SDN BANCORP, INC.

                          COMMON STOCK 
                      SUBSCRIPTION AGREEMENT


March 22, 1996


SDN Bancorp, Inc.
135 Saxony Road
Encinitas, California 92023-0926

Attn:  Robert P. Keller, President and Chief Executive Officer

Dear Sirs:

              1.    Introduction.  SDN Bancorp, Inc., a Delaware
corporation
and bank holding company ("SDN"), is offering to Dartmouth
Capital
Group, L.P., a Delaware limited partnership ("DCG" or the
"Subscriber"), shares of SDN's Common Stock, par value $0.01 per
share (the "Common Stock") (hereinafter, the shares of Common
Stock
may be referred to as the "Shares").

     SDN has agreed to acquire Liberty National Bank in a
transaction (the "Liberty Acquisition") anticipated to be
consummated as of on or about March 31, 1996.  SDN further
intends
in the near future to enter into a certain Agreement and Plan of
Reorganization with Commerce Security Bank ("CSB") (as hereafter
executed, and as may be thereafter amended, the "Reorganization
Agreement"), pursuant to which SDN will agree to acquire CSB (the
"CSB Acquisition") through a holding company to be formed
contemporaneously with such acquisition.  DCG desires to commit
to
purchase Shares on the terms provided hereinafter to fund SDN's
acquisition of Liberty and CSB.
 
     DCG hereby agrees with SDN as follows:

              2.    Purchase, Sale, Payment and Delivery of the
Shares.  The
Subscriber hereby irrevocably subscribes for, and commits to
purchase from SDN (i) $13,400,100 (the "Liberty Commitment
Amount")
of Shares at or before the closing of the Liberty Acquisition,
and
(ii) up to $16.0 million (the "CSB Commitment Amount") of Shares
at
or before the closing of the CSB Acquisition.  The price per
share
will in both cases be $3.95 (the "Purchase Price"), the book
value
per share of Common Stock at December 31, 1995.  

     3.   Notice of Amount to be Funded.  The number of Shares to
be purchased in connection with the Liberty Acquisition is a
fixed
amount equal to the Liberty Commitment Amount divided by the
Purchase Price.  Within a reasonable period prior to the
anticipated Closing Date of the CSB Acquisition, SDN will deliver
to the Subscriber a written notice (a "CSB Acquisition Funding
Notice") indicating the number of Shares to be purchased by the
Subscriber in connection with the CSB Acquisition (the "CSB
Purchase Amount"), up to the Commitment Amount, and instructing
the
Subscriber to deliver the payment for the CSB Purchase Amount
into
an account maintained by SDN or its agent.  

     4.   Payment.  The Subscriber agrees to transfer payment
equal
to the Liberty Commitment Amount to an account specified by SDN,
in
immediately available funds, not later than March 27, 1996.  SDN
shall deliver to the Subscriber or the Subscriber's designee(s),
promptly following receipt of the foregoing payment,
certificate(s)
evidencing the Shares purchased.  Not less than three (3)
business
days after the delivery of any CSB Acquisition Funding Notice (or
such longer period as SDN may specify in such CSB Acquisition
Funding Notice), the Subscriber shall transfer payment for the
CSB
Purchase Amount to the account specified in such CSB Acquisition
Funding Notice, in immediately available funds.  SDN shall
deliver
to the Subscriber or the Subscriber's designee(s), promptly
following receipt of such funds, certificate(s) evidencing the
Shares purchased.

              5.    Successors.  This Agreement shall inure to
the
benefit of
and be binding upon SDN, the Subscriber and their respective
successors and permitted assigns.  Nothing expressed herein is
intended or shall be construed to give any person other than the
persons referred to in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this
Agreement.

              6.    Termination.  This Agreement shall terminate,
without
action by either party, upon the earliest to occur of the
following: (i) the termination of the January 24, 1996 Letter of
Intent between SDN and CSB in accordance with it terms; provided,
however, that if the Liberty Acquisition has not been consummated
as of such time, this Agreement shall not terminate until the
next
business day following the consummation or earlier abandonment of
the Liberty Acquisition; or (ii) the termination of the
Reorganization Agreement in accordance with its terms.

              7.    APPLICABLE LAW.  THIS AGREEMENT SHALL BE
ENFORCED,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS
THEREOF.


                          *     *     *
               

                                                                  
        
Very truly yours,
                                                                  
        
                                                                  
        
DARTMOUTH CAPITAL GROUP, L.P.


By: Dartmouth Capital Group, Inc.
    Its General Partner
                                                                  
        

By:                                          
Name:  Robert P. Keller
Title:   President




This Subscription Agreement is hereby
confirmed and accepted as of the date first
above written.

SDN BANCORP, INC. 


By:                                                    
Name:  Robert P. Keller
Title:   President and Chief Executive Officer