UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C 20549 FORM 10-Q X		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 		EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 1999 OR 		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES	EXCHANGE ACT OF 1934 For the transition period from....................................... to............................................. Commission File No. 33-8743 ORANGE NATIONAL BANCORP (Exact Name of Registrant as Specified in Charter) 				 	 			 1201 East Katella Avenue 				 				 Orange, California 92867 						California	 	 	(714) 771-4000	 	 	33-0190684 (State of Incorporation) (Address and Telephone Number 	 (I.R.S. Employer 	 							 of Principal Executive Offices) Identification No.) 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 X No APPLICABLE ONLY TO CORPORATE ISSUERS The Registrant had 2,002,071 shares of common stock outstanding as of August 12, 1999. ORANGE NATIONAL BANCORP QUARTERLY REPORT ON FORM 10-Q JUNE 30, 1999 TABLE OF CONTENTS PART I	.	FINANCIAL STATEMENTS Item 1.	Financial statements 			Consolidated Balance Sheets as of June 30, 1999 (unaudited) 			and December 31, 1998						 	3 			Consolidated Statements of Earnings for the Three and Six 			Months Ended June 30, 1999 and 1998 (unaudited)					 4 			Consolidated Statements of Comprehensive Income for the Three 			And Six Months Ended June 30, 1999 and 1998 (unaudited)				 5 			Consolidated Statements of Stockholders' Equity for the 			Three Months Ended June 30, 1999 and 1998 (unaudited)				 6 			Consolidated Statements of Stockholders' Equity for the 			Six Months Ended June 30, 1999 and 1998 (unaudited)				 7 			Consolidated Statements of Cash Flows for the Three and Six 			Months Ended June 30, 1999 and 1998 (unaudited)					 8 			Notes to Consolidated Financial Statements					 9 Item 2.	Management's Discussion and Analysis 			of Financial Condition and Results of Operations					 10 Item 3.	Quantitative and Qualitative Disclosures About Market Risk				 20 PART II.	OTHER INFORMATION Item 1.	Legal Proceedings							 21 Item 2.	Changes in Securities							 21 Item 3.	Defaults Upon Senior Securities						 21 Item 4.	Submissions of Matters to a Vote of Security Holders					 21 Item 5.	Other Information							 21 Item 6.	Exhibits and Reports on Form 8-K					 	21 SIGNATURES					 	22 ORANGE NATIONAL BANCORP CONSOLIDATED BALANCE SHEETS June 30, 1999 (unaudited) and December 31, 1998 									 	Jun 30	 Dec 31 										1999 	1998 										 (unaudited) (audited) (dollars in thousands) Assets Cash and cash equivalents		 		$ 65,405 	$ 74,931 Securities 	Held-to-maturity securities (fair value of $12,263 in 1999 and $17,691 in 1998)	 		 	13,418 	17,640 	Available-for-sale securities 	 		 	48,084 	40,649 Loans, net of allowance for credit losses of $1,620 in 1999	and $1,524 in 1998 	 			145,420 	140,140 Premises and equipment, net			 	5,386 	5,438 Other real estate owned, net 	 			- 	- Accrued interest receivable	 		 	1,375 	1,212 Cash value of life insurance 	 	 		5,137 	5,021 Other assets			 			 1,410	 831 										$285,635 	$285,862 Liabilities Deposits		 			 	 	 $258,991 	$260,334 Accrued interest payable and other liabilities 			 2,133 	 1,805 			Total liabilities	 			261,124 	262,139 Commitments and Contingencies		 		- 	- Stockholders' Equity 	Common stock, no par value or stated value; 		authorized 20,000,000 shares; issued and 		outstanding 2,000,171 in 1999 and 1,996,788 in 1998		 	8,081 	8,036 	Retained earnings	 			16,837 	15,718 	Unrealized (loss) on available-for-sale securities, net	 		 (407)	 (31) 			Total stockholders' equity 	 			 24,511	 23,723 										$285,635 	$285,862 <FN> See Notes to Consolidated Financial Statements. </FN> ORANGE NATIONAL BANCORP CONSOLIDATED STATEMENTS OF EARNINGS Three and Six Months Ended June 30, 1999 and 1998 (unaudited) 							 Three Months Ended Six Months Ended 							 June 30,	 June 30, 							 1999 1998 1999 1998 							 (in thousands, except per share data) Interest Income 	Loans		 	 		$3,460 	$3,617 	$6,757 	$6,962 	Securities	 			941 	196 	1,851 	441 	Federal funds sold 		 420	 790	 877 	1,359 			Total interest income 		4,821 	4,603 	9,485 	8,762 Interest Expense, deposits 		1,039 	1,033 	2,073 	1,915 			Net interest income 		3,782 	3,570 	7,412 	6,847 Provision for Credit Losses		 20	 20	 90 	 20 			Net interest income after 			provision for credit losses 	 	3,762 	3,550	 7,322 	6,827 Other Income	 			867 	888 	1,573 	1,760 Other Expenses 			3,035 	3,004 	6,065 	6,097 			Earnings before income taxes	 	1,594 	1,434 	2,830 	2,490 Provision for Income Taxes 	 	 627	 573 	1,111	 969 			Net earnings	 	$ 967 	$ 861 	$1,719 	$1,521 Basic earnings per share	 	$ 0.48 	$ 0.44 	$ 0.86 	$ 0.77 Weighted average number of common shares outstanding (in thousands)	 	 2,000 	 1,991	 2,000 	 1,983 Diluted earnings per share	 	$ 0.46 	$ 0.42 	$ 0.83 	$ 0.74 Weighted average number of common shares outstanding and diluted potential common shares (in thousands) 2,113	 2,063	 2,078 	 2,053 <FN> See Notes to Consolidated Financial Statements. </FN> ORANGE NATIONAL BANCORP CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three and Six Months Ended June 30, 1999 and 1998 (unaudited) 							 Three Months Ended Six Months Ended 							 June 30,	 June 30, 							 1999 1998 1999	 1998 								 (dollars in thousands) Net earnings 				$967 	$861 	$1,719 	$1,521 Other comprehensive income 	Unrealized gains (losses) on available-for-sale securities	 	(538) 	25 	(658) 	23 	Reclassification adjustment for losses included	in net earnings - - - - 	Reclassification adjustment for losses included	in net earnings for securities transferred	 	 8	 8	 17	 17 		Other comprehensive income (loss) 		before income taxes	 	(530) 	33 	(641) 	40 	Provision for income taxes	 	 219 	 (13)	 265	 (16) 		Other comprehensive income (loss)	 	(311)	 20 	 (376)	 24 Comprehensive income 	 	$656	 $881 	$1,343 	$1,545 <FN> See Notes to Consolidated Financial Statements. </FN> ORANGE NATIONAL BANCORP CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Three Months Ended June 30, 1999 and 1998 (unaudited) 										Unrealized 										Gain (Loss) 										Available- 							 	 Common Stock 	Retained 	For-Sale 							 Shares 	Amount 	Earnings Securities Total 							 (in thousands, except per share data) Balance, March 31, 1999 	2,000 	$8,081 	$16,170 	$(96) 	$24,155 Net earnings	 		- 	- 	967 	- 	967 Cash dividend paid ($.15 per share) 	- 	- 	(300) 	- 	(300) Exercise of stock options 	- 	- 	- 	- 	- Other comprehensive income - 	 - 	 - 	 (311)	 (311) Balance, June 30, 1999 	2,000 	$8,081	 $16,837 	$(407) 	$24,511 Balance, March 31, 1998 	1,988 	$7,970 	$13,746 	$(52) 	$21,664 Net earnings 			- 	- 	861 	- 	861 Cash dividend paid ($.10 per share) 	- 	- 	(199) 	- 	(199) Exercise of stock options 	5 	42 	- 	- 	42 Other comprehensive income - 	 - 	 - 20	 20 Balance, June 30, 1998 	1,993 	$8,012 	$14,408 	$(32) 	$22,388 <FN> See Notes to Consolidated Financial Statements. </FN> ORANGE NATIONAL BANCORP CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Six Months Ended June 30, 1999 and 1998 (unaudited) 										Unrealized 										Gain (Loss) 										Available- 							 	 Common Stock 	Retained 	For-Sale 							 Shares 	Amount 	Earnings Securities	 Total 							 (in thousands, except per share data) Balance, December 31, 1998 	1,997 	$8,036 	$15,718 	$(31) 	$23,723 Net earnings	 		- 	- 	1,719 	- 	1,719 Cash dividend paid ($.30 per share) 	- 	- 	(600) 	- 	(600) Exercise of stock options 	3 	45 	- 	- 	45 Other comprehensive income - 	 - 	 - 	 (376)	 (376) Balance, June 30, 1999 	2,000 	$8,081 	$16,837 	$(407) 	$24,511 Balance, December 31, 1997 	1,970 	$7,864 	$13,778 	$(56) 	$21,586 Net earnings	 		- 	- 	1,521 	- 	1,521 Cash dividend paid ($.45 per share) 	- 	- 	(891) 	- 	(891) Exercise of stock options 	23 	148 	- 	- 	148 Other comprehensive income 	 - 	 - 	 - 	 24	 24 Balance, June 30, 1998	 1,993 	$8,012 	$14,408 	$(32) 	$22,388 <FN> See Notes to Consolidated Financial Statements. </FN> ORANGE NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS Three and Six Months Ended June 30, 1999 and 1998 (unaudited) 							 Three Months Ended Six Months Ended 							 June 30, 	 June 30, 							 1999 1998 1999 1998 								 (dollars in thousands) Cash Flows from Operating Activities 	Net earnings			 $ 967 	$ 861 	$ 1,719 	$ 1,521 	Adjustments to reconcile net earnings to	net cash provided by operating activities: 		Depreciation and amortization 		154 	133 	308 	247 		Provision for credit losses 	 	20 	20 	90 	20 		(Gain) on sale of loans 	 	(105)	 (211)	 (155) 	 (385) 		Proceeds from loan sales 		2,797 	3,211 	3,830 	5,782 		Origination of loans held for sale 	 	(2,692) 	(3,000) 	(3,675) 	(5,396) 		(Increase) in other assets 	 	(429) 	(233) 	(439) 	(206) 		Gain on cash value of life insurance	 	(77) 	(75) 	(137) 	(135) 		Increase (decrease) in other liabilities 194	 (338) 328	 (197) 			Net cash provided by operating activities 	 829	 368	 1,869	 1,251 Cash Flows from Investing Activities 	Proceeds from sales and maturities of securities 	6,265 	1,383 	17,307 	5,770 	Purchase of securities	 	(135) 	(727)	(21,179) 	(727) 	Net (increase) decrease in loans	 	(2,327) 	965 	(5,464) (6,223) 	Proceeds from sale of other real estate owned 	94 	- 	94 	126 	Purchases of premises and equipment	 	 (37)	 (388)	 (255) 	 (847) 			Net cash provided by 			(used in) investing activities	 	 3,860 	 1,233 	 (9,497)	 (1,901) Cash Flows from Financing Activities 	Net increase (decrease) in deposits 		6,031 	8,161 	(1,342) 	6,198 	Proceeds from exercise of stock options 		- 	42 	45 	148 	Dividends paid		 (300)	 (199)	 (600) 	 (891) 			Net cash provided by 			(used in) financing activities 	 	 5,731 	 8,004 	 (1,897) 5,455 Increase (decrease) in 	cash and cash equivalents 	10,420 	9,605	 (9,525) 4,805 Cash and cash equivalents at beginning of period 	54,985	 76,347 	74,930 	81,147 Cash and cash equivalents at end of period	 	$65,405 	$85,952 	$65,405 $85,952 Supplemental Cash Flow Information 	Cash payments for: 		Interest	 			$1,036 	$1,036 	$2,084 	$1,911 		Income taxes 	 	$ 782 	$ 748 	$ 782 	$ 898 	Non-cash investing activities: 		Loans to finance the sale of real estate	 	$ - 	$ - 	$ - 	$ - 		Loans foreclosed on by the Company 		$ 94 	$ 31 	$ 94 	$ 31 <FN> See Notes to Consolidated Financial Statements. </FN> ORANGE NATIONAL BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1.	Basis of Presentation 		The consolidated financial statements include the accounts of Orange National Bancorp ("Company") and its wholly-owned subsidiary, Orange National Bank ("Bank"). 		The consolidated balance sheet (unaudited) as of June 30, 1999, and the related consolidated statements (unaudited) of earnings, comprehensive income, stockholders' equity and cash flows for the three and six months ended June 30, 1999 and 1998, have been prepared in accordance with generally accepted accounting principles and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary have been made to present fairly the financial position, results of operations and cash flows as of and for the three and six months ended June 30, 1999. 		Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's December 31, 1998, annual report on Form 10-K. The operating results for the three and six months ended June 30, 1999, are not necessarily indicative of the operating results for all of 1999. Note 2.	Other income and expense 		Other income and expense for the three and six months ended June 30 consisted of the following: 							 Three Months Ended Six Months Ended 							 June 30, 	 June 30, 							 1999 1998 1999 1998 								 (dollars in thousands) Other income 	Service charges on deposit accounts		 $377 	 $362 	$ 740 	$ 746 	Fees for other customer services 	 	182 	208 	375 	407 	Gain on sale of loans 	 	105	 211 	155 	385 	Increase in cash value of life insurance 	77 	75 	137 	135 	Other			 	 126 	 32	 166	 87 							$867 	$888 	$1,573 	$1,760 Other expense 	Salaries, wages and employee benefits 		$1,506 	$1,477 	$3,032	 $2,996 	Occupancy			 	323 	331 	638 	676 	Data processing	 	232 	237 	481 	467 	Furniture and equipment 	 	193 	175 	388 	347 	Promotion			 	141 	171 	268 	356 	Legal and professional services 	 	190	 242 	387 	476 	Stationery and supplies 	 	50 	85 	100 	153 	Telephone and postage 		111 	90 	226 	216 	Other real estate owned 	 	5 	1 	3 	6 	Other	 					 284	 195	 542	 404 								$3,035 	$3,004 	$6,065 	$6,097 ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 				RESULTS OF OPERATIONS Forward Looking Statements 		Certain statements in this filing, including without limitation statements containing the words "believes," "anticipates," "intends," "expects," "proforma," and words of similar import, constitute forward- looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among other, the following: general economic conditions in the Company's market areas; variances in interest rates; changes in or amendments to regulatory authorities' capital requirements or other regulations applicable to the Company; increased competition for loans and deposits; and other factors referred to elsewhere in this filing. Given these uncertainties, shareholders are cautioned not to place undue reliance on forward-looking statements. The Company disclaims any obligation to update such factors which are not considered to be material or to publicly announce the result of any revisions to any of the forward-looking statements included herein which are not considered to be material to reflect future events or developments. Results of Operations 		Total interest income was $4.8 million in the second quarter of 1999, an increase of $0.2 million or 4.7% from the $4.6 million in the second quarter of 1998. Total interest income was $9.5 million in the first half of 1999, an increase of $0.7 million or 8.2% from the $8.8 million in first half of 1998. The average interest-earning assets were $249.6 million in the second quarter of 1999, an increase of $36.2 million or 17.0% from the $213.4 million in the second quarter of 1998. The average interest-earning assets were $245.5 million in the first half of 1999, an increase of $40.6 million or 19.8% from the $204.9 million in the first half of 1998. The average yield on interest- earning assets was 7.7% in the second quarter of 1999, a decrease of 0.9% from the 8.6% in the second quarter of 1998. The average yield on interest-earning assets was 7.7% in the first half of 1999, a decrease of 0.9% from the 8.6% in the first half of 1998. The increase in interest income during the second quarter and the first half of 1999 as compared to the similar periods in 1998 resulted from a higher level of interest-earning assets in spite of lower interest rates. 		Interest income on loans was $3.5 million in the second quarter of 1999, a decrease of $0.1 million or 4.4% from the $3.6 million in the second quarter of 1998. Interest income on loans was $6.8 million in the first half of 1999, a decrease of $0.2 million or 2.9% from the $7.0 million in the first half of 1998. The increase in interest income on loans in the second quarter and first half of 1999 as compared to the similar periods in 1998 resulted from the increase in the average size of the loan portfolio in spite of lower long-term interest rates during 1999. The average size of the loan portfolio was $147.3 million in the second quarter of 1999, an increase of $5.8 million or 4.1% from the $141.5 million in the second quarter of 1998. The average size of the loan portfolio was $144.8 million in the first half of 1999, an increase of $5.3 million or 3.8% from the $139.5 million in the first half of 1998. The yield on the loan portfolio was 9.4% in the second quarter of 1999, a decrease of 0.8% from the 10.2% in the second quarter of 1998. The yield on the loan portfolio was 9.3% in the first half of 1999, a decrease of 0.7% from the 10.0% in the first half of 1998. The increase in the average size of the loan portfolio resulted from sustained loan fundings throughout 1998 and the first six months of 1999. The yield on loans moves with changes in the prime rate as 65.1% of the loan portfolio are based on variable rates. 		Interest income on securities was $0.9 million in the second quarter of 1999, an increase of $0.7 million or 380.8% from the $0.2 million in the second quarter of 1998. Interest income on securities was $1.8 million in the first half of 1999, an increase of $1.4 million or 319.6% from the $0.4 million in the first half of 1998. The increase in interest income on securities in the second quarter and first half of 1999 as compared to the similar periods in 1998 resulted from the increase in the average size of the investment securities portfolio. The average size of the securities portfolio was $65.2 million in the second quarter of 1999, an increase of $51.8 million or 386.4% from the $13.4 million in the second quarter of 1998. The average size of the securities portfolio was $62.2 million in the first half of 1999, an increase of $47.1 million or 311.4% from the $15.1 million in the first half of 1998. The yield on securities was 5.8% in the second quarter of 1999, a decrease of 0.1% from the 5.9% in the second quarter of 1998. The yield on securities was 5.9% in the first half of 1999, an increase of 0.1% from the 5.8% in the first half of 1998. The increase in the size and yield of the investment securities portfolio resulted from the purchase of a large volume of higher yielding bonds throughout the latter half of 1998 and the first six months of 1999. 		Interest income on federal funds sold was $0.4 million in the second quarter of 1999, a decrease of $0.4 million or 46.8% from the $0.8 million in the second quarter of 1998. Interest income on federal funds sold was $0.9 million in the first half of 1999, a decrease of $0.5 million or 35.5% from the $1.4 million in the first half of 1998. The decrease in interest income on federal funds sold during the first half of 1999 as compared to the similar period of 1998 resulted from the large decrease in the average size of federal funds sold and a lower yield in 1999. The average balance of federal funds sold was $37.1 million in the second quarter of 1999, a decrease of $21.3 million or 36.5% from the $58.4 million in the second quarter of 1998. The average balance of federal funds sold was $38.5 million in the first half of 1999, a decrease of $11.8 million or 23.5% from the $50.3 million in the first half of 1998. The yield on federal funds sold was 4.5% in the second quarter of 1999, a decrease of 0.9% from the 5.4% in the second quarter of 1998. The yield on federal funds sold was 4.6% in the first half of 1999, a decrease of 0.8% from the 5.4% in the first half of 1998. The decrease in the federal funds sold resulted from excess funds being invested in investment securities throughout the latter half of 1998 and into the first half of 1999. 		Interest expense was $1.0 million in the second quarter of both 1999 and 1998. Interest expense was $2.1 million in the first half of 1999, an increase of $0.2 million or 8.3% from the $1.9 million in the first half of 1998. The increase in interest expense resulted from a larger average interest-bearing deposit base, particularly in money market accounts, in spite of a decrease in deposit rates. The average interest-bearing deposits were $155.0 million in the second quarter of 1999, an increase of $16.1 million or 11.6% from the $138.9 million in the second quarter of 1998. The average interest-bearing deposits were $157.2 million in the first half of 1999, an increase of $25.0 million or 18.9% from the $132.2 million in the first half of 1998. The average rate paid on interest-bearing deposits was 2.7% in the second quarter of 1999, a decrease of 0.3% over the 3.0% in the second quarter of 1998. The average rate paid on interest-bearing deposits was 2.6% in the first half of 1999, a decrease of 0.3% from the 2.9% in the first half of 1998. The increase in the deposit base reflects an overall prosperity of the customer base resulting from an improved economy. 		The provision for credit losses was $20,000 in the second quarter of both 1999 and 1998. The provision for loan losses was $90,000 in the first half of 1999, an increase of $70,000 from the $20,000 in the first half of 1998. The increase in the provision for credit losses during the first half of 1999 as compared to the first half of 1998 reflects a larger overall loan portfolio while the higher quality of the loan portfolio results from an improved local economy in Orange County. The Company continued to experience recoveries in the first half of 1998 on amounts previously charged-off. These recoveries offset the need for additional provision during 1998. Management believes that the current allowance for credit losses is adequate to provide for potential losses in the portfolio. The current local economic outlook is promising for the remainder of 1999. However, an assurance cannot be made as to its realization and, accordingly, future provisions for credit losses cannot be estimated at this time. While management is optimistic about the future, the effects of current economic conditions on the collectibility of loans cannot be predicted with absolute certainty and its effects on future profitability cannot be determined. 		Other income was $0.9 million in the second quarter of both 1999 and 1998. Other income was $1.6 million in the first half of 1999, a decrease of $0.2 million or 10.6% from the $1.8 million in the first half of 1998. The decrease in other income during the first half of 1999 primarily resulted from decreased gains on lower volume of SBA loans sold as compared to the similar period of 1998. The gain on sale of SBA loans was $0.2 million in the first half of 1999, a decrease of $0.2 million or 59.9% from the $0.4 million in the first half of 1998. 		Other expenses were $3.0 million in the second quarter of both 1999 and 1998. Other expenses were $6.1 million in the first half of both 1999 and 1998. The increase in other costs was offset by a reduction in promotional costs and professional fees in the first six months of 1999 compared to the first six months of 1998. 		The provision for income taxes was $0.6 million in the second quarter of both 1999 and 1998. The provision for income taxes was $1.1 million in the first half of 1999, an increase of $0.1 million or 14.7% from the $1.0 million in the first half of 1998. The increase in the provision for income taxes in the first half of 1999 results from larger pretax earnings in the first half of 1999 as compared to the first half of 1998. 		Net earnings were $967,000 in the second quarter of 1999, an increase of $106,000 or 12.2% from the $861,000 in the second quarter of 1998. Net earnings were $1,719,000 in the first half of 1999, an increase of $198,000 or 13.0% from the $1,521,000 in the first half of 1998. Financial Condition 		The Company experienced a small shrinkage during the first half of 1999. Total assets were $285.6 million as of June 30, 1999, a decrease of $0.3 million or 0.1% from the $285.9 million as of December 31, 1998. 		Total interest-earning assets were $256.6 million as of June 30, 1999, an increase of $0.9 million or 0.4% from the $255.7 million as of December 31, 1998. The increase resulted from increases in the loan and securities portfolios in spite of a decrease in federal funds sold. The Company continues to focus its efforts on originating quality loans. The new loans originated and securities purchased in the first six months of 1999 were funded primarily from the federal funds sold. 		The investment securities portfolio was $61.5 million as of June 30, 1999, an increase of $3.2 million or 5.5% from the $58.3 million as of December 31, 1998. The increase in the first six months of 1999 resulted from the continued purchasing of investment securities. The Company believes securities are the best available investment after its liquidity needs are met through cash, cash due from banks and federal funds sold. The market values decreased in the first six months of 1999 resulting from an increase in short-term and long-term interest rates. 		The loan portfolio was $145.4 million as of June 30, 1999, an increase of $5.3 million or 3.8% from the $140.1 million as of December 31, 1998. The increase in the first six months of 1999 resulted from continued loan demand, primarily SBA lending on commercial real estate. The quality of the loan portfolio continues to improve resulting from a healthier Orange County economy. 		Total deposits were $259.0 million as of June 30, 1999, a decrease of $1.3 million or 0.5% from the $260.3 million as of December 31, 1998. The decrease in the first six months of 1999 resulted from large withdrawals by customers in the first quarter of 1999. The second quarter of 1999 reflects a strong economic climate amongst the large customers of the Bank and the increase in new customers of the Bank. Liquidity 		The Company maintains substantial liquid and other short-term assets to meet the funding of loan demand, deposit withdrawals and maturities, and operating costs. The Company currently meets its funding needs from its deposit base, and cash flow from operations, loan sales, maturities of investment securities and loan principal reductions. 		The loan-to-deposit ratio was 56.1% and 53.8% as of June 30, 1999 and December 31, 1998, respectively. The slight increase in this ratio resulted as the loans increased at a higher rate than the deposits. The ratio of liquid assets (cash, cash due from banks, federal funds sold, and investment securities with maturities of one year or less) to demand deposits was 39.1% as of both June 30, 1999 and December 31, 1998. The liquid asset ratio remained unchanged resulting from a slight decrease in both liquid assets and demand deposits. 		The Company has a relatively stable and significant base of core deposits. Thus, the Company has not used brokered deposits and avoids using other wholesale, highly rate-sensitive, short-term funds. 	Other funding sources available to the Company include reduction of its federal funds sold, sale of its available-for-sale securities, increasing deposits, and borrowing from its established credit resources. The Company may borrow funds under securities sold with agreements to repurchase such securities that have not been pledged. The Company had unpledged securities of $54.6 million as of June 30, 1999. The Company has a borrowing capacity of $14.5 million with the FHLB. The Company would need to pledge certain defined collateral, consisting of loans and/or securities, with the FHLB prior to borrowing. Liquidity can also be obtained through federal funds purchased from correspondent banks and/or direct borrowings from the Federal Reserve Bank. The Company currently has unused Federal Funds borrowing lines of $10.0 million with various banks. 		Management believes the Bank has sufficient liquidity to meet its loan commitments, deposit withdrawals and operating costs. Investment Securities Portfolio 		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 Bank does not invest in derivative financial instruments. The Bank purchases mortgage-backed securities of investment grade only. The following schedule presents the Bank's investment securities portfolio: 									 June 30, 1999	 December 31, 1998 										Amortized 	Market 	Amortized 	Market 				 						 Cost	 Value	 Cost	 Value 											(dollars in thousands) Held-to-maturity Mortgage-backed securities	 			$13,418 	$12,263 	$17,640 	$17,691 Available-for-sale U.S. Government Agency Securities			$24,216 	$24,061 	$14,503 	$14,512 Mortgage-backed securities		 		23,505 	22,995 	25,241 	25,226 Other	 								 1,028	 1,028	 911	 911 										$48,749 	$48,084 	$40,655 	$40,649 Total		 							$62,167 	$60,347 	$58,295 	$58,340 Loan Portfolio 		A major part of the Bank's objective is serving the credit needs of customers in Orange County and surrounding areas. Credit decisions are based upon the judgement of the Bank's lending personnel and Loan Committee. The legal lending limit to each customer is restricted to a percentage of the Bank's total capital, the exact percentage depends on 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 policy to obtain collateral for loans under most circumstances. The Bank has a highly diversified portfolio, a solid underwriting process, a loan review program and an active loan service function which management believes serves to minimize the possibility of material loss in the loan portfolio. 		The three broad categories in which the Bank has directed virtually all of its lending activities are (a) real estate loans, (b) commercial loans, and (c) loans to individuals. These three categories accounted for 66.6%, 25.3%, and 8.0%, respectively, of the Bank's loan portfolio as of June 30, 1999. Commercial real estate loans are originated for terms of up to 25 years. The Bank's commercial loans are primarily funded to small- and medium-sized businesses for terms ranging from 30 days to 5 years. Consumer installment loans are for a maximum term of 48 months on unsecured loans and for a term of the depreciable life of tangible property used as collateral on secured loans. 		Variable interest rate loans comprise 65.1% of the loan portfolio as of June 30, 1999. 		The Bank had standby letters of credit of $0.5 million and commitments to extend credit of $25.0 million as of June 30, 1999. The Bank presently has sufficient liquidity to fund all loan commitments. 		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. 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. The amount of impairment, if any, and any subsequent changes are included in the allowance for credit losses. Loan Portfolio Composition 		The composition of the Bank's loan portfolio (all domestic) is presented in the following table: 												Jun 30	 Dec 31 												 1999	 1998 											 	(dollars in thousands) Dollars Real estate 	Commercial						 	$ 95,463 	$ 86,049 	Construction					 		3,171	 5,074 Commercial and industrial					 	37,429 	40,217 Loans to individuals					 	11,818 	11,180 Other		 									 172	 241 Total	 										148,053	 142,761 Unearned net loan fees and premiums			 		(1,013) 	(1,097) Allowance for credit losses						 (1,620)	 (1,524) Total, net							 		$145,420 	$140,140 Percentages Real estate 	Commercial 							64.5%	 60.3% 	Construction					 		2.1 	3.6 Commercial and industrial					 	25.3 	28.2 Loans to individuals				 		8.0 	7.8 Other											 0.1	 0.1 Total		 									100.0% 	100.0% Credit Risk Management 		The Bank manages its loan portfolio through a process designed to assure acceptable quality of loans entering the portfolio and to bring any potential losses or potential defaults in 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 assigned. The Bank's Senior Vice President and Senior Credit Officer are responsible for general supervision of the loan portfolio and adherence by the loan officers to the loan policies of the Bank. The Bank currently engages an outside consulting firm to periodically review the loan portfolio to provide suggested risk rating of selected loans. Bank management reviews the suggested ratings along with all other available information to properly monitor the loan portfolio, including all loan evaluations made during periodic examinations by the OCC. 		In accordance with the Bank's loan policies, management presents a written report to the Bank's Board of Directors at its monthly meeting. The Directors review the delinquency report listing of all loans 30 days or more past due and the watch list report including loans having increased credit risk, both delinquency and other factors, over the rest of the portfolio. Additionally, the Directors review a monthly report including all loans originated during the prior month. 		The Bank maintains an allowance for credit losses to provide for potential losses in the loan portfolio. Additions to the allowance for credit losses are either charged to operations in the form of a provision for possible credit losses, or recovered from loans previously charged-off. All loans that are judged to be uncollectible are charged against 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 features 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. 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 OCC periodically reviews the Company's allowance for credit losses as an integral part of their normal recurring examination process, 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. 		The following table presents loans on nonaccrual status or contractually past due 90 days or more as to interest or principal payments and still accruing interest: 												Jun 30 	Dec 31 												 1999	 1998 											 	(dollars in thousands) Loans on nonaccrual status					 	$1,218 	$1,631 Loans past due 90 days or more and still accruing interest						 75	 76 Total	 										$1,293 	$1,701 		Loans are generally placed on nonaccrual status when principal or interest payments are past due 90 days or more. Certain loans are placed on nonaccrual status earlier if there is reasonable doubt as to the collectibility of interest or principal. Loans that are in the renewal process, have sufficient collateral, or are in the process of collection continue to accrue interest. 		Had the loans on nonaccrual status paid according to their original terms, the gross interest income to date on such loans would have been approximately $865,000. 		Management does not have knowledge of any additional loans not disclosed in this section as nonaccrual, past due, or troubled debt restructuring that may be potential problem loans. The Bank has no loans to foreign borrowers. The collateral value of certain nonaccrual loans are large enough that management believes all principal and interest will be collected on those loans and therefore do not meet the definition of impaired. 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. Impaired loans are valued primarily at the fair value of the underlying collateral. 		There were no loan concentrations to individual borrowers exceeding 10% of the total loan portfolio and no other interest-bearing assets that would be required to be in the paragraphs above, if such assets were classified as loans as of June 30, 1999 and December 31, 1998. 		The following table presents loans outstanding, the activity of the allowance for credit losses, and pertinent ratios during the three and six months ended and as of June 30: 							 Three Months Ended Six Months Ended 							 June 30,	 June 30, 							 1999	 1998 1999 1998 								 (dollars in thousands) Average gross loans 	$147,307 	$142,564 	$144,802 	$140,489 Total gross loans at end of period	 $147,039	 $140,027 	$147,039	 $140,027 Allowance for credit losses: Balance, beginning of period 	$1,596 	$1,553 	$1,524 	$1,581 Charge-offs	 		(3) 	(16) 	 (5) 	(56) Recoveries	 			 7	 10	 11	 22 Net (charge-offs) recoveries 	4 	(6) 	6 	(34) Provisions charged to operations	 20	 20	 90	 20 Balance, end of period 	$1,620 	$1,567 	$1,620 	$1,567 Net (charge-offs) recoveries during the period to average gross loans outstanding during period 	0.00% 	(0.00%) 	0.00%	 (0.02%) 		Included in the Bank's allocation of its allowance for credit losses are specific reserves on certain identified loans and general reserves for unknown potential losses. Management classifies loans through its internal loan review system that is supplemented by an independent third party reviewer and review of loans from its regulators. None of these classifications indicate trends or uncertainties, which will materially impact future operating results, liquidity, or capital resources. The allowance provides 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. Any loans which management doubts the ability of borrowers to comply with loan repayment terms are provided for in the allowance. Summary of Deposits 		Deposits are currently the Bank's sole source of funds. The Bank can obtain additional funds when needed to meet occasional declines in deposits or other short-term liquidity needs through the overnight purchase of federal funds and other borrowing facilities. However, the Bank does not currently use these sources of funds. Generally, the Bank has funds in excess of its needs for deposit withdrawals and other short-term liquidity. The Bank regularly sells such excess funds as federal funds sold to other financial institutions. 		The Bank's deposits are attracted primarily from commercial enterprises and individuals. The Bank also attracts some deposits from municipalities and other government agencies. The Bank does not have foreign deposits, brokered deposits or variable rate fixed-term deposits, nor does the Bank currently expect to obtain future funding through these types of deposits. The Bank had noninterest-bearing demand deposits of $94.1 million, interest-bearing Negotiable Orders of Withdrawal Accounts ("NOW") and Money Market Deposit Accounts ("MMDA") of $118.6 million, time deposits of $33.3 million, and savings accounts of $13.0 million as of June 30, 1999. 		The Company had interest-bearing deposits of 63.7% and 61.7% of total deposits as of June 30, 1999 and December 31, 1998, respectively. While the Bank does not experience material seasonal fluctuations in deposit levels, the Bank's relative growth in deposits and loans and level of liquidity may be affected by seasonal and economic changes of its customers. Management believes it has sufficient liquidity to fund loan commitments, deposit demands and operating costs. 		The following table presents the Bank's average balances of deposits, as a percentage of average total deposits and average interest paid by category for the first six months of 1999 and for the year 1998: 										MMDA			 Total 				 					Demand 	and NOW	 Savings	 Time 	 Deposits 											(dollars in thousands) June 30, 1999 Average balance		 		$91,290 	$111,667 	$12,755 	$32,774 	$248,486 Percent of total		 		36.7% 	44.9% 	5.1% 	13.3% 	100.0% Average interest rate paid	 		0.0% 	2.2% 	2.0% 	4.4% 	1.7% December 31, 1998 Average balance	 			$84,499 	$103,142 	$12,186 	$28,088 	$227,915 Percent of total	 			37.1%	 45.3% 	5.3% 	12.3% 	100.0% Average interest rate paid	 		0.0%	 2.4% 	2.0% 	5.0% 	1.8% 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 Bank is subject to various regulatory capital requirements. The Bank must meet specific capital guidelines that involve certain measurements of the Bank's assets and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification of these assets and certain off-balance sheet items are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Tier 1 capital for the Bank under the regulations is defined as stockholders' equity before any unrealized gains or losses on its available-for-sale securities portfolio, less defined portions of intangible assets. Total capital is defined as Tier 1 capital plus the allowance for credit losses, subject to certain limitations. The table below presents the Bank's actual capital ratios, the minimum capital required for adequacy purposes and to be categorized as "well capitalized" for the capital ratios of total risk-based, Tier 1 risk-based and Tier 1 leverage. The Bank's capital ratios exceeded the "well capitalized" threshold prescribed in the rules of its principal federal regulator as of June 30, 1999. To Be Well Capitalized Under 	 								 For Capital	 Prompt Corrective 								Actual	 Adequacy Purposes	 Action Provisions 							Amount 	Ratio 	Amount 	Ratio 	Amount 	Ratio 									 	(dollars in thousands) June 30, 1999 Total capital (to risk-weighted assets) 	$25,718 	13.9%	 $14,840 	8.0%	 $18,549 	10.0% Tier 1 capital (to risk-weighted assets) 	24,098 	13.0% 	7,420 	4.0%	 11,130 	6.0% Tier 1 capital (to average assets)		24,098 	8.7% 	11,098 	4.0%	 13,873 	5.0% December 31, 1998 Total capital (to risk-weighted assets) 	$24,484 	13.7% 	$14,314 	8.0% 	$17,893 	10.0% Tier 1 capital (to risk-weighted assets) 	22,960 	12.8% 	7,157 	4.0% 	10,736	 6.0% Tier 1 capital (to average assets)		22,960 	8.4% 	10,942 	4.0% 	13,678 	5.0% 		Management believes that the Bank is properly and adequately capitalized, as evidenced by these ratios as of June 30, 1999. The most recent notification from the Office of the Comptroller of the Currency categorized the Bank as "well capitalized" as of June 30, 1997 under the regulatory framework for prompt corrective action. 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 or is not assured, or where contractual amounts are used solely to determine cash flows to be exchanged. 	The Company's off- balance sheet financial instruments consist of commitments to extend credit and standby letters of credit. A majority of these commitments are written with variable interest rates. 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 inflation. 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. Year 2000 Issue 		The "Year 2000 issue" results from the fact that many computer programs use only two digits to represent a year, such as "98" to represent "1998," which means that in the Year 2000 such programs could incorrectly treat the Year 2000 as the year 1900. This issue has grown in importance as the use of computers and microchips has become more pervasive throughout the economy, and interdependencies between systems have multiplied. The issue must be recognized as a business problem, rather than simply a computer problem, because of the way its effects could ripple through the economy. The Year 2000 issue could materially and adversely affect the Company either directly or indirectly. This could happen if any of its critical computer systems or equipment containing embedded logic fail, if the local infrastructure (electric power, phone system, or water system) fails, if its significant vendors are adversely impacted, or if its borrowers or depositors are adversely impacted by their internal systems or those of their customers or suppliers. Failure of the Company to complete testing and renovation of its critical systems on a timely basis could have a material adverse effect on the Company's financial condition and results of operations, as could Year 2000 problems faced by others with whom the Company does business. 		Federal banking regulators have responsibility for supervision and examination of banks to determine whether each institution has an effective plan for identifying, renovating, testing and implementing solutions for Year 2000 processing and coordinating Year 2000 processing capabilities with its customers, vendors and payment system partners. Bank examiners are also required to assess the soundness of a bank's internal controls and to identify whether further corrective action may be necessary to assure an appropriate level of attention to Year 2000 processing capabilities. 		The Company has a written plan to address its risks associated with the impact of the Year 2000. The plan directs the Company's Year 2000 compliance efforts under the framework of a five-step program mandated by the Federal Financial Institutions Examination Council ("FFIEC"). The FFIEC's five-step program consists of five phases: awareness, assessment, renovation, validation and implementation. In the awareness phase, which the Company has completed, the Year 2000 problem is defined and executive level support for the necessary resources to prepare the Company for Year 2000 compliance is obtained. In the assessment phase, which the Company has also completed, the size and complexity of the problem and details of the effort necessary to address the Year 2000 issues are assessed. Although the awareness and assessment phases are completed, the Company continues to evaluate new issues as they arise. In the renovation phase, which the Company has completed, the required incremental changes to hardware and software components are installed. In the validation phase, which the Company has also completed, the hardware and software components are tested. In the implementation phase, which the Company has also completed, changes to hardware and components are brought on line and re-testing of such changes are completed. 		The Company has used both internal and external resources to identify, correct or reprogram, and test its systems for Year 2000 compliance. The Company has identified 25 vendor or software applications which management believes are material to its operations. Based on information received from its vendors and testing results, the Company believes that substantially all material applications of its operations are Year 2000 compliant as of June 30, 1999. The Company has not identified any material applications that the Company does not believe are fully Year 2000 compliant as of June 30, 1999. 		The Company is also making efforts to ensure that its customers, particularly its significant customers, are aware of the Year 2000 problem. The Company has either sent Year 2000 correspondence to, or met personally with its significant deposit and loan customers. A customer of the Company is deemed significant if the customer possesses either of the following characteristics: (1) total indebtedness to the Company of $500,000 or more, or (2) an average ledger deposit balance greater than $500,000. 		The Company has amended its credit authorization documentation to include consideration of the Year 2000 problem. The Company assesses its significant customer's Year 2000 readiness and assigns the customer an assessment of "low," "medium" or "high" risk. Risk evaluation of the Company's significant customers was completed in September 1998. The Company evaluates any depositor or lending customer determined to have a high or medium risk on an ongoing basis. Currently, 2% of loan customers are considered high risk and are being monitored closely for progress. Substantially all deposit customers are either low risk or compliant, the exception being those loan customers considered high risk. 		It is impossible to quantify the total potential cost of Year 2000 problems or to determine the Company's worst-case scenario in the event the Company's Year 2000 remediation efforts or the efforts of those with whom it does business are not successful, due to the wide range of possible issues and large number of variables involved. In order to deal with the uncertainty associated with the Year 2000 problem, the Company has developed a contingency plan to address the possibility that efforts to mitigate the Year 2000 risk are not successful either in whole or part. These plans include but are not limited to manual processing of information for critical information technology systems and having increased cash on hand. The contingency plan will be validated, after which the appropriate implementation training will be scheduled. 		The Company incurred and expensed $0.1 million of Year 2000 costs through June 30, 1999. These Year 2000-related costs have been funded from the continuing operations of the Company. These costs were approximately 7% of the Company's information systems budget. The Company currently estimates its costs to complete its Year 2000 compliance at approximately $0.3 million. This estimate includes the cost of purchasing hardware and software licenses, the cost of the time of internal staff and the cost of consultants. Testing is not expected to add significant incremental costs. Current Accounting Developments 		In June 1998, FASB issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS 133 is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. The Company does not invest in derivative instruments nor engage in hedging activities. 		Management does not believe the application of the Statement to transactions of the Bank that have been typical in the past will materially affect the Bank's financial position and results of operations. ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Sensitivity 		The Company uses asset liability management on its balance sheet to minimize the exposure of interest rate movements on its net interest income. The principal function of asset liability management is to manage the interest rate risk in the balance sheet by maintaining a proper balance, match and mix between rate-sensitive interest-earning assets and rate-sensitive interest-bearing liabilities. The term "rate-sensitive" refers to those assets and liabilities that are "sensitive" to fluctuations in interest rates. When interest rates fluctuate, earnings may be affected in many ways as the interest rates of assets and liabilities change at different times or by different amounts. 		The Company minimizes its interest rate risk in the balance sheet by emphasizing the origination of variable interest rate loans that have the ability to reprice overnight and maintaining a high balance of federal funds sold to offset the deposits that may potentially reprice overnight. 		A repricing gap is the difference between total interest-earning assets and total interest-bearing liabilities available for repricing during a given time interval. 	A positive repricing gap exists when total interest-earning assets exceed total interest-bearing liabilities within a repricing period and a negative repricing gap exists when total interest-bearing liabilities are in excess of interest-earning assets within a repricing period. 		Generally, a positive repricing gap increases net interest income in a rising rate environment and decreases net interest income in a falling rate environment. A positive repricing gap may increase net interest income in a falling rate environment depending on the amount of the excess repricing gap and extent of the drop in interest rates. A negative repricing gap tends to increase net interest income in a falling rate environment and decrease net interest income in a rising rate environment. The net interest income of the Company will benefit from a rising rate environment based on the positive repricing gap. 		The following table presents the repricing periods for interest- earning assets and interest-bearing liabilities and the related repricing gaps as of June 30, 1999: 											After one 									Due within	 Due within 	but within 	After 							 		0-3 months	 4-12 months	 five years	 five years Total 											 (dollars in thousands) Interest-earning assets (1)	 		$145,907 	$ 19,428 	$46,579 	$40,850 	$252,764 Interest-bearing liabilities 			156,791 	 6,689 	 1,434	 - 	164,914 Repricing gap					 (10,884) 	 12,739 	45,145 	40,850	 87,850 Cumulative repricing gap			 $(10,884) 	$ 1,855 	$47,000 	$87,850 Cumulative gap as a percent of earning assets 		(4.3%) 	0.7% 	18.6% 	34.8% <FN> (1)	Includes collateralized mortgage obligations in the one-year to five-year maturities based on the average expected lives. </FN> 		The Company had interest-earning assets of $145.9 million and interest-bearing demand and savings deposits of $131.6 million as of June 30, 1999 that are able to reprice overnight. 		The estimated effect on net interest income for a 10% decrease from prevailing interest rates over a one-year period would be a decline of approximately $0.9 million. PART II. OTHER INFORMATION ITEM 1.		LEGAL PROCEEDINGS 					None ITEM 2.		CHANGES IN SECURITIES 					None ITEM 3.		DEFAULTS UPON SENIOR SECURITIES 					None ITEM 4.		SUBMISSION OF MATTERS FOR VOTE OF SECURITIES HOLDERS A. The Annual Meeting of Stockholders was held on May 17, 1999. B. The Stockholders elected the following Directors for a one-year term during the Annual Meeting: Michael W. Abdalla Michael J. Christianson Kenneth J. Cosgrove Robert W. Creighton Charles R. Foulger Gerald R. Holte James E. Mahoney Wayne F. Miller San E. Vaccaro All votes, including those by proxy, resulted in the election of all management nominees. Additionally, there was no solicitation in opposition to management's nominees. C.		The Stockholders ratified the appointment of McGladrey & Pullen, LLP as independent public accountants for the Company for the year 1999 during the Annual Meeting. ITEM 5.		OTHER INFORMATION 					None ITEM 6.		EXHIBITS AND REPORTS ON FORM 8-K During the second quarter of 1999, the Company a filed a report on Form 8-K dated June 2, 1999. The Form 8-K was filed pursuant to Item 5 of the report, whereby the Company entered into a merger agreement with CVB Financial Corp. The Bank will be merged into Citizen Business Bank, a subsidiary of CVB at the close of the transaction. The transaction is expected to be accounted for using the "pooling-of-interests" method of accounting. 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:		/s/ KENNETH J. COSGROVE	 	 	Date: AUGUST 13, 1999 		 Kenneth J. Cosgrove, President 		 and Chief Executive Officer By:		/s/ ROBERT W. CREIGHTON	 		Date: AUGUST 13, 1999 		 Robert W. Creighton, Secretary 		 and Chief Financial Officer By:		/s/ JERRO M. OTSUKI			 	Date: AUGUST 13, 1999 		 Jerro M. Otsuki, Vice President 		 and Controller