

Burton N. Sterman................................................... Shares 72,950 1.6%
Director Options 6,000
Total 78,950

Robert G. Jacobsen.................................................. Shares 1,550 0.5%
Executive Vice President and Chief Credit Officer Warrants 100
Options 22,750
Total 24,400

Wendy R. Moskal..................................................... Shares(5) 6,000 0.6%
Executive Vice President and Chief Operating Officer Options 24,000
Total 30,000
</TABLE>

62
<PAGE>

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENTAGE OF CLASS
NAME AND TITLE OWNERSHIP(1) BENEFICIALLY OWNED(2)
- -------------------------------------------------------------------- ---------------------- -----------------------
<S> <C> <C>
All directors and executive officers as a group
(11 persons)(6)................................................... Shares 703,520 18.6%
Warrants 60,932
Options 196,550
Total 961,002
</TABLE>

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

(1) The term "Beneficial Owner" includes any person who, directly or indirectly,
through any contract, arrangement, understanding, relationship, or otherwise
has or shares: (a) voting power, which includes the power to vote, or to
direct the voting power, of such security; and/or (b) investment power,
which includes the power to dispose, or to direct the disposition of, such
security. The term "beneficial owner" also includes any person who has the
right to acquire beneficial ownership of such security as defined above
within 60 days of the BKLA Record Date. Ownership includes stock options and
warrants exercisable within 60 days of the BKLA Record Date. Except as
disclosed in notes 3 through 5, all shares held by directors, executive
officers and shareholders are with their sole investment power.

(2) In computing the percentage of shares beneficially owned, the number of
shares which the person or group has the right to acquire within 60 days of
the BKLA Record Date are deemed outstanding for the purposes of computing
the percentage of BKLA Common Stock beneficially owned by such person or
group, but are not deemed outstanding for the purpose of computing the
percentage of shares beneficially owned by any other person.

(3) The 1998 Morry J. Burford Revocable Trust was set up for Maurice J. Burford
who died on May 6, 1998. On that date, all of the shares of BKLA Common
Stock, vested options and warrants owned by Mr. Burford were transferred to
the 1998 Morry J. Burford Revocable Trust. Upon Mr. Burford's death all
unvested options terminated pursuant to BKLA's stock option plan resulting
in the termination of 37,500 unvested options. Alix Truax, Trustee of the
Trust, has all voting rights for the Trust. Ms. Truax's spouse, Mike Truax,
owns 10,331 shares of Common Stock with Rob Douglas. Ms. Truax's daughter,
Catherine Kitzmiller, owns 15,727 shares of Common Stock and 6,086 Warrants
to acquire BKLA Common Stock.

(4) Mr. Reimann has 51% ownership in Vintage Investment Group, which owns 74,002
shares of BKLA Common Stock and 33,111 warrants to acquire BKLA Common
Stock. Mr. Reimann's spouse, Beverly Reimann, owns 10,575 shares of BKLA
Common Stock and 3,525 warrants to acquire BKLA Common Stock.

(5) The 6,000 shares are held in joint tenancy with John W. Moskal.

(6) Does not include shares held by the 1998 Morry J. Burford Revocable Trust,
which is controlled by Alix Truax who is neither a director nor an executive
officer. If the trust's shares, warrants and options were to be combined and
added to the totals, the sums would be 884,611, 140,774 and 234,050,
respectively, for a total of 1,259,435, and a combined percentage of class
beneficially owned of 23.8%.

DISSENTERS' RIGHTS

If the principal terms of the Merger are approved by the BKLA Shareholders,
holders of BKLA Common Stock who elect to dissent from the approval of the
principal terms of the Merger may be entitled to have their shares purchased in
accordance with Chapter 13 of the CGCL. IN ORDER FOR A BKLA SHAREHOLDER TO
EXERCISE DISSENTERS' RIGHTS, A NOTICE OF SUCH SHAREHOLDER'S INTENTION TO
EXERCISE HIS OR HER DISSENTERS' RIGHTS AS PROVIDED IN THE CGCL MUST BE SENT BY
SUCH SHAREHOLDER AND RECEIVED BY BKLA ON OR BEFORE THE DATE OF THE BKLA MEETING,
AND ANY SUCH SHAREHOLDER MUST VOTE AGAINST THE APPROVAL OF THE PRINCIPAL TERMS
OF THE MERGER AND COMPLY WITH SUCH OTHER PROCEDURES AS REQUIRED BY THE CGCL, AS
MORE

63
<PAGE>
FULLY DESCRIBED BELOW IN "THE MERGER--DISSENTERS' RIGHTS". FAILURE TO SEND SUCH
NOTICE, TO VOTE AGAINST THE PRINCIPAL TERMS OF THE MERGER OR TO FOLLOW SUCH
OTHER PROCEDURES WILL RESULT IN A WAIVER OF SUCH SHAREHOLDER'S DISSENTERS'
RIGHTS. See "SUMMARY--Dissenters' Rights" and "THE MERGER--Dissenters' Rights"
for a discussion of Dissenters' Rights and a description of the procedures that
must be followed to perfect such rights.

ELECTION OF BKLA DIRECTORS

The persons named below have been nominated for election to serve as
directors of BKLA. In the event that the Merger is not consummated, all
directors of BKLA elected at the BKLA Meeting will continue to serve as
directors of BKLA until the next annual meeting of BKLA and until their
successors have been elected and duly qualified.

The bylaws of BKLA currently provide that nominations for election of
members of the BKLA Board may be made by the BKLA Board or by any shareholder of
any outstanding class of voting stock of BKLA entitled to vote for the election
of directors. Notice of intention to make any nominations, other than by the
BKLA Board, shall be made in writing and shall be received by the President and
Chief Executive Officer of BKLA no more than 60 days prior to any meeting of
Shareholders called for the election of directors, no more than ten days after
the date the notice of such meeting is sent to shareholders pursuant to Section
2.2 of BKLA's bylaws, and not later than the time fixed in the notice of the
BKLA meeting for the opening of the BKLA meeting. Notification shall contain the
following information to the extent known to the notifying shareholder: (a) the
name and address of each proposed nominee; (b) the principal occupation of each
proposed nominee; (c) the number of shares of voting stock of BKLA owned by each
proposed nominee; (d) the name and residence address of the notifying
shareholder; and (e) the number of shares of voting stock of BKLA owned by the
notifying shareholder. Nominations made without nominee information may be
disregarded by the Chairman of the meeting, and the election inspectors shall
disregard all votes cast for each nominee. See "--Votes Required and Voting of
Proxies".

The following table sets forth information concerning BKLA's nominees for
directors:

<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR
NAME TITLE AGE APPOINTED
- --------------------------------- ---------------------------------- ----------- ----------------
<S> <C> <C> <C>
Adriana M. Boeka................. Chairman of the Board 47 1996
Mary Anne Chalker................ Director 68 1981
Roy Doumani...................... Director 62 1996
John J. Feldman.................. President/CEO and Director 66 1997
Rickey M. Gelb................... Director 53 1997
John R. Newhouse................. Senior Vice President/Director 43 1998
James V. Reimann................. Director 58 1995
Melvin F. Shaw................... Director 62 1997
Burton N. Sterman................ Director 65 1997
</TABLE>

Adriana M. Boeka. Chairman of the Board since May 6, 1998. Vice Chairman of
BKLA from October 1997 to May 1998. Principal of Manex Group, a business and
management consulting corporation from 1995 to present; Senior Vice
President/Division Manager at Union Bank of California from 1987 to 1995.

Mary Anne Chalker. Board member of BKLA since inception in 1981; Insurance
Broker and President of LFC Insurance Brokers & Agents, Inc. from 1950 to
present.

Roy Doumani. Former Chairman of the Board of WTB from 1982 to 1995;
currently Mr. Doumani is retired and is a private investor.

64
<PAGE>

John J. Feldman. President and Chief Executive Officer of BKLA from April
1997 to the present; President and Chief Executive Officer from August 1993 to
March 1997 of AWB.

Rickey M. Gelb. General Partner of Gelb Enterprises a real estate and
property management company since 1955.

John R. Newhouse. Senior Vice President/Business Development of BKLA from
January 1998 to present; President/Chief Executive Officer of CNB from January
1991 to December 1997.

James V. Reimann. Board member of BKLA since 1995; President of Reimann
Associates, a real estate development and sales company since December 1987;
President of Pacific Management Company, a real estate management company; and
Director of R.B. Rubber since 1995.

Melvin F. Shaw. President and Chief Executive Officer of Accounts Receivable
and Resource Management Company from 1968 to present.

Burton N. Sterman. Certified Public Accountant with Brown & Sterman,
Accountancy Corporation for the past 26 years.

CERTAIN COMMITTEES OF THE BKLA BOARD

BKLA has no Nominating Committee. The procedures for nominating directors,
other than by the BKLA Board itself, are set forth in BKLA's bylaws.

The Audit Committee of BKLA is chaired by Mary Anne Chalker, and includes as
current members, directors Mary Anne Chalker, James V. Reimann and Burton N.
Sterman. The Audit Committee meets every other month and met six times during
1997. The purpose of the Audit Committee is to review audit reports generated by
R. Maslac Associates and Vavrinek, outside consulting firms. In addition, the
Audit Committee reviews all internal audits and examinations and management's
response. It is also the responsibility of this Committee to recommend to BKLA's
Board the appointment of independent auditors and to meet with these auditors
for the review of the audit of the financial statements.

The BKLA Compensation/Stock Option Committee was chaired by Maurice J.
Burford until his death on May 6, 1998. Roy Doumani and James V. Reimann are the
remaining two committee members. The Compensation/Stock Option Committee meets
on an as-needed basis and met three times during 1997. The Compensation/Stock
Option Committee is responsible for setting the compensation for the Chief
Executive Officer and awarding stock options to all employees and directors. The
Compensation/Stock Option Committee answers to the BKLA Board, and
recommendations from this Committee are submitted to the BKLA Board for
ratification or approval.

During 1997, the Board of Directors of BKLA met twelve times. Each of the
persons who is a current member of the Board of Directors of BKLA, and was
serving as a member of BKLA Board in 1997, attended at least 75% of the
aggregate of (i) the total number of meetings of BKLA's Board held during the
time such a person was a director and (ii) the total number of meetings held by
all committees of the BKLA Board during the time such person served on such
committees.

BKLA DIRECTOR COMPENSATION

BKLA outside directors are compensated $500 for each meeting of the BKLA
Board. In addition, outside directors are compensated $150 for each committee
meeting attended that is not held on the day of the monthly BKLA Board meeting.

65
<PAGE>
BKLA EXECUTIVE OFFICERS

The following table sets forth, as to each of the persons who currently
serves as an Executive Officer of BKLA, such person's age, position with BKLA,
and the period during which the person has served in such position:

COMPENSATION OF BKLA EXECUTIVE OFFICERS

The following table reflects all compensation paid to John J. Feldman, the
President and Chief Executive Officer, Maurice J. Burford, BKLA's former
Chairman of the Board and Adriana M. Boeka, the current Chairman of the Board,
who were the only executive officers receiving a total annual salary and bonus
of $100,000 or more.

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------ -------------------------
AWARDS SECURITIES ALL OTHER
-------------------- UNDERLYING COMPENSATION
YEAR SALARY BONUS OTHER OPTIONS (1)
---- -------- ----- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
John J. Feldman......................... 1997 $138,750 $406 -- 75,000 $2,775
President and Chief Executive
Officer(2)

Maurice J. Burford(3)................... 1997 110,000 441 -- -- 2,199
Former Chairman of the Board 1996 145,000 441 -- 37,500 3,088
1995 108,000 -- -- -- 795

Adriana M. Boeka(4)..................... 1997 19,602 435 29,200(5)(6) -- --
Current Chairman of the Board
</TABLE>

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

(1) Employer contributions for 401K retirement plans.

(2) Mr. Feldman's annual salary is $185,000.

(3) Deceased on May 6, 1998.

(4) Ms. Boeka's current annual salary of $110,000 became effective as of October
29, 1997. She also received 25,000 options on January 21, 1998.

(5) Amount represents $6,200 in fees paid for attending meetings of the BKLA
Board of Directors and BKLA Audit Committee.

(6) Amount represents $23,000 in fees paid for consulting services as an outside
director prior to being appointed vice-chairman.

66
<PAGE>
The following table sets forth certain information regarding the options
exercised by those certain executive officers during 1997 and the value of
unexercised options held by those executive officers at December 31, 1997.

BKLA AGGREGATED OPTION EXERCISE AND OPTION VALUES AS OF DECEMBER 31, 1997

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1997(#) DECEMBER 31, 1997($)
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Maurice J. Burford.............. -- -- 18,750 56,250 $ 185,156 $ 555,469
Adriana M. Boeka................ -- -- 1,500 4,500 $ 14,813 $ 44,438
John J. Feldman................. -- -- -- 75,000 $ -- $ 523,125
</TABLE>

BKLA OPTIONS GRANTED FOR THE YEAR ENDING DECEMBER 31, 1997(1)

<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SECURITIES TOTAL OPTIONS GRANT DATE
UNDERLYING GRANTED TO PRESENT
NAME OPTIONS EMPLOYEES EXERCISE PRICE EXPIRATION DATE VALUE(2)
- ------------------------------------ ----------- ----------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
John J. Feldman..................... 75,000 45% $ 6.90 May 20, 2007 $ 276,000
</TABLE>

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

(1) Adriana M. Boeka received 25,000 options on January 21, 1998 at an exercise
price of $11.05 expiring on January 21, 2008.

(2) Value of stock option was determined at date of grant using the
Black-Scholes model.

CERTAIN BKLA TRANSACTIONS

Mr. Feldman became the President and Chief Executive Officer of BKLA,
effective April 1, 1997, as a result of the merger of AWB with and into BKLA.
Mr. Burford was the Chairman of the Board of BKLA. Ms. Boeka, previously the
Vice Chairman, was appointed Chairman of the Board on May 6, 1998, upon Mr.
Burford's death.

Some of the directors, officers and principal shareholders of BKLA, and the
businesses with which they are associated, were customers of, and had banking
transactions with, BKLA in the ordinary course of BKLA's business during 1997.
All loans and commitments to lend included in such transactions were made in
compliance with applicable laws and on substantially the same terms, including
interest rates, collateral and repayment terms, as those prevailing at the time
for comparable transactions with other persons of similar creditworthiness and,
in the opinion of management of BKLA, did not involve more than a normal risk of
collectability or present other unfavorable features. As of December 31, 1997
the aggregate principal amount of extensions of credit to directors and
executive officers and related interests was $1,601,000 which represents
approximately 5% of BKLA's shareholder's equity as of December 31, 1997.

EMPLOYMENT AGREEMENT

BKLA has entered into a contract with John R. Newhouse, former President and
Chief Executive Office of CNB, pursuant to which Mr. Newhouse will be employed
by BKLA from December 31, 1997 through December 31, 1999. During this period,
Mr. Newhouse will serve as Senior Vice President of the Culver City Branch.

The employment agreement may be terminated by BKLA for reasons of death,
disability or for cause (as defined therein), or by Mr. Newhouse for any reason
with written notice. The employment agreement may be terminated by BKLA at will,
however, Mr. Newhouse is then entitled to six months salary upon a

67
<PAGE>
30-day written notice, or if the term of the contract remaining is less than six
months, pay equal to the months remaining.

BKLA COMPENSATION/STOCK OPTION COMMITTEE REPORT

BKLA's executive compensation program is designed to attract, reward and
retain highly qualified executives and to encourage the achievement of business
objectives, including superior corporate performance. Total compensation to
BKLA's executive management is composed of base salary, annual bonuses and stock
option awards. Base salaries for executive management are determined by
evaluating the responsibilities associated with the position held and an
individual's overall level of experience.

BKLA's compensation program also includes stock option awards, which are
intended to provide additional incentive to increase stockholder value. All
stock option awards were granted with an exercise price equal to the fair market
value of BKLA's stock on the date of grant and become exercisable over four
years on a pro rata basis. Because BKLA stock option awards provide value only
in the event of share price appreciation, the Committee believes stock options
represent an important component of a well-balanced incentive program.
Individual awards are based upon a subjective evaluation of each individual's
overall past and expected future contribution; therefore, no specific formula is
used to determine option awards for any employee. Key employees are eligible to
receive stock options. The Committee also believes that BKLA is successfully
pursuing strategic growth and strengthening its position as a community bank in
a highly competitive environment.

Mr. Feldman, President and Chief Executive Officer, was allocated the
largest number of shares in stock option awards for 1997, together with the base
salary of $185,000. The Committee believed that the total compensation was at
market and did not require adjustment in 1998. In setting Mr. Feldman's
compensation, the Committee also took into account the compensation levels of
Chief Executive Officers at BKLA's peer companies and the compensation of other
executive officers of BKLA.

Adriana M. Boeka, a non-employee director since 1996, was appointed Vice
Chairman of the Board on October 29, 1997 as an employee. Ms. Boeka's
compensation was set at $110,000 annually, with 25,000 BKLA stock options to be
granted in conjunction with future employee grants. The salary of the previous
Chairman of the Board, Maurice J. Burford, was reduced to $25,000 annually at
that time.

No current member of the BKLA Compensation/Stock Option Committee is a
former or current employee of BKLA or any of its subsidiaries. However, Maurice
J. Burford, who chaired the committee until his death on May 6, 1998, was also
the Chairman of the BKLA Board.

The committee's report was completed as of January 21, 1998. The members of
the BKLA Compensation/Stock Option Committee filing the report were Maurice J.
Burford, Roy Doumani and James V. Reimann.

BKLA PERFORMANCE GRAPH

The following line graph compares the yearly percentage change in BKLA's
cumulative total shareholder return on BKLA Common Stock as measured by the
difference between BKLA's share price for the five years presented. BKLA has not
issued dividends in the five years presented for use in determining total
shareholder return. The cumulative total shareholder return of BKLA is compared
to the Nasdaq Bank Stock Index and the Nasdaq Stock Market Total Return Index as
prepared for Nasdaq by the Center for Research in Security Prices at the
University of Chicago.

BKLA began trading on Nasdaq on July 29, 1996. Prior to that date, BKLA
Common Stock was traded on a very limited basis on the over-the-counter market
through various brokerage firms and records of those trades are not available.
Consequently, the prices listed before that date represent quotations by dealers
making a market in BKLA Common Stock and reflect inter-dealer prices, without
adjustments for mark-ups, mark-downs or commissions, and may not necessarily
represent actual transactions. Prior to July

68
<PAGE>

29, 1996, trading in BKLA Common Stock was limited in volume and may not be a
reliable indicator of its market value. To compute the change in the cumulative
total shareholder return on BKLA Common Stock, the 1993 stock market price of
BKLA was derived from various brokerage firms that were market makers for BKLA
stock reporting the high sale price in the fourth quarter. The source of the
data for 1994 and 1995 is Black and Company, reporting the high sale price in
the fourth quarter. The stock market prices for the years 1996 and 1997 are the
BKLA share price at the end of those years, as listed on Nasdaq.

PERFORMANCE GRAPH

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
BKLA NASDAQ BANKS NASDAQ INDEX
<S> <C> <C> <C>
1992 100 100 100
1993 23 114 115
1994 27 114 112
1995 29 169 139
1996 46 223 195
1997 101 377 240
</TABLE>

69
<PAGE>
THE MERGER

THIS SECTION OF THE PROXY STATEMENT-PROSPECTUS DESCRIBES CERTAIN ASPECTS OF
THE PROPOSED MERGER, AND SUCH INFORMATION IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE OTHER INFORMATION CONTAINED ELSEWHERE IN THIS PROXY
STATEMENT-PROSPECTUS, INCLUDING THE APPENDICES HERETO, AND THE DOCUMENTS
INCORPORATED HEREIN BY REFERENCE. A COPY OF THE MERGER AGREEMENT IS SET FORTH AS
APPENDIX A TO THIS PROXY STATEMENT-PROSPECTUS AND THE TEXT THEREOF IS
INCORPORATED HEREIN BY REFERENCE, AND REFERENCE IS MADE THERETO FOR A COMPLETE
DESCRIPTION OF THE TERMS OF THE MERGER. SHAREHOLDERS ARE URGED TO READ CAREFULLY
THE MERGER AGREEMENT AND EACH OF THE OTHER APPENDICES HERETO IN THEIR ENTIRETY.

BACKGROUND AND REASONS FOR THE MERGER

Western, principally through its wholly-owned subsidiary Santa Monica Bank,
and BKLA each conducts general banking operations in western Los Angeles County.
In serving individuals, small businesses and mid-market corporations, each
historically has focused on a community-based approach to banking. Management of
each of Western and BKLA has been cognizant of the rapidly changing structure of
the banking market in Southern California and Los Angeles County, in part as a
result of the severe problems associated with the savings and loan industry and
the problems experienced by other independent banks within Los Angeles County
during the recent recession. As is the case throughout the United States, the
managements of Western and BKLA believe that a process of consolidation will
continue to occur in the Southern California financial services industry
resulting in, among other things, a reduction in the number of community and
independent banks.

In order to compete effectively with the larger financial institutions that
Western Management believed would result from the various consolidations and
mergers in the industry locally, Western Management saw a need to expand
prudently and recognized the opportunity to build a larger regional, independent
financial institution in the Los Angeles County market. Accordingly, as a part
of its effort to achieve long-term, stable profitability, Western has explored
acquisition opportunities to achieve greater market share in Los Angeles County
and in Southern California.

In 1995 a small group of investors recapitalized BKLA. One of the
attractions of the investment was the opportunity to acquire and/or combine with
other California banks whose stock prices were then depressed due to the very
difficult economic conditions at that time. Between 1995 and 1997, BKLA was
successful in acquiring and/or combining with three other community banks. See
"SUMMARY--Summary Unaudited Pro Forma Combined Financial Data".

By mid 1997, however, the economy in California had improved significantly,
and along with it the prices of California bank stocks had also risen. In
October 1997, BKLA Management asked GBS Financial, its investment bankers, to
analyze the opportunities available to BKLA, including the opportunities for
acquisitions. GBS Financial advised that, given the recent and dramatic
appreciation in California bank stocks, the opportunities for acquisitions for
BKLA were very limited.

BKLA Management and GBS Financial, independently and jointly, reviewed
BKLA's strategic plan and compared the results that could be achieved by
pursuing that plan with the results that could be achieved by modifying BKLA's
strategic plan or being acquired by a larger institution, including an analysis
of bank and bank holding company mergers, discounted cash flow analysis, and
comparable bank and bank holding data. BKLA Management concluded that
shareholder value would be maximized by a merger with a larger bank.

The BKLA Board, at their regular meeting on October 29, 1997, authorized the
engagement of an investment banking firm to pursue a merger with a larger
partner. After researching various firms, on December 31, 1997, GBS Financial
was retained. On January 20, 1998, GBS Financial was directed to identify a
group of the most desirable and compatible acquisition candidates and to
approach that group

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regarding a potential transaction. BKLA Management decided to approach only the
most desirable candidates regarding a transaction to keep knowledge of the
transaction to a minimum.

The decision by BKLA Management to keep knowledge of a potential sale to a
minimum was preceded by a financially difficult period two years earlier, which
culminated in a capital infusion. Prior to the capital infusion, the financial
difficulties had caused employee demoralization and customer base erosion. BKLA
Management believes its employees are its most valuable asset and felt that
widespread knowledge of a potential sale would again negatively affect employee
morale. Also, considerable resources in client retention and new client
relationships had been expended, and it was felt that knowledge of a potential
sale could adversely affect BKLA's customer base. The BKLA Board and Management
believed that selecting the most qualified acquisition candidates, soliciting
bids from each and selecting a winning bid, while retaining a motivated staff
and high level of customer service, would maximize shareholder value.

BKLA Management subsequently narrowed the group of desirable candidates to
approximately one dozen candidates, with seven candidates expressing interest.
Candidates returning confidentiality agreements were sent confidential material
on BKLA on February 18, 1998. Discussions concerning a potential transaction
were held with candidates expressing interest in February 1998; however, other
than the discussions held with representatives of Western, such discussions were
not fruitful.

In February 1998, Scott Burford of GBS Financial, contacted Matthew P.
Wagner, President and Chief Executive Officer of Western, to explore a possible
acquisition. On March 4, 1998, a non-binding indication of interest to acquire
BKLA was received from Belle Plaine Partners, Inc., financial advisor to
Western. Several discussions were conducted between Scott Burford, Matthew P.
Wagner and John M. Eggemeyer III, director of Western and principal of Belle
Plaine Partners, Inc. A meeting was arranged on March 31, 1998 to negotiate the
major terms of the acquisition. The meeting was attended by Scott Burford,
Maurice J. Burford, the Chairman of the Board of BKLA at the time, Adriana M.
Boeka, the Vice Chairman of the Board of BKLA at the time, John M. Eggemeyer
III, Matthew P. Wagner, Arnold C. Hahn, Chief Financial Officer of Western and
Julius G. Christensen, General Counsel of Western. The principal terms of the
transaction were agreed upon.

The BKLA Board and Management considered certain factors before accepting
the Western offer, independently, including: (i) the feasibility of remaining
independent in the short term and seeking to merge with Western or another
banking organization in the future; (ii) the ability to merge BKLA with a
similar sized bank or with a banking institution other than Western; (iii)
continuing to operate as an independent entity indefinitely; (iv) the strategy,
business, operations, earnings, and financial condition of Western on both a
historical and prospective basis; (iv) the historical stock price performance of
Western Common Stock; (vi) the high price of Western Common Stock relative to
its tangible book value; (vii) the liquidity and marketability of Western Common
Shares; (viii) the ability of Western's Management to integrate its recent
acquisitions; (ix) Western's rapid expansion; (x) due diligence investigations
conducted by BKLA Management and its advisors; (xi) the general impact the
Merger would have on various constituencies served by BKLA, including its
employees; (xii) Western's favorable ratings under the Community Reinvestment
Act; and (xiii) the terms of the Merger Agreement.

In reaching its determination to approve and recommend the Merger, the BKLA
Board did not assign any relative or specific weights to the various factors
considered by it. Individual directors may have given different weights to
different factors and such other things as assessments of Western's credit
policies, asset quality, adequacy of loan loss reserves and interest rate risk.

On April 9, 1998, BKLA hired Wedbush to provide an opinion as to the
fairness of the Conversion Number. The BKLA Board held a special meeting on
April 16, 1998, at which the proposed merger was considered in detail and the
opinion provided by Wedbush and the Merger Agreement was presented. At that
meeting, the BKLA Board unanimously approved the Merger Agreement and the
various matters and

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related agreements contemplated thereby. Maurice J. Burford did not attend the
meeting, but assented in absence. Due diligence was performed by BKLA and the
Merger Agreement was executed.

The Western Board held a meeting on April 7, 1998, at which the proposed
Merger was considered in detail with Western's Management, including the
consideration to be paid by Western and the related transactions. At that
meeting, the Western Board approved the Merger Agreement and the various matters
and related agreements contemplated thereby and authorized Western Management to
take all action reasonably necessary to effect the Merger. The Merger Agreement
as approved contained a "due diligence out" provision pursuant to which Western
could, in its sole discretion, upon completion of its due diligence review of
BKLA, terminate the Merger at any time prior to 5:00 p.m. on April 29, 1998. On
April 29, 1998, Western completed its due diligence and determined not to
terminate the Merger Agreement.

On April 16, 1998, the SMB Board held a special meeting and approved the
Merger after reviewing the terms of the Merger in detail. On April 17, 1998,
Western and BKLA publicly announced the Merger.

The managements of Western and BKLA believe that the two institutions
complement each other in their community-based approaches to banking and in
terms of their markets, both geographic and demographic. Consequently both
managements perceive opportunities for increased operating efficiencies through
combination and believe that, by combining forces, they will be able to compete
more efficiently and successfully to take advantage of banking opportunities in
the rapidly evolving Los Angeles and Southern California markets. See "RISK
FACTORS--Ability to Integrate the Operations of Western and BKLA; Rapid Growth".

STRUCTURE OF THE MERGER

The Merger Agreement provides for the merger of BKLA with and into Santa
Monica Bank, with Santa Monica Bank being the Surviving Corporation, operating
under that name. As more fully described below in "THE MERGER AGREEMENT" in
connection with the Merger, each share of BKLA Common Stock issued and
outstanding at the Effective Time (other than (a) shares that have not been
voted in favor of approval of the principal terms of the Merger and with respect
to which Dissenters' Rights have been perfected in accordance with the CGCL and
(b) shares held directly or indirectly by Western, other than shares held in a
fiduciary capacity or in satisfaction of a debt previously contracted in good
faith) will be converted automatically into, subject to the limitations set
forth in the Merger Agreement with respect to proration and fractional shares,
the Consideration. Each share of Western Common Stock outstanding immediately
prior to the Effective Time will remain outstanding after the Merger as one
share of Western Common Stock. See "THE MERGER AGREEMENT--The Merger".

At the Effective Time, all BKLA Stock Options, unless otherwise exercised
pursuant to BKLA's Stock Option Plan, shall be converted into the right to
receive for each share of BKLA Common Stock otherwise issuable upon exercise
thereof a number of shares of Western Common Stock equal to the quotient
obtained by dividing the Spread by $42.61. At the Effective Time, each BKLA
Warrant shall be converted into a warrant to acquire, on the same terms and
conditions as were applicable under such BKLA warrant agreement, the number of
shares of Western Common Stock equal to (a) the number of shares of BKLA Common
Stock subject to the BKLA Warrant, multiplied by (b) the Conversion Number (such
product rounded down to the nearest whole number), at an exercise price per
share (rounded up to the nearest whole cent) equal to (y) the aggregate exercise
price for the shares of BKLA Common Stock which were purchasable pursuant to
such BKLA Warrant divided by (z) the number of full shares of Western Common
Stock subject to such Replacement Warrant.

See "NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA--NOTE
1".

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REASONS FOR THE MERGER; RECOMMENDATIONS OF THE BKLA BOARD OF DIRECTORS

The BKLA Board has unanimously approved the Merger and the Merger Agreement
and unanimously recommends that BKLA Shareholders vote "FOR" the approval of the
principal terms of the Merger. In reaching its determination to approve the
Merger, the BKLA Board analyzed BKLA's alternatives for enhancement of BKLA
Shareholder value, including BKLA's prospects under several assumptions so as to
be able to compare the value of a share of BKLA Common Stock with the
Consideration as well as with comparable transactions. At the same time, the
BKLA Board also reviewed the history of Western and the prospects of Western if
the Merger were consummated. The factors that were examined as part of this
analysis, include, but were not limited to the following:

(a) Data showing BKLA's results of operations and financial condition;

(b) The increasing competition in BKLA's markets from both existing and
potential competitors, some of whom have far greater assets and resources,
in part as a result of the consolidation taking place in the banking
industry;

(c) The efficacy of BKLA's strategic plan under current competitive
conditions and actions which would increase financial performance and
shareholder value over the period of its projection;

(d) The consolidation of the banking industry nationally and in California;

(e) A review of potential benefits for shareholders of a larger organization
with greater resources, increased operating efficiencies, the ability to
utilize trust department capacity over a larger base, an increased lending
limit and a stronger market position in western Los Angeles County;

(f) The belief of the BKLA Board and Management that a business combination
with Western would offer increased long-term value and liquidity to current
BKLA Shareholders;

(g) A comparison of the Western offer with reported transactions, nationally
and in California, by financial institutions with similar characteristics;
and

(h) The opinion of Wedbush that, as of April 15, 1998, and based upon, and
subject to, the matters stated in that opinion, the Conversion Number was
fair, from a financial point of view, to the BKLA Shareholders.

The foregoing discussion of material factors considered by the BKLA Board is
not intended to be exhaustive but does set forth the principal factors
considered by the BKLA Board. The BKLA Board collectively reached the unanimous
conclusion to approve the Merger in light not only of the factors described
above but of such other factors as each Board member felt were appropriate. The
BKLA Board did not assign relative or specific weights to any of the factors
described above and individual directors may have weighed such factors
differently.

FOR THE REASONS SET FORTH ABOVE THE BKLA BOARD HAS UNANIMOUSLY APPROVED THE
MERGER AS IN THE BEST INTERESTS OF BKLA AND ITS SHAREHOLDERS AND UNANIMOUSLY
RECOMMENDS THAT BKLA SHAREHOLDERS APPROVE THE PRINCIPAL TERMS OF THE MERGER.

OPINION OF WEDBUSH

Pursuant to a letter agreement dated April 9, 1998 (the "Wedbush
Agreement"), Wedbush was retained by the Board of Directors of BKLA to render an
opinion as to whether the Conversion Number in the Merger is fair, from a
financial point of view, to the BKLA Shareholders.

Representatives of Wedbush attended the special meeting of the BKLA Board
held on April 16, 1998 at which time the BKLA Board considered and approved the
Merger Agreement. At that meeting, Wedbush rendered its opinion dated April 15,
1998 that, as of such date, the Conversion Number was fair to the holders of
shares of BKLA Common Stock from a financial point of view (the "Wedbush
Opinion"). Such opinion was reconfirmed in writing as of the date of this Proxy
Statement-Prospectus (the "Wedbush Reconfirming Opinion"). No limitations were
imposed by BKLA's Board on Wedbush with respect to the investigations made or
procedures followed in rendering its opinion.

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THE FULL TEXT OF THE WEDBUSH RECONFIRMING OPINION, WHICH SETS FORTH THE
PROCEDURES FOLLOWED, ASSUMPTIONS MADE, MATTERS CONSIDERED AND QUALIFICATIONS AND
LIMITATIONS ON THE REVIEW UNDERTAKEN, IS ATTACHED HERETO AS APPENDIX B TO THIS
PROXY STATEMENT-PROSPECTUS AND IS INCORPORATED HEREIN BY REFERENCE WITH THE
CONSENT OF WEDBUSH. THE SUMMARY OF THE WEDBUSH OPINION SET FORTH IN THIS PROXY
STATEMENT-PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT
OF SUCH OPINION. HOLDERS OF BKLA'S COMMON STOCK ARE URGED TO READ THE WEDBUSH
RECONFIRMING OPINION IN ITS ENTIRETY IN CONNECTION WITH THEIR CONSIDERATION OF
THE PROPOSED MERGER. THE WEDBUSH OPINION AND THE WEDBUSH RECONFIRMING OPINION
ARE ADDRESSED TO THE BKLA BOARD OF DIRECTORS ONLY AND DO NOT CONSTITUTE A
RECOMMENDATION TO ANY SHAREHOLDER AS TO HOW THAT SHAREHOLDER SHOULD VOTE AT THE
SPECIAL MEETING.

The following discussion summarizes the material features of the Wedbush
Opinion, Wedbush's qualifications and BKLA's engagement of Wedbush. Prior to
this engagement, Wedbush had not performed any material services for BKLA, and
no additional services are contemplated at this time. The Conversion Number in
the Merger Agreement was negotiated by BKLA prior to Wedbush's engagement.

For purposes of its opinion, Wedbush reviewed and analyzed, among other
things: (1) a draft of the Merger Agreement and the specific terms of the
Merger, (2) certain publicly available business and financial information
relating to BKLA and Western that Wedbush deemed to be relevant, (3) certain
internal information, primarily financial in nature, including financial
projections and other financial and operating data relating to strategic
implications and operational benefits anticipated to result from the Merger,
furnished to Wedbush by BKLA and Western, (4) certain publicly available and
other information concerning the trading of, and the trading market for, BKLA
and Western Common Stock, (5) certain publicly available information with
respect to other companies that Wedbush believed to be comparable in certain
respects to BKLA or Western, and (6) certain publicly available information with
respect to other merger and acquisition transactions that Wedbush believed to be
comparable in certain respects to the Merger. In addition, Wedbush held
discussions with the managements of BKLA and Western concerning their views as
to the financial and other information described above and the potential cost
savings, operating synergies, revenue enhancements and strategic benefits
expected to result from the Merger. In addition to the foregoing, Wedbush
conducted such other analyses and examinations and considered such other
financial, economic and market criteria as it deemed appropriate to arrive at
its opinion.

In arriving at its opinion, Wedbush assumed and relied upon the accuracy and
completeness of all financial and other information provided to or reviewed by
it or publicly available, and Wedbush has not assumed any responsibility for
independent verification of any such information. With respect to financial
projections and other information provided to or reviewed by Wedbush, it has
been advised by the managements of BKLA and Western that such projections and
other information were reasonably prepared on bases reflecting the best
currently available estimates and judgments of the respective managements of
BKLA and Western as to the expected future financial performance of BKLA and
Western and the strategic implications and operational benefits anticipated from
the Merger, and Wedbush assumed that, after the Merger, Western and its
subsidiaries will perform substantially in accordance with such projections.
Wedbush further relied on the assurances of managements of BKLA and Western that
they are unaware of any facts that would make the information or projections
provided to Wedbush incomplete or misleading. In particular, Wedbush relied upon
a schedule provided by Western of estimated synergies and related cost savings
that BKLA expects to achieve as a result of the Merger. With respect to pending
legal and regulatory proceedings involving BKLA or Western, Wedbush was not in a
position to evaluate the impact of such proceedings and it assumed that these
matters would be resolved in a manner that would not adversely affect in any
material respect the financial projections on which Wedbush relied for purposes
of its opinion. Wedbush did not make or receive any independent evaluations

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or appraisals of any of BKLA's or Western's assets, properties, liabilities or
securities, nor did Wedbush make any physical inspection of the properties or
assets of BKLA or Western. Wedbush assumed that Western will account for the
Merger as a pooling of interests in accordance with generally accepted
accounting principles ("GAAP"), and that the Merger qualifies for such
accounting treatment under GAAP. Wedbush also assumed that the Merger will
constitute a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended, and neither BKLA, Western, Santa
Monica Bank nor holders of BKLA Shares will recognize gain or loss for U.S.
federal and state income tax purposes as a result of the Merger. Wedbush also
assumed that all conditions to the Agreement will be satisfied and not waived.

Wedbush is not an expert in the evaluation of loan losses or reserves or
allowances therefor, and it did not make an independent evaluation of the
adequacy of the reserve or allowance for loan losses of BKLA or Western, nor did
it review any individual credit files relating to BKLA or Western. Rather,
Wedbush assumed that the aggregate reserve or allowance for loan losses for each
of BKLA and Western was adequate to cover such losses and will be adequate after
the Merger for Western and its subsidiaries.

The Wedbush Opinion relates to the relative values of BKLA and Western and
does not imply any conclusion as to what the values of the Western Shares
actually will be when issued pursuant to the Merger or the price at which such
stock will trade following the consummation of the Merger. The Wedbush Opinion
necessarily is based upon conditions and circumstances as they exist and can be
evaluated as of the date of such opinion and does not address the underlying
business decision of BKLA to enter into the Agreement or complete the Merger.
Specifically, Wedbush was not asked to nor did it express an opinion as to the
relative merits of the Merger as compared to any alternative business strategies
that might exist for BKLA or the effect of any other transaction in which BKLA
might engage.

The Wedbush Opinion was based on economic, market and other conditions as in
effect on, and the information made available to Wedbush as of, the date of such
opinion. Events occurring after that date could materially affect the
assumptions used in preparing the opinion.

Wedbush was selected to render its opinion as to the fairness of the
Conversion Number from a financial point of view based upon its qualifications,
expertise and reputation. Wedbush is an investment banking firm and a member of
the New York Stock Exchange and other principal stock exchanges in the United
States, and is regularly engaged as part of its business in the valuation of
businesses and their securities in connection with mergers and acquisitions,
negotiated underwriting private placements, secondary distributions of listed
and unlisted securities, and valuations for corporate, estate and other
purposes.

SUMMARY OF ANALYSES OF WEDBUSH

While the following summaries describe the principal elements of the
analyses and examinations that Wedbush performed in arriving at the Wedbush
Opinion, they are not a comprehensive description of all analyses and
examinations actually conducted by Wedbush. The preparation of a fairness
opinion involves various determinations of the most appropriate and relevant
methods of financial analysis and the application of those methods to the
particular circumstances, and, therefore, such an opinion is not susceptible to
partial analysis or summary description. Each of the analyses conducted by
Wedbush was carried out in order to provide a different perspective on the
transaction and to add to the total mix of information available. Wedbush did
not form a conclusion as to whether any individual analysis, considered alone,
supported or failed to support an opinion as to fairness from a financial point
of view. Rather, in reaching its conclusion, Wedbush considered the results of
the analyses as a whole and did not place particular reliance or weight on any
individual factor. Therefore, selecting portions of the analyses and the factors
considered, without considering all such analyses and factors, would create an
incomplete or misleading view of the evaluation process underlying the Wedbush
Opinion. The range of valuations

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resulting from any particular analysis described herein should not be taken to
be Wedbush's view of the actual value or predicted future value of BKLA or
Western Common Stock.

In performing its analyses, Wedbush made numerous assumptions with respect
to industry performance and general business and economic conditions such as
industry growth, inflation, interest rates and various other matters, many of
which are beyond the control of BKLA, Western, and Wedbush. Any estimates
contained in Wedbush's analyses are not necessarily indicative of actual values
or future results, which may be significantly more or less favorable than
indicated by such analyses. See "RISK FACTORS". Such analyses were prepared
solely as part of Wedbush's analysis of the fairness of the Conversion Number to
BKLA Shareholders. Additionally, estimates of the values of the business and
securities do not purport to be appraisals of the assets or market values of
BKLA or Western, or their respective securities, nor do they necessarily reflect
the prices at which such businesses or securities may actually be sold.

The following is a summary of the material financial analyses performed by
Wedbush in connection with the Wedbush Opinion.

SUMMARY OF THE PROPOSED TRANSACTION

Wedbush reviewed the terms of the Merger, including the Conversion Number
and the implied aggregate and per share transaction value. Based on a price of
$47.13 per share of Western Common Stock on April 15, 1998, Wedbush calculated
an implied aggregate transaction value of approximately $115.0 million assuming:
(i) exercise of all stock options and warrants; (ii) no Dissenters Rights are
perfected by BKLA Shareholders; (iii) no cash is paid in lieu of fractional
shares; and (iv) an implied transaction value per share of BKLA Common Stock of
approximately $19.91. Wedbush noted that the implied transaction per share value
represented multiples of (1) 19.5x BKLA's twelve months' ending March 31, 1998
diluted earnings per share ("Diluted EPS"), (2) 3.11x BKLA's diluted book value
per share at March 31, 1998, and (3) 3.69x BKLA's diluted tangible book value
per share at March 31, 1998, as well as a premium of 26% over BKLA's closing
stock price of $15.75 on April 9, 1998 (five trading days prior to public
announcement of the Merger).

ANALYSIS OF SELECTED BANK MERGER TRANSACTIONS

Wedbush reviewed certain publicly available information regarding selected
merger and acquisition transactions: (1) involving banks and bank holding
companies located in California, (2) with assets of between $100 million and
$600 million, and (3) announced between September 1, 1996 and April 15, 1998.
The selection of the comparable transactions involves complex considerations and
judgments concerning similarities and differences in financial, operational and
other characteristics that could affect the acquisition value of potentially
comparable banks. None of the acquired banks utilized in the selected merger and
acquisition comparable valuation were identical to BKLA and none of the
transactions were identical to the Merger.

The transactions deemed appropriate for comparison (the "Comparison Merger
Transactions") involved the following sets of institutions (identified by
acquiror/acquired bank): Bank of Commerce/ Rancho Vista National Bank; Mid-State
Bank/BSM Bancorp; Pacific Bank, NA/Sterling West Banc; Zions Bancorp/FP Bancorp,
Inc.; SierraWest Bancorp/CA Community Bancshares; Urban Bank/Redwood Bancorp;
Greater Bay Bancorp/Peninsula Bank; City National Corporation/Harbor Bancorp;
Western/ SCB; US Bancorp/Business & Professional Bank; Dartmouth
Capital/Eldorado Bancorp; Western/CCB; Santa Barbara Bancorp/First Valley Bank;
Golden State Bancorp/Transworld Bancorp; City National Corporation/Riverside
National Bank; Bank SinoPac/Far East National Bank; and City National
Corporation/Ventura County National Bancorp.

For each of the Comparison Merger Transactions, Wedbush analyzed the
transaction's value as a multiple of the acquired bank's (1) prior twelve months
publicly reported basic earnings per share ("LTM Multiple"), (2) publicly
reported book value at the end of the last accounting period prior to the

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acquisition ("Book Value Multiple"), and (3) publicly reported tangible book
value at the end of the last accounting period prior to the acquisition
("Tangible Book Value Multiple"). Additionally, Wedbush analyzed the
"Acquisition Premium" paid in each transaction, defined as the amount by which
the acquisition price per share surpassed the price per share of the acquired
bank's common stock five days before the acquisition was publicly announced.

This analysis indicated a range of transaction values for the Comparison
Merger Transactions representing LTM Multiples of 6.8x to 28.2x (with a median
of 17.5x) compared to 19.5x for BKLA at the Conversion Number; Book Value
Multiples of 1.16x to 4.08x (with a median of 1.93x) compared to 3.11x for BKLA
at the Conversion Number; Tangible Book Value Multiples of 1.16x to 4.08x (with
a median of 1.98x) compared to 3.69x for BKLA at the Conversion Number; and
Acquisition Premiums of 3% to 91% (with a median of 20%) compared to 26% for
BKLA at the Conversion Number.

Wedbush then calculated an implied transaction per share equity reference
range for BKLA by applying the median of the range of multiples derived from the
Comparison Merger Transactions to corresponding financial data for BKLA, which
indicated an implied transaction equity value reference range of between $10.66
and $18.93 per share of BKLA.

DISCOUNTED CASH FLOW ANALYSIS

Using a discounted cash flow analysis, Wedbush estimated the present value
of the future streams of after-tax cash flow that BKLA could produce on a
stand-alone basis from 1998 through 2002 and distribute to BKLA's shareholders
("Dividendable Net Income"). Wedbush projected after-tax distributions such that
BKLA's ratio of tangible common equity to tangible assets would be maintained at
a 6.0% level. Wedbush estimated the residual value of BKLA at the end of 2002 to
be in the range of 13x to 17x projected 2002 net income plus goodwill
amortization ("Cash Net Income"). The projected Dividendable Net Income streams
and residual values were then discounted to present value at rates ranging from
12% to 16%. Wedbush then aggregated (1) the present value of the Dividendable
Net Income flows and (2) the present value of the residual values to derive an
implied transaction equity value reference range of $9.60 to $13.00 per share of
BKLA. Wedbush also performed a discounted cash flow analysis assuming the
realization of certain cost savings and revenue enhancements expected to result
from the Merger. This analysis indicated an implied equity value reference range
of $13.20 to $18.60 per share of BKLA.

In determining the discount rates used in the discounted cash flow analysis
of BKLA, Wedbush noted, among other things, factors such as inflation,
prevailing market interest rates, the business risk inherent to Western, the
required rates of return of holders or prospective buyers of BKLA Common Stock,
and the cost of capital for banks similar to BKLA. In determining the range of
residual value multiples used in deriving the residual value of BKLA, Wedbush
noted, among other things, the multiples at which BKLA Common Stock historically
traded, the multiples at which public banks Wedbush deemed appropriate for
comparison to BKLA historically traded, and the multiples observed in historical
business combination transactions which Wedbush deemed relevant.

COMPARABLE BANK ANALYSIS

Using publicly available information, Wedbush compared certain financial,
operating and stock market data of BKLA with similar data of selected publicly
traded companies in the banking industry of a size considered by Wedbush to be
appropriate for comparison to BKLA, after applying an equity control premium of
20% (based on the median premium paid in the Comparison Merger Transactions).
Although such banks were considered similar to BKLA, none of them has the same
management, assets, deposit base, size or franchise as BKLA.

Wedbush considered the following banks appropriate for comparison (the
"Comparable Banks") to BKLA: Bank of Hemet, Bank of Santa Clara, Borel Bank &
Trust Company, BYL Bancorp, California Independent Bancorp, Coast Bancorp,
Desert Community Bank, First Regional Bancorp, North County

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Bancorp, North Valley Bancorp, Orange National Bancorp, Professional Bancorp,
Inc., and Six Rivers National Bank.

All multiples were based on closing share prices as of April 13, 1998. This
analysis indicated a range of share prices for the Comparable Banks (after
applying the equity control premium of 20%) representing multiples of such
companies' (1) latest twelve months basic earnings per share of 14.24x to 43.48x
(with a median of 20.87x); (2) latest publicly reported book value of 1.56x to
3.89x (with a median of 2.44x); and (3) latest publicly reported tangible book
value of 1.59x to 3.89x (with a median of 2.49x). Wedbush then calculated an
implied transaction equity value reference range for BKLA by applying the median
of these multiples to corresponding data for BKLA, which indicated an implied
per share value reference range of $15.70 to $20.87.

CONTRIBUTION ANALYSIS

Wedbush analyzed the respective contributions of BKLA and Western to the
combined company's pro forma balance sheet as of March 31, 1998 and pro forma
historic net income for the latest twelve months ended March 31, 1998 without
giving effect to certain cost savings and revenue enhancements expected to
result from the Merger. The financial and operating information reviewed
included, among other things, total assets, deposits, net loans, common equity,
tangible equity, at March 31, 1998; pro forma net income and pro forma Cash Net
Income for the twelve months ended March 31, 1998. This analysis showed that
BKLA would have contributed approximately 11.8% of total assets, 10.5% of net
loans, 11.8% of deposits, 10.1% of common equity, 16.1% of tangible equity,
43.7% of pro forma net income, 20.9% of pro forma Cash Net Income, for the
twelve months ended March 31, 1998. By contrast, BKLA Shareholders would own
approximately 13% of the diluted shares of the combined company upon
consummation of the Merger based upon the Conversion Number.

PRO FORMA MERGER ANALYSIS

Based on projections and various other assumptions provided by BKLA and
Western, including estimated cost savings and revenue enhancements expected to
result from the Merger, Wedbush analyzed the pro forma per share impact of the
Merger on a variety of projected financial measures including, among others,
BKLA's Diluted EPS, book value per share and tangible book value per share
during the calendar years 1999 through 2000 relative to BKLA on a stand-alone
basis.

The analysis indicated that on a per share basis, the proposed Merger could
be accretive to BKLA's Diluted EPS and book value, while dilutive to its
tangible book value, in each of the years analyzed assuming certain cost savings
and revenue enhancements anticipated by Western Management to result from the
Merger are achieved. Wedbush also analyzed the potential pro forma effect of the
Merger on Western's Diluted EPS during the calendar years 1999 and 2000 relative
to Western on a stand-alone basis. This analysis indicated that the Merger could
be accretive to Western's Diluted EPS in each year, assuming certain cost
savings and revenue enhancements anticipated by the Western Management to result
from the Merger are achieved.

Wedbush also performed a pro forma sensitivity analysis by varying many of
the underlying assumptions of the analysis including, among others, the cost
savings, revenue enhancement, and growth estimates of BKLA, Western and SMB as
part of the analysis of the estimated pro forma effect of the Merger.

HISTORICAL TRADING AND CONVERSION NUMBER ANALYSIS

Wedbush analyzed the ratios of closing stock prices per share of Western
Common Stock to BKLA Common Stock as reported on the Nasdaq during various time
periods. Wedbush observed that from June 4, 1997 through April 14, 1998, the
average ratio of closing stock prices of BKLA and Western was 0.3560x, with a
high of 0.4710x and a low of 0.2458x. For the 30 trading day period of March 3,
1998

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through April 14, 1998, the average ratio of closing stock prices of BKLA and
Western was 0.3438x, with a high of 0.3702x and a low of 0.3223x.

Wedbush reviewed the comparative performance of Western and BKLA Common
Stock relative to the S&P 500 index, the Nasdaq Banking index, and the S&P Bank
Index. This analysis indicated that both companies outperformed the indexes over
the period of June 4, 1997 through April 14, 1998.

WEDBUSH FEE

Pursuant to the terms of the Wedbush Agreement, BKLA has paid Wedbush a fee
of $75,000, half of which was payable upon execution of the Wedbush Agreement
and the other half of which became payable at the time Wedbush notified BKLA
that it was prepared to deliver to the Board of BKLA its opinion as to the
fairness of the Conversion Number without disclosing the conclusion reached
therein. BKLA considered this fee reasonable after soliciting and receiving bids
from other qualified firms for $150,000 to $250,000. BKLA has also agreed to
reimburse Wedbush for its reasonable out-of-pocket expenses incurred in
connection with its engagement and to indemnify Wedbush and its employees,
agents, officers, attorneys and shareholders and any person who controls or is
deemed to control Wedbush against certain liabilities, including liabilities
under the federal securities laws.

In the ordinary course of business, Wedbush and its affiliates may actively
trade the equity securities of BKLA and of Western for their own account and for
accounts of customers and, accordingly, may at any time hold a long or short
position in such securities.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

THE FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW MAY NOT BE APPLICABLE TO
CERTAIN CLASSES OF TAXPAYERS, INCLUDING SECURITIES DEALERS AND OTHERS THAT USE A
"MARKET-TO-MARKET" METHOD OF ACCOUNTING FOR FEDERAL INCOME TAX PURPOSES, TAX
EXEMPT ORGANIZATIONS OR TRUSTS, FOREIGN PERSONS, PERSONS WHO HOLD SHARES OF BKLA
COMMON STOCK AS PART OF A STRADDLE OR CONVERSION TRANSACTION AND PERSONS WHO
ACQUIRED SHARES OF BKLA COMMON STOCK PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK
OPTIONS OR RIGHTS OR OTHERWISE AS COMPENSATION. BKLA SHAREHOLDERS ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF
THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL AND
OTHER TAX LAWS.

TAX OPINIONS

It is intended that the Merger will be treated as a reorganization within
the meaning of Section 368(a) of the Code. Consummation of the Merger as a
reorganization is conditioned upon receipt by Western of confirmation,
immediately prior to the Effective Time, of the opinion of Sullivan & Cromwell,
and receipt by BKLA of confirmation, immediately prior to the Effective Time, of
the opinion of Vavrinek, which opinions will be dated as of the Effective Date,
substantially to the effect that, for federal income tax purposes: (i) the
Merger will be treated as a reorganization within the meaning of Section 368(a)
of the Code, and (ii) each of Western, Santa Monica Bank and BKLA will be a
party to that reorganization within the meaning of Section 368(b) of the Code.

The Tax Opinions will not be binding on the Internal Revenue Service (the
"IRS"), and there can be no assurance that the IRS will not contest the
conclusions expressed therein. The Tax Opinions will be based in part upon
certain factual assumptions and upon certain representations made, and
certificates delivered, by Western, Santa Monica Bank and BKLA, which
representations and certificates Sullivan & Cromwell and Vavrinek will assume to
be true, correct and complete. If such representations or certificates are
inaccurate, the Tax Opinions could be adversely affected.

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TAX CONSEQUENCES OF THE MERGER

GENERAL. The following summary sets forth certain anticipated material
federal income tax consequences of the Merger to BKLA Shareholders. The tax
treatment of each BKLA Shareholder will depend in part upon such shareholder's
particular situation. This summary is based on the provisions of the Code, the
Treasury Regulations promulgated thereunder and administrative and judicial
interpretations thereof, all as in effect as of the date hereof. Such laws,
regulations or interpretations may differ at the Effective Time, and relevant
facts also may differ.

No gain or loss will be recognized by a BKLA Shareholder who receives solely
Western Common Stock for such BKLA Shareholder's shares of BKLA Common Stock
(except to the extent such shareholder receives cash in lieu of a fractional
share interest in Western Common Stock).

Such a BKLA Shareholder's aggregate tax basis in the Western Common Stock
received pursuant to the Merger will equal such shareholder's aggregate tax
basis in the shares of BKLA Common Stock exchanged therefor, reduced by any
amount allocable to a fractional share interest of Western Common Stock for
which cash is received. The holding period of Western Common Stock received
pursuant to the Merger (the "Holding Period" as described in the paragraph
below), will include the holding period of the shares of BKLA Common Stock
exchanged therefor, provided that such shares were held as a capital asset as of
the Effective Date.

FRACTIONAL SHARES OF WESTERN COMMON STOCK. No fractional shares of Western
Common Stock will be issued in the Merger. A BKLA Shareholder who receives cash
in lieu of such a fractional share will be treated as having received such
fractional share pursuant to the Merger and then as having exchanged such
fractional share for cash in a redemption by Western subject to Section 302 of
the Code. Such a deemed redemption will be treated as a sale of the fractional
share, provided that it is not "essentially equivalent to a dividend". If the
Western Common Stock represents a capital asset in the hands of the shareholder,
the shareholder will generally recognize capital gain or loss on such a deemed
redemption of the fractional share in an amount determined by the difference
between the amount of cash received therefor and the shareholder's tax basis in
the fractional share. The Holding Period of any such capital gain or loss will
be long-term if the BKLA Common Stock exchanged was held for more than one year.
Effective as of January 1, 1998, long-term capital gain of a non-corporate
shareholder is generally subject to a maximum capital gains rate of 20% for
capital assets held for more than one year.

BACKUP WITHHOLDING

Unless an exemption applies under applicable law and regulations, the
Exchange Agent (as defined herein), will be required to withhold 31% of any cash
payments to which a non-corporate shareholder or payee is entitled pursuant to
the Merger unless the shareholder or other payee provides its taxpayer
identification number (social security number, employer identification number or
individual taxpayer identification number) and certifies that such number is
correct. Each shareholder and, if applicable, each other payee must provide the
information and certification necessary to avoid backup withholding, unless an
applicable exemption exists and is established in a manner satisfactory to
Western and the Exchange Agent.

REGULATORY APPROVALS

GENERAL

The Merger cannot proceed in the absence of the regulatory approvals.
Western and BKLA are not aware of any material governmental approvals or actions
that are required for consummation of the Merger, except as described below.
Western and BKLA have agreed in the Merger Agreement to use reasonable best
efforts promptly to take all actions necessary, proper or advisable to
consummate the transactions contemplated by the Merger Agreement, including
using efforts to obtain all necessary

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approvals from all applicable governmental entities, making all necessary
registrations, applications and filings and obtaining any contractual consents
and regulatory approvals. However, there can be no assurance that such
regulatory approvals will be obtained, nor can there be assurance as to the date
of any such approval. There can also be no assurance that any such approval will
not contain a condition or requirement that causes such approvals to fail to
satisfy the conditions set forth in the Merger Agreement and described below
under "THE MERGER AGREEMENT--Conditions".

FEDERAL DEPOSIT INSURANCE CORPORATION AND FEDERAL RESERVE BOARD APPROVALS

Consummation of the Merger is subject to receipt of the prior approval of
the FDIC under the Bank Merger Act, 12 U.S.C. Section 1828(c) (the "BMA"). The
BMA requires that the FDIC take into consideration, among other factors, the
financial and managerial resources and future prospects of the institutions and
the convenience and needs of the communities to be served. The BMA prohibits the
FDIC from approving the Merger (i) if such transaction would result in a
monopoly or be in furtherance of any combination or conspiracy to monopolize or
to attempt to monopolize the business of banking in any part of the United
States, or (ii) if the effect of such transaction in any section of the country
may be substantially to lessen competition or to tend to create a monopoly, or
if it would in any other manner be a restraint of trade, unless the relevant
regulatory agency finds that the anti-competitive effects of such merger are
clearly outweighed by the public interest and by the probable effect of the
transaction in meeting the convenience and needs of the communities to be
served.

The Merger is also subject to prior approval by the Federal Reserve Board
under Section 3 of the BHCA or a waiver of such requirement in accordance with
regulations adopted by the Federal Reserve Board under the BHCA. If an
application is required under the BHCA, the Federal Reserve Board will take into
consideration, among other things, competition, the financial and managerial
resources and future prospects of the holding companies and banks concerned and
the convenience and needs of the communities to be served. The BHCA prohibits
the Federal Reserve Board from approving the Merger if (a) it would result in a
monopoly or would be in furtherance of any combination or conspiracy to
monopolize or attempt to monopolize the business of banking in any part of the
United States or (b) its effect in any section of the country may be
substantially to lessen competition or tend to create a monopoly, or it would in
any other manner be in restraint of trade, unless the Federal Reserve Board
finds that the anti-competitive effects of the Merger are clearly outweighed in
the public interest by the probable effect of the transaction in meeting the
convenience and needs of the communities to be served.

Each of the FDIC and the Federal Reserve Board has the authority to deny an
application if it concludes that the combined organization would have an
inadequate capital structure, taking into account, among other factors, the
nature of the business and operations and plans for expansion. Furthermore, the
FDIC and the Federal Reserve Board must also assess the records of the
depository institution subsidiaries of Western and BKLA under the Community
Reinvestment Act of 1977, as amended (the "CRA"). The CRA requires that the FDIC
and the Federal Reserve Board assess, when evaluating an application, each
depository institution's record of meeting the credit needs of its local
communities, including low- and moderate-income neighborhoods, consistent with
safe and sound operation and take such record into account when evaluating
certain regulatory applications. Each of Santa Monica Bank, SCB and BKLA has a
CRA rating of "satisfactory".

Under the BMA and the BHCA, the Merger may not be consummated until the
thirtieth day following FDIC or Federal Reserve Board approval, as the case may
be. If the FDIC and the Federal Reserve Board have not received any adverse
comments from the Department of Justice relating to competitive factors, the
waiting period may be reduced to no less than 15 days. If the United States
Department of Justice commenced an action challenging the Merger on antitrust
grounds during such waiting period, commencement of such action would stay the
effectiveness of the FDIC and Federal Reserve Board approvals, unless a court
specifically orders otherwise.

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Western and BKLA submitted an application seeking approval of the Merger and
related matters to the FDIC on or about June 30, 1998. The application was
deemed informationally complete by the FDIC on July 13, 1998 and processing of
the same commenced. It is expected that an approval will be received prior to
the BKLA Meeting, but there can be no assurance that such approval will be
obtained. Western and BKLA sought a waiver of jurisdiction from the Federal
Reserve Board on June 30, 1998 and said waiver was granted on July 8, 1998.

STATE COMMISSIONER APPROVAL

Because BKLA and Santa Monica Bank are state-chartered banks, Santa Monica
Bank must obtain approval of the State Commissioner pursuant to the California
Financial Code prior to the consummation of the Merger. Santa Monica Bank sought
such approval by filing an application with the State Commissioner on or about
June 30, 1998. The application submitted to the State Commissioner for approval
was accepted as complete on July 7, 1998. It is expected that an approval will
be received prior to the BKLA Meeting, but there can be no assurance that such
approval will be obtained.

RESALE OF WESTERN COMMON STOCK

All shares of Western Common Stock received by BKLA Shareholders in the
Merger will be freely transferrable, except that shares of Western Common Stock
received by BKLA Shareholders who are deemed to be "affiliates" (as defined for
purposes of Rule 145 under the Securities Act or SEC Accounting Series Releases
130 and 135) of BKLA ("BKLA Affiliates") as of the date of the BKLA Meeting may
be resold by BKLA Affiliates only pursuant to an effective registration
statement under the Securities Act covering resales of such shares or in
transactions permitted by the resale provisions of Rule 145 of the Securities
Act or as otherwise permitted under the Securities Act. Persons who may be
deemed to be affiliates of BKLA or Western generally include individuals or
entities that control, are controlled by, or are under common control with, such
entities and may include certain officers and directors of such entities as well
as principal shareholders of such entities.

BKLA has agreed in the Merger Agreement to use its best efforts to obtain a
written agreement from each officer or director of BKLA who is identified as a
possible BKLA Affiliate providing that each such person will not sell, pledge,
transfer or otherwise dispose of any shares of Western Common Stock to be
received by such person in the Merger, except in compliance with the applicable
provisions of the Securities Act. See "THE MERGER AGREEMENT--Exchange of Stock
Certificates; Dividends".

CERTAIN EFFECTS OF THE MERGER

SMB will be the Surviving Corporation following the Merger. Once the Merger
is consummated, the trading of BKLA Common Stock on Nasdaq will cease, and BKLA
will no longer be required to file reports pursuant to the Exchange Act. It is
anticipated that the management and operation of SMB and BKLA will be integrated
after the Merger and will allow additional services to be provided to customers,
without adversely affecting current day-to-day service. Such additional services
would include greater resources, trust services, increased operational
efficiencies, the cost savings of which may translate into lower prices for
customers, and an ability to service larger customers with larger transactions.
BKLA has agreed, subject to certain conditions, at or before the Effective Time,
to make such accounting adjustments as Western requests in order to implement
its plans regarding BKLA or to reflect merger-related expenses and costs
incurred by BKLA. See "THE MERGER AGREEMENT--Certain Covenants--CERTAIN POLICIES
OF BKLA".

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Certain historical regulatory capital ratios for SMB and BKLA as of June 30,
1998 are listed below. The pro forma column reflects certain effects that the
Merger will have on Santa Monica Bank's financial statements.

<TABLE>
<CAPTION>
REQUIREMENT HISTORICAL
---------------------------- -------------------------- SANTA MONICA
ADEQUATELY WELL SANTA MONICA BANK AND BKLA
CAPITALIZED CAPITALIZED BANK BKLA PRO FORMA
------------- ------------- --------------- --------- ---------------
(GREATER THAN OR EQUAL TO)
<S> <C> <C> <C> <C> <C>
Tier I Leverage................................... 4.00% 5.00% 7.09% 9.62% 7.27%
Tier I Risk-based................................. 4.00 6.00 10.01 14.43 10.39
Total Risk-based.................................. 8.00 10.00 11.27 15.68 11.65
</TABLE>

The capital ratios listed above are governed by guidelines created by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA").
FIRREA's guidelines are intended to provide a systematic framework with which to
analyze banking organizations. In order to analyze a banking organization's
business, the guidelines split total capital into two components: Tier I capital
(core capital) and Tier II capital (supplementary capital). For BKLA and Santa
Monica Bank, Tier I capital consists of common stock shareholders' equity before
gain or loss on securities available for sale, less goodwill and other
intangible assets. Tier II capital consists of loan loss reserves limited to
1.25% of risk-weighted assets. Total capital is Tier I plus Tier II capital.

The Tier I leverage ratio is Tier I capital divided by average total assets
less intangibles. For banks rated in the highest category of the five categories
used by the FDIC to rate banks, the minimum leverage ratio in such category is
3%. For all banks not rated in the highest category, the minimum leverage ratio
must be at least 100 to 200 base points above the 3% minimum, or 4% to 5%.

In addition to the Tier I leverage ratio, the FDIC takes into account
risk-based ratios as well. Tier I risk-based capital is Tier I capital divided
by net risk-weighted assets. Total capital to risk-based assets is total capital
divided by net risk-weighted assets. These risk-based guidelines are intended to
provide a measure of capital that reflects the degree of risk associated with a
banking organization's operations.

After the Merger, SMB will be headquartered at 1251 Fourth Street, Santa
Monica, California 90401. The telephone number at such offices will be (310)
394-9611.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

GENERAL

In considering the recommendations of the BKLA Board, BKLA Shareholders
should be aware that certain employees and members of BKLA Management and of the
BKLA Board have certain interests in the transactions contemplated by the Merger
Agreement that are in addition to the interests of shareholders generally and
that may create potential conflicts of interest. These interests include, among
others, provisions in the Merger Agreement relating to the indemnification of
BKLA officers and directors, directors' and officers' liability insurance, the
appointment of Adriana M. Boeka to the Western Board as of the Effective Time,
and certain employee benefits discussed below.

Additionally, Scott Burford, son of the late Maurice J. Burford and
president of Burford Capital, provided consulting services to BKLA through GBS
Financial in connection with the Merger. GBS entered into an agreement pursuant
to which it will receive a flat fee of 1% of value received by BKLA shareholders
if BKLA is sold for between $15 per share and $16.99 per share, or 1.5% of the
value received if BKLA is sold for $17 per share or more. Assuming consummation
of the Merger upon the terms and conditions contained in the Merger Agreement,
GBS will receive approximately $1.5 million for its services. GBS Financial will
receive no compensation if BKLA sells for less than $15 per share or if the
Merger is not consummated.

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Further, American West Associates is a partnership which leases the Encino
branch building to BKLA for approximately $277,000 per year. Melvin F. Shaw and
Burton N. Sterman, directors of BKLA, are 15% and 17% partners, respectively, of
American West Associates. BKLA Management believes this transaction to be on
substantially the same terms as those prevailing at the time for comparable
transactions.

INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE

The Merger Agreement provides that for a period of six years after the
Effective Time, Western will indemnify each director and officer determined as
of the Effective Time, against certain liabilities arising out of matters
existing or occurring at or prior to the Effective Time to the extent to which
such indemnified parties were entitled under California law and BKLA's articles
of incorporation or bylaws in effect on April 16, 1998. Western also will
advance expenses as incurred to the extent permitted under California law and
BKLA's articles of incorporation and bylaws. In addition, for a period of six
years after the Effective Time, Western will use its reasonable best efforts to
cause to be maintained in effect the current policies of directors' and
officers' liability insurance maintained by BKLA, provided that Western may
substitute therefor policies of comparable coverage with respect to claims
arising from facts or events that occurred before the Effective Time.

APPOINTMENT OF DIRECTOR

Pursuant to the Merger Agreement, BKLA has elected to nominate, and Western
has consented to appoint, Adriana M. Boeka to the Western Board as of the
Effective Time.

EMPLOYEE BENEFITS

Pursuant to the Merger Agreement, all benefit and compensation plans,
contracts, policies or arrangements covering current employees or former
employees of BKLA and its subsidiaries and current or former directors of BKLA,
including, but not limited to, "employee benefit plans" within the meaning of
Section 3(3) of ERISA, and deferred compensation, stock option, stock purchase,
stock appreciation rights, stock based, incentive and bonus plans will be
governed, managed and/or terminated by Western in Western's sole discretion from
and after the Effective Date. See "THE MERGER AGREEMENT-- Certain
Covenants--EMPLOYEE BENEFITS".

RELATED TRANSACTIONS

Other than the Merger Agreement, the Shareholder Agreements, the Stock
Option Agreement and the transactions contemplated by and described in this
Proxy Statement-Prospectus, Western and BKLA do not know of any past, present or
proposed material contracts, arrangements or understandings between Western or
its affiliates, on the one hand, and BKLA and its affiliates, on the other hand.

STOCK OPTIONS

Upon delivery of notice by the BKLA Board to holders of BKLA Stock Options
of the pendency of the Merger, any option granted prior to the Merger shall be
exercisable in full and not only as to those shares with respect to which
installments, if any, have then accrued, subject, however, to earlier expiration
or termination as provided elsewhere in BKLA's stock option plan.

At the Effective Time, all BKLA Stock Options, unless otherwise exercised
pursuant to Section 10 of BKLA's stock option plan, shall be converted into the
right to receive for each share of BKLA Common Stock otherwise issuable upon
exercise thereof a number of shares of Western Common Stock equal to the
quotient obtained by dividing the spread by $42.61. After accumulating all such
Replacement Shares issuable to any holder of BKLA Stock Options, any fractional
Replacement Shares issuable to any holder of BKLA Stock Options of .2 or above
shall be rounded upwards. See "NOTES TO UNAUDITED PRO

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FORMA COMBINED CONDENSED FINANCIAL DATA--NOTE 1" and "THE MERGER
AGREEMENT--Exchange of Stock Certificates; Dividends".

As of the BKLA Record Date, there were 322,850 options outstanding, and
executive officers of BKLA held the following unvested options to purchase BKLA
Common Stock which will vest at the Effective Time as a result of the Merger:

<TABLE>
<CAPTION>
NUMBER OF UNVESTED OPTIONS VALUE AT THE BKLA RECORD DATE
WHICH BECOME EXERCISABLE AT THE OF OPTIONS WHICH VEST AT THE
NAME EFFECTIVE TIME EFFECTIVE TIME (1)
- -------------------------------------------------- ------------------------------- -----------------------------
<S> <C> <C>
John J. Feldman................................... 56,250 $ 605,340
Adriana M. Boeka.................................. 29,500 217,767
Robert G. Jacobsen................................ 17,750 181,640
Wendy Moskal...................................... 19,000 187,870
------- -----------
122,500 $ 1,192,617
</TABLE>

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

(1) Value is based on the closing sale price for Western Common Stock as
reported by Nasdaq multiplied by the Conversion Number of 0.4224 on the BKLA
Record Date, less the weighted average per share exercise price.

SUBMISSION OF SHAREHOLDERS' PROPOSALS FOR BKLA'S 1999 ANNUAL MEETING

In the event that the Merger is not consummated as contemplated in the
Merger Agreement, BKLA Shareholders may submit proposals for shareholder action
at the 1999 Annual Meeting of BKLA Shareholders if they do so in accordance with
applicable regulations of the Commission. Any such proposals must be submitted
to Beverly A. Dyck, Corporate Secretary of BKLA, no later than November 5, 1998,
in order to be considered for inclusion in BKLA's 1999 proxy materials.

DISSENTERS' RIGHTS

In connection with the Merger, the Shareholders may be entitled to
Dissenters' Rights under Chapter 13 of the CGCL, attached hereto as Appendix C.
The description of Dissenters' Rights contained in this Proxy
Statement-Prospectus is qualified in its entirety by reference to Chapter 13 of
the CGCL. IN ORDER FOR A BKLA SHAREHOLDER TO EXERCISE DISSENTERS' RIGHTS, A
NOTICE OF SUCH SHAREHOLDER'S INTENTION TO EXERCISE HIS OR HER DISSENTERS' RIGHTS
AS PROVIDED IN THE CGCL MUST BE SENT BY SUCH SHAREHOLDER AND RECEIVED BY BKLA ON
OR BEFORE THE DATE OF THE BKLA MEETING, AND SUCH SHAREHOLDER MUST VOTE AGAINST
THE APPROVAL OF THE PRINCIPAL TERMS OF THE MERGER AND COMPLY WITH SUCH OTHER
PROCEDURES AS REQUIRED BY THE CGCL, AS MORE FULLY DESCRIBED BELOW. FAILURE TO
SEND SUCH NOTICE, TO VOTE AGAINST THE PRINCIPAL TERMS OF THE MERGER OR TO FOLLOW
SUCH OTHER PROCEDURES WILL RESULT IN A WAIVER OF SUCH SHAREHOLDER'S DISSENTERS'
RIGHTS.

Any demands, notices, certificates or other documents delivered to BKLA
prior to the Merger may be sent to Beverly A. Dyck, Corporate Secretary, Bank of
Los Angeles, 8901 Santa Monica Boulevard, West Hollywood, California 90069.
Thereafter, they may be sent to Julius G. Christensen, Executive Vice President,
General Counsel and Secretary, Western Bancorp, 4100 Newport Place, Suite 900,
Newport Beach, California 92660.

If no instructions are indicated on proxies received by BKLA, such proxies
will be voted for the proposal to approve the principal terms of the Merger at
the BKLA Meeting. Those BKLA Shareholders who return their proxies without
instructions, resulting in a vote for the approval of the principal terms of the
Merger, will not be entitled to Dissenters' Rights.

In addition, because the BKLA Common Stock is traded on Nasdaq, BKLA
Shareholders will not have Dissenters' Rights unless demands for purchase in
cash of such shares at their fair market value as of April 16, 1998 pursuant to
Section 1301 of the CGCL (each, a "Demand"), are made with respect to 5% or

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more of the outstanding shares of BKLA Common Stock, (before giving effect to
the Merger). Such Demands must be received by BKLA or its transfer agent not
later than the date of the BKLA Meeting. In the event that Demands are made with
respect to 5% or more of the outstanding shares of BKLA Common Stock on or
before the date of the BKLA Meeting, the BKLA Shareholders who made Demands will
be entitled to Dissenters' Rights, provided that such Dissenters' Rights are
perfected pursuant to Chapter 13 of the CGCL.

In the event that (i) the Merger is approved by the BKLA Shareholders and
(ii) Demands are made by holders of 5% or more of the BKLA Common Stock, a
holder of BKLA Common Stock who objects to the Merger (a "Dissenting
Shareholder") will be entitled to payment in cash of the fair market value as of
April 16, 1998 (the day before the public announcement of the Merger) of his or
her Shares ("Dissenting Shares"); provided that (a) such shares were outstanding
immediately prior to the date for the determination of shareholders entitled to
vote on the Merger; (b) the Dissenting Shareholder voted his or her shares
against the approval of the principal terms of the Merger; (c) the Dissenting
Shareholder made a Demand; and (d) the Dissenting Shareholder has submitted for
endorsement certificates representing his or her Dissenting Shares, in
accordance with Section 1302 of the CGCL.

The Demand must (a) be a written demand to purchase the Dissenting Shares
and make payment to the Dissenting Shareholder in cash of their fair market
value as of April 16, 1998; (b) be received by BKLA on or before the date of the
BKLA Meeting; (c) state the number and class of the shares held of record by the
Dissenting Shareholder that the Dissenting Shareholder demands that BKLA
purchase; and (d) contain a statement of what the Dissenting Shareholder claims
to be the fair market value of his or her Dissenting Shares as of April 16,
1998. Such statement of the fair market value constitutes an offer by the
Dissenting Shareholder to sell his or her Dissenting Shares at such price. A
Dissenting Shareholder who has made such a demand for payment may not withdraw
such Demand unless BKLA consents thereto. A proxy or vote against the approval
of the principal terms of the Merger Agreement does not in itself constitute a
Demand.

The Dissenting Shareholder must submit the certificates representing the
Dissenting Shares for endorsement as Dissenting Shares to BKLA at its principal
office or at the office of its transfer agent within 30 days after the date on
which notice of approval of the Merger by BKLA Shareholders was mailed to such
Dissenting Shareholder.

If any Shareholder has Dissenters' Rights, BKLA will mail to each such
shareholder a notice of the approval of the Merger by the BKLA Shareholders,
within ten days after the date of such approval, accompanied by (a) a copy of
Sections 1300, 1301, 1302, 1303 and 1304 of Chapter 13 of the CGCL; (b) a
statement of the price determined by BKLA to represent the fair market value as
of April 16, 1998 of the Dissenting Shares (which BKLA believes to be the
closing price on April 16, 1998 of $16.50); and (c) a brief description of the
procedure to be followed if the shareholder desires to exercise his or her
Dissenters' Rights under such sections. The statement of price constitutes an
offer by BKLA to purchase such Dissenting Shares.

If BKLA denies that shares submitted to it as Dissenting Shares are
Dissenting Shares, or if BKLA and a Dissenting Shareholder fail to agree on the
fair market value of the Dissenting Shares, either such Dissenting Shareholder
or BKLA may file a complaint in the Superior Court of the proper county in
California requesting that the court determine such issue. Such complaint must
be filed within six months after the date on which notice of the approval of the
Merger is mailed to Dissenting Shareholders. It is the opinion of BKLA that the
fair market value of its Shares with regard to valuation for Dissenting Share
purposes is $16.50, the closing price of BKLA Common Stock as reported on the
Nasdaq for April 16, 1998, the day prior to announcement of the Merger.

On trial of the action, the court will first determine if the shares are
Dissenting Shares, and if so determined, the court will either determine the
fair market value or appoint one or more impartial appraisers to do so. If both
BKLA and the Dissenting Shareholder fail to file a complaint within six months

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after the date on which notice of the approval of the Merger was mailed to the
Dissenting Shareholders, such Dissenting Shareholder will lose his or her
Dissenters' Rights. In addition, if the Dissenting Shareholder transfers such
Dissenting Shares prior to their submission for the required endorsement, such
shares will lose their status as Dissenting Shares.

FAILURE TO TAKE ANY NECESSARY STEP WILL RESULT IN A TERMINATION OR WAIVER OF
THE RIGHTS OF THE HOLDER UNDER CHAPTER 13 OF THE CGCL. A PERSON HAVING A
BENEFICIAL INTEREST IN BKLA COMMON STOCK THAT IS HELD OF RECORD IN THE NAME OF
ANOTHER PERSON, SUCH AS A TRUSTEE OR NOMINEE, MUST ACT PROMPTLY TO CAUSE THE
RECORD HOLDER TO FOLLOW THE REQUIREMENTS OF CHAPTER 13 OF THE CGCL IN A TIMELY
MANNER IF SUCH PERSON ELECTS TO DEMAND PAYMENT OF THE FAIR MARKET VALUE OF SUCH
SHARES.

ACCOUNTING TREATMENT

For accounting and financial reporting purposes, it is currently expected
that the Merger will be accounted for as a pooling of interests in accordance
with GAAP, and comfort by the independent auditors for both Western and BKLA of
the ability to use such accounting treatment is one of the conditions to the
consummation of the Merger. Under this method of accounting, the previously
recorded assets and liabilities of Santa Monica Bank and BKLA would be carried
forward to SMB at their recorded amounts; income and expenses of SMB would
include income and expenses of Santa Monica Bank and BKLA for the entire fiscal
year in which the Merger occurs; and the reported results of the separate
corporations for prior periods would be combined and restated as the results of
SMB. The results of the pooling treatment for accounting purposes would be
reflected in historical consolidated financial statements of Western.

Confirmation by the independent auditors of each of Western and BKLA of the
ability to use the pooling-of-interest method of accounting to account for the
Merger is one condition (the "Pooling Condition") to consummation of the Merger.
Such confirmation is to be delivered shortly prior to each of the mailing date
of this Proxy Statement-Prospectus and the Effective Date. In the event that the
Pooling Condition is not satisfied, each of Western and BKLA may terminate the
Merger Agreement for failure of the Pooling Condition. However, if both Western
and BKLA decide to waive in writing the Pooling Condition prior to the Effective
Time, the Merger will be consummated and will be accounted for using the
purchase method of accounting, provided that all other conditions to
consummation of the Merger are fulfilled or waived in writing.

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THE MERGER AGREEMENT

SET FORTH BELOW IS A DESCRIPTION OF CERTAIN OF THE TERMS AND CONDITIONS OF
THE MERGER AGREEMENT AND RELATED MATTERS. THIS SUMMARY OF THE TERMS AND
CONDITIONS OF THE MERGER AGREEMENT DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE MERGER AGREEMENT
AS SET FORTH IN APPENDIX A HERETO AND THE TEXT THEREOF IS INCORPORATED BY
REFERENCE HEREIN.

THE MERGER

The Merger Agreement was entered into by and among Western, Santa Monica
Bank and BKLA on April 16, 1998, and amended and restated as of June 24, 1998
and July 16, 1998. Pursuant to the Merger Agreement, at the Effective Time, BKLA
will merge with Santa Monica Bank, with Santa Monica Bank being the Surviving
Corporation and operating under the name "Santa Monica Bank". The separate
corporate existence of BKLA will then cease. In connection with the Merger, each
share of BKLA Common Stock issued and outstanding at the Effective Time (other
than (a) shares that have not been voted in favor of approval of the principal
terms of the Merger and with respect to which Dissenters' Rights have been
perfected in accordance with the CGCL and (b) shares held by any of BKLA's
subsidiaries or by Western or any of its Subsidiaries, in each case other than
in a fiduciary (including custodial or agency) capacity or as a result of debts
previously contracted in good faith) will be converted automatically into,
subject to the limitations set forth in the Merger Agreement with respect to
proration and fractional shares, the Consideration. Each share of Western Common
Stock outstanding immediately prior to the Effective Time will remain
outstanding after the Merger as one share of Western Common Stock.

At the Effective Time, all BKLA Stock Options, unless otherwise exercised
pursuant to BKLA's stock option plan, shall be converted into the right to
receive for each share of BKLA Common Stock otherwise issuable upon exercise
thereof a number of shares of Western Common Stock equal to the quotient
obtained by dividing the Spread by $42.61. At the Effective Time, each BKLA
Warrant shall be converted into a warrant to acquire, on the same terms and
conditions as were applicable under such BKLA warrant agreement, the number of
shares of Western Common Stock equal to (a) the number of shares of BKLA Common
Stock subject to the BKLA Warrant, multiplied by (b) the Conversion Number (such
product rounded down to the nearest whole number), at an exercise price for the
share (rounded up to the nearest whole cent) equal to (y) the aggregate exercise
price for the shares of BKLA Common Stock which were purchasable pursuant to
such BKLA Warrant divided by (z) the number of full shares of Western Common
Stock subject to such Replacement Warrant.

It is expected that the Merger will be a reorganization within the meaning
of Section 368(a) of the Code. See "THE MERGER--Certain Federal Income Tax
Consequences".

EFFECTIVE TIME AND EFFECTIVE DATE

On a date to be selected by Western, which will be within ten days after the
last to occur of the expiration of all applicable waiting periods in connection
with approvals of governmental authorities and the receipt of all approvals of
governmental authorities and all conditions to the consummation of the Merger
being satisfied or waived (or, at the election of Western, on the last business
day of the month in which such tenth day occurs or, if such tenth day occurs on
one of the last five business days of such month, on the last business day of
the succeeding month), or on such earlier or later date as may be agreed in
writing by Western and BKLA, an agreement of merger will be executed in
accordance with all appropriate legal requirements and will be filed as required
by law, and the Merger will become effective upon such filing or on such date as
may be specified in such agreement of merger. The date of such filing or such
later effective date is herein called the "EFFECTIVE DATE". The "EFFECTIVE TIME"
of the Merger will be the time of such filing or as set forth in such agreement
of merger.

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EXCHANGE OF STOCK CERTIFICATES; DIVIDENDS

At or prior to the Effective Time, Western will deposit, or will cause to be
deposited, with U.S. Stock Transfer or with such other unaffiliated exchange
agent as Western will reasonably select (in such capacity, the "Exchange
Agent"), for the benefit of the holders of certificates formerly representing
shares of BKLA Common Stock ("Old Certificates"), for exchange, certificates
representing the shares of Western Common Stock ("New Certificates") and an
estimated amount of cash to be paid in exchange for outstanding shares of BKLA
Common Stock.

As soon as practicable, but no later than five (5) business days after the
Effective Date, Western will send or cause to be sent to each former holder of
record of shares of BKLA Common Stock immediately prior to the Effective Time
transmittal materials (the "Letter of Transmittal") for use in exchanging such
shareholder's Old Certificates for the Consideration. Western will cause the New
Certificates into which shares of a shareholder's BKLA Common Stock are
converted on the Effective Date and/or any check in respect of any fractional
share interests or dividends or distributions which such person will be entitled
to receive to be delivered to such shareholder upon delivery to the Exchange
Agent of Old Certificates representing such shares of BKLA Common Stock owned by
such shareholder. No interest will be paid on any such cash to be paid in lieu
of fractional share interests or in respect of dividends or distributions which
any such person will be entitled to receive upon such delivery.

At the election of Western, no dividends or other distributions with respect
to Western Common Stock with a record date occurring after the Effective Time
will be paid to the holder of any unsurrendered Old Certificate representing
shares of BKLA Common Stock converted in the Merger into the right to receive
shares of such Western Common Stock until the holder thereof will be entitled to
receive New Certificates in exchange therefor in accordance with the procedures
set forth in the Merger Agreement, and no such shares of BKLA Common Stock will
be eligible to vote until the holder of Old Certificates is entitled to receive
New Certificates in accordance with the procedures set forth in the Merger
Agreement. After becoming so entitled in accordance with Section 3.04 of the
Merger Agreement, the record holder thereof also will be entitled to receive any
such dividends or other distributions, without any interest thereon, which
theretofore had become payable with respect to shares of Western Common Stock
such holder had the right to receive upon surrender of the Old Certificate.

BKLA SHAREHOLDERS SHOULD NOT FORWARD BKLA COMMON STOCK CERTIFICATES TO THE
EXCHANGE AGENT UNTIL THEY HAVE RECEIVED TRANSMITTAL FORMS. BKLA SHAREHOLDERS
SHOULD NOT RETURN CERTIFICATES WITH THE ENCLOSED PROXY.

NO FRACTIONAL SHARES

No fractional shares of Western Common Stock will be issued in the Merger.
In lieu of the issuance of any fractional share of Western Common Stock that
would otherwise be issuable in conversion or exchange for warrants, a cash
adjustment will be paid to BKLA Shareholders in an amount equal to such
fractional proportion of the price of a share of Western Common Stock as of the
close of business on the day immediately prior to the Effective Time. In lieu of
the issuance of any fractional share of Western Common Stock that would
otherwise be issuable in accordance with the Stock Option Agreement, any
Fractional Replacement Shares of holders of BKLA Stock Options of 0.2 or above
shall be rounded upwards. See "NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL DATA" and "THE MERGER--Interests of Certain Persons in the
Merger--STOCK OPTIONS".

CONDUCT OF THE BUSINESS OF BKLA AND WESTERN PRIOR TO THE MERGER

Pursuant to the Merger Agreement, each of Western and BKLA has agreed that,
during the period from the date of the Merger Agreement until the Effective
Time, except as permitted by the Merger Agreement, each will not (a) take any
action that would adversely affect or delay the ability of BKLA or

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Western to perform any of their obligations on a timely basis under the Merger
Agreement, or take any action that is reasonably likely to have a material
adverse effect on BKLA or Western; or (b) (i) take any action which it knows or
reasonably should know that such action would, or would be reasonably likely to,
prevent or impede the Merger from qualifying (A) for pooling-of-interests
accounting treatment or (B) as a reorganization within the meaning of Section
368 of the Code; or (ii) knowingly take any action that is intended or is
reasonably likely to result in (A) any of its representations and warranties set
forth in the Merger Agreement being or becoming untrue in any material respect
at any time at or prior to the Effective Time, (B) any of the conditions to the
Merger set forth in Article VII of the Merger Agreement not being satisfied or
(C) a violation of any provision of the Merger Agreement.

In addition, BKLA has agreed that, during the same period, it will not,
subject to certain exceptions, without the prior consent of Western, (a) conduct
the business of BKLA other than in the ordinary and usual course; (b) (i) issue,
sell or otherwise permit to become outstanding, or authorize the creation of,
any additional shares of BKLA Common Stock or preferred stock, (ii) enter into
any agreement with respect to the foregoing or (iii) permit any additional
shares of BKLA Common Stock to become subject to new grants of employee or
director stock options or other similar stock-based employee rights; (c) (i)
make, declare, pay or set aside for payment any dividend or declare or make any
distribution or (ii) directly or indirectly adjust, split, combine, redeem,
reclassify, purchase or otherwise acquire, any shares of its capital stock; (d)
increase the compensation of employees or directors, or make any other changes
with respect to compensation, other than (i) general increases in compensation
for employees, (ii) for grants of awards to newly hired employees consistent
with past practice, (iii) in accordance with applicable law or (iv) to satisfy
contractual obligations existing as of April 16, 1998; (e) enter into,
establish, adopt or amend any pension, retirement, stock option, or similar plan
or arrangement, or take any action to accelerate the vesting or exercisability
of stock options, restricted stock or other compensation or benefits payable
thereunder; (f) dispose of or discontinue any of its assets, deposits, business
or properties except in the ordinary course of business and in a transaction
that is not material to BKLA; (g) acquire all or any portion of, the assets,
business, deposits or properties of any other entity except in the ordinary
course of business; (h) make any capital expenditures other than those in the
ordinary course of business in amounts not exceeding $10,000 individually or
$50,000 in the aggregate; (i) amend its articles or by-laws; (j) implement or
adopt any change in its accounting principles or practices or methods; (k)
except in the ordinary course of business, enter into or terminate any material
contract or amend or modify in any material respect any existing material
contracts; (l) except in the ordinary course of business, settle any claim,
action or proceeding, except for those involving solely money damages in an
amount, individually or in the aggregate, not material to BKLA; (m) (i)
implement or adopt any material change in its interest rate and other risk
management policies, procedures or practices; (ii) fail to follow its existing
policies or practices with respect to managing its exposure to interest rate and
other risk; or (iii) fail to use commercially reasonable means to avoid any
material increase in its aggregate exposure to interest rate risk; (n) incur any
indebtedness for borrowed money other than in the ordinary course of business;
(o) make any loan, loan commitment or renewal or extension thereof to any person
which would, when aggregated with all outstanding loans, commitments for loans
or renewals or extensions thereof made by BKLA to such person and any affiliate
or immediate family member of such person, exceed $500,000 without submitting
loan package information to the chief credit officer of Western for review with
a right of comment at least one full business day prior to taking such action;
or (p) agree or commit to do any of the foregoing.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains various customary representations and
warranties relating to, among other things, (a) organization and similar
corporate matters; (b) the capital structure of each of BKLA, Western and Santa
Monica Bank; (c) authorization, execution, delivery, performance and
enforceability of the Merger Agreement and related matters; (d) conflicts under
articles or bylaws, required consents or approvals, and violations of any
agreements or law; (e) documents filed with the Commission and the FDIC and the
accuracy of information contained therein; (f) absence of certain material
adverse events,

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changes, effects or undisclosed liabilities; (g) retirement and other employee
plans and matters relating to the Employee Retirement Income Security Act of
1974, as amended; (h) litigation; (i) compliance with law, including
environmental compliance; (j) tax returns and audits; (k) ownership of real
property; (l) absence of regulatory actions; and (m) labor matters.

CERTAIN COVENANTS

ACQUISITION PROPOSALS

Pursuant to the Merger Agreement, BKLA agrees that it will not, and will
cause its officers, directors, agents, advisors and affiliates not to, solicit
or encourage inquiries or proposals with respect to, or engage in any
negotiations concerning, or provide any confidential information to, or have any
discussions with, any person relating to, any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving BKLA or any
proposal or offer to acquire in any manner a substantial equity interest in, or
a substantial portion of the assets or deposits of, BKLA, other than the
transactions contemplated by the Merger Agreement (any such proposal or offer
being referred to as an "Acquisition Proposal"), except to the extent legally
required for the discharge by the BKLA Board of its fiduciary duties as advised
by counsel to the BKLA Board.

BKLA has also agreed, as of the date of the Merger Agreement, to immediately
cease and cause to be terminated any activities, discussions or negotiations
conducted prior to the date of the Merger Agreement with any parties other than
Western with respect to any of the foregoing and to use its reasonable best
efforts to enforce any confidentiality or similar agreement relating to an
Acquisition Proposal. BKLA will promptly (within 24 hours) advise Western
following the receipt by BKLA of any Acquisition Proposal and the substance
thereof (including the identity of the person making such Acquisition Proposal),
and advise Western of any developments with respect to such Acquisition Proposal
immediately upon the occurrence thereof.

CERTAIN POLICIES OF BKLA

At or before the Effective Time, BKLA will, consistent with GAAP and on a
basis mutually satisfactory to it and Western, modify and change its loan,
litigation and real estate valuation policies and practices (including loan
classifications and levels of reserves) so as to be applied on a basis that is
consistent with that of Western.

EMPLOYEE BENEFITS

Pursuant to Merger Agreement, from and after the Effective Date, all of
BKLA's benefit and compensation plans, contracts, policies or arrangements
covering employees or former employees of BKLA and current or former directors
of BKLA, including, but not limited to, "employee benefit plans" within the
meaning of Section 3(3) of ERISA, and deferred compensation, stock option, stock
purchase, stock appreciation rights, stock based, incentive and bonus plans,
will be governed, managed and/or terminated by Western in Western's sole
discretion.

INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE

From and for a period of six years after the Effective Time, Western and SMB
have agreed to indemnify and hold harmless each director and officer of BKLA,
determined as of the Effective Time (the "Indemnified Parties"), against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages or liabilities (collectively, "Costs") incurred in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of matters
existing or occurring at or prior to the Effective Time (including with respect
to the Merger Agreement or any of the transactions contemplated thereby),
whether asserted, claimed or arising prior to, at or after the Effective Time,
to the extent to which such Indemnified Parties were entitled under

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California law and BKLA's articles of incorporation or bylaws in effect on April
16, 1998, and Western also will advance expenses as incurred to the extent
permitted under California law and BKLA's articles of incorporation and bylaws.

Any Indemnified Party wishing to claim indemnification under the Merger
Agreement, upon learning of any such claim, action, suit, proceeding or
investigation, must as promptly as possible notify Western thereof, but the
failure so to notify will not relieve Western of any liability it may have to
such Indemnified Party if such failure does not materially prejudice Western. In
the event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (a) Western will have the right to
assume the defense thereof and Western will not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the defense
thereof, except that if Western elects not to assume such defense, or counsel
for the Indemnified Parties advises that there are issues that raise conflicts
of interest between Western and the Indemnified Parties, the Indemnified Parties
may retain counsel satisfactory to them, and Western will pay the reasonable
fees and expenses of one such counsel for the Indemnified Parties in any
jurisdiction promptly as statements thereof are received; (b) the Indemnified
Parties will cooperate in the defense of any such matter; and (c) Western will
not be liable for any settlement effected without its prior written consent.
Notwithstanding the foregoing, Western will not have any obligation under the
Merger Agreement to any Indemnified Party when and if a court of competent
jurisdiction ultimately determines, and such determination becomes final and
nonappealable, that the indemnification of such Indemnified Party in the manner
contemplated hereby is not permitted or is prohibited by applicable law.

Western also has agreed that for a period of six years after the Effective
Time, it will use its reasonable best efforts to cause to be maintained in
effect at a minimum the policies of directors' and officers' liability insurance
maintained by BKLA as of April 16, 1998 (provided that Western may substitute
therefor policies of comparable coverage with respect to claims arising from
facts or events that occurred before the Effective Time); PROVIDED, HOWEVER,
that in no event will Western be obligated to expend, in order to maintain or
provide insurance coverage pursuant to the Merger Agreement, any amount per
annum in excess of 125% of the amount of the annual premiums paid as of the date
of the Merger Agreement by BKLA for such insurance (the "Maximum Amount"). If
the amount of the annual premiums necessary to maintain or procure such
insurance coverage exceeds the Maximum Amount, Western will use all reasonable
efforts to maintain the most advantageous policies of directors' and officers'
insurance obtainable for an annual premium equal to the Maximum Amount.
Notwithstanding the foregoing, prior to the Effective Time, Western may request
BKLA to, and BKLA thereupon will, purchase insurance coverage, on such terms and
conditions as shall be acceptable to Western, extending for a period of six
years BKLA's directors' and officers' liability insurance coverage in effect as
of the date of the Merger Agreement (covering past or future claims with respect
to periods before the Effective Time) and such coverage will satisfy Western's
obligations under the Merger Agreement.

If Western or any of its successors or assigns (a) shall consolidate with or
merge into any other corporation or entity and shall not be the continuing or
surviving corporation or entity of such consolidation or merger or (b) shall
transfer all or substantially all of its properties and assets to any
individual, corporation or other entity, then and in each such case, proper
provision will be made to ensure that the successors and assigns of Western
assume the obligations described above.

NOTIFICATION OF CERTAIN MATTERS

Western and BKLA each has agreed to give prompt notice to the other of any
fact, event or circumstance known to it that (i) is reasonably likely,
individually or taken together with all other facts, events and circumstances
known to it, to result in any material adverse effect with respect to it or (ii)
would cause or constitute a material breach of any of its representations,
warranties, covenants or agreements contained in the Merger Agreement.

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SECURITIES ACT

Not later than the 15th day prior to the mailing of this Prospectus-Proxy
Statement to the BKLA Shareholders, BKLA has agreed to deliver to Western a
schedule of each person that, to the best of BKLA's knowledge, is or is
reasonably likely to be, as of the date of the BKLA Meeting, deemed to be a BKLA
Affiliate.

BKLA will use its reasonable best efforts to cause each person who may be
deemed to be a BKLA Affiliate to execute and deliver to Western on or before the
date of mailing of this Prospectus-Proxy Statement to BKLA Shareholders an
agreement which provides that each such person will agree not to sell, pledge,
transfer or otherwise dispose of the shares of Western Common Stock to be
received by such person in the Merger except in compliance with the applicable
provisions of the Securities Act.

CONDITIONS

The respective obligations of Western and BKLA to consummate the Merger are
subject to certain conditions, including (a) the approval by the BKLA
Shareholders of the principal terms of the Merger; (b) receipt of approvals
required by law in connection with the Merger and the other transactions
contemplated by the Merger Agreement (the parties having agreed that no such
approval will be deemed to have been received if it includes any condition or
requirement that would result in a material adverse effect on SMB or would
reduce the economic benefits of the Merger in so significant and adverse a
manner that Western would not have entered into the Merger Agreement had such
condition or requirement been known to it); (c) the absence of any statute,
rule, regulation, order, injunction or decree being in effect and prohibiting
the consummation of the Merger or any other transaction contemplated by the
Merger Agreement; (d) the Registration Statement having become effective and
there being issued no stop order suspending the effectiveness of the
Registration Statement and no proceedings for that purpose initiated or
threatened by the Commission; (e) the receipt and continued effectiveness of all
permits and other authorizations under state securities laws necessary to
consummate the transactions contemplated by the Merger Agreement and to issue
the shares of Western Common Stock to be issued in the Merger; (f) the approval
for listing on Nasdaq, subject to official notice of issuance, of the shares of
Western Common Stock to be issued in the Merger; (g) the receipt by each of
Western and BKLA from each of their respective accountants stating that in its
opinion the Merger will qualify for pooling-of-interests accounting treatment;
and (h) the receipt by each of Western and BKLA from Sullivan & Cromwell and
Vavrinek, respectively, each stating that in its opinion, the Merger will be
treated as a reorganization within the meaning of Section 368(a) of the Code.

The obligations of Western and Santa Monica Bank to consummate the Merger
also are subject to the fulfillment or waiver by Western prior to the Effective
Time of certain conditions, including the following: (a) the representations and
warranties of BKLA being true and correct unless the failure so to be true and
correct is not likely to have a material adverse effect on BKLA; (b) the
performance by BKLA in all material respects of all obligations contained in the
Merger Agreement required to be performed by BKLA before the Effective Time; and
(c) receipt by Western of a customary "cold comfort" letter from Vavrinek, with
respect to certain financial statements and data of BKLA.

In addition, the obligation of BKLA to consummate the Merger also is subject
to the fulfillment or waiver by BKLA prior to the Effective Time of certain
conditions, including the following: (a) the representations and warranties of
Western being true and correct unless the failure so to be true and correct is
not likely to have a material adverse effect on Western; (b) the performance by
Western in all material respects of all obligations contained in the Merger
Agreement required to be performed before the Effective Time; (c) receipt by
BKLA of a customary "cold comfort" letter from KPMG Peat Marwick LLP with
respect to certain financial statements and data of Western; and (d) as of the
Effective Time, the appointment by BKLA of a director to the Western Board.

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TERMINATION

The Merger Agreement may be terminated, and the Merger abandoned, prior to
the Effective Date, either before or after its approval by the BKLA
Shareholders: (a) by the mutual consent of Western and BKLA, if so determined by
their respective Boards; (b) by either of Western or BKLA, if so determined by
its Board, by written notice to the other, in the event of (i) the failure of
the BKLA Shareholders to approve the Merger at the BKLA Meeting, (ii) a material
breach by the other party of any representation, warranty, covenant or agreement
contained in the Merger Agreement that is not cured or not curable within 30
days after written notice of such breach is given to the party committing such
breach, or (iii) the Merger not having been consummated by December 31, 1998;
(c) by either of Western or BKLA, by written notice to the other, if any
approval of a governmental authority required to permit consummation of the
Merger or any transaction necessary to consummate the Merger shall have been
denied; (d) by BKLA, if with respect to any Ten Day Period (as defined below),
both (i)(A) the Ten Day Average Price (as defined below) shall be less than
$35.37 per share and (B) the Western Common Stock Price Percentage (as defined
below) shall be less than the BKX Index Percentage (as defined below) and (ii)
BKLA has delivered written notice to Western of its intention to terminate this
Agreement within forty-eight (48) hours following the date of such event; (e) by
Western, if the BKLA Board shall fail to recommend the Merger for approval by
the BKLA Shareholders; or (f) by BKLA, if the BKLA Board receives an Acquisition
Proposal and determines, based upon the written advice of counsel, to accept the
proposal and that proceeding with the Merger would violate fiduciary duties of
the BKLA Board to the BKLA Shareholders.

"Western Common Stock Price Percentage" is defined in the Merger Agreement
to mean the percentage determined by dividing the Ten Day Average Price by
$42.61 (as such amount may be adjusted pursuant to the paragraph above); (x)
"BKX Index Percentage" means the percentage determined by dividing (i) the
product of (A) the Keefe Bank Index as of the date of determination times (B)
.66 by (ii) the Keefe Bank Index as of the date hereof; (y) "Ten Day Average
Price" means the average sales price per share of Western Common Stock for a Ten
Day Period determined by averaging the last reported sales price on each trading
day; and (z) "Ten Day Period" means any period of ten (10) consecutive trading
days.

TERMINATION PAYMENT

If the Merger Agreement is terminated by BKLA pursuant to a material breach
of any representation, warranty, covenant or agreement contained therein by
Western that is not cured or not curable within 30 days after written notice of
such breach is given to Western by BKLA, Western will pay to BKLA a fee equal to
BKLA's out-of-pocket expenses in connection with the Merger, up to $500,000. If
the Merger Agreement is terminated by Western pursuant to a material breach of
any representation, warranty, covenant or agreement contained therein by BKLA
that is not cured or not curable within 30 days after written notice of such
breach is given to BKLA by Western, or under the circumstances described in
clause (e) under "--Termination" above, BKLA shall pay to Western a fee equal to
BKLA's out-of-pocket expenses in connection with the Merger, up to $500,000. In
the event that there is a termination as a result of BKLA entering into an
Acquisition Proposal under the circumstances described in clause (e) under
"--Termination" above, BKLA shall pay Western up to $500,000 to cover
out-of-pocket expenses in addition to Western's rights under the Stock Option
Agreement.

EXPENSES

The estimated aggregate Merger costs were $1.5 million for employer costs,
$0.5 million for conversion costs, $3.0 million for investment banking and other
professional fees, and $2.1 million for other costs. The total estimated
aggregate Merger costs are $5.4 million, after giving effect to an estimated
reduction of $1.7 million due to beneficial tax effects. All of these costs and
expenses incurred in connection with the Merger Agreement and the transactions
contemplated thereby shall be paid by the party incurring such costs or
expenses, except upon termination of the Merger Agreement under certain
circumstances. See "--Termination Payment".

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THE STOCK OPTION AGREEMENT

GENERAL

As an inducement and condition to Western's entering into the Merger
Agreement, BKLA entered into the Stock Option Agreement with Western. Pursuant
to the Stock Option Agreement, BKLA granted to Western an irrevocable Option,
exercisable only under certain limited and specifically defined circumstances,
none of which, to the best of BKLA's and Western's knowledge, has occurred as of
the date hereof, to purchase up to 945,585 authorized but theretofore unissued
shares of BKLA Common Stock (but in no event more than 19.9 percent of the
shares of BKLA Common Stock outstanding at the time of exercise), for a purchase
price per share of $17.375, calculated by taking the average of the daily
closing price of the BKLA Common Stock as reported on Nasdaq for the Ten Day
Period beginning April 10, 1998, subject to adjustment in certain circumstances.
The purchase of BKLA Common Stock pursuant to the Stock Option Agreement is
subject to compliance with applicable law, including receipt of any necessary
approvals under the BHCA.

The Stock Option Agreement and the Option are intended to increase the
likelihood that the Merger will be consummated according to the terms set forth
in the Merger Agreement, and may be expected to discourage offers by third
parties to acquire BKLA prior to the Merger.

THE STOCK OPTION

Western may exercise the Option, in whole or in part, at any time and from
time to time following the occurrence of certain events (each, a "Purchase
Event"), including (a) the acquisition by any person other than Western or any
subsidiary of Western of beneficial ownership of shares of BKLA Common Stock,
other than by exercise of existing options, warrants or other rights or as a
result of the execution and delivery of the Shareholder Agreements, such that,
upon the consummation of such acquisition, such person would have beneficial
ownership, in the aggregate, of 25 percent or more of the then outstanding
shares of BKLA Common Stock; or (b) the occurrence of certain other events (each
also referred to as a "Preliminary Purchase Event"), including:

(i) BKLA or any of its subsidiaries (each a "BKLA Subsidiary"), without
having received Western's prior written consent, having entered into an
agreement to engage in an Acquisition Transaction (as defined herein) with any
person other than Western or any of its subsidiaries (each a "Western
Subsidiary") or the BKLA Board having recommended that the BKLA Shareholders
approve or accept any Acquisition Transaction with any person other than Western
or any Western Subsidiary;

(ii) Any person, other than Western or any Western Subsidiary, having
acquired beneficial ownership or the right to acquire beneficial ownership,
other than by exercise of existing options, warrants or other rights, of shares
of BKLA Common Stock such that, upon the consummation of such acquisition, such
person would have beneficial ownership, in the aggregate, of ten percent or more
of the then outstanding shares of BKLA Common Stock;

(iii) Any person, other than Western or any Western Subsidiary, having made a
BONA FIDE proposal to BKLA or its shareholders, by public announcement or
written communication that is or becomes the subject of public disclosure, to
engage in an Acquisition Transaction; or

(iv) After a proposal is made by a third party to BKLA or its shareholders
to engage in an Acquisition Transaction, (A) BKLA having breached any covenant
or obligation contained in the Merger Agreement which breach would entitle
Western to terminate the Merger Agreement or (B) the holders of BKLA Common
Stock not approving the Merger Agreement at the meeting of such shareholders
held for the purpose of voting on the Merger Agreement, such meeting not having
been held or having been canceled prior to termination of the Merger Agreement
or the BKLA Board having withdrawn or modified in a manner adverse to Western
the recommendation of the BKLA Board with respect to the Merger Agreement.

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"Acquisition Transaction" is defined in the Stock Option Agreement to mean
(a) a merger or consolidation, or any similar transaction, involving BKLA or any
of BKLA's subsidiaries, (b) a purchase, lease or other acquisition of all or
substantially all of the assets of BKLA or any of BKLA's Subsidiaries or (c) a
purchase or other acquisition of securities representing ten percent or more of
the voting power of BKLA or any BKLA Subsidiary, other than by exercise of
existing options, warrants or other rights.

The Stock Option Agreement also provides for certain adjustments intended to
protect Western against dilution of its rights to acquire BKLA Common Stock. The
Stock Option Agreement grants certain registration rights ("Registration
Rights") to Western with respect to the shares issuable upon exercise of the
Option.

TERMINATION

The Option will terminate upon the earliest to occur of (a) the time
immediately prior to the Effective Time; (b) 12 months after the first
occurrence of a Purchase Event; (c) 18 months after the termination of the
Merger Agreement following the occurrence of a Preliminary Purchase Event; (d)
termination of the Merger Agreement in accordance with the terms thereof prior
to the occurrence of a Purchase Event or a Preliminary Purchase Event (other
than a termination of the Merger Agreement under the certain circumstances
referred to in the next clause (e)); or (e) 12 months after the termination of
the Merger Agreement upon the happening of certain events, including a material
breach of the Merger Agreement by BKLA and certain events relating to an
Acquisition Proposal.

THE SHAREHOLDER AGREEMENTS

Western has entered into Shareholder Agreements with Adriana M. Boeka,
Maurice J. Burford, Mary Anne Chalker, Roy Doumani, John J. Feldman, Rickey M.
Gelb, Robert G. Jacobsen, Wendy R. Moskal, John R. Newhouse, James V. Reimann,
Melvin F. Shaw and Burton N. Sterman (the "Party Shareholders"), each a BKLA
Shareholder and a current director or trustee of an estate of a former director
of BKLA. The Party Shareholders, holding in the aggregate shares representing
approximately 18.0% of the total voting power of BKLA Common Stock as of the
BKLA Record Date, each agreed, in consideration of the substantial expenses
incurred by Western and Santa Monica Bank in connection with the Merger
Agreement and as a condition to Western and Santa Monica Bank entering into the
Merger Agreement, to vote or to cause to be voted, or to execute a written
consent with respect to, all of such Party Shareholder's shares of BKLA Common
Stock (a) in favor of adoption and approval of the Merger Agreement and the
Merger at every meeting of BKLA Shareholders at which such matters are
considered and at every adjournment thereof and in connection with every
proposal to take action by written consent with respect thereto; and (b) against
any other Acquisition Proposal at every meeting of the BKLA Shareholders at
which such matters are considered and at every adjournment thereof and in
connection with every proposal to take action by written consent with respect
thereto.

Each Shareholder Agreement also provides that the Party Shareholder will
not, and will not permit any entity under its control to, deposit any of such
Party Shareholder's shares of BKLA Common Stock in a voting trust or subject any
such shares to any agreement, arrangement or understanding with respect to the
voting of such shares inconsistent with the Shareholder Agreement entered into
by that Party Shareholder. In addition, the Party Shareholders each agreed not
to sell, assign, transfer or dispose of any of his or her shares of BKLA Common
Stock during the term of the relevant Shareholder Agreement.

The Shareholder Agreements will terminate upon the earlier to occur of the
Effective Time (except for certain provisions which will survive the Effective
Time) and the date on which the Merger Agreement is terminated in accordance
with its terms.

The Shareholder Agreements bind the actions of the signatories thereto only
in their capacity as BKLA Shareholders. Those directors of BKLA who signed
Shareholder Agreements are not and could not be contractually bound to abrogate
their fiduciary duties as directors of BKLA. Accordingly, while such

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shareholders/directors are, under the Shareholder Agreements executed by them,
contractually bound to vote as a BKLA Shareholder in favor of the Merger and
against other Acquisition Proposals (should any be presented), their fiduciary
duties as BKLA directors nevertheless require them to act in their capacity as
directors in the best interest of BKLA when they decided to approve the Merger.
In addition, such shareholders/directors will continue to be bound by their
fiduciary duties as BKLA directors with respect to any decisions they may take
in connection with the Merger or otherwise.

COMPARISON OF SHAREHOLDER RIGHTS

COMPARISON OF CORPORATE STRUCTURE

Both Western and BKLA are California corporations and as such are governed
by the CGCL. Listed below is a summary of the material differences in the rights
of the shareholders of Western Common Stock and BKLA Common Stock. Except as
otherwise noted below, there are no material differences with regard to electing
members of the board of directors, amending the articles of incorporation or
bylaws, calling special meetings of shareholders, acting by written consent of
shareholders without a meeting, indemnifying directors and other voting rights.

DIVIDENDS AND DIVIDEND POLICY

BKLA

As a California state bank, BKLA may not make a distribution without prior
approval of the State Commissioner to the BKLA Shareholders (including a payment
of dividends, but excluding stock dividends) which exceeds the lesser of (i) its
retained earnings and (ii) its net income for the last three fiscal years, less
the amount of any previous distributions during such period. With the approval
of the State Commissioner, BKLA may make a distribution not exceeding its
retained earnings, its net income for the past fiscal year or its net income for
the current fiscal year. To date, BKLA has not declared or paid any dividends.

WESTERN

Holders of Western Common Stock are entitled to receive dividends declared
by the Western Board out of funds legally available therefor under the laws of
the State of California, subject to the rights of holders of any preferred stock
of Western that may be issued after the date hereof. On August 20, 1997, the
Western Board approved the institution of a quarterly dividend and thereafter
declared a dividend of $0.15 per common share in the fourth quarter of 1997.
Western also paid a dividend in the first quarter of 1998 of $0.15 per common
share, and on May 20, 1998, the Western Board declared a dividend of $0.15 per
common share which was paid on June 26, 1998 to shareholders of record on June
5, 1998. The $0.15 cash dividend paid by Western in June of 1998 was
approximately 38% of diluted earnings per share of $0.39 and approximately 27%
of diluted earnings per share before goodwill amortization of $0.55.

Western Management believes that it will be able to continue paying
quarterly dividends. However, because Western must comply with the CGCL and
banking regulations when paying dividends, there can be no assurance that
Western will continue to pay dividends at this level, if at all. In addition,
Western's ability to pay dividends is limited by a Third Amendment to Revolving
Credit Agreement, dated as of January 26, 1998, between Western and The Northern
Trust Company which provides that Western may not declare or pay any dividend
other than dividends payable in Western Common Stock or in the ordinary course
of business not to exceed 50% of net income per fiscal quarter of Western before
goodwill amortization and any restructuring charges incurred in connection with
any merger, consolidation or other restructuring contemplated by the SMB Merger
or similar transactions. See "RISK FACTORS--Regulation" and "INFORMATION
REGARDING WESTERN--Quarterly Dividend".

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NUMBER OF DIRECTORS

The bylaws of BKLA provide that the authorized number of directors of BKLA
shall be not less than six and not more than eleven. Currently, the actual
number of directors of BKLA is nine.

The Western Restated Bylaws provide that the authorized number of directors
of Western shall not be less than nine nor more than fifteen and that any
amendment to the Western Restated Bylaws affecting the authorized number of
directors must be approved by a majority of the Western Shareholders, provided
that an amendment to the bylaws reducing the number of directors to a number
less than five cannot be adopted if the votes cast against its adoption are
equal to more than 16 2/3% of the outstanding shares entitled to vote on such
amendment. Currently, the actual number of directors of Western is nine. Upon
consummation of the Merger, the addition of Adriana M. Boeka to the Western
Board of Directors will increase the actual number of directors to ten.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 317 of the CGCL authorizes a court to award, or a corporation's
Board of Directors to grant, indemnity to directors, officers and employees in
terms sufficiently broad to permit such indemnification under certain
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the Securities Act. Article Five of Western's restated articles of
incorporation provides for elimination of liability for monetary damages of its
directors, and Article Six of Western's Restated Articles of Incorporation and
Article VI of Western's Restated Bylaws provide for indemnification of its
directors, officers, employees and other agents to the fullest extent permitted
by the CGCL. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of Western pursuant to the foregoing provisions, or otherwise, Western has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.

VALIDITY OF WESTERN COMMON STOCK

The validity of the shares of Western Common Stock to be issued in the
Merger has been passed upon by Julius G. Christensen, Executive Vice President,
General Counsel and Secretary of Western.

EXPERTS

The consolidated financial statements of Western and subsidiaries as of
December 31, 1997 and 1996, and for the years then ended, have been incorporated
by reference herein and in the registration statement in reliance on the report
of KPMG Peat Marwick LLP, independent auditors, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing. Such report indicates that: (i) KPMG Peat Marwick LLP did not audit
either the 1996 consolidated financial statements of CCB or the 1996
consolidated financial statements of SCB, both of which were acquired during
1997 in mergers accounted for as poolings of interests. Such financial
statements were audited by other auditors whose reports were furnished to KPMG
Peat Marwick LLP, and KPMG Peat Marwick LLP's opinion, insofar as it related to
CCB and SCB, is based solely on the reports of the other auditors; (ii) the 1995
consolidated statements of operations, changes in shareholders' equity, and cash
flows of Western, prior to their restatement for the 1997 poolings of interest,
were audited by other auditors; (iii) the separate 1995 consolidated financial
statements of CCB and SCB included in the 1995 consolidated financial statements
of Western were audited by other auditors; and (iv) the combination of the
consolidated statements of operations, changes in shareholders' equity and cash
flows for the year ended December 31, 1995, after restatement for the 1997
poolings of interest, has been audited by KPMG Peat Marwick LLP.

The consolidated financial statements of Western for the year ended December
31, 1995, prior to their restatement for the 1997 poolings of interest, have
been incorporated by reference herein in reliance upon

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the report given thereto upon the authority of Vavrinek (the successor to Dayton
& Associates) as experts in accounting and auditing.

The consolidated statements of financial condition of CCB and subsidiaries
as of December 31, 1996, and the related consolidated statements of operations,
changes in shareholders' equity and cash flows for each of the two years in the
period ended December 31, 1996, incorporated in this prospectus by reference
from the Annual Report on Form 10-K, for the year ended December 31, 1997, of
Western have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and has been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.

The consolidated balance sheet of SCB and subsidiary as of December 31,
1996, and the related consolidated statements of operations, changes in
shareholders' equity and cash flows for each of the two years in the period
ended December 31, 1996 incorporated in this prospectus by reference from the
Annual Report on Form 10-K, for the year ended December 31, 1997, of Western
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and has been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.

The financial statements of Santa Monica Bank as of and for the years ended
December 31, 1997 and 1996, incorporated by reference from the Current Report on
Form 8-K/A, dated April 9, 1998 of Western, have been audited by Arthur Andersen
LLP, as indicated in their report thereto, and are incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting and
auditing in giving said report.

The statements of operations, changes in shareholders' equity and cash
flows, of Santa Monica Bank, for the year ended December 31, 1995 incorporated
in this prospectus by reference from the Current Report on Form 8-K/A, dated
April 9, 1998 of Western, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and has been so incorporated in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.

The balance sheets of BKLA as of the years ended December 31, 1997 and 1996,
and the related statements of operations, changes in shareholders' equity and
cash flows for each of the three years in the period ended December 31, 1997,
incorporated herein by reference from the Current Report on Form 8-K filed by
Western on June 25, 1998, have been audited by Vavrinek, independent auditors,
as indicated in their report with respect thereto, and are incorporated herein
by reference in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.

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APPENDIX A

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

SECOND AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER

DATED AS OF JULY 16, 1998

BY AND AMONG

WESTERN BANCORP

SANTA MONICA BANK

AND

BANK OF LOS ANGELES

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS

RECITALS

<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE I

Certain Definitions

1.01 CERTAIN DEFINITIONS................................................................................ A-1

ARTICLE II

The Merger

2.01 THE MERGER......................................................................................... A-4
2.02 EFFECTIVE DATE AND EFFECTIVE TIME.................................................................. A-5

ARTICLE III

Consideration; Exchange Procedures

3.01 MERGER CONSIDERATION............................................................................... A-5
3.02 RIGHTS AS SHAREHOLDERS; STOCK TRANSFERS............................................................ A-5
3.03 FRACTIONAL SHARES.................................................................................. A-6
3.04 EXCHANGE PROCEDURES................................................................................ A-6
3.05 ANTI-DILUTION PROVISIONS........................................................................... A-7
3.06 OPTIONS............................................................................................ A-7
3.07 WARRANTS........................................................................................... A-8

ARTICLE IV

Actions Pending Acquisition

4.01 FOREBEARANCES OF BKLA.............................................................................. A-8
4.02 FOREBEARANCES OF WESTERN........................................................................... A-10

ARTICLE V

Representations and Warranties

5.01 DISCLOSURE SCHEDULES............................................................................... A-10
5.02 STANDARD........................................................................................... A-10
5.03 REPRESENTATIONS AND WARRANTIES OF BKLA............................................................. A-11
5.04 REPRESENTATIONS AND WARRANTIES OF WESTERN.......................................................... A-17

ARTICLE VI

Covenants

6.01 REASONABLE BEST EFFORTS............................................................................ A-20
6.02 SHAREHOLDER APPROVAL............................................................................... A-20
6.03 REGISTRATION STATEMENT............................................................................. A-20
6.04 PRESS RELEASES..................................................................................... A-21
6.05 ACCESS; INFORMATION................................................................................ A-21
6.06 ACQUISITION PROPOSALS.............................................................................. A-22
6.07 AFFILIATE AGREEMENTS............................................................................... A-22
6.08 TAKEOVER LAWS...................................................................................... A-22
</TABLE>

i
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<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
6.09 CERTAIN POLICIES................................................................................... A-22
6.10 NASDAQ LISTING..................................................................................... A-22
6.11 REGULATORY APPLICATIONS............................................................................ A-22
6.12 INDEMNIFICATION; DIRECTOR AND OFFICERS' INSURANCE.................................................. A-23
6.13 BENEFIT PLANS...................................................................................... A-24
6.14 ACCOUNTANTS' LETTERS............................................................................... A-24
6.15 NOTIFICATION OF CERTAIN MATTERS.................................................................... A-24
6.16 SHAREHOLDER AGREEMENTS............................................................................. A-24

ARTICLE VII

Conditions to Consummation of the Merger

7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER......................................... A-24
7.02 CONDITIONS TO OBLIGATION OF BKLA................................................................... A-25
7.03 CONDITIONS TO OBLIGATION OF WESTERN................................................................ A-25

ARTICLE VIII

Termination

8.01 TERMINATION........................................................................................ A-26
8.02 EFFECT OF TERMINATION AND ABANDONMENT.............................................................. A-27
8.03 TERMINATION FEE.................................................................................... A-27

ARTICLE IX

Miscellaneous

9.01 SURVIVAL........................................................................................... A-28
9.02 WAIVER; AMENDMENT.................................................................................. A-28
9.03 COUNTERPARTS....................................................................................... A-28
9.04 GOVERNING LAW; WAIVER OF JURY TRIAL................................................................ A-28
9.05 EXPENSES........................................................................................... A-28
9.06 NOTICES............................................................................................ A-29
9.07 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES................................................. A-29
9.08 INTERPRETATION; EFFECT............................................................................. A-29

EXHIBIT A Form of Affiliate Agreement
EXHIBIT B Form of Shareholder's Agreement
</TABLE>

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SECOND AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of July
16, 1998 (this "Agreement"), by and among Bank of Los Angeles ("BKLA"), Western
Bancorp ("Western") and Santa Monica Bank.

RECITALS

A. BKLA. BKLA is a California corporation, having its principal place of
business in West Hollywood, California.

B. WESTERN. Western is a California corporation, having its principal
place of business in Newport Beach, California.

C. SANTA MONICA BANK. Santa Monica Bank is a California corporation having
its principal place of business in Santa Monica, California.

D. STOCK OPTION AGREEMENT. Concurrently herewith, BKLA and Western are
entering into a stock option agreement (the "STOCK OPTION AGREEMENT"), to be
dated the date hereof, whereby BKLA will grant to Western the option to purchase
up to 19.9% of the outstanding shares of the BKLA Common Stock upon the
occurrence of certain events.

E. INTENTIONS OF THE PARTIES. It is the intention of the parties to this
Agreement that the business combination contemplated hereby be accounted for
under the "pooling-of-interests" accounting method and be treated as a
"reorganization" under Section 368 of the Internal Revenue Code of 1986 as
amended (the "CODE").

F. BOARD ACTION. The respective Boards of Directors of each of Western and
BKLA have determined that it is in the best interests of their respective
companies and their stockholders to consummate the strategic business
combination transaction provided for herein.

NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein, the
parties agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

1.01 CERTAIN DEFINITIONS. The following terms are used in this Agreement
with the meanings set forth below:

"ACQUISITION PROPOSAL" means any tender or exchange offer, proposal for
a merger, consolidation or other business combination involving BKLA or any
of its Subsidiaries or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets or
deposits of, BKLA or any of its Subsidiaries, other than the transactions
contemplated by this Agreement.

"AFFILIATE AGREEMENTS" has the meaning set forth in Section 6.07(b).

"AGREEMENT" means this Agreement, as amended or modified from time to
time in accordance with Section 9.02.

"BENEFIT PLANS" has the meaning set forth in Section 5.03(m).

"BKLA" has the meaning set forth in the preamble to this Agreement.

"BKLA AFFILIATE" has the meaning set forth in Section 6.07(a).

"BKLA ARTICLES" means the Articles of Incorporation of BKLA.

"BKLA BOARD" means the Board of Directors of BKLA.

"BKLA BY-LAWS" means the By-laws of BKLA.

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"BKLA COMMON STOCK" means the common stock, no par value per share, of
BKLA.

"BKLA MEETING" has the meaning set forth in Section 6.02.

"BKLA STOCK OPTION" has the meaning set forth in Section 3.06.

"BKLA STOCK PLAN" means BKLA's 1988 Stock Option Plan (as amended).

"BKLA WARRANT" has the meaning set forth in Section 3.07.

"BKLA WARRANT AGREEMENT" has the meaning set forth in Section 3.07.

"BUSINESS COMBINATION" has the meaning set forth in Section 3.05.

"CGCL" means the California General Corporation law.

"CALIFORNIA SECRETARY" means the California Secretary of State.

"CODE" has the meaning set forth in the recitals.

"COMMISSIONER" means the California Commissioner of Financial
Institutions.

"COSTS" has the meaning set forth in Section 6.12(a).

"DISCLOSURE SCHEDULE" has the meaning set forth in Section 5.01.

"EFFECTIVE DATE" means the date on which the Effective Time occurs, as
provided for in Section 2.02.

"EFFECTIVE TIME" means the effective time of the Merger, as provided for
in Section 2.02.

"EMPLOYEES" has the meaning set forth in Section 5.03(m).

"ENVIRONMENTAL LAW" has the meaning set forth in Section 5.03(o).

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

"ERISA AFFILIATE" has the meaning set forth in Section 5.03(m).

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.

"EXCHANGE AGENT" has the meaning set forth in Section 3.04.

"EXCHANGE FUND" has the meaning set forth in Section 3.04.

"EXCHANGE RATIO" has the meaning set forth in Section 3.01(a).

"FDIC" means the Federal Deposit Insurance Corporation.

"FEDERAL RESERVE" means the Board of Governors of the Federal Reserve
System.

"GOVERNMENTAL AUTHORITY" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality, or any Regulatory Authority.

"HAZARDOUS SUBSTANCE" has the meaning set forth in Section 5.03(o).

"INDEMNIFIED PARTY" has the meaning set forth in Section 6.12(a).

"INSURANCE POLICY" has the meaning set forth in Section 5.03(s).

"LIENS" means any charge, mortgage, pledge, security interest,
restriction, claim, lien or encumbrance.

"LOAN PROPERTY" has the meaning set forth in Subsection 5.03(o).

A-2
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"MATERIAL ADVERSE EFFECT" means, with respect to Western or BKLA, any
effect that (i) is material and adverse to the financial position, results
of operations or business of Western and its Subsidiaries taken as a whole
or BKLA and its Subsidiaries taken as a whole, respectively, or (ii) would
materially impair the ability of either Western or BKLA to perform its
obligations under this Agreement or otherwise materially threaten or
materially impede the consummation of the Merger and the other transactions
contemplated by this Agreement; PROVIDED, HOWEVER, that Material Adverse
Effect shall not be deemed to include the impact of (a) changes in banking
and similar laws of general applicability or interpretations thereof by
courts or governmental authorities, (b) changes in generally accepted
accounting principles or regulatory accounting requirements applicable to
banks and their holding companies generally and (c) any modifications or
changes to valuation policies and practices in connection with the Merger or
restructuring charges taken in connection with the Merger, in each case in
accordance with generally accepted accounting principles.

"MAXIMUM AMOUNT" has the meaning set forth in Section 6.12(c).

"MERGER" has the meaning set forth in Section 2.01.

"MERGER CONSIDERATION" has the meaning set forth in Section 2.01.

"MULTIEMPLOYER PLANS" has the meaning set forth in Section 5.03(m).

"NASDAQ" means The Nasdaq Stock Market, Inc.'s National Market.

"NEW CERTIFICATE" has the meaning set forth in Section 3.04.

"OLD CERTIFICATE" has the meaning set forth in Section 3.04.

"PERSON" means any individual, bank, corporation, partnership,
association, joint-stock company, business trust or unincorporated
organization.

"PENSION PLAN" has the meaning set forth in Section 5.03(m).

"PLANS" has the meaning set forth in Section 5.03(m).

"PREVIOUSLY DISCLOSED" by a party shall mean information set forth in
its Disclosure Schedule.

"PROXY STATEMENT" has the meaning set forth in Section 6.03.

"REGISTRATION STATEMENT" has the meaning set forth in Section 6.03.

"REGULATORY AUTHORITY" has the meaning set forth in Section 5.03(i).

"REGULATORY DOCUMENTS" means documents filed with the SEC or the FDIC,
as applicable, of the types referred to in Section 5.03(g) and Section
5.04(f).

"REPLACEMENT WARRANT" has the meaning set forth in Section 3.07.

"REPRESENTATIVES" means, with respect to any Person, such Person's
directors, officers, employees, legal or financial advisors or any
representatives of such legal or financial advisors.

"RIGHTS" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person
any right to subscribe for or acquire, or any options, calls or commitments
relating to, or any stock appreciation right or other instrument the value
of which is determined in whole or in part by reference to the market price
or value of, shares of capital stock of such Person.

"SEC" means the Securities and Exchange Commission.

"SECURITIES ACT" means the Securities Act of 1933, as amended, and rules
and regulations thereunder.

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"SHAREHOLDER AGREEMENTS" has the meaning set forth in Section 6.16.

"STOCK OPTION AGREEMENT" has the meaning set forth in the Recitals.

"SUBSIDIARY" and "SIGNIFICANT SUBSIDIARY" have the meanings ascribed to
them in Rule 1-02 of Regulation S-X of the SEC.

"SURVIVING CORPORATION" has the meaning set forth in Section 2.01.

"TAKEOVER LAWS" means any "moratorium", "control share", "fair price",
"affiliate transaction", "business combination" or other antitakeover laws
and regulations of the state of California.

"TAX" and "TAXES" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts,
sales, use, ad valorem, goods and services, capital, production, transfer,
franchise, windfall profits, license, withholding, payroll, employment,
disability, employer health, excise, estimated, severance, stamp,
occupation, property, environmental, unemployment or other taxes, custom
duties, fees, assessments or charges of any kind whatsoever, together with
any interest and any penalties, additions to tax or additional amounts
imposed by any taxing authority whether arising before, on or after the
Effective Date.

"TAX RETURNS" means any return, amended return or other report
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be filed with respect to any Tax.

"TREASURY STOCK" shall mean shares of BKLA Common Stock held by any of
BKLA's Subsidiaries or by Western or any of its Subsidiaries, in each case
other than in a fiduciary (including custodial or agency) capacity or as a
result of debts previously contracted in good faith.

"WESTERN" has the meaning set forth in the preamble to this Agreement.

"WESTERN BOARD" means the Board of Directors of Western.

"WESTERN COMMON STOCK" means the common stock, no par value per share,
of Western.

"WESTERN PREFERRED STOCK" means the preferred, no par or stated value
per share, of Western.

ARTICLE II

THE MERGER

2.01 THE MERGER. (a) At the Effective Time, BKLA shall merge with and into
Santa Monica Bank (the "Merger"), the separate corporate existence of BKLA shall
cease and Santa Monica Bank shall survive and continue to exist as a California
corporation (Santa Monica Bank, as the surviving corporation in the Merger,
sometimes being referred to herein as the "SURVIVING CORPORATION"). Western may
at any time prior to the Effective Time change the method of effecting the
combination with BKLA (including, without limitation, the provisions of this
Article II) if and to the extent it deems such change to be necessary,
appropriate or desirable; PROVIDED, HOWEVER, that no such change shall (i) alter
or change the amount or kind of consideration to be issued to holders of BKLA
Common Stock as provided for in this Agreement (the "MERGER CONSIDERATION"),
(ii) cause the transaction to be treated as anything other than a tax-free
reorganization to the shareholders of BKLA or (iii) materially impede or delay
consummation of the transactions contemplated by this Agreement.

(b) Subject to the satisfaction or waiver of the conditions set forth in
Article VII, the Merger shall become effective upon the occurrence of the filing
in the office of the Commissioner in accordance with the California Financial
Code after the filing with the California Secretary of an agreement of merger in
accordance with the CGCL or such later date and time as may be set forth in such
agreement. The Merger shall have the effects prescribed in the CGCL.

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(c) ARTICLES OF INCORPORATION AND BY-LAWS. The articles of incorporation and
by-laws of Santa Monica Bank immediately after the Merger shall be those of
Santa Monica Bank as in effect immediately prior to the Effective Time.

(d) DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The directors and
officers of Santa Monica Bank immediately after the Merger shall be the
directors and officers of Santa Monica Bank immediately prior to the Effective
Time, until such time as their successors shall be duly elected and qualified.

(e) DIRECTORS AND OFFICERS OF WESTERN. The directors and officers of Western
immediately after the Merger shall be the directors and officers of Western
immediately prior to the Effective Time, until such time as their successors
shall be duly elected and qualified. Notwithstanding the foregoing, at the
Effective Time a director of BKLA's election to be mutually agreed upon prior to
the date of the initial filing of any application with a Regulatory Authority
shall be appointed to the board of directors of Western.

2.02 EFFECTIVE DATE AND EFFECTIVE TIME. On such date as Western selects
(and promptly provides notice thereof to BKLA), which shall be within ten days
after the last to occur of the expiration of all applicable waiting periods in
connection with approvals of governmental authorities and the receipt of all
approvals of governmental authorities and all conditions to the consummation of
the Merger are satisfied or waived (or, at the election of Western, on the last
business day of the month in which such tenth day occurs or, if such tenth day
occurs on one of the last five business days of such month, on the last business
day of the succeeding month), or on such earlier or later date as may be agreed
in writing by the parties, an agreement of merger shall be executed in
accordance with all appropriate legal requirements and shall be filed as
required by law, and the Merger provided for herein shall become effective upon
such filing or on such date as may be specified in such agreement of merger. The
date of such filing or such later effective date is herein called the "EFFECTIVE
DATE." The "EFFECTIVE TIME" of the Merger shall be the time of such filing or as
set forth in such agreement of merger.

ARTICLE III

CONSIDERATION; EXCHANGE PROCEDURES

3.01 MERGER CONSIDERATION. Subject to the provisions of this Agreement, at
the Effective Time, automatically by virtue of the Merger and without any action
on the part of any Person:

(a) OUTSTANDING BKLA COMMON STOCK. Each share, excluding Treasury Stock,
of BKLA Common Stock issued and outstanding immediately prior to the
Effective Time shall become and be converted into 0.4224 of a share of
Western Common Stock (the "EXCHANGE RATIO"). The Exchange Ratio shall be
subject to adjustment as set forth in Section 3.05.

(b) OUTSTANDING WESTERN COMMON STOCK. Each share of Western Common Stock
and each share of Santa Monica Bank Common Stock, in each case as issued and
outstanding immediately prior to the Effective Time, shall remain issued and
outstanding and unaffected by the Merger.

(c) TREASURY SHARES. Each share of BKLA Common Stock held as Treasury
Stock immediately prior to the Effective Time shall be canceled and retired
at the Effective Time and no consideration shall be issued in exchange
therefor.

(d) DISSENTING SHAREHOLDERS. Any shares of BKLA Common Stock held by
persons who have satisfied the requirements of Chapter 13 of the California
General Corporation Law ("Chapter 13"), and have not effectively withdrawn
or lost their dissenters' rights under Section 1309 of the California
General Corporation Law, shall not be converted pursuant to Section 3.01(a),
but the holders thereof shall be entitled only to such consideration
determined pursuant to Chapter 13.

3.02 RIGHTS AS SHAREHOLDERS; STOCK TRANSFERS. At the Effective Time,
holders of BKLA Common Stock shall cease to be, and shall have no rights as,
shareholders of BKLA (except as provided for in Section 3.01(d)), other than to
receive any dividend or other distribution with respect to such BKLA

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Common Stock with a record date occurring prior to the Effective Time and the
consideration provided under this Article III. After the Effective Time, there
shall be no transfers on the stock transfer books of BKLA or the Surviving
Corporation of shares of BKLA Common Stock.

3.03 FRACTIONAL SHARES. Notwithstanding any other provision hereof, no
fractional shares of Western Common Stock and no certificates or scrip therefor,
or other evidence of ownership thereof, will be issued in the Merger; instead,
Western shall pay to each holder of BKLA Common Stock who would otherwise be
entitled to a fractional share of Western Common Stock (after taking into
account all Old Certificates delivered by such holder) an amount in cash
(without interest) determined by multiplying such fraction by the average of the
closing prices of Western Common Stock, as reported on NASDAQ (as reported in
THE WALL STREET JOURNAL or, if not reported therein, in another authoritative
source), for the five NASDAQ trading days immediately preceding the Effective
Date.

3.04 EXCHANGE PROCEDURES. (a) At or prior to the Effective Time, Western
shall deposit, or shall cause to be deposited, with U.S. Stock Transfer or with
such other unaffiliated exchange agent as Western shall reasonably elect (in
such capacity, the "EXCHANGE AGENT"), for the benefit of the holders of
certificates formerly representing shares of BKLA Common Stock ("OLD
CERTIFICATES"), for exchange in accordance with this Article III, certificates
representing the shares of Western Common Stock ("NEW CERTIFICATES") and an
estimated amount of cash (such cash and New Certificates, together with any
dividends or distributions with a record date occurring after the Effective Date
with respect to the New Certificates (without any interest on any such cash,
dividends or distributions), being hereinafter referred to as the "EXCHANGE
FUND") to be paid pursuant to this Article III in exchange for outstanding
shares of BKLA Common Stock.

(b) As soon as practicable, but no later than five (5) business days after
the Effective Date, Western shall send or cause to be sent to each former holder
of record of shares of BKLA Common Stock immediately prior to the Effective Time
transmittal materials for use in exchanging such stockholder's Old Certificates
for the consideration set forth in this Article III. Western shall cause the New
Certificates into which shares of a shareholder's BKLA Common Stock are
converted on the Effective Date and/or any check in respect of any fractional
share interests or dividends or distributions which such person shall be
entitled to receive to be delivered to such shareholder upon delivery to the
Exchange Agent of Old Certificates representing such shares of BKLA Common Stock
(or an affidavit of lost certificate and, if required by the Exchange Agent,
indemnity reasonably satisfactory to Western and the Exchange Agent, if any of
such certificates are lost, stolen or destroyed) owned by such shareholder. No
interest will be paid on any such cash to be paid in lieu of fractional share
interests or in respect of dividends or distributions which any such person
shall be entitled to receive pursuant to this Article III upon such delivery. In
the event of a transfer of ownership of any shares of BKLA Common Stock not
registered in the transfer records of BKLA, the exchange described in this
Section 3.04(b) may nonetheless be effected and a check for the cash to be paid
in lieu of fractional shares may be issued to the transferee if the Old
Certificate representing such BKLA Common Stock is presented to the Exchange
Agent, accompanied by documents sufficient, in the discretion of Western and the
Exchange Agent, (i) to evidence and effect such transfer but for the provisions
of Section 3.02 hereof and (ii) to evidence that all applicable stock transfer
taxes have been paid.

(c) If Old Certificates are not surrendered or the consideration therefor is
not claimed prior to the date on which such consideration would otherwise
escheat to or become the property of any governmental unit or agency, the
unclaimed consideration shall, to the extent permitted by abandoned property and
any other applicable law, become the property of the Surviving Corporation (and
to the extent not in its possession shall be paid over to the Surviving
Corporation), free and clear of all claims or interest of any person previously
entitled to such claims. Notwithstanding the foregoing, neither the Exchange
Agent nor any party hereto shall be liable to any former holder of BKLA Common
Stock for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.

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(d) At the election of Western, no dividends or other distributions with
respect to Western Common Stock with a record date occurring after the Effective
Time shall be paid to the holder of any unsurrendered Old Certificate
representing shares of BKLA Common Stock converted in the Merger into the right
to receive shares of such Western Common Stock until the holder thereof shall be
entitled to receive New Certificates in exchange therefor in accordance with the
procedures set forth in this Section 3.04, and no such shares of BKLA Common
Stock shall be eligible to vote until the holder of Old Certificates is entitled
to receive New Certificates in accordance with the procedures set forth in this
Section 3.04. After becoming so entitled in accordance with this Section 3.04,
the record holder thereof also shall be entitled to receive any such dividends
or other distributions, without any interest thereon, which theretofore had
become payable with respect to shares of Western Common Stock such holder had
the right to receive upon surrender of the Old Certificate.

(e) Any portion of the Exchange Fund that remains unclaimed by the
shareholders of BKLA for six months after the Effective Time shall be returned
by the Exchange Agent to Western at the election of Western. Any shareholders of
BKLA who have not theretofore complied with this Article III shall thereafter
look only to Western for payment of the shares of Western Common Stock, cash in
lieu of any fractional shares and unpaid dividends and distributions on Western
Common Stock deliverable in respect of each share of BKLA Common Stock such
shareholder holds as determined pursuant to this Agreement, in each case,
without any interest thereon.

3.05 ANTI-DILUTION PROVISIONS. In the event Western changes (or
establishes a record date for changing) the number of shares of Western Common
Stock issued and outstanding prior to the Effective Date as a result of a stock
split, stock dividend, recapitalization or similar transaction with respect to
the outstanding Western Common Stock and the record date therefor shall be prior
to the Effective Date, the Exchange Ratio shall be proportionately adjusted. If,
between the date hereof and the Effective Time, Western shall consolidate with
or into any other corporation (a "BUSINESS COMBINATION") and the terms thereof
shall provide that Western Common Stock shall be converted into or exchanged for
the shares of any other corporation or entity, then provision shall be made as
part of the terms of such Business Combination so that (i) shareholders of BKLA
who would be entitled to receive shares of Western Common Stock pursuant to this
Agreement shall be entitled to receive, in lieu of each share of Western Common
Stock issuable to such shareholders as provided herein, the same kind and amount
of securities or assets as shall be distributable upon such Business Combination
with respect to one share of Western Common Stock.

3.06 OPTIONS. At the Effective Time, all outstanding options to purchase
shares of BKLA Common Stock under the BKLA Stock Plan (each, a "BKLA STOCK
OPTION"), unless otherwise exercised pursuant to Section 10 of the BKLA Stock
Plan, shall be converted into the right to receive for each share of BKLA Common
Stock otherwise issuable upon exercise thereof a number of shares of Western
Common Stock equal to the quotient obtained by dividing the Spread by $42.61
("Replacement Shares"). As used herein, "Spread" means the difference, if
positive, obtained by subtracting the exercise price of such BKLA Stock Option
from $18.00. After accumulating all such Replacement Shares issuable to any
holder of BKLA Stock Options, any fractional Replacement Shares issuable to any
holder of BKLA Stock Options of .2 or above shall be rounded upwards. Each
person who is a BKLA Affiliate as described in Section 6.07 hereby consents that
the Replacement Shares and/or Western Common Stock to be received by such person
on exercise of such persons BKLA Stock Option (collectively, the "Escrow
Shares"), as applicable, shall be placed, at Western's sole discretion, in an
escrow account until such time as the sale of such shares shall be permitted
pursuant to the Affiliate Agreement and applicable securities laws, at which
time the appropriate number of shares of Western Common Stock necessary to
satisfy any withholding tax obligation shall be sold, unless provided for
otherwise by such BKLA Affiliate, and applied to payment of such obligation,
with the balance of the shares of Western Common Stock of such BKLA Affiliate
transferred promptly to such BKLA Affiliate. Notwithstanding the foregoing, each
BKLA Affiliate shall have any and all rights to any dividends and voting rights
applicable to such BKLA Affiliate's Escrow Shares.

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3.07 WARRANTS. At the Effective Time, each outstanding warrant to purchase
shares of BKLA Common Stock under the BKLA Warrant Agreement (each, a "BKLA
WARRANT"), shall be converted into a warrant to acquire, on the same terms and
conditions as were applicable under such BKLA Warrant Agreement, the number of
shares of Western Common Stock equal to (a) the number of shares of BKLA Common
Stock subject to the BKLA Warrant, multiplied by (b) the Exchange Ratio (such
product rounded down to the nearest whole number) (a "REPLACEMENT WARRANT"), at
an exercise price per share (rounded up to the nearest whole cent) equal to (y)
the aggregate exercise price for the shares of BKLA Common Stock which were
purchasable pursuant to such BKLA Warrant divided by (z) the number of full
shares of Western Common Stock subject to such Replacement Warrant in accordance
with the foregoing. At or prior to the Effective Time, BKLA shall take all
action, if any, necessary with respect to the BKLA Warrant Agreement to permit
the replacement of the outstanding BKLA Warrants by Western pursuant to this
Section 3.07. At the Effective Time, Western shall assume the BKLA Warrant
Agreement; PROVIDED, that such assumption shall be only in respect of the
Replacement Warrants and that Western shall have no obligation with respect to
any awards under the BKLA Warrant Agreement other than the Replacement Warrants
and shall have no obligation to make any additional grants or awards under such
assumed BKLA Warrant Agreement.

ARTICLE IV

ACTIONS PENDING ACQUISITION

4.01 FOREBEARANCES OF BKLA. From the date hereof until the Effective Time,
except as expressly contemplated by this Agreement, without the prior written
consent of Western, BKLA will not, and will cause each of its Subsidiaries not
to:

(a) ORDINARY COURSE. Conduct the business of BKLA and its Subsidiaries
other than in the ordinary and usual course or fail to use reasonable best
efforts to preserve intact their business organizations and assets and
maintain their rights, franchises and existing relations with customers,
suppliers, employees and business associates, take any action that would
adversely affect or delay the ability of BKLA, Western or any of their
Subsidiaries to perform any of their obligations on a timely basis under
this Agreement, or take any action that is reasonably likely to have a
Material Adverse Effect on BKLA or its Subsidiaries, taken as a whole.

(b) CAPITAL STOCK. Other than pursuant to Rights Previously Disclosed
and outstanding on the date hereof, (i) issue, sell or otherwise permit to
become outstanding, or authorize the creation of, any additional shares of
BKLA Common Stock or any Rights or issue any shares of preferred stock, (ii)
enter into any agreement with respect to the foregoing or (iii) permit any
additional shares of BKLA Common Stock to become subject to new grants of
employee or director stock options, other Rights or similar stock-based
employee rights.

(c) DIVIDENDS, ETC. (a) Make, declare, pay or set aside for payment
any dividend on or in respect of, or declare or make any distribution on any
shares of BKLA Common Stock or (b) directly or indirectly adjust, split,
combine, redeem, reclassify, purchase or otherwise acquire, any shares of
its capital stock.

(d) COMPENSATION; EMPLOYMENT AGREEMENTS; ETC. Enter into or amend or
renew any employment, consulting, severance or similar agreements or
arrangements with any director, officer or employee of BKLA or its
Subsidiaries, or grant any salary or wage increase or increase any employee
benefit (including incentive or bonus payments), except (i) for normal
individual increases in compensation to employees in the ordinary course of
business consistent with past practice, (ii) for other changes that are
required by applicable law, (iii) to satisfy Previously Disclosed
contractual obligations existing as of the date hereof or (iv) for grants of
awards to newly hired employees consistent with past practice.

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(e) BENEFIT PLANS. Enter into, establish, adopt or amend (except (i)
as may be required by applicable law or (ii) to satisfy Previously Disclosed
contractual obligations existing as of the date hereof) any pension,
retirement, stock option, stock purchase, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement
(or similar arrangement) related thereto, in respect of any director,
officer or employee of BKLA or its Subsidiaries, or take any action to
accelerate the vesting or exercisability of stock options, restricted stock
or other compensation or benefits payable thereunder.

(f) DISPOSITIONS. Except as Previously Disclosed, sell, transfer,
mortgage, encumber or otherwise dispose of or discontinue any of its assets,
deposits, business or properties except in the ordinary course of business
and in a transaction that is not material to it and its Subsidiaries taken
as a whole.

(g) ACQUISITIONS. Except as Previously Disclosed, acquire (other than
by way of foreclosures or acquisitions of control in a bona fide fiduciary
capacity or in satisfaction of debts previously contracted in good faith, in
each case in the ordinary and usual course of business consistent with past
practice) all or any portion of, the assets, business, deposits or
properties of any other entity except in the ordinary course of business
consistent with past practice and in a transaction that is not material to
the BKLA and its Subsidiaries, taken as a whole.

(h) CAPITAL EXPENDITURES. Except as Previously Disclosed, make any
capital expenditures other than capital expenditures in the ordinary course
of business consistent with past practice in amounts not exceeding $10,000
individually or $50,000 in the aggregate.

(i) GOVERNING DOCUMENTS. Amend the BKLA Articles, BKLA By-Laws or the
articles of incorporation or by-laws (or similar governing documents) of any
of BKLA's Subsidiaries.

(j) ACCOUNTING METHODS. Implement or adopt any change in its
accounting principles, practices or methods, other than as may be required
by generally accepted accounting principles.

(k) CONTRACTS. Except in the ordinary course of business consistent
with past practice, enter into or terminate any material contract (as
defined in Section 5.03(k)) or amend or modify in any material respect any
of its existing material contracts.

(l) CLAIMS. Except in the ordinary course of business consistent with
past practice, settle any claim, action or proceeding, except for any claim,
action or proceeding involving solely money damages in an amount,
individually or in the aggregate for all such settlements, that is not
material to BKLA and its Subsidiaries, taken as a whole.

(m) ADVERSE ACTIONS. (a) Take any action which BKLA either knows or
reasonably should know that such action would, or would be reasonably likely
to, prevent or impede the Merger from qualifying (i) for "pooling of
interests" accounting treatment or (ii) as a reorganization within the
meaning of Section 368 of the Code; or (b) knowingly take any action that is
intended or is reasonably likely to result in (i) any of its representations
and warranties set forth in this Agreement being or becoming untrue in any
material respect at any time at or prior to the Effective Time, (ii) any of
the conditions to the Merger set forth in Article VII not being satisfied or
(iii) a violation of any provision of this Agreement except, in each case,
as may be required by applicable law or regulation.

(n) RISK MANAGEMENT. Except as required by applicable law or
regulation, (i) implement or adopt any material change in its interest rate
and other risk management policies, procedures or practices; (ii) fail to
follow its existing policies or practices with respect to managing its
exposure to interest rate and other risk; or (iii) fail to use commercially
reasonable means to avoid any material increase in its aggregate exposure to
interest rate risk.

(o) INDEBTEDNESS. Incur any indebtedness for borrowed money other than
in the ordinary course of business consistent with past practice.

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(p) LOANS. Make any loan, loan commitment or renewal or extension
thereof to any person which would, when aggregated with all outstanding
loans, commitments for loans or renewals or extensions thereof made by BKLA
to such person and any affiliate or immediate family member of such person,
exceed $500,000 without submitting loan package information to the chief
credit officer of Western for review with a right of comment at least one
full business day prior to taking such action.

(q) COMMITMENTS. Agree or commit to do any of the foregoing.

4.02 FOREBEARANCES OF WESTERN. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of BKLA, Western will not, and will cause each of its
Subsidiaries not to:

(a) ORDINARY COURSE. Take any action that would adversely affect or
delay the ability of BKLA or Western to perform any of their obligations on
a timely basis under this Agreement, or take any action that is reasonably
likely to have a Material Adverse Effect on Western or its Subsidiaries,
taken as a whole.

(b) ADVERSE ACTIONS. (i) Take any action which Western either knows or
reasonably should know that such action would, or would be reasonably likely
to, prevent or impede the Merger from qualifying (A) for "pooling of
interests" accounting treatment or (B) as a reorganization within the
meaning of Section 368 of the Code; or (ii) knowingly take any action that
is intended or is reasonably likely to result in (A) any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time at or prior to the Effective
Time, (B) any of the conditions to the Merger set forth in Article VII not
being satisfied or (C) a violation of any provision of this Agreement
except, in each case, as may be required by applicable law or regulation.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

5.01 DISCLOSURE SCHEDULES. On or prior to the date hereof, each of BKLA
and Western has delivered to the other a schedule (a "DISCLOSURE SCHEDULE")
setting forth, among other things, items the disclosure of which is necessary or
appropriate either in response to an express disclosure requirement contained in
a provision hereof, or items which are an exception to one or more
representations or warranties contained in Section 5.03 or Section 5.04;
PROVIDED, that (a) no such item is required to be set forth in a Disclosure
Schedule as an exception to a representation or warranty if its absence would
not be reasonably likely to result in the related representation or warranty
being deemed untrue or incorrect under the standard established by Section 5.02,
and (b) the mere inclusion of an item in a Disclosure Schedule as an exception
to a representation or warranty shall not be deemed an admission by a party that
such item represents a material exception or fact, event or circumstance or that
such item is reasonably likely to result in a Material Adverse Effect.

5.02 STANDARD. No representation or warranty of BKLA, Western or Santa
Monica Bank contained in Section 5.03 or 5.04 shall be deemed untrue or
incorrect, and no party hereto shall be deemed to have breached a representation
or warranty, as a consequence of the existence of any fact, event or
circumstance unless such fact, circumstance or event, individually or taken
together with all other facts, events or circumstances inconsistent with any
representation or warranty contained in Section 5.03 or 5.04 has had or is
reasonably likely to have a Material Adverse Effect on the party making such
representation or warranty.

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5.03 REPRESENTATIONS AND WARRANTIES OF BKLA. Subject to Sections 5.01 and
5.02 and except as Previously Disclosed in its Disclosure Schedule corresponding
to the relevant paragraph below, BKLA hereby represents and warrants to Western:

(a) ORGANIZATION, STANDING AND AUTHORITY. BKLA is a corporation duly
organized, validly existing and in good standing under the laws of the State
of California. BKLA is duly qualified to do business and is in good standing
in the State of California and any foreign jurisdictions where its ownership
or leasing of property or assets or the conduct of its business requires it
to be so qualified. BKLA is duly licensed by the Commissioner as a
commercial bank and its deposits are insured by the FDIC through the Bank
Insurance Fund in the manner and to the fullest extent provided by law.

(b) BKLA CAPITAL STOCK. As of the date hereof, the authorized capital
stock of BKLA consists solely of (i) 75,000,000 shares of BKLA Common Stock,
of which no more than 4,762,100 shares were outstanding as of the date
hereof and (ii) 25,000,000 shares of preferred stock, of which no shares
were outstanding as of the date hereof. As of the date hereof, no shares of
BKLA Common Stock were held in treasury by BKLA or otherwise owned by BKLA
or its Subsidiaries. The outstanding shares of BKLA Common Stock have been
duly authorized and are validly issued and outstanding, fully paid and
nonassessable, and subject to no preemptive rights (and were not issued in
violation of any preemptive rights). As of the date hereof, there are no
shares of BKLA Common Stock authorized and reserved for issuance, BKLA does
not have any Rights issued or outstanding with respect to BKLA Common Stock,
and BKLA does not have any commitment to authorize, issue or sell any BKLA
Common Stock or Rights, except pursuant to this Agreement, any BKLA Stock
Option, the BKLA Stock Plan, any BKLA Warrant and the BKLA Warrant
Agreement. The number of shares of BKLA Common Stock which are issuable and
reserved for issuance upon exercise of BKLA Stock Options as of the date
hereof are Previously Disclosed in BKLA's Disclosure Schedule. The number of
shares of BKLA Common Stock which are issuable and reserved for issuance
upon exercise of BKLA Warrants as of the date hereof are Previously
Disclosed in BKLA's Disclosure Schedule.

(c) SUBSIDIARIES. (i)(A) BKLA has Previously Disclosed a list of all
of its Subsidiaries together with the jurisdiction of organization of each
such Subsidiary, (B) BKLA owns, directly or indirectly, all the issued and
outstanding equity securities of each of its Subsidiaries, (C) no equity
securities of any of its Subsidiaries are or may become required to be
issued (other than to it or its wholly-owned Subsidiaries) by reason of any
Right or otherwise, (D) there are no contracts, commitments, understandings
or arrangements by which any of such Subsidiaries is or may be bound to sell
or otherwise transfer any equity securities of any such Subsidiaries (other
than to it or its wholly-owned Subsidiaries), (E) there are no contracts,
commitments, understandings, or arrangements relating to its rights to vote
or to dispose of such securities and (F) all the equity securities of each
Subsidiary held by BKLA or its Subsidiaries are fully paid and nonassessable
and are owned by BKLA or its Subsidiaries free and clear of any Liens.

(ii) BKLA does not own beneficially, directly or indirectly, any equity
securities or similar interests of any Person, or any interest in a
partnership or joint venture of any kind, other than its Subsidiaries.

(iii) Each of BKLA's Subsidiaries has been duly organized and is validly
existing in good standing under the laws of the jurisdiction of its
organization, and is duly qualified to do business and in good standing in
the jurisdictions where its ownership or leasing of property or the conduct
of its business requires it to be so qualified.

(d) CORPORATE POWER. BKLA and each of its Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; and BKLA has the
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby.

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<PAGE>
(e) CORPORATE AUTHORITY. Subject in the case of this Agreement to
receipt of the requisite approval of the principal terms of the agreement of
merger set forth in this Agreement by the holders of a majority of the
outstanding shares of BKLA Common Stock entitled to vote thereon (which is
the only shareholder vote required thereon), this Agreement, the Stock
Option Agreement and the transactions contemplated hereby and thereby have
been authorized by all necessary corporate action of BKLA and the BKLA Board
on or prior to the date hereof. This Agreement is a valid and legally
binding obligation of BKLA, enforceable in accordance with its terms (except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general
equity principles). The BKLA Board has received the written opinion of
Wedbush Morgan Securities to the effect that as of the date hereof the
consideration to be received by the holders of BKLA Common Stock in the
Merger is fair to the holders of BKLA Common Stock from a financial point of
view.

(f) REGULATORY APPROVALS; NO DEFAULTS. (i) No consents or approvals
of, or filings or registrations with, any Governmental Authority or with any
third party are required to be made or obtained by BKLA or any of its
Subsidiaries in connection with the execution, delivery or performance by
BKLA of this Agreement, the Stock Option Agreement, the BKLA Warrant
Agreement, or to consummate the Merger except for (A) filings of
applications or notices with the Commissioner, the FDIC and the Federal
Reserve, as required, (B) filings with the SEC and state securities
authorities and the approval of this Agreement by the shareholders of BKLA,
(C) the filing of an agreement of merger with the California Secretary
pursuant to the CGCL and with the Commissioner pursuant to the California
Financial Code. As of the date hereof, BKLA is not aware of any reason why
the approvals set forth in Section 7.01(b) will not be received without the
imposition of a condition, restriction or requirement of the type described
in Section 7.01(b).

(ii) Subject to receipt of the approvals referred to in the preceding
paragraph, and the expiration of related waiting periods, and required
filings under federal and state securities laws, the execution, delivery and
performance of this Agreement and the Stock Option Agreement and the
consummation of the transactions contemplated hereby and thereby do not and
will not (A) constitute a breach or violation of, or a default under, or
give rise to any Lien, any acceleration of remedies or any right of
termination under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or instrument
of BKLA or of any of its Subsidiaries or to which BKLA or any of its
Subsidiaries or properties is subject or bound, (B) constitute a breach or
violation of, or a default under, the BKLA Articles or the BKLA By-Laws, or
(C) require any consent or approval under any such law, rule, regulation,
judgment, decree, order, governmental permit or license, agreement,
indenture or instrument.

(g) FINANCIAL REPORTS AND REGULATORY DOCUMENTS. (i) BKLA's (or its
predecessors') Annual Reports on Form 10-K for the fiscal years ended
December 31, 1995, 1996 and 1997, and all other reports, registration
statements, definitive proxy statements or information statements filed or
to be filed by it or any of its Subsidiaries subsequent to December 31, 1995
under the Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act or under the securities regulations of the FDIC, in the form
filed or to be filed (collectively, BKLA's "REGULATORY DOCUMENTS") with the
FDIC as of the date filed, (A) complied or will comply in all material
respects as to form with the applicable requirements under the Securities
Act, the Exchange Act or the securities regulations of the FDIC, as the case
may be, and (B) did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and each of the
balance sheets contained in or incorporated by reference into any such
Regulatory Document (including the related notes and schedules thereto)
fairly presents, or will fairly present, the financial position of BKLA and
its Subsidiaries as of its date, and each of the statements of income and
changes in shareholders' equity and cash flows or equivalent statements in
such Regulatory Documents (including any related notes and schedules
thereto) fairly presents, or will fairly present, the results of

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<PAGE>
operations, changes in shareholders' equity and cash flows, as the case may
be, of BKLA and its Subsidiaries for the periods to which they relate, in
each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except in each case as may
be noted therein, subject to normal year-end audit adjustments in the case
of unaudited statements.

(ii) Since December 31, 1997, BKLA and its Subsidiaries have not
incurred any liability other than in the ordinary course of business
consistent with past practice.

(iii) Since December 31, 1997, (A) BKLA and its Subsidiaries have
conducted their respective businesses in the ordinary and usual course
consistent with past practice (excluding the incurrence of expenses related
to this Agreement and the transactions contemplated hereby) and (B) no event
has occurred or circumstance arisen that, individually or taken together
with all other facts, circumstances and events (described in any paragraph
of this Section 5.03 or otherwise), is reasonably likely to have a Material
Adverse Effect with respect to BKLA.

(h) LITIGATION. No litigation, claim or other proceeding before any
court or governmental agency is pending against BKLA or any of its
Subsidiaries and, to BKLA's knowledge, no such litigation, claim or other
proceeding has been threatened and there are no facts which could reasonably
give rise to such litigation, claim or other proceeding.

(i) REGULATORY MATTERS. (i) Neither BKLA nor any of its Subsidiaries
or any of their properties is a party to or is subject to any order, decree,
agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary supervisory
letter from, any federal or state governmental agency or authority charged
with the supervision or regulation of financial institutions or issuers of
securities or engaged in the insurance of deposits (including, without
limitation, the Commissioner and the FDIC) or the supervision or regulation
of it or any of its Subsidiaries (collectively, the "REGULATORY
AUTHORITIES").

(ii) Neither BKLA nor any of its Subsidiaries has been advised by, nor
has any knowledge of facts which could give rise to an advisory notice by,
any Regulatory Authority that such Regulatory Authority is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission.

(j) COMPLIANCE WITH LAWS. BKLA and each of its Subsidiaries:

(i) is in compliance with all applicable federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders
or decrees applicable thereto or to the employees conducting such
businesses, including, without limitation, the Equal Credit Opportunity
Act, the Fair Housing Act, the Community Reinvestment Act, the Home
Mortgage Disclosure Act and all other applicable fair lending laws and
other laws relating to discriminatory business practices;

(ii) has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit them to own
or lease their properties and to conduct their businesses as presently
conducted; all such permits, licenses, certificates of authority, orders
and approvals are in full force and effect and, to BKLA's knowledge, no
suspension or cancellation of any of them is threatened; and

(iii) has received, since December 31, 1996, no notification or
communication from any Governmental Authority (A) asserting that BKLA or
any of its Subsidiaries is not in compliance with any of the statutes,
regulations or ordinances which such Governmental Authority enforces or
(B) threatening to revoke any license, franchise, permit or governmental
authorization (nor, to BKLA's knowledge, do any grounds for any of the
foregoing exist).

(k) MATERIAL CONTRACTS; DEFAULTS. Except for those agreements and
other documents filed as exhibits to its Regulatory Documents, neither it
nor any of its Subsidiaries is a party to, bound by or

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<PAGE>
subject to any agreement, contract, arrangement, commitment or understanding
(whether written or oral) (i) that is a "material contract" within the
meaning of Item 601(b)(10) of the SEC's Regulation S-K or (ii) that
materially restricts the conduct of business by it or any of its
Subsidiaries. Neither BKLA nor any of its Subsidiaries is in default under
any contract, agreement, commitment, arrangement, lease, insurance policy or
other instrument to which it is a party, by which its respective assets,
business, or operations may be bound or affected, or under which it or its
respective assets, business, or operations receives benefits, and there has
not occurred any event that, with the lapse of time or the giving of notice
or both, would constitute such a default.

(l) NO BROKERS. No action has been taken by BKLA that would give rise
to any valid claim against any party hereto for a brokerage commission,
finder's fee or other like payment with respect to the transactions
contemplated by this Agreement, excluding Previously Disclosed fees to be
paid to Wedbush Morgan Securities and GBS Financial.

(m) EMPLOYEE BENEFIT PLANS.

(i) All benefit and compensation plans, contracts, policies or
arrangements covering current employees or former employees of BKLA and its
subsidiaries (the "EMPLOYEES") and current or former directors of BKLA,
including, but not limited to, "employee benefit plans" within the meaning
of Section 3(3) of ERISA, and deferred compensation, stock option, stock
purchase, stock appreciation rights, stock based, incentive and bonus plans
(the "BENEFIT PLANS"), are Previously Disclosed in the Disclosure Schedule.
True and complete copies of all Benefit Plans, including, but not limited
to, any trust instruments and insurance contracts forming a part of any
Benefit Plans, and all amendments thereto have been provided or made
available to BKLA.

(ii) All employee benefit plans, other than "multiemployer plans" within
the meaning of Section 3(37) of ERISA, covering Employees (the "PLANS"), to
the extent subject to ERISA, are in substantial compliance with ERISA. BKLA
is not a party to any "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA ("PENSION PLAN") and which is intended to be qualified
under Section 401(a) of the Code. There is no material pending or threatened
litigation relating to the Plans. Neither BKLA nor any of its Subsidiaries
has engaged in a transaction with respect to any Plan that, assuming the
taxable period of such transaction expired as of the date hereof, could
subject BKLA or any Subsidiary to a tax or penalty imposed by either Section
4975 of the Code or Section 502(i) of ERISA in an amount which would be
material.

(iii) No liability under Subtitle C or D of Title IV of ERISA has been or
is expected to be incurred by BKLA or any of its Subsidiaries with respect
to any ongoing, frozen or terminated "single-employer plan", within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by
any of them, or the single-employer plan of any entity which is considered
one employer with BKLA under Section 4001 of ERISA or Section 414 of the
Code (an "ERISA AFFILIATE"). Neither BKLA, any of its Subsidiaries nor an
ERISA Affiliate has contributed to a "multiemployer plan", within the
meaning of Section 3(37) of ERISA, at any time on or after September 26,
1980. No notice of a "reportable event," within the meaning of Section 4043
of ERISA for which the 30-day reporting requirement has not been waived, has
been required to be filed for any Pension Plan or by any ERISA Affiliate
within the 12-month period ending on the date hereof or will be required to
be filed in connection with the transactions contemplated by this Plan.

(iv) All contributions required to be made under the terms of any Plan
have been timely made or have been reflected on the consolidated financial
statements of BKLA included in the Regulatory Documents. Neither any Pension
Plan nor any single-employer plan of an ERISA Affiliate has an "accumulated
funding deficiency" (whether or not waived) within the meaning of Section
412 of the Code or Section 302 of ERISA and no ERISA Affiliate has an
outstanding funding waiver. Neither BKLA nor any of its Subsidiaries has
provided, or is required to provide, security to any Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of
the Code.

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<PAGE>
(v) Under each Pension Plan which is a single-employer plan, as of the
last day of the most recent plan year ended prior to the date hereof, the
actuarially determined present value of all "benefit liabilities," within
the meaning of Section 4001(a)(16) of ERISA (as determined on the basis of
the actuarial assumptions contained in the Plan's most recent actuarial
valuation), did not exceed the then current value of the assets of such
Plan, and there has been no material change in the financial condition of
such Plan since the last day of the most recent plan year.

(vi) Neither BKLA nor any of its Subsidiaries has any obligations for
retiree health and life benefits under any Benefit Plan. BKLA or its
Subsidiaries may amend or terminate any such Benefit Plan at any time
without incurring any liability thereunder.

(vii) The consummation of the transactions contemplated by this Agreement
will not (A) entitle any employees of BKLA or any of its Subsidiaries to
severance pay, (B) accelerate the time of payment or vesting or trigger any
payment of compensation or benefits under, increase the amount payable or
trigger any other material obligation pursuant to, any of the Benefit Plans
or (C) result in any breach or violation of, or a default under, any of the
Benefit Plans. Without limiting the foregoing, as a result of the
consummation of the transactions contemplated by this Agreement, none of
Western, BKLA, or any of its Subsidiaries will be obligated to make a
payment to an individual that would be a "parachute payment" to a
"disqualified individual" as those terms are defined in Section 280G of the
Code, without regard to whether such payment is reasonable compensation for
personal services performed or to be performed in the future.

(n) LABOR MATTERS. Neither BKLA nor any of its Subsidiaries is a party
to or is bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is
BKLA or any of its Subsidiaries the subject of a proceeding asserting that
it or any such Subsidiary has committed an unfair labor practice (within the
meaning of the National Labor Relations Act) or seeking to compel BKLA or
any such Subsidiary to bargain with any labor organization as to wages or
conditions of employment, nor is there any strike or other labor dispute
involving it or any of its Subsidiaries pending or, to BKLA's knowledge,
threatened, nor is BKLA aware of any activity involving its or any of its
Subsidiaries' employees seeking to certify a collective bargaining unit or
engaging in other organizational activity.

(o) ENVIRONMENTAL MATTERS.

(i) BKLA and each of its Subsidiaries has complied at all times with
applicable Environmental Laws; (ii) no real property (including buildings or
other structures) currently or formerly owned or operated by BKLA or any of
its Subsidiaries, or any property in which BKLA or any of its Subsidiaries
has held a security interest, lien or a fiduciary or management role ("LOAN
PROPERTY"), has been contaminated with, or has had any release of, any
Hazardous Substance; (iii) neither BKLA nor any of its Subsidiaries could be
deemed the owner or operator of any Loan Property under any Environmental
Law which such Loan Property has been contaminated with, or has had any
release of, any Hazardous Substance; (iv) neither BKLA nor any of its
Subsidiaries is subject to liability for any Hazardous Substance disposal or
contamination on any third party property; (v) neither BKLA nor any of its
Subsidiaries has received any notice, demand letter, claim or request for
information alleging any violation of, or liability under, any Environmental
Law; (vi) neither BKLA nor any of its Subsidiaries is subject to any order,
decree, injunction or other agreement with any Governmental Authority or any
third party relating to any Environmental Law; (vii) to the best of BKLA's
knowledge, there are no circumstances or conditions (including the presence
of asbestos, underground storage tanks, lead products, polychlorinated
biphenyls, prior manufacturing operations, dry-cleaning, or automotive
services) involving BKLA or any of its Subsidiaries, any currently or
formerly owned or operated property, or any Loan Property, that could
reasonably be expected to result in any claims, liability or investigations
against BKLA or any of its Subsidiaries, result in any restrictions on the
ownership, use, or transfer of any property pursuant to any Environmental
Law, or adversely affect the value of any Loan Property, and (viii) BKLA has
delivered to Western copies of all environmental

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<PAGE>
reports, studies, sampling data, correspondence, filings and other
environmental information in its possession or reasonably available to it
relating to BKLA, any Subsidiary of BKLA, any currently or formerly owned or
operated property or any Loan Property.

As used herein, the term "ENVIRONMENTAL LAW" means any federal, state or
local law, regulation, order, decree, permit, authorization, opinion, common
law or agency requirement relating to: (A) the protection or restoration of
the environment, health, safety, or natural resources, (B) the handling,
use, presence, disposal, release or threatened release of any Hazardous
Substance or (C) noise, odor, wetlands, indoor air, pollution, contamination
or any injury or threat of injury to persons or property in connection with
any Hazardous Substance and the term "HAZARDOUS SUBSTANCE" means any
substance in any concentration that is: (A) listed, classified or regulated
pursuant to any Environmental Law; (B) any petroleum product or by-product,
asbestos-containing material, lead-containing paint or plumbing,
polychlorinated biphenyls, radioactive materials or radon; or (C) any other
substance which is or may be the subject of regulatory action by any
Governmental Authority in connection with any Environmental Law.

(p) TAX MATTERS. (i) (A) All Tax Returns that are required to be filed
(taking into account any extensions of time within which to file) by or with
respect to BKLA and its Subsidiaries have been duly filed, (B) all Taxes
shown to be due on the Tax Returns referred to in clause (A) have been paid
in full, (C) the Tax Returns referred to in clause (A) have been examined by
the Internal Revenue Service or the appropriate Tax authority or the period
for assessment of the Taxes in respect of which such Tax Returns were
required to be filed has expired, (D) all deficiencies asserted or
assessments made as a result of such examinations have been paid in full,
(E) no issues that have been raised by the relevant taxing authority in
connection with the examination of any of the Tax Returns referred to in
clause (A) are currently pending, and (F) no waivers of statutes of
limitation have been given by or requested with respect to any Taxes of BKLA
or its Subsidiaries. BKLA has made available to Western true and correct
copies of the United States federal income Tax Returns filed by BKLA and its
Subsidiaries for each of the three most recent fiscal years ended on or
before December 31, 1996. Neither BKLA nor any of its Subsidiaries has any
liability with respect to income, franchise or similar Taxes that accrued on
or before the end of the most recent period covered by BKLA's Regulatory
Documents filed prior to the date hereof in excess of the amounts accrued
with respect thereto that are reflected in the financial statements included
in BKLA's Regulatory Documents filed on or prior to the date hereof. Neither
BKLA nor any of its Subsidiaries is a party to any Tax allocation or sharing
agreement, is or has been a member of an affiliated group filing
consolidated or combined Tax returns (other than a group the common parent
of which is or was BKLA) or otherwise has any liability for the Taxes of any
person (other than BKLA and its Subsidiaries). As of the date hereof,
neither BKLA nor any of its Subsidiaries has any reason to believe that any
conditions exist that might prevent or impede the Merger from qualifying as
a reorganization within the meaning of Section 368 of the Code.

(ii) No Tax is required to be withheld pursuant to Section 1445 of the
Code as a result of the transfer contemplated by this Agreement.

(q) RISK MANAGEMENT INSTRUMENTS. All interest rate swaps, caps,
floors, option agreements, futures and forward contracts and other similar
risk management arrangements, whether entered into for BKLA's own account,
or for the account of one or more of BKLA's Subsidiaries or their customers
(all of which are listed on BKLA's Disclosure Schedule), if any, were
entered into (i) in accordance with prudent business practices and all
applicable laws, rules, regulations and regulatory policies and (ii) with
counter parties believed to be financially responsible; and each of them
constitutes the valid and legally binding obligation of BKLA or one of its
Subsidiaries, enforceable in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general
equity principles), and are in full force and effect. Neither BKLA nor its

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<PAGE>
Subsidiaries, nor to BKLA's knowledge, any other party thereto, is in breach
of any of its obligations under any such agreement or arrangement.

(r) BOOKS AND RECORDS. The books and records of BKLA and its
Subsidiaries have been fully, properly and accurately maintained in all
material respects, and there are no material inaccuracies or discrepancies
of any kind contained or reflected therein, and they fairly present the
financial position of BKLA and its Subsidiaries.

(s) INSURANCE. BKLA has Previously Disclosed all of the insurance
policies, binders, or bonds maintained by BKLA or its Subsidiaries
("INSURANCE POLICIES"). BKLA and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of BKLA
reasonably has determined to be prudent in accordance with industry
practices. All the Insurance Policies are in full force and effect; BKLA and
its Subsidiaries are not in material default thereunder; and all claims
thereunder have been filed in due and timely fashion.

(t) ACCOUNTING TREATMENT. As of the date hereof, BKLA is not aware of
any reason with respect to it why the Merger will fail to qualify for
"pooling of interests" accounting treatment.

5.04 REPRESENTATIONS AND WARRANTIES OF WESTERN. Subject to Sections 5.01
and 5.02 and except as Previously Disclosed in its Disclosure Schedule
corresponding to the relevant paragraph below, Western hereby represents and
warrants to BKLA:

(a) ORGANIZATION, STANDING AND AUTHORITY. Each of Western and Santa
Monica Bank is duly organized, validly existing and in good standing under
the laws of the State of California. Each of Western and Santa Monica Bank
is duly qualified to do business and is in good standing in the states of
the United States and foreign jurisdictions where its ownership or leasing
of property or assets or the conduct of its business requires it to be so
qualified. Western and Santa Monica Bank have in effect all federal, state,
local, and foreign governmental authorizations necessary for them to own or
lease their respective properties and assets and to carry on their
respective business as it is now conducted.

(b) WESTERN CAPITAL STOCK. As of the date hereof, the authorized
capital stock of Western consists solely of 100,000,000 shares of Western
Common Stock, of which no more than 15,704,000 shares were outstanding as of
the date hereof and 5,000,000 shares of Western Preferred Stock, of which no
shares were outstanding as of the date hereof.

(c) SANTA MONICA BANK CAPITAL STOCK. As of the date hereof, the
authorized capital stock of Santa Monica Bank consists solely of 50,000,000
shares of Santa Monica Bank common stock, of which one share was outstanding
as of the date hereof.

(d) CORPORATE POWER. Western and each of its Significant Subsidiaries
has the corporate power and authority to carry on its business as it is now
being conducted and to own all its properties and assets; and each of
Western and Santa Monica Bank has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby.

(e) CORPORATE AUTHORITY. This Agreement and the transactions
contemplated hereby have been authorized by all necessary corporate action
of each of Western and Santa Monica Bank and their respective board of
directors. This Agreement is a valid and legally binding agreement of each
of Western and Santa Monica Bank, as the case may be, enforceable in
accordance with its terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles).

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<PAGE>
Subsidiaries in connection with the execution, delivery or performance by
either Western or Santa Monica Bank of this Agreement or to consummate the
Merger except for (A) the filing of applications and notices, as applicable,
with federal and state banking Governmental Authorities; (B) approval of the
listing on the NASDAQ of Western Common Stock to be issued in the Merger;
(C) the filing and declaration of effectiveness of the Registration
Statement; (D) the filing of an agreement of merger with the California
Secretary pursuant to the CGCL; (E) filing of an agreement of merger with
the Commissioner pursuant to the California Financial Code; (F) such filings
as are required to be made or approvals as are required to be obtained under
the securities or "Blue Sky" laws of various states in connection with the
issuance of Western Common Stock in the Merger; and (G) receipt of the
approvals set forth in Section 7.01(b). As of the date hereof, Western is
not aware of any reason why the approvals set forth in Section 7.01(b) will
not be received without the imposition of a condition, restriction or
requirement of the type described in Section 7.01(b).

(ii) Subject to receipt of the regulatory approvals referred to in the
preceding paragraph and expiration of the related waiting periods, and
required filings under federal and state securities laws, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (A) constitute a breach
or violation of, or a default under, or give rise to any Lien, any
acceleration of remedies or any right of termination under, any law, rule or
regulation or any judgment, decree, order, governmental permit or license,
or agreement, indenture or instrument of Western or of any of its
Subsidiaries or to which Western or any of its Subsidiaries or properties is
subject or bound, (B) constitute a breach or violation of, or a default
under, the articles of incorporation or by-laws (or similar governing
documents) of Western or any of its Significant Subsidiaries, or (C) require
any consent or approval under any such law, rule, regulation, judgment,
decree, order, governmental permit or license, agreement, indenture or
instrument.

(g) FINANCIAL REPORTS AND REGULATORY DOCUMENTS; MATERIAL ADVERSE
EFFECT. (i) Western's Regulatory Documents, as of the date filed, (A)
complied or will comply in all material respects as to form with the
applicable requirements under the Securities Act or the Exchange Act, as the
case may be, and (B) did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and each of the
balance sheets contained in or incorporated by reference into any such
Regulatory Document (including the related notes and schedules thereto)
fairly presents, or will fairly present, the financial position of Western
and its Subsidiaries as of its date, and each of the statements of income
and changes in shareholders' equity and cash flows or equivalent statements
in such Regulatory Documents (including any related notes and schedules
thereto) fairly presents, or will fairly present, the results of operations,
changes in shareholders' equity and cash flows, as the case may be, of
Western and its Subsidiaries for the periods to which they relate, in each
case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except in each case as may
be noted therein, subject to normal year-end audit adjustments in the case
of unaudited statements.

(ii) Since December 31, 1997, no event has occurred or circumstance
arisen that, individually or taken together with all other facts,
circumstances and events (described in any paragraph of this Section 5.04 or
otherwise), is reasonably likely to have a Material Adverse Effect with
respect to it.

(h) NO BROKERS. No action has been taken by Western that would give
rise to any valid claim against any party hereto for a brokerage commission,
finder's fee or other like payment with respect to the transactions
contemplated by this Agreement, excluding a Previously Disclosed fee payable
to Belle Plaine Partners, Inc.

(i) ACCOUNTING TREATMENT; TAX MATTERS. As of the date hereof, Western
is aware of no reason with respect to it why the Merger will fail to qualify
for "pooling of interests" accounting treatment. As of the date hereof,
neither Western nor any of its Subsidiaries has any reason to believe that
any

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conditions exist that might prevent or impede the Merger from qualifying as
a reorganization within the meaning of Section 368 of the Code.

(j) REGULATORY MATTERS. (i) Neither Western nor any of its Significant
Subsidiaries or any of its properties is a party to or is subject to any
order, decree, agreement, memorandum of understanding or similar arrangement
with, or a commitment letter or similar submission to, or extraordinary
supervisory letter from, any Regulatory Authorities.

(ii) Neither Western nor any of its Significant Subsidiaries has been
advised by, nor has any knowledge of facts which could give rise to an
advisory notice by, any Regulatory Authority that such Regulatory Authority
is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, commitment letter, supervisory letter or
similar submission.

(k) COMPLIANCE WITH LAWS. Each of Western and its Significant
Subsidiaries:

(ii) has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit them to own
or lease their properties and to conduct their businesses as presently
conducted; all such permits, licenses, certificates of authority, orders
and approvals are in full force and effect and, to Western's knowledge,
no suspension or cancellation of any of them is threatened; and

(iii) has received, since December 31, 1996, no notification or
communication from any Governmental Authority (A) asserting that Western
or any of its Significant Subsidiaries is not in compliance with any of
the statutes, regulations or ordinances which such Governmental Authority
enforces or (B) threatening to revoke any license, franchise, permit or
governmental authorization (nor, to Western's knowledge, do any grounds
for any of the foregoing exist).

(l) BOOKS AND RECORDS. The books and records of each of Western and
its Significant Subsidiaries have been fully, properly and accurately
maintained in all material respects, and there are no material inaccuracies
or discrepancies of any kind contained or reflected therein, and they fairly
present the financial position of Western and its Significant Subsidiaries.

(m) ENVIRONMENTAL MATTERS.

(i) Each of Western and its Significant Subsidiaries has complied at all
times with applicable Environmental Laws; (ii) no real property (including
buildings or other structures) currently or formerly owned or operated by
Western or its Significant Subsidiaries, or any Loan Property, has been
contaminated with, or has had any release of, any Hazardous Substance; (iii)
neither Western nor any of its Significant Subsidiaries could be deemed the
owner or operator of any Loan Property under any Environmental Law which
such Loan Property has been contaminated with, or has had any release of,
any Hazardous Substance; (iv) neither Western nor any of its Significant
Subsidiaries is subject to liability for any Hazardous Substance disposal or
contamination on any third party property; (v) neither Western nor any of
its Significant Subsidiaries has received any notice, demand letter, claim
or request for information alleging any violation of, or liability under,
any Environmental Law; (vi) neither Western nor any of its Significant
Subsidiaries is subject to any order, decree, injunction or other agreement
with any Governmental Authority or any third party relating to any
Environmental Law; (vii) to the best of Western's knowledge, there are no
circumstances or conditions (including the presence of asbestos, underground
storage tanks, lead products, polychlorinated biphenyls, prior

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manufacturing operations, dry-cleaning, or automotive services) involving
Western or its Significant Subsidiaries, any currently or formerly owned or
operated property, or any Loan Property, that could reasonably be expected
to result in any claims, liability or investigations against Western or its
Significant Subsidiaries, result in any restrictions on the ownership, use,
or transfer of any property pursuant to any Environmental Law, or adversely
affect the value of any Loan Property, and (viii) each of Western and its
Significant Subsidiaries has made available to BKLA copies of all
environmental reports, studies, sampling data, correspondence, filings and
other environmental information in its possession or reasonably available to
it, if any, relating to each of Western and its Significant Subsidiaries,
any currently or formerly owned or operated property or any Loan Property.

ARTICLE VI

COVENANTS

6.01 REASONABLE BEST EFFORTS. Subject to the terms and conditions of this
Agreement, each of BKLA, Western and Santa Monica Bank agrees to use its
reasonable best efforts in good faith to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
desirable, or advisable under applicable laws, so as to permit consummation of
the Merger as promptly as practicable and otherwise to enable consummation of
the transactions contemplated hereby and shall cooperate fully with the other
party hereto to that end.

6.02 SHAREHOLDER APPROVAL. BKLA agrees to take, in accordance with
applicable law and the BKLA Articles and the BKLA By-Laws, all action necessary
to convene an appropriate meeting of its shareholders to consider and vote upon
the approval and adoption of this Agreement and any other matters required to be
approved by BKLA's shareholders for consummation of the Merger (including any
adjournment or postponement, the "BKLA MEETING"), in each case as promptly as
practicable after the Registration Statement is declared effective. Except to
the extent legally required for the discharge by the BKLA Board of its fiduciary
duties as advised by counsel to the BKLA Board, the BKLA Board shall recommend
such approval, and BKLA shall take all reasonable, lawful action to solicit such
approval by its shareholders.

6.03 REGISTRATION STATEMENT. (a) Western agrees to prepare a registration
statement on Form S-4 or other applicable form (the "REGISTRATION STATEMENT") to
be filed by Western with the SEC in connection with the issuance of Western
Common Stock in the Merger (including the proxy statement and prospectus and
other proxy solicitation materials of BKLA constituting a part thereof (the
"PROXY STATEMENT") and all related documents). BKLA agrees to cooperate, and to
cause its Subsidiaries to cooperate, with Western, its counsel and its
accountants, in preparation of the Registration Statement and the Proxy
Statement. BKLA agrees to file the Proxy Statement in preliminary form with the
FDIC as soon as reasonably practicable on a confidential basis, and Western
agrees to file the Registration Statement with the SEC as soon as reasonably
practicable on a confidential basis, after any SEC comments with respect to the
preliminary Proxy Statement are resolved. Each of BKLA and Western agrees to use
all reasonable efforts to cause the Registration Statement to be declared
effective under the Securities Act as promptly as reasonably practicable after
filing thereof. Western also agrees to use all reasonable efforts to obtain all
necessary state securities law or "Blue Sky" permits and approvals required to
carry out the transactions contemplated by this Agreement. BKLA agrees to
furnish to Western all information concerning BKLA, its Subsidiaries, officers,
directors and shareholders as may be reasonably requested in connection with the
foregoing.

(b) Each of BKLA and Western agrees, as to itself and its Subsidiaries, that
none of the information supplied or to be supplied by it for inclusion or
incorporation by reference in (i) the Registration Statement will, at the time
the Registration Statement and each amendment or supplement thereto, if any,
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (ii) the Proxy
Statement and any amendment or supplement thereto will, at the date of mailing
to shareholders and at the time of the BKLA Meeting, contain any untrue
statement of a material fact or

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omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or any statement which, in the light
of the circumstances under which such statement is made, will be false or
misleading with respect to any material fact, or which will omit to state any
material fact necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier statement in the
Proxy Statement or any amendment or supplement thereto. Each of BKLA and Western
further agrees that if it shall become aware prior to the Effective Date of any
information furnished by it that would cause any of the statements in the Proxy
Statement to be false or misleading with respect to any material fact, or to
omit to state any material fact necessary to make the statements therein not
false or misleading, promptly to inform the other party thereof and to take the
necessary steps to correct the Proxy Statement.

(c) Western agrees to advise BKLA, promptly after Western receives notice
thereof, of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, of the issuance of any stop order or the
suspension of the qualification of Western Common Stock for offering or sale in
any jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.

6.04 PRESS RELEASES. Each of BKLA and Western agrees that it will not,
without the prior approval of the other party, issue any press release or
written statement for general circulation relating to the transactions
contemplated hereby, except as otherwise required by applicable law or
regulation or NASDAQ rules (provided that the issuing party shall nevertheless
provide the other party with notice of, and the opportunity to review, any such
press release or written statement).

6.05 ACCESS; INFORMATION. (a) Each of BKLA and Western agrees that upon
reasonable notice and subject to applicable laws relating to the exchange of
information, each party shall afford the other party and the other party's
officers, employees, counsel, accountants and other authorized representatives,
such access during normal business hours throughout the period prior to the
Effective Time to the books, records (including, without limitation, tax returns
and work papers of independent auditors), properties, personnel and to such
other information as the requesting party may reasonably request and, during
such period, the providing party shall furnish promptly to the requesting party
(i) a copy of each material report, schedule and other document filed by it
pursuant to the requirements of federal or state securities or banking laws, and
(ii) all other information concerning the business, properties and personnel of
it as the requesting party may reasonably request.

(b) Each party agrees that it will not, and will cause its representatives
not to, use any information obtained pursuant to this Section 6.05 (as well as
any other information obtained prior to the date hereof in connection with the
entering into of this Agreement) for any purpose unrelated to the consummation
of the transactions contemplated by this Agreement or the Stock Option
Agreement. Subject to the requirements of law, each party will keep
confidential, and will cause its representatives to keep confidential, all
information and documents obtained pursuant to this Section 6.05 (as well as any
other information obtained prior to the date hereof in connection with the
entering into of this Agreement) unless such information (i) was already known
to such party, (ii) becomes available to such party from other sources not known
by such party to be bound by a confidentiality obligation, (iii) is disclosed
with the prior written approval of the providing party or (iv) is or becomes
readily ascertainable from published information or trade sources. In the event
that this Agreement is terminated or the transactions contemplated by this
Agreement shall otherwise fail to be consummated, each party shall promptly
cause all copies of documents or extracts thereof containing information and
data as to the other party to be returned to the other party. No investigation
by either party of the business and affairs of the other party shall affect or
be deemed to modify or waive any representation, warranty, covenant or agreement
in this Agreement, or the conditions to either party's obligation to consummate
the transactions contemplated by this Agreement.

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6.06 ACQUISITION PROPOSALS. BKLA agrees that it shall not, and shall cause
its Subsidiaries and its and its Subsidiaries' officers, directors, agents,
advisors and affiliates not to, solicit or encourage inquiries or proposals with
respect to, or engage in any negotiations concerning, or provide any
confidential information to, or have any discussions with, any person relating
to, any Acquisition Proposal, except to the extent legally required for the
discharge by the BKLA Board of its fiduciary duties as advised by counsel to the
BKLA Board. BKLA shall immediately cease and cause to be terminated any
activities, discussions or negotiations conducted prior to the date of this
Agreement with any parties other than Western with respect to any of the
foregoing and shall use its reasonable best efforts to enforce any
confidentiality or similar agreement relating to an Acquisition Proposal. BKLA
shall promptly (within 24 hours) advise Western following the receipt by BKLA of
any Acquisition Proposal and the substance thereof (including the identity of
the person making such Acquisition Proposal), and advise Western of any
developments with respect to such Acquisition Proposal immediately upon the
occurrence thereof.

6.07 AFFILIATE AGREEMENTS. (a) Not later than the 15th day prior to the
mailing of the Proxy Statement, BKLA shall deliver to Western a schedule of each
person that, to the best of its knowledge, is or is reasonably likely to be, as
of the date of the BKLA Meeting, deemed to be an "affiliate" of BKLA (each, a
"BKLA AFFILIATE") as that term is used in Rule 145 under the Securities Act or
SEC Accounting Series Releases 130 and 135.

(b) BKLA shall use its reasonable best efforts to cause each person who may
be deemed to be a BKLA Affiliate to execute and deliver to Western on or before
the date of mailing of the Proxy Statement an agreement in the form attached
hereto as EXHIBIT A (the "Affiliate Agreements").

6.08 TAKEOVER LAWS. No party hereto shall take any action that would cause
the transactions contemplated by this Agreement or the Stock Option Agreement to
be subject to requirements imposed by any Takeover Law and each of them shall
take all necessary steps within its control to exempt (or ensure the continued
exemption of) the transactions contemplated by this Agreement from, or if
necessary challenge the validity or applicability of, any applicable Takeover
Law, as now or hereafter in effect.

6.09 CERTAIN POLICIES. Prior to the Effective Date, BKLA shall, consistent
with generally accepted accounting principles and on a basis mutually
satisfactory to it and Western, modify and change its loan, litigation and real
estate valuation policies and practices (including loan classifications and
levels of reserves) so as to be applied on a basis that is consistent with that
of Western.

6.10 NASDAQ LISTING. Western agrees to use its reasonable best efforts to
list, prior to the Effective Date, on the NASDAQ, subject to official notice of
issuance, the shares of Western Common Stock to be issued to the holders of BKLA
Common Stock in the Merger.

6.11 REGULATORY APPLICATIONS. (a) Western and BKLA and their respective
Subsidiaries shall cooperate and use their respective reasonable best efforts to
prepare all documentation, to effect all filings and to obtain all permits,
consents, approvals and authorizations of all third parties and Governmental
Authorities necessary to consummate the transactions contemplated by this
Agreement. Western and BKLA shall use their reasonable best efforts to make all
required bank regulatory filings, including the appropriate filings with the
Commissioner, the FDIC and the Federal Reserve. Each of Western and BKLA shall
have the right to review in advance, and to the extent practicable each will
consult with the other, in each case subject to applicable laws relating to the
exchange of information, with respect to all material written information
submitted to any third party or any Governmental Authority in connection with
the transactions contemplated by this Agreement. In exercising the foregoing
right, each of the parties hereto agrees to act reasonably and as promptly as
practicable. Each party hereto agrees that it will consult with the other party
hereto with respect to the obtaining of all material permits, consents,
approvals and authorizations of all third parties and Governmental Authorities
necessary or advisable to consummate the transactions contemplated by this
Agreement and each party will keep the other party appraised of the status of
material matters relating to completion of the transactions contemplated hereby.

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(b) Each party agrees, upon request, to furnish the other party with all
information concerning itself, its Subsidiaries, directors, officers and
shareholders and such other matters as may be reasonably necessary or advisable
in connection with any filing, notice or application made by or on behalf of
such other party or any of its Subsidiaries to any third party or Governmental
Authority.

6.12 INDEMNIFICATION; DIRECTOR AND OFFICERS' INSURANCE. (a) From and after
the Effective Time through the sixth anniversary of the Effective Date, Western
agrees to indemnify and hold harmless each present and former director and
officer of BKLA or any Subsidiary of BKLA determined as of the Effective Time
(the "INDEMNIFIED PARTIES"), against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "COSTS") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of matters existing or occurring at or prior to the
Effective Time (including with respect to this Agreement or any of the
transactions contemplated hereby) (but excluding any Costs arising out of any
violation or alleged violation of the Exchange Act or the rules and regulations
thereunder with respect to insider trading), whether asserted, claimed or
arising prior to, at or after the Effective Time, to the extent to which such
Indemnified Parties were entitled under California law and the BKLA Articles or
the BKLA By-Laws in effect on the date hereof, and Western shall also advance
expenses as incurred to the extent permitted under California law, the Western
Articles and the Western By-Laws and, with respect to any Indemnified Party, any
indemnification agreement to which such person is a party.

(b) Any Indemnified Party wishing to claim indemnification under Section
6.12(a), upon learning of any such claim, action, suit, proceeding or
investigation, shall as promptly as possible notify Western thereof, but the
failure to so notify shall not relieve Western of any liability it may have to
such Indemnified Party if such failure does not materially prejudice Western. In
the event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) Western shall have the right to
assume the defense thereof and Western shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the defense
thereof, except that if Western elects not to assume such defense or counsel for
the Indemnified Parties advises in writing that there are issues which raise
conflicts of interest between Western and the Indemnified Parties, the
Indemnified Parties may retain counsel satisfactory to them, and Western shall
pay the reasonable fees and expenses of one such counsel for the Indemnified
Parties in any jurisdiction promptly as statements thereof are received, (ii)
the Indemnified Parties will cooperate in the defense of any such matter and
(iii) Western shall not be liable for any settlement effected without its prior
written consent (which consent shall not be unreasonably withheld); and
PROVIDED, FURTHER, that Western shall not have any obligation hereunder to any
Indemnified Party when and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and nonappealable,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is not permitted or is prohibited by applicable law.

(c) For a period of six years after the Effective Time, Western shall use
its reasonable best efforts to cause to be maintained in effect at a minimum the
current policies of directors' and officers' liability insurance maintained by
BKLA (provided that Western may substitute therefor policies of comparable
coverage with respect to claims arising from facts or events which occurred
before the Effective Time); PROVIDED, HOWEVER, that in no event shall Western be
obligated to expend, in order to maintain or provide insurance coverage pursuant
to this Section 6.12(c), any amount per annum in excess of 125% of the amount of
the annual premiums paid as of the date hereof by BKLA for such insurance (the
"MAXIMUM AMOUNT"). If the amount of the annual premiums necessary to maintain or
procure such insurance coverage exceeds the Maximum Amount, Western shall use
all reasonable efforts to maintain the most advantageous policies of directors'
and officers' insurance obtainable for an annual premium equal to the Maximum
Amount. Notwithstanding the foregoing, prior to the Effective Time, Western may
request BKLA to, and BKLA shall, purchase insurance coverage, on such terms and
conditions as shall be acceptable to Western, extending for a period of six
years BKLA's directors' and officers' liability insurance

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coverage in effect as of the date hereof (covering past or future claims with
respect to periods before the Effective Time) and such coverage shall satisfy
Western's obligations under this Section 6.12(c).

(d) If Western or any of its successors or assigns (i) shall consolidate
with or merge into any other corporation or entity and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) shall transfer all or substantially all of its properties and assets to any
individual, corporation or other entity, then and in each such case, proper
provision shall be made so that the successors and assigns of Western shall
assume the obligations set forth in this Section 6.12.

6.13 BENEFIT PLANS. BKLA consents and covenants that from and after the
Effective Date BKLA's Benefits Plans will be governed, managed and/or terminated
by Western, all within Western's sole discretion.

6.14 ACCOUNTANTS' LETTERS. Each of BKLA and Western shall use its
reasonable best efforts to cause to be delivered to the other party, and to
Western's directors and officers who sign the Registration Statement, a letter
of their respective independent auditors, dated (i) the date on which the
Registration Statement shall become effective and (ii) a date shortly prior to
the Effective Date, and addressed to such directors and officers, in form and
substance customary for "comfort" letters delivered by independent accountants
in accordance with Statement of Accounting Standards No. 72.

6.15 NOTIFICATION OF CERTAIN MATTERS. Each of BKLA and Western shall give
prompt notice to the other of any fact, event or circumstance known to it that
(i) is reasonably likely, individually or taken together with all other facts,
events and circumstances known to it, to result in any Material Adverse Effect
with respect to it or (ii) would cause or constitute a material breach of any of
its representations, warranties, covenants or agreements contained herein.

6.16 SHAREHOLDER AGREEMENTS. The directors and certain officers and
shareholders of BKLA, in their capacities as shareholders, in exchange for good
and valuable consideration, have executed and delivered to Western shareholder
agreements substantially in the form of EXHIBIT B hereto (the "SHAREHOLDER
AGREEMENTS"), committing such persons, among other things, (i) to vote their
shares of BKLA Common Stock in favor of the Agreement at the BKLA Meeting and
(ii) to certain representations concerning the ownership of BKLA Common Stock
and Western Common Stock to be received in the Merger.

ARTICLE VII

CONDITIONS TO CONSUMMATION OF THE MERGER

7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each of Western and BKLA to consummate the Merger is
subject to the fulfillment or written waiver by Western and BKLA prior to the
Effective Time of each of the following conditions:

(a) SHAREHOLDER APPROVALS. This Agreement and the Merger shall have
been duly adopted by the requisite vote of the shareholders of BKLA.

(b) REGULATORY APPROVALS. All regulatory approvals required to
consummate the transactions contemplated hereby shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired and no such approvals shall contain any
conditions, restrictions or requirements which the Western Board reasonably
determines would (i) following the Effective Time, have a Material Adverse
Effect on the Surviving Corporation and its Subsidiaries taken as a whole or
(ii) reduce the benefits of the transactions contemplated hereby to such a
degree that Western would not have entered into this Agreement had such
conditions, restrictions or requirements been known at the date hereof.

(c) NO INJUNCTION. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, judgment, decree, injunction or

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other order (whether temporary, preliminary or permanent) which is in effect
and prohibits consummation of the transactions contemplated by this
Agreement.

(d) REGISTRATION STATEMENT. The Registration Statement shall have
become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
SEC.

(e) BLUE SKY APPROVALS. All permits and other authorizations under
state securities laws necessary to consummate the transactions contemplated
hereby and to issue the shares of Western Common Stock to be issued in the
Merger shall have been received and be in full force and effect.

(f) LISTING. The shares of Western Common Stock to be issued in the
Merger shall have been approved for listing on the NASDAQ, subject to
official notice of issuance.

7.02 CONDITIONS TO OBLIGATION OF BKLA. The obligation of BKLA to
consummate the Merger is also subject to the fulfillment or written waiver by
BKLA prior to the Effective Time of each of the following conditions:

(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Western set forth in this Agreement (subject to the standard set forth in
Section 5.02) shall be true and correct as of the date of this Agreement and
as of the Effective Date as though made on and as of the Effective Date
(except that representations and warranties that by their terms speak only
as of the date of this Agreement or some other date shall be true and
correct as of such date), and BKLA shall have received a certificate, dated
the Effective Date, signed on behalf of Western by the Chief Executive
Officer and the Chief Financial Officer of Western to such effect.

(b) PERFORMANCE OF OBLIGATIONS OF WESTERN. Western shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Effective Time, and BKLA shall
have received a certificate, dated the Effective Date, signed on behalf of
Western by the Chief Executive Officer and the Chief Financial Officer of
Western to such effect.

(c) ACCOUNTANTS' LETTERS. BKLA shall have received the letters
referred to in Section 6.14 from Western's independent auditors.

(d) OPINION OF BKLA'S INDEPENDENT AUDITORS; ACCOUNTING TREATMENT. BKLA
shall have received from Vavrinek, Trine, Day & Co., LLP, its independent
auditors, (i) an opinion dated the Effective Date, to the effect that, on
the basis of facts, representations and assumptions set forth in such
opinion, (A) the Merger constitutes a "reorganization" within the meaning of
Section 368 of the Code and (B) no gain or loss will be recognized by
shareholders of BKLA who receive shares of Western Common Stock in exchange
for shares of BKLA Common Stock, except with respect to cash received in
lieu of fractional share interests, and (ii) letters, dated the date of or
shortly prior to each of the mailing date of the Proxy Statement and the
Effective Date, stating its opinion that the Merger shall qualify for
pooling-of-interests accounting treatment. In rendering its opinion,
Vavrinek, Trine, Day & Co., LLP may require and rely upon representations
contained in letters from BKLA, Western and shareholders of BKLA.

(e) DIRECTOR. Western shall have elected as a director, the individual
agreed in accordance with Section 2.01 hereof, effective immediately after
the Effective Time.

7.03 CONDITIONS TO OBLIGATION OF WESTERN. The obligation of Western to
consummate the Merger is also subject to the fulfillment or written waiver by
Western prior to the Effective Time of each of the following conditions:

(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of BKLA set forth in this Agreement (subject to the standard set forth in
Section 5.02) shall be true and correct as of the date of this Agreement and
as of the Effective Date as though made on and as of the Effective Date

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(except that representations and warranties that by their terms speak only
as of the date of this Agreement or some other date shall be true and
correct as of such date) and Western shall have received a certificate,
dated the Effective Date, signed on behalf of BKLA by the Chief Executive
Officer and the Chief Financial Officer of BKLA to such effect.

(b) PERFORMANCE OF OBLIGATIONS OF BKLA. BKLA shall have performed in
all material respects all obligations required to be performed by it under
this Agreement at or prior to the Effective Time, and Western shall have
received a certificate, dated the Effective Date, signed on behalf of BKLA
by the Chief Executive Officer and the Chief Financial Officer of BKLA to
such effect.

(c) OPINION OF WESTERN'S COUNSEL. Western shall have received an
opinion of Sullivan & Cromwell, special counsel to Western, dated the
Effective Date, to the effect that, on the basis of facts, representations
and assumptions set forth in such opinion, the Merger constitutes a
reorganization under Section 368 of the Code. In rendering its opinion,
Sullivan & Cromwell may require and rely upon representations contained in
letters from BKLA, Western and shareholders of BKLA.

(d) ACCOUNTANTS' LETTERS. Western shall have received the letters
referred to in Section 6.14 from BKLA's independent auditors.

(e) ACCOUNTING TREATMENT. Western shall have received from KPMG Peat
Marwick LLP, Western's independent auditors, letters, dated the date of or
shortly prior to each of the mailing date of the Proxy Statement and the
Effective Date, stating its opinion that the Merger shall qualify for
pooling-of-interests accounting treatment.

ARTICLE VIII

TERMINATION

8.01 TERMINATION. This Agreement may be terminated, and the Acquisition
may be abandoned:

(a) MUTUAL CONSENT. At any time prior to the Effective Time, by the
mutual consent of Western and BKLA, if the Board of Directors of each so
determines by vote of a majority of the members of its entire Board.

(b) BREACH. At any time prior to the Effective Time, by Western or
BKLA, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event of either: (i) a breach by the
other party of any representation or warranty contained herein (subject to
the standard set forth in Section 5.02), which breach cannot be or has not
been cured within 30 days after the giving of written notice to the
breaching party of such breach; or (ii) a breach by the other party of any
of the covenants or agreements contained herein, which breach cannot be or
has not been cured within 30 days after the giving of written notice to the
breaching party of such breach, provided that such breach (whether under (i)
or (ii)) would be reasonably likely, individually or in the aggregate with
other breaches, to result in a Material Adverse Effect.

(c) DELAY. At any time prior to the Effective Time, by Western or
BKLA, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event that the Merger is not consummated
by December 31, 1998.

(d) NO APPROVAL. By BKLA or Western in the event (i) the approval of
any Governmental Authority required for consummation of the Merger and the
other transactions contemplated by this Agreement shall have been denied by
final nonappealable action of such Governmental Authority or (ii) the
shareholder approval required by Section 7.01(a) herein is not obtained at
the BKLA Meeting.

(e) FAILURE TO RECOMMEND, ETC. At any time prior to the BKLA Meeting,
by Western if the BKLA Board shall have failed to make its recommendation
referred to in Section 6.02, withdrawn

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such recommendation or modified or changed such recommendation in a manner
adverse in any respect to the interests of Western.

(f) TERMINATION BY WESTERN. This Agreement may be terminated and the
Merger may be abandoned by Western by the giving of notice to BKLA at any
time prior to 5 p.m. on April 29, 1998, if Western determines in its sole
discretion, upon completion of its due diligence review of BKLA, to so
terminate.

(g) WESTERN COMMON STOCK. This Agreement may be terminated by BKLA in
the event that, with respect to any Ten Day Period (as defined below), both
(i)(A) the Ten Day Average Price (as defined below) shall be less that
$35.37 per share and (B) the Western Common Stock Price Percentage (as
defined below) shall be less than the BKX Index Percentage (as defined
below) and (ii) BKLA has delivered written notice to Western of its
intention to terminate this Agreement within forty-eight (48) hours
following the date of such event (it being understood that, if the
circumstances set forth in clause (i) shall have occurred and BKLA fails to
timely deliver the notice referred to in this clause (ii), BKLA shall have
the right to terminate if any such event subsequently occurs and BKLA timely
delivers such notice); PROVIDED, HOWEVER, that, if Western effects a stock
dividend, reclassification, recapitalization, stock split, combination,
exchange of shares or similar transaction after the date hereof and prior to
the Effective Time, the provisions of this Section 8.01(g) shall be
appropriately adjusted;

As used in this Section 8.01(g), (w) "Western Common Stock Price
Percentage" means the percentage determined by dividing the Ten Day Average
Price by $42.61 (as such amount may be adjusted pursuant to the paragraph
above); (x) "BKX Index Percentage " means the percentage determined by
dividing (i) the product of (A) the Keefe Bank Index as of the date of
determination times (B) .66 by (ii) the Keefe Bank Index as of the date
hereof; (y) "Ten Day Average Price" means the average sales price per share
of Western Common Stock for a Ten Day Period determined by averaging the
last reported sales price on each trading day, and (z) "Ten Day Period"
means any period of ten (10) consecutive trading days.

(h) ACQUISITION PROPOSAL. This Agreement may be terminated by BKLA by
written notice to Western if BKLA receives an Acquisition Proposal on terms
and conditions which the BKLA Board determines, after receiving the advice
of its outside counsel that to proceed with the Merger will violate the
fiduciary duties of the BKLA Board to BKLA's shareholders in light of such
Acquisition Proposal, to accept such proposal; provided, however, that BKLA
shall not be entitled to terminate this Agreement pursuant to this Section
8.01(h) unless it shall have provided Western with written notice of such a
possible determination (which written notice will inform Western of the
material terms and conditions of the proposal, including the identity of the
proponent) not less than two business days prior to such determination.

8.02 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination of
this Agreement and the abandonment of the Merger pursuant to Section 8.01, no
party to this Agreement shall have any liability or further obligation to any
other party hereunder except as set forth in Section 8.03 and Section 9.01.

8.03 TERMINATION FEE.

(a) MATERIAL BREACH BY WESTERN. Should BKLA terminate this Agreement
pursuant to Section 8.01(b) (unless such breach under Section 8.01(b) shall
result from no act or omission of Western), Western shall promptly, if so
requested by BKLA, but in no event later than five business days after the date
of such request, pay BKLA a fee equal to BKLA's out-of-pocket expenses in
connection with this Agreement and the transactions contemplated hereby, up to a
maximum of $500,000, which amount shall be payable in same day funds, provided
however that no fee shall be paid pursuant to this Section 8.03(a) if BKLA shall

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be in material breach of its obligations hereunder and Western shall owe no
further duty or liability on account of this Agreement to BKLA.

(b) MATERIAL BREACH BY BKLA; ENTERING ACQUISITION PROPOSAL. Should Western
terminate this Agreement pursuant to either Section 8.01(e) or 8.01(b) (unless
such breach under Section 8.01(b) shall result from no act or omission of BKLA),
BKLA shall promptly, if so requested by Western, but in no event later than five
business days after the date of such request, pay Western a fee equal to
Western's out-of-pocket expenses in connection with this Agreement and the
transactions contemplated hereby, up to a maximum of $500,000, which amount
shall be payable in same day funds, provided however that no fee shall be paid
pursuant to this Section 8.03 if Western shall be in material breach of its
obligations hereunder and BKLA and the shareholders who are parties to the
Shareholder Agreements shall owe no further duty or liability on account of this
Agreement or the Shareholders Agreement to either Western or Santa Monica Bank.
In the event that there is a termination as a result of BKLA entering into an
Acquisition Proposal pursuant to Section 8.01(h), BKLA shall pay Western up to
$500,000 to cover out-of-pocket expenses in addition to Western's rights under
the Stock Option Agreement and BKLA and the shareholders who are parties to the
Shareholder Agreements shall owe no further duty or liability on account of this
Agreement to either Western or Santa Monica Bank except under the Stock Option
Agreement.

ARTICLE IX

MISCELLANEOUS

9.01 SURVIVAL. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than
Sections 3.01, 3.03, 3.04, 3.07, 6.12 and this Article IX which shall survive
the Effective Time) or the termination of this Agreement if this Agreement is
terminated prior to the Effective Time (other than Sections 6.03(b), 6.05(b),
8.02, 8.03 and this Article IX which shall survive such termination).

9.02 WAIVER; AMENDMENT. Prior to the Effective Time, any provision of this
Agreement may be (i) waived by the party benefitted by the provision, or (ii)
amended or modified at any time, by an agreement in writing between the parties
hereto executed in the same manner as this Agreement, except that after the BKLA
Meeting, this Agreement may not be amended if it would violate the CGCL or
reduce the consideration to be received by BKLA shareholders in the Merger.

9.03 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.

9.04 GOVERNING LAW; WAIVER OF JURY TRIAL. This Agreement shall be governed
by, and interpreted in accordance with, the laws of the State of California
applicable to contracts made and to be performed entirely within such State.
Each of the parties hereto hereby irrevocably waives any and all right to trial
by jury in any legal proceeding arising out of or related to this Agreement or
the transactions contemplated hereby.

9.05 EXPENSES. Each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby, except
as provided in Section 8.02.

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9.06 NOTICES. All notices, requests and other communications hereunder to
a party shall be in writing and shall be deemed given if personally delivered,
telecopied (with machine-generated confirmation) or mailed by registered or
certified mail (return receipt requested) to such party at its address set forth
below or such other address as such party may specify by notice to the parties
hereto.

If to, to:

Bank of Los Angeles
8901 Santa Monica Blvd.
West Hollywood, CA 90069-4901
Attention: Adriana M. Boeka
Facsimile: (310) 843-1498

With a copy to:

Horgan, Rosen, Beckham & Coren
21700 Oxnard Street
Suite 1400
Woodland Hills, CA 91367
Attention: Arthur Coren
Facsimile: (818) 340-6190

If to Western or Santa Monica Bank, to:

Western Bancorp
1251 Westwood Boulevard
Los Angeles, CA 90024
Attention: Matthew P. Wagner
Facsimile: (310) 477-8611

With a copy to:

Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Attention: Stanley F. Farrar
Facsimile: (213) 683-0457

9.07 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Agreement,
the Stock Option Agreement, the Affiliate Agreements and the Shareholder
Agreements represent the entire understanding of the parties hereto with
reference to the transactions contemplated hereby and thereby and this Agreement
supersedes any and all other oral or written agreements heretofore made (other
than any such Stock Option Agreement, Affiliate Agreements or Shareholder
Agreements). Nothing in this Agreement expressed or implied, is intended to
confer upon any person, other than the parties hereto or their respective
successors, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.

9.08 INTERPRETATION; EFFECT. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." No provision of this Agreement shall
be construed to require BKLA, Western or any of their respective Subsidiaries,
affiliates or directors to take any action which would violate applicable law
(whether statutory or common law), rule or regulation.

* * *

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.

<TABLE>
<S> <C> <C>
BANK OF LOS ANGELES

By: /s/ A. BOEKA
-----------------------------------------
Name:
Title:

WESTERN BANCORP

By: /s/ ARNOLD C. HAHN
-----------------------------------------
Name:
Title:

SANTA MONICA BANK

By: /s/ ARNOLD C. HAHN
-----------------------------------------
Name:
Title:
</TABLE>

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<PAGE>
APPENDIX B

1000 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90017-2465
MAILING ADDRESS: P.O. BOX 30014, LOS ANGELES, CALIFORNIA 90030-0014

[LOGO]
WEDBUSH MORGAN (213) 688-4545
SECURITIES FAX (213) 688-6642
INVESTMENT BANKERS SINCE 1925

August 17, 1998

Board of Directors
Bank of Los Angeles
8901 West Santa Monica Blvd.
West Hollywood, CA 90069

Members of the Board:

We understand that Western Bancorp ("Western"), its wholly-owned subsidiary,
Santa Monica Bank ("Santa Monica"), and Bank of Los Angeles (the "Bank") have
entered into an Agreement and Plan of Merger, dated as of April 16, 1998 (the
"Agreement"), pursuant to which the Bank will be merged with and into Santa
Monica (the "Merger"), as a result of which each outstanding share of the Bank's
common stock (the "Bank of Los Angeles Shares") will be converted into 0.4224 of
a share (the "Exchange Ratio") of the common stock of Western (the "Western
Shares"). The terms and conditions of the Merger are set forth in more detail in
the Agreement.

You have asked us whether, in our opinion, the proposed Exchange Ratio in the
Merger is fair to the stockholders of the Bank from a financial point of view.
This opinion updates our written opinion to you dated April 15, 1998 concerning
the same subject matter.

Wedbush Morgan Securities is an investment banking firm and member of the New
York Stock Exchange and other principal stock exchanges in the United States,
and is regularly engaged as part of its business in the valuation of businesses
and their securities in connection with mergers and acquisitions, negotiated
underwritings, private placements, secondary distributions of listed and
unlisted securities, and valuations for corporate, estate and other purposes.

For purposes of this opinion and in connection with our review of the Merger, we
have reviewed and analyzed, among other things: (1) the Agreement and the
specific terms of the Merger, (2) certain publicly available business and
financial information relating to the Bank and Western that we deem to be
relevant, (3) certain internal information, primarily financial in nature,
including financial projections and other financial and operating data relating
to strategic implications and operational benefits anticipated to result from
the Merger, furnished to us by the Bank and Western, (4) certain publicly
available and other information concerning the trading of, and the trading
market for, the common stock of the Bank and Western, (5) certain publicly
available information with respect to other companies that we believe to be
comparable in certain respects to the Bank or Western, and (6) certain publicly
available information with respect to other merger and acquisition transactions
that we believe to be comparable in certain respects to the Merger. In addition,
we have held discussions with the managements of the Bank and Western concerning
their views as to the financial and other information described above and the
potential cost savings, operating synergies, revenue enhancements and strategic
benefits expected to result from the Merger. In addition to the foregoing, we
have conducted such other analyses and examinations and considered such other
financial, economic and market criteria as we deem appropriate to arrive at our
opinion.

MEMBER NEW YORK STOCK EXCHANGE

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Board of Directors August 17, 1998
Bank of Los Angeles Page 2 of 3

In arriving at our opinion, we have assumed and relied upon the accuracy and
completeness of all financial and other information provided to or reviewed by
us or publicly available, and we have not assumed any

responsibility for independent verification of any such information. With
respect to financial projections and other information provided to or reviewed
by us, we have been advised by the managements of the Bank and Western that such
projections and other information were reasonably prepared on bases reflecting
the best currently available estimates and judgments of the respective
managements of the Bank and Western as to the expected future financial
performance of the Bank and Western and the strategic implications and
operational benefits anticipated from the Merger, and we have assumed that,
after the Merger, Western and its subsidiaries will perform substantially in
accordance with such projections. We further relied on the assurances of
managements of the Bank and Western that they are unaware of any facts that
would make the information or projections provided to us incomplete or
misleading. In particular, we were provided with and relied upon a schedule
provided by Western of estimated synergies and related cost savings that the
Bank expects to achieve as a result of the Merger. With respect to pending legal
and regulatory proceedings involving the Bank or Western, we were not in a
position to evaluate the impact of such proceedings and we have assumed that
these matters will be resolved in a manner that will not adversely affect in any
material respect the financial projections on which we have relied for purposes
of our opinion. We have not made or been provided with any independent
evaluations or appraisals of any of the Bank's or Western's assets, properties,
liabilities or securities, nor have we made any physical inspection of the
properties or assets of the Bank or Western. We have assumed that Western will
account for the Merger as a pooling-of-interests in accordance with generally
accepted accounting principles ("GAAP"), and that the Merger qualifies for such
accounting treatment under GAAP. We have also assumed that the Merger will
constitute a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended, and neither the Bank, Western, Santa
Monica nor holders of Bank of Los Angeles Shares will recognize gain or loss for
U.S. federal and state income tax purposes as a result of the Merger. We have
further assumed that all conditions to the Agreement will be satisfied and not
waived.

We are not experts in the evaluation of loan losses or reserves or allowances
therefor, and with your consent, we have not made an independent evaluation of
the adequacy of the reserve or allowance for loan losses of the Bank or Western,
nor have we reviewed any individual credit files relating to the Bank or
Western. Rather, with your consent, we have assumed that the aggregate reserve
or allowance for loan losses for each of the Bank and Western is adequate to
cover such losses and will be adequate after the Merger for Western and its
subsidiaries.

Our opinion as expressed below relates to the relative values of the Bank and
Western and does not imply any conclusion as to what the values of the Western
Shares actually will be when issued pursuant to the Merger or the price at which
such stock will trade following the consummation of the Merger. Our opinion
necessarily is based upon conditions and circumstances as they exist and can be
evaluated as of the date hereof and does not address the underlying business
decision of the Bank to enter into the Agreement or complete the Merger.
Specifically, we have not been asked to nor do we express an opinion as to the
relative merits of the Merger as compared to any alternative business strategies
that might exist for the Bank or the effect of any other transaction in which
the Bank might engage.

Our opinion is based on economic, market and other conditions as in effect on,
and the information made available to us as of, the date hereof. Events
occurring after the date hereof could materially affect the assumptions used in
preparing this opinion. We have not undertaken to reaffirm or revise this
opinion or otherwise comment upon any events occurring after the date hereof.

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Board of Directors August 17, 1998
Bank of Los Angeles Page 3 of 3

In the ordinary course of our business, we and our affiliates may actively trade
the common stock of the Bank and Western for our own account and for the
accounts of our customers and, accordingly, we may at any time hold a long or
short position in the common stock of the Bank or Western.

This opinion is for the benefit and use of the members of the Board of Directors
of the Bank in connection with their evaluation of the Merger and does not
constitute a recommendation to any holder of Bank of Los Angeles Shares as to
how such shareholder should vote with respect to the Merger. This opinion may
not be used for any other purpose without our prior written consent, except as
provided for in the engagement letter dated as of April 9, 1998 between the Bank
and Wedbush Morgan Securities.

Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the Exchange Ratio in the Merger is fair to the shareholders of the Bank
from a financial point of view.

Very truly yours,
/s/ WEDBUSH MORGAN SECURITIES INC.
WEDBUSH MORGAN SECURITIES INC.

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APPENDIX C

CORPORATIONS CODE
TITLE 1. CORPORATIONS
DIVISION 1. GENERAL CORPORATION LAW
CHAPTER 13. DISSENTERS' RIGHTS

Section 1300. Reorganization or short-form merger; dissenting shares;
corporate purchase at fair market value; definitions

(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.

Section 1301. Notice to holders of dissenting shares in reorganizations;
demand for purchase; time; contents

(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

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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.

Section 1302. Submission of share certificates for endorsement;
uncertificated securities

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 with a statement that the shares are dissenting shares or to
be exchanged for certificates of appropriate denomination so 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.

Section 1303. Payment of agreed price with interest; agreement fixing fair
market value; filing; time of 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.

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Section 1304. Action to determine whether shares are dissenting shares or
fair market value; limitation; joinder; consolidation; determination of issues;
appointment of appraisers

(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.

Section 1305. Report of appraisers; confirmation; determination by court;
judgment payment; appeal; 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).

Section 1306. Prevention of immediate payment; status as creditors;
interest

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.

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Section 1307. Dividends on dissenting shares

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.

Section 1308. Rights of dissenting shareholders pending valuation;
withdrawal of demand for payment

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.

Section 1309. Termination of dissenting share and 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.

Section 1310. Suspension of right to compensation or valuation proceedings;
litigation of shareholders' approval

If litigation is instituted to test the sufficiency or regularity of the
votes of the shareholders in authorizing a reorganization, any proceedings under
Sections 1304 and 1305 shall be suspended until final determination of such
litigation.

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.

Section 1312. Right of dissenting shareholders to attack, set aside or
rescind merger or reorganization; restraining order or injunction; conditions

(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

C-4
<PAGE>
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.

(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.

C-5
<PAGE>
PLEASE SIGN AND DATE BELOW

THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING
AND PROXY STATEMENT-PROSPECTUS.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" PROPOSAL 1. THE PROXY
CONFERS AUTHORITY TO AND SHALL BE VOTED "FOR" PROPOSAL 1 UNLESS "AGAINST" OR
"ABSTAIN" IS INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE
WITH SUCH INSTRUCTIONS.

IF ANY OTHER BUSINESS IS PRESENTED AT THE SPECIAL MEETING, THIS PROXY SHALL
BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF A MAJORITY OF THE BOARD OF
DIRECTORS.
Please sign exactly as name appears on stock certificates. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.

Number of Shares ----------------------------- Date: ----------------------------------------
----------------------------- Signature
----------------------------- Signature,
if held jointly.
I (we) do [ ] do not [ ] expect to attend the
Special Meeting.
Number of persons-----------------------------
</TABLE>

PLEASE MARK, DATE AND SIGN THIS PROXY, AND RETURN IT PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE.
<PAGE>
REVOCABLE PROXY
BANK OF LOS ANGELES
SPECIAL MEETING OF SHAREHOLDERS--SEPTEMBER 23, 1998
The undersigned shareholder(s) of Bank of Los Angeles ("BKLA") hereby
nominates, constitutes and appoints Adriana M. Boeka, Roy Doumani, and James V.
Reimann, each of them, the attorney, agent, and proxy of the undersigned, with
full power of substitution, to vote all stock of BKLA which the undersigned is
entitled to vote at the special meeting of Shareholders (the "Special Meeting")
of BKLA, to be held in lieu of an annual meeting, at BKLA's Beverly Hills
branch, 9601 Wilshire Boulevard, Beverly Hills, California 90210 on September
23, 1998, at 5:30 p.m., and any and all adjournments thereof ("the "Meeting"),
as fully and with the same force and effect as the undersigned might or could do
if personally present thereat, in the manner indicated below on any other
matters properly brought before the Special Meeting or any adjournments thereof,
as set forth in the Proxy Statement-Prospectus as follows:
Please mark your choice in the / / in blue or black ink.
1. To consider and vote on a proposal to approve the principal terms of the
proposed merger of BKLA with and into Santa Monica Bank, a wholly-owned
subsidiary of Western Bancorp ("Western") pursuant to the Agreement and
Plan of Merger.

<TABLE>
<S> <C> <C>
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>

2. To set the number of directors at nine, and consider and approve the
election of nine persons to the BKLA Board of Directors to serve until
the Merger is consummated or, if the Merger is not consummated, until the
1998 Annual Meeting of Shareholders at which their successors will be
elected and duly qualified. The following persons are the nominees:
/ / FOR all nominees listed below (except as marked to the contrary below),
including discretionary authority to cumulate votes.
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE
BOX NEXT TO THE NOMINEE'S NAME BELOW.)

<TABLE>
<S> <C> <C>
/ / Adriana M. Boaka / / John J. Feldman / / James V. Reimann
/ / Mary Anne Chalker / / Rickey M. Gelb / / Melvin F. Shaw
/ / Roy Doumani / / John R. Newhouse / / Burton N. Sterman
</TABLE>

3. To ratify the appointment of Vavrinek, Trine, Day & Co. ("Vavrinek") as
BKLA's independent public accountants, for the fiscal year ending
December 31, 1998 should the Merger not be consummated.

<TABLE>
<S> <C> <C>
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>

4. To transact such other business as may properly come before the Special
Meeting or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE
REVOKED PRIOR TO ITS EXERCISE.
PLEASE SIGN AND DATE ON REVERSE SIDE.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION AND METHOD OF FILING
- ----------- --------------------------------------------------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of April 16, 1998, and amended and restated as of June 24, 1998
and July 16, 1998, by and among Western, Santa Monica Bank and BKLA (incorporated by reference to
Appendix A to this Registration Statement on Form S-4)

4.1 Form of Certificate representing shares of Western Common Stock (incorporated by reference to Exhibit 4
to the Registrant's Current Report on Form 8-K, dated June 19, 1997)

5.1 Opinion of Julius G. Christensen

8.1 Tax Opinion of Sullivan & Cromwell

8.2 Tax Opinion of Vavrinek, Trine, Day & Co., LLP

9.1 Shareholder Agreement, dated as of April 16, 1998, by and among Adriana M. Boeka and Bank of Los Angeles

9.2 Shareholder Agreement, dated as of April 16, 1998, by and among Maurice J. Burford and Bank of Los
Angeles

9.3 Shareholder Agreement, dated as of April 16, 1998, by and among Mary Anne Chalker and Bank of Los
Angeles

9.4 Shareholder Agreement, dated as of April 16, 1998, by and among Roy Doumani and Bank of Los Angeles

9.5 Shareholder Agreement, dated as of April 16, 1998, by and among John J. Feldman and Bank of Los Angeles

9.6 Shareholder Agreement, dated as of April 16, 1998, by and among Rickey Gelb and Bank of Los Angeles

9.7 Shareholder Agreement, dated as of April 16, 1998, by and among Robert G. Jacobsen and Bank of Los
Angeles

9.8 Shareholder Agreement, dated as of April 16, 1998, by and among Wendy R. Moskal and Bank of Los Angeles

9.9 Shareholder Agreement, dated as of April 16, 1998, by and among John R. Newhouse and Bank of Los Angeles

9.10 Shareholder Agreement, dated as of April 16, 1998, by and among James V. Reimann and Bank of Los Angeles
</TABLE>

II-1
<PAGE>

9.12 Shareholder Agreement, dated as of April 16, 1998, by and among Burton N. Sterman and Bank of Los
Angeles

10.1 Agreement and Plan of Merger, dated as of July 24, 1998, by and among Western, Portola Merger Sub and
Peninsula.

23.1 Consent of KPMG Peat Marwick LLP

23.2 Consent of Vavrinek, Trine, Day & Co., LLP (BKLA)

23.3 Consent of Deloitte & Touche LLP (Santa Monica Bank)

23.4 Consent of Deloitte & Touche LLP (SC Bancorp)

23.5 Consent of Deloitte & Touche LLP (California Commercial Bankshares)

23.6 Consent of Julius G. Christensen (included in opinion filed as Exhibit 5.1 hereto)

23.7 Consent of Sullivan & Cromwell for Tax Opinion that is filed as Exhibit 8.1 hereto

23.8 Consent of Vavrinek, Trine, Day & Co., LLP for Tax Opinion that is filed as Exhibit 8.2 hereto

23.9 Consent of Vavrinek, Trine, Day & Co., LLP (Monarch Bancorp)

23.10 Consent of Arthur Andersen LLP (Santa Monica Bank)

24.1 Power of Attorney (set forth on Page II-4 in Registration Statement No. 333-57759)

99.1 Consent of Wedbush

99.2 Form of Letter of Transmittal

99.3* Consent of Adriana M. Boeka, proposed Western director
</TABLE>

* Previously filed.

ITEM 22. UNDERTAKINGS.

(a) 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 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.

(b) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

(c) 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),

II-2
<PAGE>
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.

(d) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (c) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act 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 that time shall be deemed to be
the initial BONA FIDE offering thereof.

(e) 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 provisions described under Item 20 above, 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 is, 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 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.

(f) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.

(g) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

II-3
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 1 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the city of
Newport Beach, State of California, on August 13, 1998.

<TABLE>
<S> <C> <C>
WESTERN BANCORP

By: /s/ ARNOLD C. HAHN
-----------------------------------------
Name: Arnold C. Hahn
Title: Executive Vice President and
Chief Financial Officer
</TABLE>

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------ -------------------------- -------------------

<S> <C> <C>
/s/ HUGH S. SMITH, JR.*
- ------------------------------ Chairman and Director August 13, 1998
Hugh S. Smith, Jr.

/s/ ARNOLD C. HAHN Executive Vice President
- ------------------------------ and Chief Financial August 13, 1998
Arnold C. Hahn Officer

/s/ MATTHEW P. WAGNER*
- ------------------------------ Chief Executive Officer, August 13, 1998
Matthew P. Wagner President and Director

/s/ AUBREY L. AUSTIN*
- ------------------------------ Director August 13, 1998
Aubrey L. Austin

/s/ RICE E. BROWN*
- ------------------------------ Director August 13, 1998
Rice E. Brown
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------ -------------------------- -------------------

<S> <C> <C>
/s/ JOHN M. EGGEMEYER*
- ------------------------------ Director August 13, 1998
John M. Eggemeyer

/s/ WILLIAM C. GREENBECK*
- ------------------------------ Director August 13, 1998
William C. Greenbeck

/s/ ROBERT L. MCKAY*
- ------------------------------ Director August 13, 1998
Robert L. McKay

/s/ MARK H. STUENKEL*
- ------------------------------ Director August 13, 1998
Mark H. Stuenkel

/s/ DALE E. WALTER*
- ------------------------------ Director August 13, 1998
Dale E. Walter
</TABLE>

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

* Signed by Arnold C. Hahn as attorney-in-fact pursuant to a power of
attorney, dated June 25, 1998, included on the signature page to a
Registration Statement (File No. 333-40611) filed on June 26, 1998.

II-5
<PAGE>
EXHIBIT INDEX