ORANGE NATIONAL BANCORP
10-K, 1996-04-01
NATIONAL COMMERCIAL BANKS
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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                      Washington D.C 20549
                            FORM 10-K
     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
     ACT OF 1934

For the Fiscal Year Ended December 31, 1995
                                OR

     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
     For the transition period from.......................................
     to.............................................
     Commission File No. 33-8743

                    Orange National Bancorp
        (Exact Name of Registrant as Specified in Charter)

                           California
                (State or Other Jurisdiction of
                 Incorporation or Organization)
                           33-0190684
               (I.R.S. Employer Identification No.)


                     1201 E. Katella Avenue
                       Orange, California
             (Address of Principal Executive Offices)
                             92667
                            (Zip Code)


            Registrant's telephone number, including
                            area code
                          (714) 771-4000

Securities registered pursuant to Section 12(b) of the Act:
                                
                      Title of Each Class
                    Name of Each Exchange on
                        Which Registered
                                
                                
                               None
                              None
                                
Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock
                         (Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes         No       

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.         

As of February 15,1996, the aggregate market value of the voting shares held
by nonaffiliates of the Registrant was approximately $13,638,353.  The
aggregate market value of the voting shares held by nonaffiliates includes all
stockholders except officers and directors and was computed based on a market
price which resulted from a recent trade.

1,937,646 Shares of Common Stock were outstanding at March 15, 1996.
<PAGE>
               DOCUMENTS INCORPORATED BY REFERENCE



                      Document Incorporated
                       Part of Form 10-K
                     into which incorporated


Definitive Proxy Statement for the
Annual Meeting of Stockholders to be
filed within 120 days of the fiscal
year ended December 31, 1995


                             Part III

<PAGE>
<PAGE>
                       TABLE OF CONTENTS
                                
                             PART I

ITEM                                                         Page

1.   Business                                                4-20

2.   Properties                                                20

3.   Legal Proceedings                                         20

4.   Submissions of Matters to a Vote of Security Holders      20

                            PART II

5.   Market for Registrant's Common Equity and Related Stockholder Matters21

6.   Selected Financial Data                                   21

7.   Management's Discussion and Analysis of Financial Condition and Results
of Operations                                               22-27

8.   Financial Statements and Supplementary Data               27

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

                            PART III

10.  Directors and Executive Officers of the Registrant        28

11.  Executive Compensation                                    28

12.  Security Ownership of Certain Beneficial Owners and Management28

13.  Certain Relationships and Related Transactions            28

                            PART IV

14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K29

Signatures                                                  30-31

Index to Exhibits                                              32
<PAGE>
<PAGE>
                             PART I.


ITEM 1.   BUSINESS

General

     Orange National Bancorp (the "Bancorp") was organized and incorporated
under the laws of the State of California on July 28, 1986, at the direction of
the Board of Directors of Orange National Bank (the "Bank") and for the purpose
of becoming a bank holding company to acquire all the outstanding capital stock
of the Bank.  The principal location of the Bancorp and its operations is at the
head office of the Bank located at 1201 East Katella Avenue, Orange, CA 92667. 
On January 16, 1987, with the approval of the Comptroller of the Currency and 
the Federal Reserve Bank of San Francisco, the Bank became a wholly-owned 
subsidiary of the Bancorp, and the Bancorp commenced operations as a bank 
holding company within the meaning of the Bank Holding Company Act of 1956, as 
amended, and became subject to the supervision and regulation of the Board of 
Governors of the Federal Reserve System.

     Substantially all consolidated operating income and net income is presently
derived from banking related activities.  For the foreseeable future, it is
expected that such banking related activities will continue to represent the
Bancorp's primary source of operating income and net income.  In 1992, the
Bancorp formed a new subsidiary to perform mortgage brokerage services.  In 
1993, the Company began mortgage banking operations including origination, sale 
and servicing of mortgage loans.  During 1994, the Company ceased its mortgage
banking operations and there were no gains or losses on the disposal of the
Segment.  The Bank was organized and chartered as a national banking association
on October 31, 1979 and opened for business on the same date.   The Bank
currently has six offices.  Its head office is located at 1201 East Katella
Avenue, Orange, California 92667 and the five branch offices are located at 77
Plaza Square, Orange, California 92666; 2019 West Orangewood Avenue, Orange,
California 92668; 7510 East Chapman Avenue, Orange, California 92669; 800
Glenneyre Road, Laguna Beach, California 92651; and 25255 Cabot Road, Laguna
Hills, California 92653.   Additional administration offices are located  at 
2117 West Orangewood Avenue, Orange, California 92668 and at 115 and 274 North
Glassell Street, Orange, California 92666.



Narrative Description of Business

     The Bancorp is engaged in the ownership of one commercial bank.   During
1993 and 1994 the Bancorp was involved in mortgage banking operations.    These
operations were discontinued in 1994.   The Bancorp does not consider its
business to be seasonal nor is any material part of the business of the Bancorp
and its subsidiaries dependent upon a single customer or a few customers and the
loss of any one customer would not have a material adverse effect upon the
Bancorp or its subsidiary.  Neither the Bancorp nor its subsidiary are engaged
in operations outside the United States or derive a portion of revenues from
customers located outside of the United States.  Losses from the discontinued
mortgage banking operations totaled $224,000 in 1994 and $258,000 in 1993.

     The Bank offers a full range of commercial banking services, including the
acceptance of demand, savings and time deposits, and the making of commercial,
real estate, Small Business Administration, personal, home improvement,
automobile, and other installment and term loans.  It also offers travelers'
checks, safe deposit boxes, notary public, international banking, and other
customary bank services to its customers, except trust services.  The Bank's
lobby is open from 9:00 a.m. to 5:00 p.m., Monday through Thursday, and 
9:00 a.m. through 6:00 p.m. on Friday.  In addition, drive-up services are 
available at the Bank's main office.  The Bank is insured by Federal Deposit 
Insurance Corporation and is a member of the Federal Reserve System.

Narrative Description of Business (Continued)

     The Bank currently does not issue VISA or MASTERCARD credit cards but
honors merchant drafts under both types of cards, and its customers are offered
MASTERCARD and VISA credits cards through one of its correspondent banks.  In
addition, although management of the Bank believes there is a need for trust
services in its service area, the Bank does not operate or have any present
intention to seek authority to operate a trust department since management of 
the Bank believes that the costs of establishing and operating such a department
would not be justified by the potential income to be gained therefrom.

     The three general areas in which the Bank has directed virtually all of its
lending activities are (I) commercial loans, (ii) loans to individuals, and 
(iii) residential,  commercial, and construction real estate loans.  As of 
December 31, 1995, these three categories accounted for approximately 36.2%, 
9.1%, and 53.7%, respectively, of the Bank's loan portfolio.  The Bank's 
commercial loans are primarily to small and medium sized businesses and are 
for terms ranging primarily from 30 days to 5 years, with the majority of 
loans being due within one year.  Consumer installment loans are for a 
maximum term of 48 months for unsecured loans and for a term of the 
depreciable life of tangible property used as collateral for secured loans. 
 Commercial real estate loans are generally for terms of up to 5 years.  
Approximately 85% of loans are written with variable interest rates.

     As of December 31, 1995, the Bank has total unused loan and credit
commitments of $25,272,000 of which $1,533,000 were standby letters of credit 
and $23,739,000 were commitments to grant loans.  The Bank presently has 
sufficientliquidity to fund all loan commitments.

     Although the loan portfolio is diversified, as of December 31, 1995, the
Bank is the creditor for approximately $4.8 million of loans to companies or
individuals and approximately $6.3  million in loan commitments which are
unsecured.  The Bank's policy for requiring collateral is to obtain collateral
whenever it is available or desirable, depending upon the degree of risk the 
Bank is willing to undertake.

     The Bank's deposits are attracted primarily from individuals and commercial
enterprises.  The Bank also attracts some deposits from municipalities and other
government agencies.  The Bank does not have nor does it anticipate originating
any brokered deposits.

     As of December 31, 1995, the Bank had approximately $70.2 million in total
noninterest bearing demand deposits, $12.5 million in savings, $14.6  million in
time deposits for individuals and corporations, and $91.7 million in NOW and
money market accounts.

     As of December 31, 1995, the Bank had total deposits of approximately
$189.0 million.  This total accounted for approximately 13% of the total 
deposits in the City of Orange and surrounding service area, and 
approximately 1% of the total deposits in the Laguna Beach area.

     The principal source of the Bank's income are interest and fees and other
charges from the Bank's loan portfolio and interest income on the Bank's
investments.  For 1995, these sources comprised approximately 66.9% and 18.7%,
respectively, of the Bank's total income for this period.  The remaining
significant sources of income are from fees on deposit accounts and other
customer services.<PAGE>
<PAGE>
Distribution of Assets, Liabilities, and Stockholders' Equity

     The following schedule shows the average balance of the Bancorp's assets,
liabilities, and stockholders' equity accounts and the percentage distribution
of the items, computed using the average daily balances for the periods
indicated.  Percentages indicated below are percentages of total average 
assets. (In thousands of dollars, except percent amounts.):

<TABLE>
<CAPTION>

                     Year Ended December 31,
              ASSETS                     1995                             1994
<S>                                   <C>       <C>             <C>        <C>
Cash and due from banks              $19,679    9.5%         $18,934      9.8%
Interest bearing deposits at
financial institutions                 0          0              2           0
Securities                             43,073     20.8        32,960      17.0
Federal funds sold                     20,372      9.9        19,944      10.3

Loans                                 114,820     55.4       114,718      59.3
Less allowance for loan losses         (1,601)    (0.7)       (1,562)     (0.8)

               Net loans              113,219     54.7       113,156      58.5

Bank premises and equipment,  net       5,483      2.7         5,492       2.8

Accrued interest receivable and
other assets                            5,101      2.4         3,143       1.6

               TOTAL ASSETS          $206,927    100.0%     $193,631     100.0%

                 LIABILITIES AND STOCKHOLDERS'
                             EQUITY
                                 
Deposits:

     Noninterest-bearing, demand      $64,372     31.1%      $59,628      30.8%
     Market rate and money
     market, demand                    99,182     47.9        90,734      46.9
     Savings                           13,474      6.5        14,229       7.3
     Time                              12,511      6.1        13,650       7.1

               Total deposits         189,539     91.6       178,241      92.1

Other liabilities                       1,286      0.6           869       0.4

               Total liabilities      190,825     92.2       179,110      92.5

Stockholders' equity:

     Common stock                       7,109      3.4         6,848       3.5
     Retained earnings                  8,993      4.4         7,673       4.0
     Total stockholders' equity        16,102      7.8        14,521       7.5

             TOTAL LIABILITIES AND
              STOCKHOLDERS' EQUITY   $206,927    100.0%     $193,631     100.0%
</TABLE>
<TABLE>
<CAPTION>

            ASSETS                       1993
<S>                                      <C>           <C>

Cash  and due from banks              $18,812          10.1%
Interest bearing deposits at
financial institutions                  4,266           2.3
Securities                              8,930           4.8
Federal funds sold                     28,522          15.3

Loans                                 118,774          63.7
Less allowance for loan losses         (1,732)         (0.9)

               Net loans              117,041          62.8

Bank premises and equipment,  net       5,619           3.0
Accrued interest receivable and
other assets                            3,213           1.7

               TOTAL ASSETS          $186,403         100.0%


      LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

     Noninterest-bearing, demand      $51,141          27.4%
     Market rate and money
     market, demand                    88,661          47.6
     Savings                           14,354           7.7
     Time                              14,923           8.0

               Total deposits        $169,079          90.7

Other liabilities                       2,540           1.4

               Total liabilities      171,619          92.1

Stockholders' equity:

     Common stock                       6,848           3.5
     Retained earnings                  7,936           4.2
     Total stockholders' equity        14,784           7.9

     TOTAL LIABILITIES AND
        STOCKHOLDERS' EQUITY         $186,403         100.0%
</TABLE>
<PAGE>
Interest Income Rates

     Certain information concerning average interest-earning assets and yields
thereon is set forth in the following chart.  Amounts outstanding are the 
average daily balances for the respective periods.  Yields and amounts earned 
include loan origination fees.  Non-accrual loans have been included for the 
purposes of this analysis.  Tax exempt income is not presented on a tax 
equivalent basis as the amounts are not material.  (In thousands of dollars,
 except  percent amounts.):
<TABLE>
<CAPTION>

                                 Year Ended December 31,
          Category               1995              1994                  1993

<S>                                <C>               <C>                 <C>
Interest bearing deposits at
financial institutions:

     Average outstanding           $-                 $2               $4,266
     Average yield                  -                  -                 3.59%
     Amount of interest earned      -                  -                 $153

Securities:

     Average outstanding          $43,073          $32,960             $8,930
     Average yield                   5.74%            4.87%              4.87%
     Amount of interest earned     $2,471           $1,606               $435

Federal funds sold:

     Average outstanding          $20,372          $19,944            $28,522
     Average yield                   5.63%            4.12%              2.82%
     Amount of interest earned     $1,146             $822               $805

Net loans:

     Average outstanding         $113,219         $113,156           $117,041
     Average yield                  11.44%           10.15%              9.42%
     Amount of interest  and
     fees earned                  $12,954          $11,480            $11,022

Total earning assets:

     Average outstanding         $176,664          166,062           $158,759
     Average yield                   9.38%            8.38%              7.82%
     Amount of interest earned    $16,571          $13,908            $12,415
</TABLE>
<PAGE>
Interest Expense Rates

     The following table sets forth the Bancorp's amount of savings and time
deposits and other borrowings and the average rate paid on such deposits and
borrowings for the periods indicated.  (In thousands of dollars, except
percent amounts.)  Amounts outstanding are the average daily balances
outstanding for the respective periods:

<TABLE>
<CAPTION>
          Category                     Year Ended December 31,
                              1995                1994               1993
<S>                             <C>                 <C>               <C>
Market rate and money market deposits(1)
                          
     Average outstanding         $99,182        $90,734           $88,661
     Average rate paid              2.34%          2.01%             2.10%
     Amount of interest paid or
         accrued                  $2,325         $1,826            $1,865
                                
Savings:
                                
     Average outstanding         $13,474        $14,229           $14,354
     Average rate paid              1.98%          2.00%             2.30%
     Amount or interest paid or
         accrued                    $267           $285              $330
                                
                                
                                
Time:
                                
     Average outstanding         $12,511        $13,650           $14,923
     Average rate paid              4.39%          2.90%             2.87%
     Amount of interest paid or
         accrued                    $549           $396              $428
                    
Total interest-bearing liabilities:
                                
     Average outstanding        $125,167       $118,613          $117,938
     Average rate paid              2.51%          2.11%             2.22%
     Interest expense             $3,141         $2,507            $2,623
                               
(1)  Market rate and money market deposits include only interest-bearing
     transaction accounts.
        
Net Yield on Interest- Earning Assets 7.60%        6.87%             6.17%
</TABLE>
<PAGE>
Rate/Volume Analysis of Net Interest Income
                                
The following table sets forth the cause and amounts of change in interest
earned and paid for the periods indicated (In thousands of dollars):  
<TABLE>
<CAPTION>

                                   1995 over 1994 (1)
                             Volume      Rate     Total
<S>                            <C>         <C>      <C>
                                
Increase (decrease) in:
                                
  Interest income:
                                
    Interest-bearing deposits 
    at financial institutions    $-0-      $-0-      $-0-
    Investment securities         493       372       865
    Federal funds sold             18       306       324
    Net loans                       6     1,468     1,474
                                
    Total earning assets         $517    $2,146    $2,663
                                
                                
Interest expense:
                                
   Market rate and money
   market deposits               $170      $329      $499
   Savings deposits               (15)       (3)      (18)
   Time deposits                  (33)      186       153
                                
   Total Interest-bearing 
   liabilities                   $122      $512      $634
</TABLE>
<TABLE>
<CAPTION
                                
                                    1994 over 1993 (1)
                                
                                Volume     Rate       Total
<S>                               <C>        <C>        <C>
              
Increase (decrease) in:
                                
Interest income:
                                
     Interest-bearing deposits
     at financial institutions  $(153)       $-0-     $(153)
     Investment securities      1,170           1     1,171
     Federal funds sold          (242)        259        17
     Net loans                   (366)        824       458

     Total earning assets        $409      $1,084    $1,493

Interest expense:
                                
     Market rate and money
     market deposits              $44        $(83)     $(39)
     Savings deposits              (3)        (42)      (45)
     Time deposits                (37)          5       (32)

     Total Interest-bearing
     liabilities                   $4       $(120)     $(116)
</TABLE>
(1)The variance not solely due to rate or volume is allocated to the rate
   variances.  Non-accrual loans have been included for the purpose of this
   analysis.  Loan fees of approximately  $1,089,000 for 1995 , $1,153,000 for
   1994, and $1,042,000 for 1993 have been included for purposes of this
   analysis.  Tax exempt income is not presented on a tax equivalent basis as
   the amounts are not material.
<PAGE>
Securities

          The Bank's Board of Directors reviews all securities transactions on a
monthly basis.  There are no securities from a single issuer other than
securities of the U.S. Government, Agencies and corporations whose aggregate
market value is greater than 10% of stockholders' equity.   The following
schedule summarizes the amounts and the distribution of the Bank's securities
held to maturity as of the dates indicated (in thousands of dollars)

<TABLE>
<CAPTION>

                                      December 31,
                                   1995                     1994

                          Amortized         Market       Amortized      Market
                          Cost (1)          Value        Cost (1)       Value
<S>                         <C>             <C>           <C>           <C>

Mortgage-backed securities  $12,479         $12,421      $12,857       $11,745

U.S. Treasury securities and
obligations of other U.S.
Government agencies and
corporations                   -0-             -0-         8,873         8,649

Other                          174             174           174           174

     Total                 $12,653         $12,595       $21,904       $20,568
</TABLE>
<TABLE>
<CAPTION>
                                               1993

                           Amortized         Market
                           Cost (1)          Value
<S>                           <C>             <C>
Mortgage-backed securities   $9,076          $8,959

U.S. Treasury securities and
obligations of other U.S.
Government agencies and
corporations                   999              975 

Other                          174              174

     Total                 $10,249          $10,108
</TABLE>
(1)Securities held to maturity are stated at cost as disclosed in the notes
   to financial statements, adjusted for amortization of premium and
   accretion of discount.

   The securities classified as available for sale as of the dates indicated
are as follows (in thousands of dollars):

<TABLE>
<CAPTION>

                                       December 31,

                                  1995                   1994
<S>                           <C>           <C>          <C>         <C>
                            Amortized       Market      Amortized    Market
                            Cost            Value (2)   Cost         Value(2)

U.S. Treasury securities and
obligations of other U.S.
Government agencies and
corporations                  $24,984       $24,914      $15,940      $15,377

Mortgage-backed securities      2,018         1,994        4,024        3,871

     Total                    $27,002       $26,908      $19,964      $19,248
</TABLE>
<TABLE>
<CAPTION>

                                     1993

                             Amortized        Market
                             Cost             Value (2)
<S>                             <C>            <C.
U.S. Treasury securities and
obligations of other U.S.
Government agencies and
corporations                   $10,010        $9,993

Mortgage-backed securities       8,020         7,912

     Total                     $18,030       $17,905
</TABLE>

(2)Securities available for sale are stated at market value with 
   unrealized gains and losses being reported as an adjustment to stockholders'
   equity net of the related tax effect.

   None of the mortgage-backed securities are classified as "high risk" by the
Bank's regulators.

            On March 31, 1994, the Company transferred certain securities from
available for sale to held to maturity.  The amortized cost and fair value of 
the securities at date of transfer were $5,972,000 and $5,701,000, respectively.
Amortized cost of held to maturity securities is presented net of  approximately
$192,000 of unrealized loss on the securities transferred from available for
sale.
<PAGE>
Securities (continued)

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

Maturity of Investment Securities

            The following table summarizes the maturity of the Bancorp's and 
Bank's securities and weighted average yield as of December 31 1995 (in 
thousands of dollars, except percent amounts):
<TABLE>
<CAPTION>
<S>                              <C>              <C>              <C>
                          Principal Amount   Book Value(1)  Average Yield(2)

Mortgage-backed securities(3)   $14,641         $14,473         5.28%

U.S. Treasury Securities and
obligations of U.S.
Government Agencies and
corporations:

     Due within one year          6,000           6,004         5.62%

     Due after one year but
     within five years           19,000          18,910         5.77%

Other                               174             174         5.87%

          Total Securities      $39,815         $39,561         5.57%
</TABLE>

(1)Securities held to maturity are stated at cost, adjusted for amortization
   of premiums and accretion of discounts, securities available for sale are
   recorded at quoted market values.

(2)Weighted average yield is the yield on the book value of the security
   computed on the coupon rate and amortization of premium and accretion of
   discount.

(3)Mortgage-backed securities are not scheduled for maturities due to the
   periodic principal payments received and unknown amount of expected
   prepayments.
<PAGE>
Loan Portfolio

   A major part of the Bank's objective is serving the legitimate credit needs
of clientele in central Orange County and surrounding areas. Credit decisions
have been based upon the best judgement of the Bank's lending personnel, giving
full recognition to the needs and limitations of the Bank due to its size and
staff.  Legal lending limits to each customer are restricted to a percentage of
the Bank's total stockholders' equity, the exact percentage depending upon the
nature of the particular loan and the collateral involved.   Credit risk is
inherent to any loan portfolio and it is the management of this risk which
defines the quality of the portfolio.  The Bank has a highly diversified
portfolio and a loan review procedure which management believes serves to
minimize the possibility of material loss.

The allowance for credit losses is established through a provision for credit
losses charged to expense.  Loans are charged against the allowance for credit
losses when management believes that collectibility of the principal is 
unlikely. The allowance is an amount that management believes will be adequate 
to absorb estimated losses on existing loans that may become uncollectible, 
based on evaluation of the collectibility of loans and prior loan loss 
experience.  This evaluation also takes into consideration such factors as 
changes in the nature and volume of the loan portfolio, overall portfolio 
quality, review of specific problem loans, and current economic conditions that
 may affect the borrower's ability to pay.  While management uses the best 
information available to make its evaluation, future adjustments to the 
allowance may be necessary if there are significant changes in economic or 
other conditions.  In addition, the Office of the Comptroller of the Currency
 (OCC), as an integral part of their examination process, periodically reviews
 the Company's allowance for credit losses, and may require the Company to make
 additions to the allowance based on their judgment about information available
 to them at the time of their examinations.

Impaired loans are measured based on the present value of expected future cash
flows discounted at the loan's effective interest rate or, as a practical
expedient, at the loan's observable market price or the fair value of the
collateral if the loan is collateral dependent.  A loan is impaired when it is
probable the creditor will be unable to collect all contractual principal and
interest payments due in accordance with terms of the loan agreement.
<PAGE>
Types of Loans

            The types of the Bank's total loans (all domestic) as of the dates
indicated are shown in the following table (in thousands of dollars, except
percent amounts):
<TABLE>
<CAPTION>

                              December 31,

                               1995                    1994

TYPE OF LOAN
<S>                           <C>           <C>          <C>            <C>

Real estate, mortgage (includes
only loans secured primarily
by real estate                 $61,084     53.5%    $61,345           53.7%

Mortgage loans held for sale        -         -          -               -

Real estate, construction          242      0.2%      2,286            2.0%

Commercial and industrial       41,361     36.2%     40,976           35.9%

Loans to individuals            10,343      9.1%      9,384            8.2%

Other                            1,207      1.0%        177            0.2%

TOTAL LOANS                   $114,237      100%   $114,168            100%

Less allowance for possible loan losses
                               (1,513)               (1,465)

TOTAL NET LOANS              $112,724              $112,703

</TABLE>
<TABLE>
<CAPTION>
                                     December 31,
                                 1993                    1992
<S>                            <C>        <C>       <C>      <C>
TYPE OF LOAN

Real estate, mortgage
(includes only loans secured
primarily by real estate     $64,310     55.9%     $61,816      52.1%

Mortgage loans held for sale   2,050      1.8%          -         - 

Real estate, construction      3,473      3.0%       7,097       6.0%

Commercial and industrial     34,376     29.8%      38,432      32.4%

Loans to individuals          10,127      8.8%      10,455       8.8%

Other                            858      0.7%         890       0.7%

TOTAL LOANS                 $115,194      100%    $118,690       100%

Less allowance for possible loan losses
                              (1,524)               (1,425)
TOTAL NET LOANS             $113,670              $117,265
</TABLE>
[CAPTION]
                                        December 31,
                                   1991
[S]                              [C]      [C]
TYPE OF LOAN

Real estate, mortgage
(includes only loans secured
primarily by real estate       $51,527    44.8%

Mortgage loans held for sale       -       -

Real estate, construction        5,472     4.7%

Commercial and industrial       42,710    37.2%

Loans to individuals            11,225     9.8%

Other                            4,007     3.5%

TOTAL LOANS                   $114,941     100%

Less allowance for possible loan losses
                                 ( 950)

TOTAL NET LOANS               $113,991
[/TABLE]

Included in the loans above are approximately $4,753,000, $3,743,000, 
$4,236,000, $4,037,000 and $5,385,000  from companies or individuals which are 
unsecured as of December 31, 1995,1994,1993, 1992 and 1991, respectively.
<PAGE>
Loan Maturities and Sensitivity to Changes in Interest Rates

The following table (in thousands of dollars) sets forth the maturity
distribution of the Bank's total net loans by category as of December 31 1995. 
In addition, the table shows the distribution between those loans with
predetermined (fixed) interest rates and those with variable (floating) interest
rates.   Floating rates generally fluctuate with changes in the Bank's interest
cost:
<TABLE>
<CAPTION>
                             Within one     After one but     After
                             year (1)       within five       five years
                                            years
<S>                               <C>          <C>             <C>
Commercial and industrial      $34,755      $5,864              $742

Real estate construction           242        -0-              -0-

Distribution between fixed and
floating interest rates after one
year:

     Fixed interest rates                     403                50

     Floating interest rates                5,561               692

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

Credit Risk Management

     In managing its loan portfolio, the Bank utilizes procedures designed to
assure acceptable quality and to bring any potential losses or potential 
defaultsin existing loans to the attention of the appropriate management 
personnel.  Each lending officer has primary responsibility to conduct credit 
and documentation reviews of the loans for which he is responsible.   The Bank's
 Senior Vice President and Senior Credit Officer is responsible for general 
supervision of the loan portfolio and adherence by the loan officers to the 
loan policy of the Bank.  The Bank has an outside consulting firm to 
periodically review the loan portfolio to provide suggested risk rating of 
the loans.  Bank management reviews the suggested ratings along with all 
other available information to properly monitor the loan portfolio.

            In accordance with the Bank's policies, management presents a 
written report to the Bank's Board of Directors at the monthly Board of 
Directors meeting. The Directors review the list of all loans which are 30 days
 or more past due and the loans on the Bank's watch list which include loans 
having increased credit risk over the rest of the portfolio.   Additionally,
 the report incudes a listing of all loans made the prior month.

            Management and the Board of Directors also review all loan 
evaluations made during periodic examinations by the Officer of the 
Comptroller of the Currency.
<PAGE>
Credit Risk Management (continued)

    As previously noted, the Bank maintains an allowance for credit losses to
provide for losses in the loan portfolio.  Additions to the allowance for credit
losses are made by charges to operating expenses in the form of a provision for
possible credit losses.   All loans which are judged to be uncollectible are
charged against the allowance while any recoveries are credited to the 
allowance. The allowance for credit losses is maintained at a level determined 
by management to be adequate, based on the performance of loans in the Bank's 
portfolio, evaluation of collateral for such loans, the prospects or worth of
 the prospective borrowers or guarantors, and such other factors which, in the 
Bank's judgement, deserve consideration in the estimation of possible losses.  
The allowance for credit losses is established and maintained after analyzing 
loans identified by management with certain unfavorable feature affixing a 
risk of loss attributable to each loan.  An inherent risk of loss in 
accordance with industry standards and economic conditions is then allocated 
to specific loan pools and to the remainder of the portfolio on an aggregate 
basis.

   The following table sets forth information with respect to loans which were
accounted for on a non-accrual basis or contractually past due 90 days or more
as to interest or principal payments, or restructured (in thousands of dollars):
<TABLE>
<CAPTION>
                                  At December 31,

                             1995     1994    1993      1992      1991
<S>                            <C>      <C>     <C>     <C>      <C>
Loans on non-accrual basis   $3,055   $3163  $2,744   $3,100    $310

Loans past due 90 days or more
and still accruing interest      33     158      46      958     347

Troubled debt restructuring, and
not included above              -0-     -0-      -0-     -0-     -0-

     Total                   $3,088   $3,321  $2,790   $4,058   $657
</TABLE>

     If all such loans had been current in accordance with their original terms
during the year ended December 31, 1995, approximately $273,000 would have been
the gross interest income.  The amount of interest income included in income on
these non-accrual loans during the year ended December 31, 1995 was 
approximately $68,000.

     Loans are generally placed on non-accrual status when principal or interest
payments are past due 90 days or more.   Certain loans are placed on non-accrual
status earlier if there is reasonable doubt as to the collectibility of interest
or principal.   Loans which are in the process of renewal in the normal course
of business, or are well secured, and in the process of collection, continue to
accrue interest

     Management has no knowledge of any additional loans not disclosed in this
section on non-accrual, past due, or troubled debt restructuring that may be
potential problem loans.   The Bank has no loans to foreign borrowers.

            As of December 31, 1995, 1994, 1993, 1992 and 1991 there was no
concentration of loans exceeding 10% of total loans which was not otherwise
disclosed as a category in the loan portfolio table and  there were no other
interest bearing assets that would be required to be in the paragraphs above, if
such assets were classified as loans.
<PAGE>
Credit Risk Management   (continued)

     The following table shows loans outstanding, actual charge-offs, recoveries
on loans previously charged-off, the allowance for credit losses, and pertinent
ratios during the periods and as of the dates indicated (in thousands of 
dollars, except percent amounts):
<TABLE>
<CAPTION>

           ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

                                       Year Ended December 31

                                      1995           1994             1993
<S>                                   <C>             <C>             <C>
Average loans                       $114,820       $114,718        $118,774

Total gross loans at end of period  $114,237       $114,168        $115,194

Reserve for loan losses:
     Balance, beginning of period     $1,465         $1,524          $1,425

     Charge-offs:
          Commercial and industrial     $302           $459            $232

          Real estate - construction     -0-            -0-              30

          Real estate - mortgage          70             25              76

          Installment                     16              4              27
 
                                        $388           $488            $365

     Recoveries

          Commercial and industrial      $63           $129             $67

          Leases                          45            -0-             -0-

          Real estate - construction      -0-           -0-             -0-

          Real estate - mortgage           8            -0-             -0-

          Installment                     -0-            2               3

                                         $116           $131            $70

     Net charge-offs (recoveries)        $272           $357           $295

     Additions  charge to
     (reductions in) operations          $320           $298           $394

     Acquired by purchase of Laguna
     Bank                                $-0-            $-0-           $-0-

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


Net charge-offs(recoveries)during the
period to average gross loans
outstanding during period                0.24%           0.31%        0.25%
</TABLE>
<TABLE>
<CAPTION>

           ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

Year Ended December 31,
                                          1992           1991
<S>                                         <C>            <C>
Average loans                           $120,028       $106,670

Total gross loans at end of period      $118,690       $114,941

Reserve for loan losses:

     Balance, beginning of period         $  950         $  900

     Charge-offs:

          Commercial and industrial         $582           $312

          Real estate - construction         -0-            -0-

          Real estate - mortgage             -0-             59

          Installment                         2              18

                                           $584              $389
     Recoveries

          Commercial and industrial         $34                $7
          Leases                            -0-               502

          Real estate - construction        -0-               -0-

          Real estate - mortgage            -0-               -0-

          Installment                        4                 4

                                           $38               $513

     Net charge-offs (recoveries)         $546              $(124)

     Additions  charge to
     (reductions in) operations           $790               $(74)

     Acquired by purchase of Laguna Bank  $231               $-0-

     Balance, end of period             $1,425               $950

Net charge-offs(recoveries)during the
period to average gross loans
outstanding during period                 0.45%             (0.12)%
</TABLE>
<PAGE>
Credit Risk Management   (continued)

   The Bank has allotted the allowance for loan losses according to the amount
deemed reasonably necessary to provide for the possibility of losses being
incurred within categories of loans set forth in the table below (in thousands
of dollars, except percent amounts):
<TABLE>
<CAPTION>

                                      December 31,
<S>                       <C>          <C>             <C>           <C>
                                    1995                           1994

                       Allowance     Percent of     Allowance     Percent of
                       Amount        Loans in Each  Amount        Loans in Each
                                     Category to                  Category to 
                                     Total Loans                  Total Loans

Commercial and Industrial    $831       36.2%        $744         35.9%
Real Estate - construction      3        0.2          124          2.0
Mortgage loans held for sale   -0-       0.0           -0-         0.0
Real estate - mortgage        594       53.5          468         53.7
Installment                    62        9.1          108          8.2
Other                          23        1.0           21          0.2

                           $1,513      100.0%      $1,465        100.0%

                                  1993                    1992

Commercial and Industrial    $550       29.8%         550         32.4%
Real Estate - construction     75        3.1          417          6.0
Mortgage loans held for sale   -0-       1.8           -0-         0.0
Real estate - mortgage        837       55.9          400         52.1
Installment                    40        8.8           56          8.8
Other                          22        0.7            2          0.7

                           $1,524      100.0%      $1,425        100.0%

                                  1991

Commercial and Industrial    $370       37.2%
Real Estate - construction     33        4.7
Mortgage loans held for sale   -0-       0.0
Real estate - mortgage        256       44.8
Installment                    67        9.8
Other                         224        3.5

                             $950      100.0%
</TABLE>

       Included in the Bank's allocation of its allowance for loan losses are
provisions for specific loans, current economic conditions and a general reserve
for unknown potential losses.  Bank management considers loans classified by its
internal loan review system, an independent third party reviewer  and its
regulators.   None of these classifications indicate trends or uncertainties
which will materially impact future operating results, liquidity, or capital
resources.  The Bank has provided for the potential adverse effects of current
economic conditions. However, the full effects of the economy on the loan
portfolio cannot be predicted with any certainty.  See discussion in item 7.  
Any loans which management doubts the ability of borrowers to comply with loan
repayment terms are provided for in the allowance.   On January 1, 1995, the
Company adopted Financial Accounting Standards Board (FASB) Statement No. 114,
Accounting by Creditors for Impairment of a Loan, as amended by FASB Statement
No. 118, Accounting by Creditors for Impairment of a Loan - Income Recognition
and Disclosures.  There was no effect on the Company's financial statements for
this change, which generally requires impaired loans to be measured on the
present value of the expected future cash flows discounted at the loan's
effective interest rate, or as an expedient at the loan's observable market 
price or the fair value of the collateral if the loan is collateral dependent.  
The entire change in the present value of the expected future cash flows is 
recorded as an increase or decrease in provision for credit losses.  A loan is 
impaired when it is probable the creditor will be unable to collect all 
contractual principal and interest payments due in accordance with the terms 
of the loan agreement.  Generally, interest income is not recognized until 
all principal amounts are received.  At January 1, 1995, the Bank has 
classified $3,409,000 of its loans as impaired with a specific loss reserve 
of $404,000.
<PAGE>
Summary of Deposits

      Deposits are the Bank's  primary source of funds.   The Bank can obtain
additional funds when needed to meet occasional declines in deposits to satisfy
cash reserve requirements, or for other short-term liquidity needs, through the
overnight purchase of federal funds.   However, the Bank does not use these
sources of funds.   Regularly, the Bank has more funds than it needs for its
reserve requirements or short-term liquidity needs, and it, therefore, sells
federal funds to other financial institutions, places funds in certificates of
deposit with other financial institutions, or invests in short-term securities.

      At December 31, 1995 and 1994, the aggregate amount of interest-bearing
deposits was 62.8% and 64.1%, respectively, of total deposits.  The Bank has no
foreign deposits.  While the Bank does not experience material repeated seasonal
fluctuations in deposit levels, the 'Bank's relative growth in deposits and 
loans may be affected by seasonal and economic changes which, in turn, may 
impact liquidity.  The Bank does not have any brokered deposits.  As of 
December 31, 1995, the Bank has deposit concentrations of $28,158,000 from 
four customers. Management believes it has sufficient liquidity to meet loan 
commitments and deposit demands.

            The following table sets forth information for the periods indicated
regarding the average balances of the Bank's deposits by category and as  a
percentage of average total deposits (in thousands of dollars, except percent
amounts):
<TABLE>
<CAPTION>
<S>                  <C>            <C>           <C>      <C>      <C>
Year Ended         Demand        MoneyMarket   Savings   Time    TotalDeposits
December 31        (noninterest  and Now
                   Bearing
1995

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

1994

Average balance    $59,628       $90,734       $14,229   $13,650     $178,241
Percent of total      33.5%         50.9%          8.0%      7.6%         100%
Average rate paid      0.0%          2.0%          2.0%      2.9%         1.4%

1993

Average balance    $51,141       $88,661       $14,354   $14,923     $169,079
Percent of total      30.3%         52.4%          8.5%      8.8%         100%
Average rate paid      0.0%          2.1%          2.3%      2.9%         1.6%
</TABLE>

      The following table indicates the amount (in thousands of dollars, except
percent amounts) and maturity of the Bank's time certificates of deposit over
$100,000 as of December 31 1995.

<TABLE>
<CATION>
                                           1995

<S>                                  <C>          <C>

                                  Balance     Percent of Total

Less than three months             $4,017       60.6%

Three months through six months     1,611       24.3

Six months through twelve months    1,004       15.1

Over twelve months                     -0-       0.0

                                   $6,632      100.0%
</TABLE>
<PAGE>
Return on Equity and Assets

      The following table indicates the key financial ratios of the Bank for the
periods indicated:
<TABLE>
<CAPTION>
                                 Year Ended December 31,
<S>                                 <C>             <C>            <C>
                                    1995             1994           1993

Profitability ratios:

     Rate of return on average total assets
                                   1.22%            0.43%           0.11%

     Rate of return on average stockholders' equity
                                  15.68%            5.75%           1.35%

Capital Ratios:

     Dividend payment ratio to net income  (1)
                                  19.23%           11.00%            0.0%

     Average stockholders' equity to average total assets
                                   7.78%            7.50%            7.93%

</TABLE>
(1) Dividends declared exclude stock dividends

Competition

     The banking business in California and the market areas served by the Bank
are highly competitive with respect to both loans and deposits and are dominated
by a relatively small number of major banks with many offices operating over a
wide geographic area.  The Bank is one of five locally owned independent banks
located in the Bank's primary service area.  The Bank also competes for loans 
and deposits with other commercial banks, including many which are much 
larger than the Bank, as well as with savings and loan associations, finance 
companies, credit unions, and other financial institutions.   Larger 
commercial banks offer certain services (such as trust and investment 
services) which the Bank does not offer directly (but some of which it offers
 indirectly through correspondent institutions).  By virtue of their greater
 total capitalization, such banks also have substantially higher lending 
limits than the Bank has or will have.  In addition, as a result of recently 
enacted legislation, it is anticipated that there will be increased 
competition between banks, savings and loan associations, and credit unions 
for the deposit and loan business of individuals.  The growth of money market
 funds and quasi-financial institutions, such as certain activities of 
retailers and other which are not subject to the same regulatory controls, 
also presents a source of competition for the Bank.  With the decline
in interest rates, depositors have been seeking alternative investments to earn
higher yields than the Bank is currently paying.

        The Bank's primary service area encompasses the boundaries delineated by
the Orange Unified School District.  The same area constitutes the community
covered by the Bank's Community Reinvestment Act Statement.  This service area
is currently serviced by banking offices which may provide competition for the
Bank.

       In order to compete with the other financial institutions in its primary
service area, the Bank relies principally upon local promotional activities,
personal contact by its officers, directors, employees, and stockholders,
extended hours, and specialized services.  For customers whose loan demands
exceed the Bank's lending limit, the Bank has attempted and will continue in the
future to attempt to arrange for such loans on a participation basis with other
banks.  The Bank also assists customers requiring other services not offered by
the Bank in obtaining such services from its correspondent banks.
<PAGE>
Supervision and Regulation

      The Company is subject to the regulation of the Federal Reserve Bank
Holding Company Act of 1965, as amended, and the Board of Governors of the
Federal Reserve System.   Orange National Bank is subject to the regulation of
the Federal Deposit Insurance Corporation and the Office of the Comptroller of
the Currency (OCC).  Among other regulations, the OCC establishes minimum 
capital requirement which the Bank exceeds as of December  31, 1995.


Employees

      As of December 31, 1995, the Bank employed 126 full-time and 10 part-time
persons, including 28 principal officers.  None of the Bank's employees are
represented by a union or covered by a collective bargaining agreement.  The
management of the Bank believes that, in general, its employee relations are
good.

ITEM 2.     PROPERTIES

      The Bank and the Bancorp's head office is located in a two-story building
located at 1201 East Katella Avenue, Orange, California.  The Bank owns this
building and the land the building is situated on.  This building is
approximately 16,000 square feet of interior and exterior floor space and is
located on a lot of approximately 55,000 square feet.  The facility has adequate
parking and an automated teller machine.

      The Bank leases the building and land at its branch offices offering all
banking services, at the following locations: 77 Plaza Square, Orange,
California;  2019 West Orangewood Avenue, Orange, California;  7510 East Chapman
Avenue, Orange, California;  800 Glenneyre, Laguna Beach, California; and 25255
Cabot Road, Laguna Hills, California.  The branch offices have approximately
27,000 square feet of interior and exterior floor space.   Each branch has an
automated teller machine.   The Bank also leases the building and land for
administrative purposes at three additional locations at 115 and 274 North
Glassell Street, Orange, California, and 2117 West Orangewood Avenue, Orange,
California.  These offices have approximately 8,400 square feet of floor space.


ITEM 3           LEGAL PROCEEDINGS

      To the best of management's knowledge, there are no pending or threatened
legal proceedings to which the Bank, or the Bancorp is or may become a party
which  may have a materially adverse effect upon the Bank, the Bancorp or their
property.   However, in the normal course of business, the Bank, or the Bancorp
may initiate actions to protect their interests and may occasionally be made a
party to actions relating thereto seeking to recover damages from the Bank, or
the Bancorp.

ITEM 4      SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

                 None
<PAGE>
PART II
                      
ITEM 5      MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER
            MATTERS


Market Information

      Stock market information and history of cash and stock dividends and stock
            splits is set forth in item 7 of this Form 10-K on page 26 and 27.

ITEM 6           SELECTED FINANCIAL DATA

          ORANGE NATIONAL BANCORP FINANCIAL HIGHLIGHTS
                                
                    SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
                               1995                1994             1993

Results of operations(000's except per
share amounts):
<S>                                <C>              <C>              <C>
Total Interest income             $16,571         $13,908         $12,416
Net Interest Income                13,430          11,400           9,792
Provisions for possible loan
and lease losses                      320             298             394
Non Interest Income                 2,781           2,612           2,279
Non Interest Expense               12,187          11,962          11,744

Income from continuing
operations before cumulative 
effect of change in accounting
principle                           3,703           1,060             457

Cumulative effect in change in
accounting principle                    -               -              -

Income from continuing operation    3,703           1,060             457
Loss from discontinued operations       -            (225)           (258)

Net Income                          2,524             835             199

Earnings per common share: 
Primary                             $1.30           $0.43           $0.10
Fully diluted                        1.30            0.43            0.10
Cash dividends per share             0.25            0.05               -
Weighted average number of common shares
outstanding:
Primary                             1,941           1,931           1,931
Fully diluted                       1,941           1,931           1,931

Financial condition (000's):

Total assets                     $207,928        $206,510        $193,290
Loans (net)                       112,724         112,703         113,670
Deposits                          188,991         190,406         177,571
Mandatory convertible debentures       -               -              -
Stockholders' equity               17,262          14,782          14,543
                                
          ORANGE NATIONAL BANCORP FINANCIAL HIGHLIGHTS
                                
                    SELECTED FINANCIAL DATA
                                
                                     1992            1991

Results of operations(000's
except per share amounts):

Total Interest income             $12,436         $14,339
Net Interest Income                 8,917           8,635
Provisions for possible loan
and lease losses                      790             (74)
Non Interest Income                 2,381           2,228
Non Interest Expense               10,119           8,841

Income from continuing
operations before cumulative 
effect of change in accounting
principle                            229            1,273

Cumulative effect in change in
accounting principle                  -               900

Income from continuing operations    229            2,173

Loss from discontinued operations     -                -

Net Income                           229            2,173

Earnings per common share:

Primary                             $0.13           $1.29
Fully diluted                        0.13            1.15
Cash dividends per share             0.29              -
Weighted average number of common shares outstanding:
Primary                             1,638           1,543
Fully diluted                       1,745           1,754
Financial condition (000's):

Total assets                     $175,681        $178,380
Loans (net)                       117,265         113,991
Deposits                          159,118         161,139
Mandatory convertible debentures        -           1,762
Stockholders' equity               14,419          12,906
</TABLE>

Primary and fully diluted earnings per share in 1991 were increased due to the
cumulative effect of the change in accounting principle by $.56 and $.49,
respectively.  Earnings per share from continuing operations in 1994 and 1993
were $.58 and $.25, respectively.  Earnings per share prior to 1995 are restated
to reflect 5% stock dividends in 1995.
<PAGE>
ITEM 7      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

Financial Condition

Total interest earning assets decreased approximately $11,300,000 from December
31, 1994 to 1995. The decrease is due to a temporary increase in cash and due
from banks, an investment in life insurance and a small decline in deposits. The
Company is trying to increase its loan base with quality loans. Interest earning
assets increased approximately $11,200 from December 31, 1993 to 1994. In 1994,
deposits increased $12,800,000 and that increase was invested primarily in
marketable debt securities.

The Company has been increasing its investment in securities from 1993 to 1995.
Average balances have increased, $24,030,000 in 1994 and $10,113,000 in 1995. 
The reason for the increase is due to an increase in deposits without being able
 to increase loans. The Company believes securities are the best available 
investment after its liquidity needs are met through cash and due from banks 
 and federal funds sold. Generally, mortgage backed securities are classified as
held-to-maturity and U.S. Treasury and Agency securities are classified as
available-for-sale. The market values of securities declined in 1994 due to an
increasing interest rate environment. In 1995 the market values of securities
increased almost as much as 1994 values declined due to a decline in interest
rates late in the year.

Loans decreased 0.02% in 1995 compared to a decrease of 0.85% in 1994. The 
supply of high quality loans continues to be soft in the Southern California
 area.

Bank premises and equipment, net of depreciation, increased by $139,898 in 1995
and decreased $133,017 in 1994. The Company purchased approximately $300,000 in
equipment in 1994 and $675,000 in 1995.  The level of capital expenditures in 
the future is not expected to be substantially different.

In the fourth quarter of 1995, the Company entered into deferred compensation
agreements with certain officers and directors. These agreements provide a death
benefit prior to retirement. The Company also invested $3,500,000 in life
insurance policies in conjunction with these agreements. The Company does not
anticipate any substantial purchases of life insurance in the future.

Total deposits decreased .7% in 1995 compared to an increase of 7.2% in 1994. In
the last quarter of 1994 the bank entered into a deposit relationship with a
company that administers pension funds. Deposits from the company were
approximately $8,900,000 as of December 31, 1994 and $14,000,000 as of December
31, 1995. Deposit differences between the years fluctuate due to balances
maintained by large depositors. Overall average deposit balances are up
approximately $10,000,000 in 1995 and 1994.

Liquidity

The Company maintains substantial liquid and other short-term assets to meet
increases in loan demands, deposit withdrawals and maturities.

The loan-to-deposit ratio at December 31, 1995 was 59.6% compared to 59.2% at
December 31, 1994. The ratio of liquid assets (cash and due from banks, interest
bearing deposits at financial institutions, federal funds sold, and investments
with maturities of one year or less) to demand deposits was 29.4% at 
December 31, 1995 compared to 30.8% at December 31, 1994. The Company may 
borrow funds under securities sold with agreements to repurchase for 
securities that have not been pledged. At December 31, 1995 unpledged 
securities totaled approximately $35,500,000. All of the Company's installment
 loans require monthly payments, which provide a steady return of cash funds.
 Liquidity needs can also be met through federal funds purchased from 
correspondent banks and/or direct borrowings from the Federal Reserve Bank. 
The Company has established Federal Funds borrowing lines with various banks 
up to $3,000,000. As of this date, the Company has never used these facilities.
<PAGE>
Liquidity (continued)

The subsidiary bank has a significant base of core deposits and has not used
brokered deposits. The Bank also avoids using other wholesale, highly rate
sensitive, short-term funds and believes their deposits represent funding 
sources which are relatively stable with respect to liquidity. As of 
December 31, 1995, the Bank has deposit concentrations of $28,000,000 from 
four customers which include the $14,000,000 referred to above in deposits 
from a company that administers pension funds. The Company continues to meet
 its loan demands with cash flow from operations. If loan demand were to 
substantially increase, the Company would be able to generate cash flow from
 its federal funds sold, sale of marketable securities which are available 
for sale, increasing deposits and borrowing on its established credit 
resources. Management believes the Bank has sufficient liquidity to meet loan
 commitments and deposit withdrawals.

Capital Management

Capital management requires that sufficient capital be maintained for 
anticipated growth and to provide depositors assurance that their funds are 
on deposit with a solvent institution.

The subsidiary Bank has minimum regulatory capital requirements. The parent
company and subsidiary Bank have similar capital requirements. At December 31,
1995, minimum core capital is required to be 4% of risk adjusted assets and
minimum total capital is required to be 8%. The leverage ratio is required to be
4%. Core capital for the Bank under the regulations is defined as only
stockholders' equity and total capital is stockholders' equity plus the 
allowance for credit losses. Leverage is the ratio of core capital to total 
average assets. At December 31, 1995 core capital of the Bank was $16,876,000,
 total capital was $18,388,000. The ratio of core and total capital to risk 
adjusted assets at December 31, 1995 was 11.7% and 12.8%, respectively. The 
leverage ratio was 8.2% at December 31, 1995. At December 31, 1995, the Bank's
 capital ratios exceeded the "well capitalized" threshold prescribed in the 
rules of its principal federal regulator.

Management believes that the Company and its subsidiary are properly and
adequately capitalized, as evidenced by these ratios and the strong liquidity
position.

Results of Operations

Total interest income increased 19.2% in 1995, and 12.0% in 1994. The average
yield increased in 1995 and in 1994 by 1.00% and .60% respectively. The increase
in interest income in 1995 was due primarily to increased rates. The average 
rate increase on loans in 1995 was 1.29%. The yield on loans will change along 
with the movements in the prime rate as approximately 85% of the loan portfolio
 is based on variable rates. The total average balances of interest earning 
assets increased approximately $10,600,000 in 1995. The average balance in loans
increased approximately $65,000 in 1995 and average balances in investment
securities increased approximately $10,100,000.  Interest income from investment
securities increased in 1994 due to the purchase of $13,000,000 of U.S. Treasury
and Agency securities in 1994. Interest income from investment securities
increased in 1995 due to the increase in the average balances of investment
securities. The average balance in federal funds sold increased by $430,000 in
1995. Interest income on federal funds sold increased by 39.6% in 1995 and 2.0%
in 1994. The 1995 increase is due primarily to the increase in rates for most of
1995.

Total interest expense increased 25.3% in 1995 and decreased 4.4% in 1994. The
decrease in 1994 was due to an .11% decline in the average rate paid partially
offset by the average interest bearing liabilities increasing by approximately
$675,000 or 0.6% in 1994. The increase in 1995 was due to a .40% increase in the
average rate paid and average interest bearing liabilities increasing by
approximately $6,550,000 or 5.5%. 

In 1995, 1994 and 1993 the credit loss provisions were $320,000, $298,000 and
$394,000 respectively. Management believes that the allowance for credit losses
is adequate to provide for potential losses in the portfolio. The economic
outlook for 1996 cannot be predicted and, accordingly, future provisions for
credit losses cannot be estimated at this time. See Note 1 in the Notes to
Consolidated Financial Statements.
<PAGE>
Results of Operations (continued)

Other income increased $169,000 in 1995 compared to an increase of $333,000 in
1994 . The increase in 1994 was primarily due to increased service charges and
fees for business accounts which began in 1993. Other expenses such as salaries,
promotion expense and professional services decreased in 1995 due to the closure
of the mortgage banking department and a restructuring of the bank in 1994. 
Other expenses has remained fairly consistent for the years ended 1995, 1994 and
 1993.Payroll costs are up slightly in 1995 due to increases in the average
compensation per person and the accrual of discretionary bonuses, while the 
total number of full time equivalent employees is declining. Other real estate 
owned expenses are up in 1995 due to the increased number of properties owned by
 the Bank.

In 1995, the Company reduced its valuation allowance on net deferred tax assets
by $483,000. This reduction also reduced income tax expense. Income tax expense
in 1994 reflects effective tax rates on taxable earnings which approximates the
federal and state statutory tax rates of 40%. In the first quarter of 1993,
management determined that a reserve for potential future income tax liabilities
was no longer considered necessary and a $500,000 credit to income tax expense
was recorded.

The Company has approximately $165,000 recorded as a valuation allowance against
net deferred tax assets which could reduce future income tax expense if the net
assets become realizable. The provisions in statement No. 109 and the effect of
alternative minimum tax have the potential for producing, under certain
conditions, significant distortions in future income tax provisions and the
effective tax rate.

Net income in 1995 increased approximately $1,700,000 over 1994 due primarily to
an increase in the average rate on interest earning assets and the $483,000
reduction in tax expense and the closure of the mortgage banking operation. 1994
net income increased approximately $635,000 over 1993 due to a decrease in the
average rate paid on deposits and an increase in the average rate on interest
earning assets. However, 1993 net income included the $500,000 reversal of the
income tax contingency reserve provided for in prior years. While management is
optimistic about the future, the effects of current economic conditions on the
collectability of loans cannot be predicted with absolute certainty and its
effects on future profitability cannot be determined.

Off-Balance Sheet Analysis

The contractual amounts associated with certain financial transactions are not
recorded as assets or liabilities on the balance sheet. Off-balance sheet
treatment is generally considered appropriate either where exchange of the
underlying asset or liability has not occurred nor is assured, or where
contractual amounts are used solely to determine cash flows to be exchanged.

Off-balance sheet financial instruments consist of commitments to extend credit
and standby letters of credit. A majority of these commitments are with variable
interest rates and therefore are not derivative instruments. Additional
information about off-balance sheet financial instruments is provided in Note 9
of Notes to Consolidated Financial Statements.

Interest Rate Sensitivity

The Company manages its balance sheet to minimize the impact of interest rate
movements on its earnings. The term "rate sensitive" refers to those assets and
liabilities which are "sensitive" to fluctuations in rates and yields. When
interest rates move, earnings may be affected in many ways. Interest rates in
assets and liabilities may change at different times or by different amounts.
Maintaining a proper balance between rate sensitive earning assets and rate
sensitive liabilities is the principal function of asset and liability 
 management of a banking organization.
<PAGE>
Interest Rate Sensitivity (continued)

The following table shows the repricing period for interest earning assets and
interest bearing liabilities and the related repricing gap in thousands:
<TABLE>
<CAPTION>
                             Repricing period (000's omitted)
<S>                  <C>              <C>             <C>               <C>
                  Three months  Over three months  One year through  Over Five
                  or less       through twelve     Five Years        Years
                                Months

Interest
earning assets      $119,215         $9,066            $28,674         $15,343
Interest bearing
liabilities          111,373          5,523              1,858               -

     Repricing gap    $7,842         $3,543            $26,816         $15,343
Cumulative
repricing gap         $7,842        $11,385            $38,201         $53,544
Cumulative gap
as a percent
of earning assets        4.6%           6.6%              22.2%           31.1%
</TABLE>

The Company has $26,908,000 in securities classified as available for sale and
are recorded at market value. The remaining securities of $12,653,000 are
classified as held to maturity and recorded at amortized cost. These securities
may be called or repaid without penalties. The value of these securities is
subject to fluctuation based upon current long-term interest rates.

The Company has approximately $117,416,000 of interest earning loans and federal
funds sold and approximately $104,156,000 of interest bearing demand and savings
deposits which are able to reprice overnight.

Repricing gap equals total interest earning assets less total interest bearing
liabilities available for repricing during a given time interval.

A positive repricing gap for a given period exists when total interest earning
assets exceed total interest bearing liabilities and a negative repricing gap
exists when total interest bearing liabilities are in excess of interest earning
assets.

Generally, a positive repricing gap will result in increased net interest income
in a rising rate environment and decreased net interest income in a falling rate
environment. A negative repricing gap tends to produce increased net interest
income in a falling rate environment and decreased net interest income in a
rising rate environment. The Company's repricing gap indicates that it is
positioned to benefit from a rising rate environment.

Impact of Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in
accordance with generally accepted accounting principles, which require the
measurement of financial position and operating results in terms of historical
dollars without considering changes in the relative purchasing power of money
over time due to inflations.
<PAGE>
Impact of Inflation and Changing Prices (continued)

Unlike most industrial companies, virtually all of the assets and liabilities of
a financial institution are monetary in nature. As a result, interest rates have
a more significant impact on a financial institution's performance than the
effects of general levels of inflation. Interest rates do not necessarily move
in the same direction or in the same magnitude as the price of goods and
services. In the current interest rate environment, the liquidity and the
maturity structure of the Company's assets and liabilities are critical to the
maintenance of acceptable performance levels.

Effect of FASB Statements

Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of: In March 1995, the FASB issued Statement No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of.
Statement 121 establishes accounting standards for the impairment of long-lived
assets, certain identifiable intangibles, and goodwill related to those assets
to be held and used and for long-lived assets and certain identifiable
intangibles to be disposed of. Statement No. 121 will first be required for the
Company's year ending December 31, 1996. Based on its preliminary analysis, the
Bank does not anticipate that the adoption of Statement No 121 will have a
material impact on the financial statements.

Accounting for Stock-Based Compensation:
In 1995, the FASB issued Statement No. 123, Accounting for Stock-based
Compensation. Statement No. 123 establishes financial accounting and reporting
standards for stock-based employee compensation plans such as a stock purchase
plan. The statement generally suggests, but does not require, stock-based
compensation transactions be accounted for based on the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable.  An enterprise may continue to follow the
requirements of Accounting Principles Board (APB) opinion No. 25, which does not
require compensation to be recorded if the consideration to be received is at
least equal to the fair value at the measurement date. If an enterprise elects
to follow APB Opinion No. 25, it must disclose the pro forma effects on net
income as if compensation were measured in accordance with the suggestions of
Statement No. 123.  The Company has determined that it will continue to follow
APB Opinion

No. 25, therefore, adoption of this pronouncement in 1996 is not expected to 
have a material impact on the financial statements.

Stock Market Information

On February 13, 1996 Orange National Bancorp shares of common stock commenced
trading on the National Association of Securities Dealers Automated Quotation
(NASDAQ), under the symbol OGNB. Active traders for the stock are Everen
Securities, 620 Newport Center Drive, Suite 1300, Newport Beach, California 
92660 and Smith Barney, 650 Town Center Drive, Suite 100, Costa Mesa, 
California  92626.

The following table summarizes the approximate high and low bid prices for the
Company's common stock since the first quarter of 1993.

                           Bid Prices
<TABLE>
<CAPTION>                                
                       1993              1994             1995
<S>                  <C>    <C>      <C>     <C>      <C>    <C>
Calendar Quarter    High    Low      High    Low     High     Low

     1st quarter   $6.50  $5.75     $6.00  $5.00    $5.95   $4.75
     2nd quarter    6.50   5.50      6.00   5.00     7.15    5.45
     3rd quarter    6.00   4.50      6.00   5.00     9.50    6.35
     4th quarter    5.50   4.25      6.00   5.00    10.50    9.25
</TABLE>
Such market quotations reflect inter-dealer prices, without retail markup,
markdown, or commission and may not necessarily represent actual transactions.
<PAGE>
History of Cash and Stock Dividends and Stock Splits

The Company has a history of paying cash dividends to its stockholders. At
December 31, 1995, the Company had approximately 590 stockholders of record. The
following table summarizes the cash dividend history of the Bank:
<TABLE>
<CAPTION>
            <S>        <C>         <C>
                    Dividends*  Total Amount of
            Date    Per Share   Dividends Paid
            1984    $ .09          $143,568
            1985      .10          $166,320
            1986      .12          $200,584
            1987      .16          $250,730
            1988      .13          $202,734
            1989      .17          $267,329
            1990      .18          $290,008
            1991        -                 -
            1992      .30          $485,130
            1993        -                 -              
            1994      .05          $ 91,956    
            1995      .25          $473,947
</TABLE>
Also, the Company declared a three-for-two stock split on October 15, 1985, a 5%
stock dividend on November 16, 1988, a three-for-two stock split on November 20,
1989, and a 5% stock dividend on July 31, 1995. 

The Company's ability to pay dividends is dependent upon the dividend payment it
receives from its Bank subsidiary. On February 22nd, 1996, the Company declared
a $.25 cent per share dividend on its common stock. Future dividend payments 
will depend upon future profitability, meeting regulatory requirements and the 
outlook of economic conditions.

*For comparative purposes, dividends per share for all years are computed after
the effects of stock splits and stock dividends.

Form 10-K Reports

A copy of the Company's 10-K reports filed with the Securities and Exchange
Commission for the 1995 Fiscal Year can be obtained by writing to:  Corporate
Secretary's Office, Orange National Bancorp, 1201 E. Katella Avenue, Orange,
California 92667.

Transfer Agent and Registrar

First Interstate Bank, Los Angeles, California 90017.


ITEM 8           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    The consolidated financial statements of the Company are set forth on
    pages F-2 to F-20 following.  The Auditors' Report thereon is set forth on
    Page F-1 following.


ITEM 9           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                 AND FINANCIAL DISCLOSURES

            None
<PAGE>
                            PART III


ITEM 10     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

            For information concerning the directors and executive officers of
            the Bancorp, see "Election of Directors" included in the Bancorp's
            definitive proxy statement ("Proxy Statement"), which information is
            incorporated by reference.  The Proxy Statement will be filed with
            the SEC within the time period specified by General Instruction G to
            Form 10-K.


ITEM 11     EXECUTIVE COMPENSATION

            For information concerning management remuneration, see "Executive
            Compensation"  included in the Proxy Statement, which information is
            incorporated herein by reference.


ITEM 12     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

            For information concerning security ownership of beneficial owners
            and management, see "Stock Ownership of Certain Beneficial Owners
            and Management" included in the Proxy Statement, which information
            is incorporated herein by reference.


ITEM 13     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

            For information concerning related party transactions, see "Certain
            Transactions" included in the Proxy Statement, which information is
            incorporated herein by reference.

<PAGE>
                            PART IV

ITEM 14     EXHIBITS, FINANCIAL STATEMENT SCHEDULES , AND REPORTS ON FORM 8-K

            The following financial statements of the Bancorp and subsidiaries
            are included in this Form 10-K.   Page number references follow:


ORANGE NATIONAL BANCORP AND SUBSIDIARIES

            Independent auditors' report                                 F-1

            Consolidated balance sheets December 31, 1995 and 1994       F-2

            Consolidated statements of income for the three years ended 
            December 31, 1995                                            F-3

            Consolidated statement of stockholders' equity               F-4
            for the three years ended December 31, 1995            

            Consolidated statement of cash flows 
            for the three years ended December 31, 1995                  F-5

            Notes to consolidated financial statements           F-6 to F-22


Schedules

            All schedules are omitted as the information is not required , is 
            not material, or is otherwise furnished.


Exhibits

            See Index to exhibits at Page 32 of this Form 10-K


Reports on Form 8-K

            No reports on Form 8-K were filed by the Bancorp during the last 
            quarter for the year ended December 31, 1995.

<PAGE>
Signatures

       Pursuant to the requirements of Section 13 or 25(d) of the Securities
       Exchange Act of 1934, the Registrant has duly caused this report to be
       signed on its behalf by the undersigned, thereunto duly authorized.


                                ORANGE NATIONAL BANCORP
     
     
     
     
                 By:                Kenneth J. Cosgrove
                                    Kenneth J. Cosgrove
                                Chief Executive Officer
     
                 Date:              March 27, 1996
     
     
     
     
     
                 By:     Robert W. Creighton
                         Robert W. Creighton, Secretary
                               Chief  Financial Officer
     
                 Date               March 27, 1996
     
     
     Signed by a majority of the Board of Directors:
     
     
     
     
     
     Date                            Michael W. Abdalla
     
     
     
     
     
     Date                               Fred L. Barrera
     
     
     
     
     
     Date                       Michael J. Christianson
     
     
     
     
     March 27, 1996                 Kenneth J. Cosgrove
     Date                           Kenneth J. Cosgrove
     
     
     
     
     March 27, 1996                 Robert W. Creighton
     Date                           Robert W. Creighton
     
     <PAGE>
     Signatures (continued)
     
     
     
     
     
     
     Date                                Armand Durante
     
     
     
     
     March 27, 1996                   William S. Frantz
     Date                             William S. Frantz
     
     
     
     
     
     Date                            Charles R. Foulger
     
     
     
     
     March 27, 1996                     Gerald R. Holte
     Date                               Gerald R. Holte
     
     
     
     
     March 27, 1996                    James E. Mahoney
     Date                              James E. Mahoney
     
     
     
     
     
     Date                               Wayne F. Miller
     
     
     
     
     March 27, 1996                     Harlan A. Smith
     Date                               Harlan A. Smith
     
     
     
     
     March 27, 1996                      San E. Vaccaro
     Date                                San E. Vaccaro

<PAGE>
                  INDEX TO EXHIBITS
                              
     
     Exhibit No.                               Page No.
     
     
     3.1    Registrant's Articles of Incorporation (1)N/A
     
     3.2    Bylaws of the Bancorp (2)               N/A
     
     10.1   The material contracts of Registrant's
                 subsidiary, Orange National Bank, were each
                 filed as exhibits 10, 10.1, 10.3, 10.4, and 10.5
                 of the Registrant's Registration Statement on
                 Form   S-4, File No. 33-8743, and are hereby
                 incorporated by reference.         N/A
     
     
     23.    Consent of Independent Accountants       33
     
     
     
     (1)    The Articles of Incorporation of Orange National  Bancorp were
                 filed as exhibit 3 of the Registrant's Registration Statement
                 on Form  S-4, File No. 33-8743, and are hereby incorporated by
                 reference.
     
     (2)    Filed as exhibit 3.1 to the Registrant's Registration
                 Statement on Form S-1, File No. 33-13162, which exhibits are
                 incorporated herein by reference.
     
     (3)    Filed as exhibit 2 to the Registrant's Registration Statement
                 on Form S-4, File No. 33-8743, and are hereby incorporated by
                                  reference.
<PAGE>
          CONSENT OF INDEPENDENT ACCOUNTANTS
                              
     
     
     To The Board of Directors
     Orange National Bancorp
     Orange, California
     
     
     We consent to the incorporation by reference in the Registration
     Statement on Form S-8, dated ugust 20, 1993, of Orange National
     Bancorp of our report dated January 24, 1996, appearing in tem 8 in
     this Annual Report on Form 10-K.
     
     
     
     
     
     
     
     
     McGladrey & Pullen, LLP
     McGLADREY & PULLEN, LLP
     
     
     Anaheim, California
     January 24, 1996

                    INDEPENDENT AUDITOR'S REPORT




To the Board of Directors
Orange National Bancorp
Orange, California


We have audited the accompanying consolidated balance sheets of Orange National
Bancorp and subsidiary as of December 31, 1995 and 1994, and the related
consolidated statements of income, stockholders' equity and cash flows for each
 of the three years in the period ended December 31, 1995.  These financial 
statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements based 
on our audits.


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


In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Orange National 
Bancorp and subsidiary as of December 31, 1995 and 1994, and the results of 
their operations and their cash flows for each of the three years in the 
period ended December 31, 1995, in conformity with generally accepted 
accounting principles.








McGladrey & Pullen, LLP
McGLADREY & PULLEN, LLP





Anaheim, California
January 24, 1996

<PAGE>
         ORANGE NATIONAL BANCORP CONSOLIDATED BALANCE SHEETS
December 31, 1995 and 1994                        
<TABLE>
<CAPTION
<S>                                            <C>                      <C>
ASSETS                                           1995                     1994
Cash and due from banks (Note 2)          $22,929,660              $15,394,879
Securities (Note 3):
  Held-to-maturity securities (fair value 1995 $12,595,011;1994 $20,567,668)
                                           12,652,817               21,903,980
  Available-for-sale securities            26,908,298               19,247,771
Federal funds sold                         18,500,000               28,215,000
Loans, net of allowance for credit losses 1995 $1,512,544; 1994 $1,465,000
     (Notes 4, 5 and 12)                  112,724,034              112,703,283
Bank premises and equipment, net (Note 6)   5,526,577                5,386,679
Other real estate owned, net (Note 5)       3,784,482                2,007,899
Accrued interest receivable                 1,167,707                1,068,744 
Cash value of life insurance                3,514,896                   -
Other assets                                  219,553                  582,215
                                         $207,928,024             $206,510,450

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
  Deposits (Notes 3 and 7):
       Noninterest bearing demand         $70,237,126              $68,358,671
          Interest bearing:
               Demand                      91,698,505               95,972,857
               Savings                     12,456,884               13,875,405
               Time certificates of deposits of $100,000 or more
                                            6,632,038                5,162,248
               Other time                   7,966,817                7,036,672

                    Total deposits        188,991,370              190,405,853

     Accrued interest payable and other liabilities
                                            1,674,757                1,322,395

                    Total liabilities     190,666,127              191,728,248

Commitments and Contingencies (Notes 9 and 11)

Stockholders' Equity (Notes 10 and 13)
     Common stock, no par value or stated value; 20,000,000 shares
          authorized, 1995 1,933,571; 1994 1,839,116 issued and outstanding
                                            7,509,888                6,848,120
     Retained earnings                      9,920,549                8,513,693
     Unrealized (loss) on available-for-sale securities, net (Note 3)
                                             (168,540)                (579,611)

          Total stockholders' equity       17,261,897               14,782,202
                                         $207,928,024             $206,510,450
</TABLE>
<PAGE
ORANGE NATIONAL BANCORP CONSOLIDATED STATEMENTS OF INCOME
            Years Ended December 31, 1995, 1994 and 1993

<TABLE>
<CAPTION
<S>                              <C>               <C>             <C>
                               1995               1994           1993
Interest Income
     Loans                 $12,953,799         $11,479,904         $11,022,025
     Securities              2,470,549           1,605,738             435,578
     Federal funds sold      1,146,474             821,299             805,234
     Deposits in other financial institutions
                                     -                 565             152,689
          Total interest income
                            16,570,822          13,907,506          12,415,526
Interest Expense, deposits   3,140,658           2,507,412           2,623,278
        Net interest income 13,430,164          11,400,094           9,792,248
Provision for credit losses (Note 5)
                               320,000             297,907             393,740
          Net interest income after provision for credit losses
                            13,110,164          11,102,187           9,398,508
Other Income
     Service charges on deposit accounts
                             1,112,918           1,173,022             811,966
     Fees for other customer services
                               666,802             718,236             799,599
     Gain on sale of loans     754,766             651,620             539,224
     Other                     246,290              68,916             128,202
                             2,780,776           2,611,794           2,278,991
Other Expenses
  Salaries, wages and employee benefits
                             6,251,351           6,148,077           6,016,538
  Occupancy expense (Note 9) 1,104,460           1,106,871           1,019,031
     Data processing expense 1,069,909           1,154,260           1,174,424
     Furniture and equipment expense
                               706,584             572,628             538,290
     Promotion expense         467,519             366,318             359,580
     Legal and professional services
                               507,354             603,782             551,237
     Insurance                 427,928             592,694             538,564
     Stationery and supplies   278,925             252,576             291,616
     Telephone and postage     373,674             344,234             270,344
     Other real estate owned (Note 5)
                               424,907             160,675             275,164
     Other                     574,839             659,748             709,510
                            12,187,450          11,961,863          11,744,298
          Income (loss) from continuing operations before income taxes
                             3,703,490           1,752,118             (66,799)
Income tax expense (credits) (Note 8)
                             1,179,000             692,200            (523,800)
          Income from continuing operations
                             2,524,490           1,059,918             457,001
(Loss) from discontinued operations (Note 17)
                                    -             (224,432)           (258,115)
          Net income        $2,524,490            $835,486            $198,886
Earnings per share from continuing operations
                                 $1.30               $0.55               $0.24
Earnings per share               $1.30               $0.43               $0.10
Weighted average number of shares 
                             1,941,286           1,931,072           1,931,072
</TABLE>
<PAGE>
ORANGE NATIONAL BANCORP CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                  
            Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
<S>             <C>        <C>            <C>       <C>               <C>       
                                                  Unrealized
                                                  Gain (Loss)
                                                  Available-
                 Common Stock               Retained  For-Sale
               Shares    Amount         Earnings  Securities          Total
Balance, December 31, 1992
             1,839,116   $6,848,120    $7,571,277         $-       $14,419,397
  Net income       -           -          198,886          -           198,886
     Change in accounting for securities available-for-sale, net
                   -           -             -       (75,089)          (75,089)
Balance, December 31, 1993
             1,839,116    6,848,120     7,770,163    (75,089)       14,543,194
  Net income       -           -          835,486          -           835,486
     Cash dividend paid ($.05 per share)
                   -           -          (91,956)         -           (91,956)
     Net change in unrealized (loss) on
          available-for-sale securities (Note 3)
                   -           -             -       (504,522)        (504,522)
Balance, December 31, 1994
             1,839,116    6,848,120     8,513,693    (579,611)      14,782,202
   Net income      -           -        2,524,490           -        2,524,490
     Cash dividend paid ($.25 per share)
                   -           -         (473,943)          -         (473,943)
     Stock dividend paid (5% per share)
                91,955      643,691      (643,691)          -               -  
 Exercise of stock options
                 2,500       18,077          -              -           18,077
     Net change in unrealized gain(loss) on
          available-for-sale securities (Note 3)
                   -           -             -        411,071          411,071
Balance, December 31, 1995
             1,933,571   $7,509,888    $9,920,549   $(168,540 )    $17,261,897
</TABLE>
<PAGE
ORANGE NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS
            Years Ended December 31, 1995, 1994 and 1993

<TABLE>
<CAPTION>
<S>                                        <C>            <C>           <C>
                                              1995          1994          1993
Cash Flows from Operating Activities
     Net income                         $2,524,490      $835,486      $198,886
     Adjustments to reconcile net income to net cash
          provided by operating activities:
          Depreciation and amortization    535,474       448,448       410,836
          Provision for credit losses      320,000       297,907       393,740
          Provision for of other real estate owned losses
                                           303,561        31,612            -
          Proceeds from loan sales       5,428,822    19,073,450    12,209,773
          Deferred income taxes (benefits)(309,000)      338,000       687,000
          (Gain) on sale of loans         (754,766)     (759,837)     (567,704)
          Originations of loans held for sale
                                        (4,674,056)  (18,313,613)  (11,642,069)
          (Increase) decrease in other assets
                                           263,699     1,627,086      (513,807)
          Increase (decrease) in other liabilities
                                           398,577       137,036      (967,864)
                    Net cash provided by operating activities
                                         4,036,801     3,715,575       208,791
Cash Flows from Investing Activities
     Net (increase) decrease in interest bearing deposits in
          other financial institutions          -        198,000      (168,000)
     Purchase of securities to be held-to-maturity
                                                -    (11,090,000)          - 
     Proceeds from maturities of securities held-to-maturity
                                         4,400,000     5,090,000     1,000,000
     Purchase of available-for-sale securities
                                       (16,883,874)   (7,829,879)  (28,055,225)
     Proceeds from sales of available-for-sale securities
                                        14,748,366             -            -
     Change in loans made to customers, net
                                        (3,261,938)   (1,301,330)    1,644,099
     Net (increase) decrease in federal funds sold
                                         9,715,000       800,000     2,985,000
     Purchase of life insurance         (3,514,896)            -             -
     Proceeds from sale of other real estate owned
                                           841,043             -             -
    Purchases of bank premises and equipment
                                          (675,372)     (315,431)     (309,253)
          Net cash provided by (used in) investing activities
                                         5,368,329   (14,448,640)  (22,903,379)
Cash Flows from Financing Activities
     Net increase (decrease) in deposits(1,414,483)   12,834,554    18,453,261
     Proceeds from exercise of stock options18,077             -             -
     Dividends paid                       (473,943)      (91,956)            -
          Net cash provided by (used in) financing activities
                                        (1,870,349)   12,742,598    18,453,261
          Increase (decrease) in cash and due from banks
                                         7,534,781     2,009,533    (4,241,327)
Cash and Due from Banks
     Beginning                          15,394,879    13,385,346    17,626,673
     Ending                            $22,929,660   $15,394,879   $13,385,346

</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.   Nature of Banking Activities and Summary of Significant Accounting
          Policies

Nature of Operations _
Orange National Bancorp is a bank holding company which provides a full range of
banking services to its commercial and consumer customers through six branches
located in Orange County, California.

The Company grants commercial, residential and consumer loans to customers,
substantially all of whom are middle-market businesses or residents. The 
Company's business is concentrated primarily in Orange County, California, 
and the loan portfolio includes a significant credit exposure to the real 
estate industry of this area. As of December 31, 1995, real estate related 
loans accounted for approximately 55% of total loans. Substantially all of 
these loans are secured by first liens with an initial loan to value ratio of
 generally not more than 75%.

The loans are expected to be repaid from cash flows or proceeds from the sale of
selected assets of the borrowers. The Company's policy requires that collateral 
be obtained on substantially all loans. Such collateral is primarily first trust
on property.

Use of estimates in the preparation of financial statements _
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of 
contingent assets and liabilities at the date of the financial statements and 
the reported amounts of revenues and expenses during the reporting period. 
Actual results could differ from those estimates.

Principles of consolidation _
The consolidated financial statements include the accounts of Orange National
Bancorp and its wholly-owned subsidiary Orange National Bank. These entities are
collectively referred to herein as the Company. All significant intercompany
balances and transactions have been eliminated in consolidation.

Cash and due from banks and federal funds sold _
For purposes of reporting cash flows, cash and due from banks includes cash on 
hand and amounts due from banks. Cash flows from loans originated by the 
Company, deposits and federal funds purchased and sold are reported net.

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

Held-to-maturity securities _
Securities classified as held-to-maturity are those debt securities the Company 
has both the intent and ability to hold to maturity regardless of changes in 
market conditions, liquidity needs or changes in general economic conditions. 
These securities are carried at cost adjusted for amortization of premiums and 
accretion of discounts, computed by the interest method over their contractual 
lives. The sale of a security within three months of its maturity date or 
after at least 85% of the principal outstanding has been collected is 
considered a maturity for purposes of classification and disclosure.
<PAGE>
Note 1.   Nature of Banking Activities and Summary of Significant Accounting
          Policies, continued

Available-for-sale securities _
Securities classified as available-for-sale are those debt securities that the
Company intends to hold for an indefinite period of time, but not necessarily to
maturity. Any decision to sell a security classified as available-for-sale would
 be based on various factors, including significant movements in interest rates,
 changes in the maturity mix of the Company's assets and liabilities, liquidity 
needs, regulatory capital considerations, and other similar factors. Securities
available-for-sale are carried at fair value. Unrealized gains or losses, net of
 the related deferred tax effect, are reported as increases or decreases in 
stockholders' equity. Realized gains or losses, determined on the basis of the 
cost of specific securities sold, are included in earnings.

Transfers _
Transfers of debt securities into the held-to-maturity classification from the
available-for-sale classification are made at fair value on the date of transfer
 . The unrealized holding gains or losses on the date of transfer are retained as
 a separate component of stockholders' equity and in the carrying value of the
held-to-maturity securities. Such amounts are amortized over the remaining
contractual lives of the securities by the interest method.

Loans _
Loans are stated at the amount of unpaid principal, reduced by unearned fees and
allowance for loan losses.

The allowance for credit losses is established through a provision for credit 
losses charged to expense. Loans are charged against the allowance for credit 
losses when management believes that collectibility of the principal is 
unlikely. The allowance is an amount that management believes will be 
adequate to absorb estimated losses on existing loans that may become 
uncollectible, based on evaluation of the collectibility of loans and prior 
loan loss experience. This evaluation also takes into consideration such 
 factors as changes in the nature and volume of the loan portfolio, overall 
portfolio quality, review of specific problem loans, and current economic 
conditions that may affect the borrower's ability to pay. While management
uses the best information available to make its evaluation, future adjustments 
to the allowance may be necessary if there are significant changes in economic 
or other conditions. In addition, the Office of the Comptroller of the Currency
 (OCC), as an integral part of their examination process, periodically reviews
 the Company's allowance for credit losses, and may require the Company to make
 additions to the allowance based on their judgment about information available
 to them at the time of their examinations.

Impaired loans are measured based on the present value of expected future cash 
flows discounted at the loan's effective interest rate or, as a practical 
expedient, at the loan's observable market price or the fair value of the 
collateral if the loan is collateral dependent. A loan is impaired when it is
 probable the creditor will be unable to collect all contractual principal 
and interest payments due in accordance with the terms of the loan agreement.
<PAGE
Note 1.   Nature of Banking Activities and Summary of Significant Accounting
          Policies, continued

Interest and fees on loans _
Interest on loans is recognized over the terms of the loans and is calculated 
using the simple-interest method on principal amounts outstanding. The accrual 
of interest on impaired loans is discontinued when, in management's opinion,
 the borrower may be unable to meet payments as they become due. When interest
 accrual is discontinued, all unpaid accrued interest is reversed. Generally 
interest income is not subsequently recognized until all principal amounts are 
received.

Loan origination and commitment fees and certain direct loan origination costs 
are deferred and the net amount amortized as an adjustment of the related loan's
 yield. The Company is generally amortizing these amounts over the contractual
 life.

Sales of loans _
The Company sells loans to a transfer agent to provide funds for additional 
lending and to generate servicing income. Under such agreements, the Bank 
continues to service the loans and the buyer receives the principal collected 
together with interest. Loans held for sale are valued at the lower of cost 
or market value.

Gains and losses on sales of loans are recognized at the time of sale and are
calculated based on the difference between the selling price and the book 
value of loans sold. Any inherent risk of loss on loans sold is transferred to
 the buyer at the date of sale.

Bank premises and equipment _
Premises and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation is computed principally by the straight-line method 
over the following estimated useful lives: Buildings and leasehold improvements
 4 to 28 years; equipment and furnishings 5 to 10 years.

Improvements to leased property are amortized over the lesser of the term of the
lease or life of the improvements.

Other real estate owned _
Other real estate owned (OREO) represents properties acquired through 
foreclosure or other proceedings. OREO is held for sale and is recorded at 
the lower of the carrying amounts of the related loans or the estimated fair
 value of the properties less estimated costs of disposal. Any write-down to
 estimated fair value less cost to sell at the time of transfer to OREO is 
charged to the allowance for credit losses. Property is evaluated regularly by
 management and reductions of the carrying amount to estimated fair value less
 estimated costs to dispose are recorded as necessary. Depreciation is recorded
 based on the recorded amount of depreciable assets after they have been owned 
for one year. Depreciation and additions to or reductions from valuation 
allowances are recorded in income.
<PAGE>
Note 1.   Nature of Banking Activities and Summary of Significant Accounting
          Policies, continued

Income taxes _
Deferred taxes are provided on an asset and liability method whereby deferred 
tax assets are recognized for deductible temporary differences and operating 
loss and tax credit carryforwards and deferred tax liabilities are recognized 
for taxable temporary differences. Temporary differences are the differences 
between the reported amounts of assets and liabilities and their tax bases. 
Deferred tax assets are reduced by a valuation allowance when management 
determines that it is more likely than not that some portion or all of the 
deferred tax assets will not be realized. Deferred tax assets and liabilities
 are adjusted for the effects of changes in tax laws and rates on the date of
 enactment. 

Fair value of financial instruments _
Management uses its best judgment in estimating the fair value of the Company's
financial instruments; however, there are inherent weaknesses in any estimation
technique. Therefore, for substantially all financial instruments, the fair 
value estimates presented herein are not necessarily indicative of the amounts
 the Bank could have realized in a sales transaction at either 
December 31, 1995 or 1994. The estimated fair value amounts for 1995 and 1994 
have been measured as of their respective year ends, and have not been 
reevaluated or updated for purposes of these consolidated financial statements
 subsequent to those respective dates. As such, the estimated fair values of
 these financial instruments subsequent to the respective reporting dates may
 be different than the amounts reported at each year-end. 

The information in Note 15 should not be interpreted as an estimate of the fair
value of the entire Company since a fair value calculation is only required for 
a limited portion of the Company's assets.

This disclosure of fair value amounts does not include the fair values of any
intangibles, including core deposit intangibles or mortgage servicing rights.

Due to the wide range of valuation techniques and the degree of subjectivity 
used in making the estimate, comparisons between the Company's disclosures and 
those of other banks may not be meaningful.


The following methods and assumptions were used by the Company in estimating the
fair value of its financial instruments _


     Cash and short-term instruments _
     The carrying amounts reported in the consolidated balance sheets for cash 
     and due from banks, interest bearing deposits and federal funds sold 
     approximate their fair values.

     Securities _
     Carrying amounts approximate fair values for securities available-for-sale.
     Fair values for securities are based on quoted market prices when 
     available.  For certain mortgage backed securities, the Company utilizes a
     broker to determine fair value. This broker obtains estimates of fair value
     from up to three pricing services which estimate fair value based on prices
     for several securities or as pricing matures. There is no guarantee that 
     the prices obtained for these methods can be realized upon ultimate sale
     of the security.

<PAGE>
Note 1.   Nature of Banking Activities and Summary of Significant Accounting
          Policies, continued

     Loans _
     For variable-rate loans that reprice frequently and that have experienced 
     no significant change in credit risk, fair values are based on carrying 
     values.  At December 31, 1995 and 1994, variable rate loans comprised 
     approximately 85% of the loan portfolio. Fair values for all other loans
     are estimated based on discounted cash flows, using interest rates 
     currently being offered for loans with similar terms to borrowers with 
     similar credit quality. Prepayments prior to the repricing date are not 
     expected to be significant. Loans are expected to be held-to-maturity and
     any unrealized gains or losses are not expected to be realized.

     Off-balance sheet instruments _
     Fair values for off-balance sheet instruments (guarantees, letters of 
     credit and lending commitments) are based on quoted fees currently charged
     to enter into similar agreements, taking into account the remaining terms 
     of the agreements and the counterparties' credit standing.

     Deposit liabilities _
     Fair values disclosed for savings and demand deposits equal their carrying
     amounts, which approximate the amount payable on demand. The carrying 
     amounts for variable-rate money market accounts and certificates of deposit
     approximate their fair values at the reporting date. Fair values for
     fixed-rate certificates of deposit are estimated using a discounted cash 
     flow calculation that applies interest rates currently being offered on
     certificates to a schedule of aggregate expected monthly maturities on time
     deposits. Early withdrawals of fixed-rate certificates of deposit are not
     expected to be significant.

     Accrued interest receivable and payable _
     The fair values of both accrued interest receivable and payable approximate
     their carrying amounts.

Earnings per share _
Earnings per share of common stock are based on the weighted average number of
common shares and common equivalent shares outstanding. 

Financial Instruments _
The Company has purchased collaterialized mortgage obligations (CMO's) which are
derivative financial instruments. These financial instruments are held for 
purposes other than trading. The Company has no off-balance sheet derivative 
financial instruments.
<PAGE>
Note 1.   Nature of Banking Activities and Summary of Significant Accounting
          Policies, continued

Accounting by Creditors for Impairment of a Loan _
On January 1, 1995, the Company adopted Financial Accounting Standards Board 
(FASB) Statement No. 114, Accounting by Creditors for Impairment of a Loan, 
as amended by FASB Statement No. 118, Accounting by Creditors for Impairment 
of a Loan-Income Recognition and Disclosures. There was no effect on the 
Company's financial statements for this change, which generally requires 
impaired loans to be measured on the present value of expected future cash 
flows discounted at the loan's effective interest rate, or as an expedient at
 the loan's observable market price or the fair value of the collateral if 
the loan is collateral dependent. The entire change in the present value of 
expected future cash flows is recorded as an increase or decrease in provision
 for credit losses. A loan is impaired when it is probable the creditor will be
 unable to collect all contractual principal and interest payments due in 
accordance with the terms of the loan agreement. Generally, interest income 
is not recognized until all principal amounts are received. At January 1,
1995, the Bank has classified $3,409,000 of its loans as impaired with a 
specific loss reserve of $404,000.

Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to 
be Disposed of _
In March 1995, the FASB issued Statement No. 121, Accounting for the Impairment 
of Long-Lived Assets and for Long-Lived Assets to be Disposed of. Statement 
No. 121 establishes accounting standards for the impairment of long-lived 
assets, certain identifiable intangibles, and goodwill related to those assets
 to be held and used and for long-lived assets and certain identifiable 
intangibles to be disposed of. Statement No. 121 will first be required for the
 Company's year ending December 31, 1996. Based on its preliminary analysis,
 the Bank does not anticipate that the adoption of Statement No. 121 will have
 a material impact on the financial statements.

Accounting for Stock-Based Compensation _
In 1995 the FASB issued Statement No. 123, Accounting for Stock-Based 
Compensation. Statement No. 123, establishes financial accounting and reporting
 standards for stock-based employee compensation plans such as a stock 
purchase plan. The Statement generally suggests, but does not require, 
stock-based compensation transactions be accounted for based on the fair value
 of the consideration received or the fair value of the equity instruments 
issued, whichever is more reliably measurable. An enterprise may continue to 
follow the requirements of Accounting Principles Board (APB) Opinion No. 25, 
which does not require compensation to be recorded if the consideration to be 
received is at least equal to the fair value at the measurement
date. If an enterprise elects to follow APB Opinion No. 25, it must disclose the
 pro forma effects on net income as if compensation were measured in accordance 
with the suggestions of Statement No. 123. The Company has determined that it 
will continue to follow APB Opinion No. 25, therefore, adoption of this 
pronouncement in 1996 is not expected to have a material impact on the 
financial statements.

Note 2.   Restrictions on Cash and Due from Banks

The Company is required to maintain reserve balances in cash or on deposit with
Federal Reserve Banks. The total of those reserve balances was approximately
$3,053,000 as of December 31, 1995.
<PAGE>
Note 3.   Securities

Effective December 31, 1993, the Company adopted FASB Statement No. 115, 
Accounting for Certain Investments in Debt and Equity Securities. The effect of 
adopting this Statement was to decrease stockholders' equity by $75,089, net 
of applicable deferred taxes to adjust the carrying value of the portfolio of 
securities available-for-sale to market.

Carrying amounts and fair values of securities being held-to-maturity as of 
December 31, 1995 and 1994 are summarized as follows:

<TABLE>
<CAPTION>
<S>                              <C>          <C>         <C>        <C>     
                              Amortized     Unrealized Unrealized   Fair
                              Cost          Gains      Losses       Values
                                         1995
Mortgage-backed securities    $12,479,146    $5,416    $(63,222)   $12,421,340
Other                             173,671         -           -        173,671
                              $12,652,817    $5,416    $(63,222)   $12,595,011
                                         1994
U.S. Treasury securities and obligations
     of other U.S. Government corporations and agencies
                               $8,872,885      $  -   $(223,658)    $8,649,227
Mortgage-backed securities     12,857,424         -  (1,112,654)    11,744,770
Other                             173,671         -           -        173,671
                              $21,903,980      $  - $(1,336,312)   $20,567,668
</TABLE>
Securities being held-to-maturity with a carrying amount of $4,006,440 at 
December 31, 1995 were pledged as collateral on public deposits and for other 
purposes as required or permitted by law. No securities at December 31, 1994 
were pledged as collateral.

Carrying amounts and fair values of available-for-sale securities as of 
December 31, 1995 and 1994 are summarized as follows:
<TABLE>
<CAPTION>
<S>                               <C>       <C>         <C>           <C>
                             Amortized  Unrealized  Unrealized      Fair
                             Cost       Gains       Losses          Values
                                        1995
U.S. Treasury securities and obligations
     of other U.S. Government corporations and agencies
                            $24,984,083   $72,382    $(142,243)    $24,914,222
Mortgage-backed Securities    2,018,380         -      (24,304)      1,994,076
                            $27,002,463   $72,382    $(166,547)    $26,908,298
                                        1994
U.S. Treasury securities and obligations
     of other U.S. Government corporations and agencies
                            $15,939,548    $    -    $(563,017)    $15,376,531
Mortgage-backed securities    4,024,160         -     (152,920)      3,871,240
                            $19,963,708    $    -    $(715,937)    $19,247,771
</TABLE>
Available-for-sale securities with a carrying amount of $3,991,010 and 
$4,013,226 at December 31, 1995 and 1994, respectively were pledged as 
collateral on public deposits and for other purposes as required or permitted
 by law.
<PAGE>
Note 3.   Securities, continued

The amortized cost and fair value of investment securities as of 
December 31, 1995 by contractual maturities are shown below. Maturities may 
differ from contractual maturities in mortgage-backed securities because the 
mortgages underlying the securities may be called or prepaid without any 
penalties. Therefore, these securities are not included in the maturity 
categories in the following maturity summary:
<TABLE>
<CAPTION>
<S>                            <C>        <C>         <C>            <C>
                             Held-to-Maturity         Available-for-Sale
                         Amortized      Fair        Amortized     Fair
                         Cost           Value       Cost          Value
Due in one year or less       $  -      $    -      $26,000,000     $6,003,838
Due after one year through five years
                                 -         -         18,984,083     18,910,384
Mortgage-backed securities  12,479,146   12,421,340   2,018,380      1,994,076
Other                          173,671      173,671            -            -
                           $12,652,817  $12,595,011  $27,002,463   $26,908,298
</TABLE>
On March 31, 1994, the Company transferred certain securities from
available-for-sale to held-to-maturity. The amortized cost and fair value of the
securities at the date of the transfer were $5,971,740 and $5,701,014, 
respectively. Amortized cost of held-to-maturity securities is presented net 
of approximately $192,000 of unrealized loss on the securities transferred from
 available-for-sale.

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

Note 4.   Loans

The composition of the Company's loan portfolio is as follows:
<TABLE>
<CAPTION>
<S>                                      <C>            <C>
                                        1995           1994
     Real Estate Loans                  
          Construction                  $243,402     $2,298,027
          Commercial                  61,563,940     61,656,242
                                      61,807,342     63,954,269
     Commercial and industrial loans  41,686,636     41,799,764
     Loans to individuals             10,343,229      9,386,265
     Other                             1,206,759        177,080
                                     115,043,966 115,317,378 

     Deduct
          Unearned net loan fees and premiums
                                        (807,388)    (1,149,095)
          Allowance for loan losses   (1,512,544)    (1,465,000)
                                    $112,724,034 $112,703,283

<PAGE>
Note 4.   Loans, continued

Impairment of loans having recorded investments of $1,859,634 at 
December 31, 1995 has been recognized in conformity with FASB Statement No. 114
 as amended by FASB Statement No. 118. The total allowance for credit losses 
related to these loans was $390,031 on December 31, 1995. Impaired loans for 
which there is no related allowance for credit losses at December 31, 1995 is
 $217,260. Average recorded investment for all impaired loans during 1995 was
 $2,634,317. Interest income of approximately $284,000 was recognized on 
impaired loans in 1995 of which an insignificant amount was recognized using 
a cash-basis method of accounting during the time within that period that the
 loans were impaired.

As of December 31, 1995 and 1994, the Company had loans totaling approximately
$3,055,000 and $3,163,000, respectively, on which income was not currently being
accrued due to their delinquent status. Interest income which would have been 
earned on such nonaccrual loans was approximately $205,000, $169,000 and 
$210,000 for the years ended December 31, 1995, 1994 and 1993, respectively. 
The Company's policy for requiring collateral is to obtain collateral 
whenever it is available or desirable, depending upon the degree of risk the 
Company is willing to undertake.

Loans serviced _
The Company serviced approximately $56,530,000 and $58,350,000 of loans for 
others as of December 31, 1995 and 1994, respectively, which are not included
 in the accompanying balance sheets.

Note 5.   Allowance for Credit Losses and Reserve for Other Real Estate Owned

Changes in the allowance for credit losses are as follows:       

</TABLE>
<TABLE>
<CAPTION>
<S>                                         <C>           <C>              <C.
                                            1995           1994           1993
Balance, beginning                    $1,465,000     $1,524,329     $1,425,000
     Provision charged to expense        320,000        297,907        393,740
     Recoveries of amounts charged off   115,342        131,251         70,329
     Amounts charged off                (387,798)      (488,487)      (364,740)
Balance, ending                       $1,512,544     $1,465,000     $1,524,329

     Changes in the reserve for other real estate owned are as follows:
                                            1995           1994           1993
Balance, beginning                    $   31,612         $    -          $   -
     Provision charged to other real estate expense
                                         303,561         31,612              -
     Disposed of other real estate owned (34,489)             -              -
Balance, ending                       $  300,684     $   31,612         $    -
</TABLE>
Note 6.   Bank Premises and Equipment

The major classes of bank premises and equipment and the total accumulated
depreciation and amortization are
as follows:
<TABLE>
<CAPTION>
<S>                                                   <C.             <C>
                                                     1995           1994
     Land                                           $1,100,000     $1,100,000
     Buildings and leasehold improvements            4,384,645      4,155,251
     Equipment and furnishings                       3,132,999      2,729,040
                                                     8,617,644      7,984,291
     Less accumulated depreciation and amortization  3,091,067      2,597,612
                                                    $5,526,577     $5,386,679
</TABLE>

<PAGE>
Note 7.   Deposits and Concentrations

The aggregate amount of short-term jumbo certificates of deposit, each with a
minimum denomination of $100,000 was approximately $6,632,000 and $5,162,000 
in 1995 and 1994, respectively. At December 31, 1995, substantially all 
certificates of deposits mature within one year.

As of December 31, 1995, the Company has deposit concentrations of approximately
$28,158,000 from four customers.

Note 8.   Income Taxes

The cumulative tax effects of the primary temporary differences are shown in the
following table:
<TABLE>
<CAPTION>
<S>                                                     <C>           <C>
                                                        1995           1994
Deferred Tax Assets
     Loan loss allowances                             $378,000       $357,000
     Deferred compensation accruals                    165,000        138,000
     Deferred loan fees                                 93,000        100,000
     Acquired net operating loss carryforward           94,000        101,000
     Alternative minimum tax credit                        -          178,000
     Unrealized loss on available-for-sale securities  118,000        388,000
     Other real estate allowance                       125,000         26,000
     State income taxes                                133,000            -

               Total deferred tax assets            $1,106,000     $1,288,000

Deferred tax liability, property and equipment         632,000        640,000

               Subtotal                               $474,000       $648,000

Valuation allowance for deferred tax assets            165,000        648,000

               Net deferred tax assets                $309,000       $    -
</TABLE>
The Company recorded valuation allowances on deferred tax assets in excess of
deferred tax liabilities at December 31, 1995 and 1994, due to the uncertainty 
of future taxable income and reversal patterns of temporary differences. 
Management believes that the remaining deferred tax assets are more likely 
than not, to be realized.

The provision for income taxes charged to operations consists of the following:
<TABLE>
<CAPTION>
<S>                                            <C>          <C>           <C>
                                             1995         1994            1993
Current tax expense (benefit)         $1,488,000     $354,200       $(710,800)
Deferred tax expense (benefit)          (309,000)     338,000         687,000
Benefit resulting from the removal of a loss contingency
                                              -           -          (500,000)
                                      $1,179,000     $692,200       $(523,800)
<PAGE>
Note 8.   Income Taxes, continued

The income tax provision differs from the amount of income tax determined by
applying the U.S. federal income tax rate to pretax income as follows:

</TABLE>
<TABLE>
<CAPTION>
<S>                                         <C>          <C>             <C.
                                           1995         1994            1993
Computed "expected" tax expense (benefit)
                                     $1,296,000     $613,200        $(23,400)
Increase (decrease) in income taxes resulting from:
     State income taxes, net of federal tax benefit         
                                        278,000      105,000         (36,200)
     Change in valuation allowance     (483,000)     (10,000)           -
     Benefit resulting from the removal of a loss contingency
                                               -         -          (500,000)
     Other                               88,000      (16,000)         35,800
                                     $1,179,000     $692,200       $(523,800)
</TABLE>
Note 9.   Commitments and Contingencies

Contingencies _
In the normal course of business, the Company is involved in various legal
proceedings. In the opinion of management, any liability resulting from such
proceedings would not have a material adverse effect on the consolidated 
financial statements.

Financial instruments with off-balance sheet risk _
The Company is party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financing needs of its customers. These
financial instruments include commitments to extend credit and standby letters 
of credit. They involve, to varying degrees, elements of credit risk in excess
 of amounts recognized on the consolidated balance sheets.

The Company's exposure to credit loss in the event of nonperformance by the 
other parties to the financial instrument for these commitments is represented 
by the contractual amounts of those instruments. The Company uses the same 
credit policies in making commitments and conditional obligations as it does 
for on-balance sheet instruments.

A summary of the contract amount of the Company's exposure to off-balance sheet 
risk as of December 31, 1995 and 1994 is as follows: 
<TABLE>
<CAPTION>
<S>                                         <C>                 <C>
                                           1995                1994 
Commitments to extend credit            $23,739,000         $24,319,000
Standby letters of credit                 1,533,000             477,250
                                        $25,272,000         $24,796,250
</TABLE>
<PAGE>
Note 9.   Commitments and Contingencies, continued

Commitments to extend credit _
Commitments to extend credit are agreements to lend to a customer as long as 
there is no violation of any condition established in the contract. 
Commitments generally have fixed expiration dates or other termination clauses 
and may require payment of a fee. Since many of the commitments are expected 
to expire without being drawn upon, the total commitment amounts do not 
necessarily represent future cash requirements. The Company evaluates each 
customer's creditworthiness on a case-by-case basis. If deemed necessary upon
 extension of credit, the amount of collateral obtained is based on 
management's credit evaluation of the counterparty. Collateral held varies, 
but may include accounts receivable, inventory, property and equipment, and 
income-producing commercial properties.

Standby letters of credit _
Standby letters of credit are conditional commitments issued by the Company to
guarantee the performance of a customer to a third party. Those guarantees are
primarily issued to support public and private borrowing arrangements. The 
credit risk involved in issuing letters of credit is essentially the same as 
that involved in extending loan facilities to customers. Collateral held 
varies as specified above and is required in instances which the Company deems
 necessary. At December 31, 1995, all of the standby letters of credit were 
collateralized.

Lease commitments _
The Company leases certain branch facilities and equipment from nonaffiliates 
under operating leases expiring at various dates through September 2004. The 
following is a schedule of future minimum rental payments under these leases 
are as follows: 1996 $578,000; 1997 $429,000; 1998 $343,000; 1999 $ 303,000; 
2000 $ 257,000; thereafter $1,273,000; total $3,183,000. Annual rent expense 
under these leases and other month-to-month leases for the years ended 
December 31, 1995, 1994 and 1993, was approximately $ 771,000, $793,000 and 
$656,000, respectively.

In March 1995, the Company contracted with a data processing center to provide
computer services. The contract expires in March 2001. Should the Bank terminate
 the contract prior to the expiration date, the Company is subject to a 
penalty in the amount of 25% of the amounts that would have been paid to the 
center for the remainder of the contract term. The expense under this 
contract for the nine months ended December 31, 1995 was approximately 
$500,000.
<PAGE>
Note 10.  Stock Option Plans

The Company maintains a compensatory incentive stock option plan in which 
options to purchase shares of the Company's common stock are granted at the 
Board of Directors' discretion to certain management and other key personnel. 
The Plan was originally established for a maximum of 193,106 shares of the 
Company's common stock. Purchase prices associated with the options range 
from $5.78 to $6.29 and are based on the fair market value of the Company's 
stock at the time the option is granted. The options, if not exercised, will 
expire 5 years from the date they were granted. Other pertinent information 
relating to the Plan follows:
<TABLE>
<CAPTION>
<S>                                          <C>       <C>       <C>
                                             1995      1994      1993
Under option, beginning of year            47,500    41,000       -
     Granted                               20,000     6,500    41,000
     Canceled                              (5,500)      -         -
     Effect of 5% stock dividend            3,100       -         -
     Exercised                             (2,500)      -         -
Under option, end of year                  62,600    47,500    41,000

Options exercisable, end of year           62,600    47,500    41,000
Available to grant, end of year           128,006   136,411   142,911
Average price under option, end of year     $5.89     $6.07     $6.07
Average price of options granted,
     during the year                        $6.17     $6.09     $6.07
</TABLE>
Note 11.  Employee Benefit Plans

Salary deferral 401(k) plan _
The Company has a salary deferral 401(k) plan for all employees who have 
completed one year of service. The Bank contributes matching funds at its 
option which amounted to $97,000 and $101,000 for 1995 and 1994, respectively. 

Contingency contract _
In January 1996, the Company entered into a contingency contract, with the Chief
Executive Officer and Chief Financial Officer of the Company, which provides for
benefits in the event that the Company experiences a merger, acquisition, or 
other act wherein they are not retained in similar position with the surviving
 Company.

Note 12.  Loans and Other Transactions With Related Parties

Stockholders of the Company, and officers and directors, including their 
families and companies of which they are principal owners, are considered to 
be related parties. These related parties were loan customers of, and had 
other transactions with, the Company in the ordinary course of business. In 
management's opinion, these loans and transactions were on the same terms as 
those for comparable loans and transactions with nonrelated parties.

Total loans to related parties were approximately $2,832,606 and $2,829,182 at
December 31, 1995 and 1994, respectively. The activity in such loans is as 
follows:
<TABLE>
<CAPTION>
<S>                                       <C>                 <C>
                                             1995                1994
Balance, beginning                     $2,829,182          $2,550,204
     New loans, including renewals      4,356,000             505,764
     Repayments                        (4,352,576)           (226,786)
Balance, ending                        $2,832,606          $2,829,182
</TABLE>
<PAGE>
Note 12.  Loans and Other Transactions With Related Parties, continued

None of these loans are past due, nonaccrual, or restructured to provide a 
reduction or deferral of interest or principal because of deterioration in the
 financial position of the borrower. There were no loans to a related party 
that were considered classified loans at December 31, 1995 and 1994.

Note 13.  Regulatory Capital Requirements

The subsidiary bank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory _ and possibly additional 
discretionary _ actions by regulators that, if undertaken, could have a 
direct material effect on the bank's financial statements. Under capital 
adequacy guidelines and the regulatory framework for prompt corrective action,
 the bank must meet specific capital guidelines that involve qualitative 
measures of the bank's assets, liabilities, and certain off-balance sheet 
items as calculated under regulatory accounting practices. The bank's capital 
amounts and classification are also subject to qualitative judgments by the 
regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy 
require the bank to maintain minimum amounts and ratios (set forth in the 
table below) of total and Tier I capital (as defined in the regulations) to 
risk-weighted assets (as defined), and of Tier I capital (as defined) to 
average assets (as defined). Management believes, as of December 31, 1995, 
that the Bank meets all capital adequacy requirements to which it is subject.

As of June 30, 1995, the most recent notification from the Office of the 
Comptroller of the Currency (OCC) categorized the Bank as well capitalized under
 the regulatory framework for prompt corrective action. To be categorized as 
well capitalized the Bank must maintain minimum total risk-based, Tier I 
risk-based, Tier I leverage ratios as set forth in the table. There are no 
conditions or events since that management believes have changed the 
institution's category.
<PAGE>
Note 13.  Regulatory Capital Requirements, continued

The bank's actual capital amounts and ratios are presented in the following 
table (in thousands of dollars):
<TABLE>
<CAPTION>

<S>                 <C>     <C>    <C>      <C>       <C>         <C.
                   Actual       For Capital        To Be WellCapitalized Under
                                Adequacy Purposes  Prompt Corrective
                                                   Action Provisions

                   Amount  Ratio   Amount    Ratio    Amount       Ratio

As of December 31, 1995:

Total Capital (to
Risk Weighted Assets)$18,388 12.8%  $11,491   8.0%    $14,364      10.0%

Tier 1 Capital (To
Risk Weighted Assets $16,876 11.7%  $5,746   4.0%  $  8,618       6.0%

Tier 1 Capital (to 
Average Assets)      $16,876  8.2%  $8,277   4.0%   $10,346       5.0%

As of December 31, 1994:

Total Capital (to
Risk Weighted Assets)$16,444 11.9%  $11,016  8.0%   $13,771       10.0%

Tier 1 Capital (to
Risk Weighted Assets)$14,979 10.9%   $5,508  4.0%    $8,262        6.0%

Tier l Capital (to
Average Assets)      $14,979  7.7%   $7,745  4.0%    $9,681        5.0%
</TABLE>

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

Note 14.  Statement of Cash Flows
<TABLE>
<CAPTION>
<S>                                     <C>         <C>           <C.
                                        1995          1994          1993
Supplemental Disclosures of Cash Flow Information
     Cash payments (receipts) for:
          Interest                 $3,035,412     $2,526,592     $2,669,179

          Income taxes             $2,005,247     $ (630,034)    $   97,887

     Disposition of Other Real Estate Owned, financed
          by loans from the Company  $272,776     $         -    $       -
</TABLE>
<PAGE>

Note 15.  Fair Values of Financial Instruments

The fair values of the Company's financial instruments are as follows:
                                     1995                 1994 
<TABLE>
<CAPTION>
<S>                          <C>       <C>               <C>          <C>
                         Carrying                      Carrying
                           Amount    Fair Value          Amount    Fair Value
Financial Assets
     Cash and short-term investments
                      $22,929,660    $22,929,660    $15,394,879    $15,394,879
     Securities        39,561,115     39,503,309     41,151,751     39,815,529
     Loans, net       112,724,034    114,468,551    112,703,283    112,516,467
     Accrued interest receivable
                        1,167,707      1,167,707      1,068,744      1,068,744
    Federal funds sold 18,500,000     18,500,000     28,215,000     28,215,000

Financial Liabilities, deposits
                      188,991,370    188,999,119    190,405,853    190,409,037
</TABLE>
Fair value of commitments _
The estimated fair value of fee income on letters of credit at December 31, 1995
 and 1994, is insignificant. 

 
Note 16.  Parent Company Only Condensed Statements
 
                      CONDENSED BALANCE SHEETS
                             (in 000's)
<TABLE>
>CAPTION>
<S>                                    <C>       <C>
                                      1995      1994
Assets
     Cash                               $207      $205
     Investment in subsidiaries       16,877    14,399
     Other assets                        178       178

                                     $17,262   $14,782

     Stockholders' equity            $17,262   $14,782
</TABLE>
 
                   CONDENSED STATEMENTS OF INCOME
                             (in 000's)
<TABLE>
<CAPTION>
<S>                                                  <C>     <C>     <C>
                                                    1995    1994      1993
Operating income, dividends from subsidiaries       $474    $224      $165

Expenses, professional fees                           16       -         -
     Income before equity in subsidiary
          undistributed income                       458     224       165

Equity in net income of subsidiary                 2,066     611        34

          Net income                              $2,524    $835      $199
</TABLE>
<PAGE>

Note 16.  Parent Company Only Condensed Statements, continued
                 CONDENSED STATEMENTS OF CASH FLOWS
                             (in 000's)
<TABLE>
<CAPTION>
<S>                                               <C>     <C>       <C>
                                                 1995    1994      1993
Cash Flows from Operating Activities
  Net income                                   $2,524    $835      $199
  Adjustments to reconcile net income to net cash
     provided by operating activities:
     Equity in net income of subsidiaries      (2,066)   (611)      (34)
     Decrease in other assets                       -     149         -

       Net cash provided by operating activities  458     373       165

Cash Flows from Investing Activities, net cash
  (used in) capital contributed to subsidiary       -    (120)     (140)
Cash Flows from Financing Activities
  Exercise of stock options                        18       -         -
  Dividends paid                                 (474)    (92)        -
     Net cash (used in) financing activities     (456)    (92)        -
     Increase in cash and due from banks            2     161        25

Cash and Due from Banks
  Beginning                                       205      44        19
  Ending                                         $207    $205       $44
Supplemental Disclosures of Cash Flow Information,
  cash payments for income taxes               $2,005   $(630)      $98
</TABLE>
Note 17.  Discontinued Operations

The Company and its subsidiary operate primarily in the banking industry. 
Operations in the banking industry involve a variety of banking and financial 
services. In 1993, the Company began a mortgage banking division which 
consisted of origination of mortgage loans, sale of mortgage loans in the 
secondary market and servicing of mortgage loans. During 1994, the Company 
ceased its mortgage banking operations and there was no gain or loss on the 
disposal of the segment. Segment information for the year ended 
December 31, 1994 and 1993 is presented on the following table:
<TABLE>
<CAPTION>
<S>                                       <C>         <C>           <C>
                                                   Mortgage       
(Dollar amounts in thousands)            Banking    Banking  Consolidated
1994:                              
     Unaffiliated revenue                $16,544       $512      $17,056

     Income (loss) before income taxes    $1,752      $(372)      $1,380

     Identifiable assets                $206,510       $-       $206,510

1993:
     Unaffiliated revenue               $14,694       $637       $15,331

     (Loss) before income taxes            $(67)     $(429)        $(496)

     Identifiable assets               $191,089     $2,201      $193,290
</TABLE>
Income tax (credits) allocated to the loss on discontinued operations were
$(148,000) and $(171,000) in 1994 and 1993, respectively.

<TABLE> <S> <C>

<ARTICLE> 9
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1995
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               DEC-31-1995
<CASH>                                           22930
<INT-BEARING-DEPOSITS>                               0
<FED-FUNDS-SOLD>                                 18500
<TRADING-ASSETS>                                     0
<INVESTMENTS-HELD-FOR-SALE>                      26908
<INVESTMENTS-CARRYING>                           12653
<INVESTMENTS-MARKET>                             12598
<LOANS>                                         114237
<ALLOWANCE>                                       1513
<TOTAL-ASSETS>                                  207928
<DEPOSITS>                                      188991
<SHORT-TERM>                                         0
<LIABILITIES-OTHER>                               1675
<LONG-TERM>                                          0
                                0
                                          0
<COMMON>                                          7510
<OTHER-SE>                                           0
<TOTAL-LIABILITIES-AND-EQUITY>                  207928
<INTEREST-LOAN>                                  12954
<INTEREST-INVEST>                                 3617
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                                 16571
<INTEREST-DEPOSIT>                                3141
<INTEREST-EXPENSE>                                   0
<INTEREST-INCOME-NET>                            13430
<LOAN-LOSSES>                                      320
<SECURITIES-GAINS>                                   0
<EXPENSE-OTHER>                                  12187
<INCOME-PRETAX>                                   3703
<INCOME-PRE-EXTRAORDINARY>                        3703
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                      2524
<EPS-PRIMARY>                                    $1.30
<EPS-DILUTED>                                    $1.30
<YIELD-ACTUAL>                                    9.38
<LOANS-NON>                                       3055
<LOANS-PAST>                                        33
<LOANS-TROUBLED>                                     0
<LOANS-PROBLEM>                                    600
<ALLOWANCE-OPEN>                                  1465
<CHARGE-OFFS>                                      388
<RECOVERIES>                                       116
<ALLOWANCE-CLOSE>                                 1513
<ALLOWANCE-DOMESTIC>                              1513
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                              0
        

</TABLE>


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