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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of the Record Date with respect to the beneficial ownership of Company Common Stock by (i) each person who, to the knowledge of the Company, beneficially owned more than 5% of Company Common Stock, (ii) each director of the Company and (iii) each nominee for director, (iv) the Named Executive and (v) all executive officers and directors of the Company as a group.

COMMON STOCK BENEFICIALLY OWNED(1) -     NAME OF BENEFICIAL OWNER AND                  NUMBER           PERCENT OF      RELATIONSHIP WITH COMPANY                     OF SHARES         CLASS(2) -       --- Maurice J. Burford(11)                              963,395(9),(10)    11.5 Chairman of the Board, President and Chief Executive Officer

Arlen H. Andelson, Director                        154,303(3),(4)      2.58%

Sherman L. Andelson, Director                       58,756(5)            *

Mary Anne Chalker, Director                         68,029(3)          1.14%

James Reimann, Nominee for Director                458,687(9),(10)     5.5

Paul G. Ling, President,                            30,000(6)             * Chief Executive Officer and Director

Directors and Executive Officers as a group (5 persons)                           1,733,170(7)         20.72%

Investors Banking Corporation ("IBC")            7,097,640(7),(8)     82.6% Principal Shareholder

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THE FOLLOWING ARE BENEFICIAL OWNERS THROUGH THEIR STOCK OWNERSHIP IN IBC AND THEIR ABILITY TO EXCHANGE IBC STOCK FOR THE COMPANY COMMON STOCK:

John Tennant                      935,871(9),(10)           11.17 Fisher Capital                    917,482(9),(10)           10.9% Joseph Tennant                    462,429(9),(10)            5.5% Pacific University                462,429(9),(10)            5.5% Duane Hahn                        458,687(9),(10)            5.5% James Reimann, Director Nominee   458,687(9),(10)            5.5% ---


 * Less than 1%

1       Except as otherwise noted below, each person directly or indirectly has sole or shared voting and investment power with respect to the shares listed.

2       The percentage of each of these persons or group is based upon the total number of shares of the Common Stock outstanding plus the shares which the respective individual or group had the right to acquire within 60 days after the Record Date by the exercise of stock options vested pursuant to the Option Plan.

3       Includes 12,600 shares which each individual has the right to acquire within 60 days after the Record Date by the exercise of stock options vested pursuant to the Option Plan.

4       Includes 12,533 shares held by Union Bank as Trustee, FBO Arlen H.         Andelson under master IRA Rollover Plan, 2,125 shares held by Arlen H.         Andelson TR U2A Aug. 15 84 Education Trust No. 1 FBO Bobbie Jennifer Andelson 2,125 shares held by Arlen H. Andelson TR UA Aug 15 84 Education Trust No. 1 FBO Amy Alice Weirick Andelson, 7,788 shares held by Arlen H. Andelson & Michele W. Andelson TR UA Sep 12 86 Revocable Andelson Family Trust, 528 shares held by Michele W.        Andelson Cust. Amy Alice Weirick Andelson AGMA CA, 302 shares held on        account of Arlen H. and Michele Andelson TR US September 12, 1986 Revocable Andelson Family Trust with Sutro & Company, 115,122 shares held by Arlen Andelson Family Trust UTD July 23, 1980, of which Arlen H. Andelson is the trustee, and 180 shares held by Arlen H. Andelson.

5       Includes 15,004 shares which Mr. Sherman Andelson has the right to         acquire within 60 days after the Record Date by the exercise stock options vested pursuant to the Stock Option Plan.

6       Includes 30,000 shares which are vested and which Mr. Ling has the right to acquire within 60 days after the Record Date by the exercise of stock options vested pursuant to the Stock Option Plan.

7       Includes 82,804 shares which members of the group have a right to         acquire within 60 days after the Record Date by the exercise of stock options vested pursuant to the Stock Option Plan.

8       Includes 2,019,006 shares which IBC has the right to purchase within 60 days after the Record Date by the exercise of warrants issued in        connection with the Capital Infusion.

9       The address of IBC is 3735 Cherokee Drive South, Salem, Oregon 97308; of Mr. Maurice J. Burford is 1424 So. Crescent Heights Boulevard, #60, Los Angeles, California 90069; of Fisher Investment is 5619 D.T.C.        Parkway, Inglewood, Colorado 80111; of Messrs. John and Joe Tennant is         P.O. Box 1658, Portland, Oregon 97207; of Pacific University is         Pacific Crest Securities, 1100 Southwest 6th Avenue, Suite 1500, Portland, Oregon 97204; of Duane Hahn is 1100 Southwest 6th Avenue, Suite 1500, Portland, Oregon 97204; of Mr. James Reimann is Reimann Associates, 5309 River Road, Salem, Oregon 97303.

10      IBC is a bank holding company which owns 79% of Company Common Stock. The capitalization occurred in two phases. The first phase of the transaction (the "Initial Infusion") was completed on March 29, 1995 and consisted of an infusion of $3,028,509 through the purchase of        2,019,006 units of securities ("Units").

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Each Unit was comprised of two shares of the Company's common stock, no par value ("Common Stock"), and one warrant, exercisable for three years after issuance, to purchase Common Stock at $.75 per share. On March 30, 1995, IBC purchased an additional 346,874 Units for $520,311 (the "Second Infusion" and together with the Initial Infusion, the "Capital Infusion"). This resulted in a change of ownership, whereby IBC now owns 85% of BKLA Bancorp including warrants. The individuals used their personal funds to make the investment. IBC has the right to require that individuals receive the shares through distribution eight months after the execution of the Agreement and plan for Reorganization dated July 28, 1994. The shareholders/beneficial owners have the right to exercise and convert within sixty (60) days after the Record Date issued in connection with the capital infusion. IBC issued Preferred A and Preferred B Stock to its shareholders. Each of the beneficial owners received Preferred A and Preferred B Stock in IBC. Such preferred shares provides for Warrants to Preferred A shareholders on a 2:1 ratio, and to Preferred B shareholders on a 3:1 ratio. That is, for every 2 shares owned, Class A Preferred receives one Warrant, and for every 3 shares owned, Class B Preferred shareholders receive one Warrant. Maurice J. Burford owns 664,642 shares beneficially of BKLA through 201,250 shares of Class A Preferred and 87,500 shares of Class B Preferred of IBC. John J. Tennant owns 645,653 shares beneficially of BKLA through 195,500 shares of Class A Preferred and 85,000 shares of Class B Preferred of IBC. Fisher Capital Partners, Ltd. owns 632,967 shares beneficially of BKLA through 191,659 Class A Preferred and 83,330 shares Class B Preferred of IBC. Pacific University owns 319,028 shares beneficially of BKLA through 96,600 shares Class A Preferred and 42,000 shares Class B Preferred of IBC. Joseph P. Tennant owns 319,028 shares beneficially of BKLA through 96,600 Class A Preferred and 42,000 shares Class B Preferred of IBC. James Reimann/Vintage owns 316,446 shares beneficially of BKLA through 95,818 shares of Class A Preferred and 41,660 shares of Class B Preferred of IBC. Duane Hahn owns 316,446 shares beneficially of BKLA through 95,818 shares of Class A Preferred and 41,660 shares of Class B Preferred of IBC.

11 Mr. Burford is the Chairman of the Board of IBC.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS. Six persons were elected as directors for a one year term at annual shareholder meetings of BKLA and the Bank that were held in November 1993. One of the directors, Richard Kaplan, died subsequent to the Annual Meeting. Irving Fuller has resigned effective April 20, 1995. Maurice J. Burford has joined the Board of Directors of the Company and the Bank and became the Chairman and Chief Executive Officer of both institutions effective March 31, 1995.

The following table sets forth certain information, as of June 30, 1995, with respect to those persons who are currently serving as directors of BKLA. Each of these persons also currently serves as a director of the Bank.

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# OF        % OF                                                    SHARES      CLASS OF                                                    OWNED      RESULTANT NAME                AGE    TITLE     SALARY         BKLA        BANK        SUMMARY OF OCCUPATION -                 ---    -     --           -     -- M.J. Burford         58   Board      $100,000      664,642       11.07%      Chairman of the Board oF IBC Chairman, per annum                               February 1993, First President                                         Security Bank of Oregon & CEO                                             President, CEO & Chairman, currently a Board Member; May 1992 to Present; Purchased control of Colonial Bank.

Sherman Andelson(1) 70   Board         -0-         58,756         .98%      Board Member of Bank and Member                                            Company since inception 1981; Certified Public Accountant; Chairman of the Board of the Bank and the Company since July 1987 and January 1988, respectively, to the present; Interim President and Chief Executive Officer of the Company and the Bank, October 1992 to March 1993.

Arlen Andelson(1)   51   Board         -0-        154,303        2.58%      Board Member of Bank and Member                                            Company since inception 1981; Senior Partner of Andelson & Andelson, a Law Corporation; Principal of Andelson Properties, a real estate investment and property management company.

Mary Ann Chalker    66   Board         -0-         68,029        1.14%      Board Member of Bank since inception Member                                            1981; Insurance Broker; President of                                                                             LFC Insurance Brokers & Agents, Inc.

James Reimann       55   Nominee       -0-        316,616        5.29%      President of Reimann Associates, a                          Board                                              real estate development and sales Member                                            company, since 1987; Director of                                                                             R.B. Rubber since 1995.

Directors & Executive                           1,260,158        21.6 Officers as a group (5 persons)

IBC (Principal Shareholder)                     7,097,640 82.6(3)

1 Arlen H. Andelson and Sherman L. Andelson are brothers 2 There were Stock Option Grants as follows in 1994: 1900 to nonemployee Directors. 3 See footnotes under Security Ownership of Certain Beneficial Owners and Management.

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EXECUTIVE COMPENSATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATIONS. The following table sets forth certain summary information concerning compensation paid or accrued by the Company to or on behalf of the Company's Chief Executive Officer (the "Named Executive") as of December 31, 1994 for each of the fiscal years ended December 31, 1994, and 1993. No other person serving as an executive officer of the Company as of December 31, 1994 earned a salary and a bonus in excess of $100,000 in the fiscal year ended December 31, 1994.

SUMMARY COMPENSATION TABLE

Long Term Compensation ---                                   Annual Compensation                Awards                Payout - --            -                                                                      Restricted Name and Principal                                   Other Annual      Stock     Options     LTIP      All Other Position        Year     Salary($)  Bonus($)  Compensation($)  Awards($)   SARs(#)   Payout($)  Compensation - --         -    ---  --  ---   -  Paul G. Ling           1994     145,000    11,788          0               0          0          0           0 President and Chief Executive Officer     1993     130,872       0            0               0        40,000       0           0

1 Mr. Ling was appointed President and Chief Executive Officer of the Company on March 24, 1993. Prior to such time, Mr. Ling was not employed by the Company or the Bank. Mr. Ling is no longer employed by the Bank or the Company effective June 2, 1995. Pursuant to Mr. Ling's employment agreement with the Company and the Bank, Mr. Ling received $90,043.34 in connection with his departure from the Bank and the Company. Mr. Ling received $1450.08 in 1994 and $604.20 in 1995 as a 401(k) contributions. Mr. Maurice J. Burford has joined the Company and the Bank as their Chairman and Chief Executive Officers as of March 31, 1995. His annual salary is $100,000, there is not an employment agreement with Mr. Burford.

AGGREGATED OPTION (1) EXERCISES IN FISCAL YEAR 1994 AND FY-END OPTION VALUES

Values of Unexercised In-the Share                         Number of Unexercised                 Money Options at 12/31/94 Acquired                       Options at 12/31/94(#)                           $ on        Value        --      -- Exercise    Realize                                                                  Unexercisable Name               #          ($)         Exercisable      Unexercisable (1)      Exercisable           (1)  (2) -                -      ---      -              -- Paul G. Ling       0             0           $10,000            $30,000                N/A                   N/A

1. The remaining 10,000 shares will become exercisable on March 1, 1996. 2. The closing price of the Common Stock on December 31, 1994 was $.38

DIRECTOR COMPENSATION. During 1994, the Company paid Mr. Sherman Andelson, the Chairman of the Board, a $1,300 per month automobile allowance. The Company also paid Mr. Sherman Andelson $18,000 for his assistance in securing additional capital for the Bank. Additionally each of the non-officer directors were granted options to purchase 1,900 shares under the Stock Option Plan and received medical insurance benefits comparable to the Bank's employees. Except as provided above, during the fiscal year ended December 31, 1994, the Company did not compensate the directors of the Company and the Bank.

CERTAIN TRANSACTIONS. Some of the directors, officers and principals shareholders of the Company and the Bank, and the businesses with which they are associated, were customers of,

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and had banking transactions with, the Bank in the ordinary course of the Bank's business during 1994, and the Bank expects to have such banking transactions in the future. All loans and commitments to lend included in such transactions were made incompliance with applicable laws and on substantially the same terms, including interest rates, collateral and repayments terms, as those prevailing at the time for comparable transactions with other persons of similar credit worthiness and, in the opinion of the management of the Bank, did not involve more than a normal risk of collectibility or present other unfavorable features. As of June 30, 1995 the aggregate principal amount of extensions of credit to directors and executive officers and related interests was $1,604,000 which represents approximately 21% of the Bank's then shareholder equity.

The Bank leases its West Hollywood Regional Office from the Arlen Andelson Family Trust, of which Arlen H. Andelson, a director of BKLA and the Bank, is trustee. The lease provided for an initial term of five years ending in June 1987 with five consecutive five-year renewal options. The Bank has exercised its second five year renewal option. The lease provides for monthly rent of $13,400 during the present term and increased rent in each rent in any renewal period may not exceed 150% of the rent in the previous five year term. The total lease payments in 1994 by the Bank under this lease were $161,000. The Bank anticipates that lease payments in 1995 will total approximately $161,000. Prior to entering into such lease, the Board of Directors of the Bank determined that the premises were the best available for the Bank and that the terms of the agreement were no less favorable to the Bank than could have been obtained in a similar transaction with a person unaffiliated with the Bank.

On December 15, 1984, the Company entered into a sublease with Andelson & Andelson, a Law Corporation, as the sublessor and Hilldale Investment Group, Ltd., a California limited partnership, as the landlord (the"Sublease"). Arlen H. Andelson, as trustee of the Arlen Andelson Family Trust, Arlen Andelson, individually, and Sherman L. Andelson own or control a 75% equity interest in Hilldale Investment Group, Ltd. Immediately after the Company executed the Sublease, it assigned all its interest therein to the Bank. The sublease expired and BKLA vacated the premises in December 1994. The total payments in 1994 under the Sublease were $188,999. Prior to entering into the Sublease, the Board of Directors of the Company determined that the premises were the best available for the Company and that the terms of the Sublease were no less favorable to the Company than could have been obtained in a similar transaction with any person or entity not affiliated with the Company.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES ACT OF 1934. Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers and directors, and persons who own more than ten percent of a registered class of BKLA's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (the "Commission") and the NASDAQ National Market System. Executive officers, directors and greater than ten-percent shareholders are required by the Commission regulations to furnish the Company with copies of all Section 16(a) forms they file.

Based solely on a review of the copies of such forms furnished to the Company, or written representations that no Forms 5 were required, the Company believes that during the fiscal year ended December 31, 1994 all Section 16(a) filing requirements applicable to its executive offices, directors and greater than ten-percent beneficial owners were complied with.

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INDEPENDENT AUDITORS

The Board of Directors has not yet selected its independent auditor for the fiscal year ending December 31, 1995. Grant Thornton LLP, the Company's independent auditors for the fiscal year ended December 31, 1994, performed audit services that included the examination of the consolidated financial statements. All professional services rendered during 1994 were furnished at customary rates and terms. Representatives of Grant Thornton, LLP will be present at the Meeting, will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions from shareholders.

The Company replaced its former accountants, Deloitte & Touche LLP ("Deloitte"), with Grant Thornton LLP effective as of November 2, 1994. The decision to change independent auditors was recommended by the Audit Committee and approved by the Board of Directors. The decision to dismiss Deloitte and engage new auditors was based primarily on the Company's efforts to control accounting costs. Except as provided below, Deloitte's report on the financial statements for both 1993 and 1992 contained no adverse opinion or disclaimer of opinion, nor was qualified or modified as to uncertainty, audit scope or accounting principles.

Deloitte's 1993 report stated that the Company and its wholly owned subsidiary, the Bank did not meet the minimum capital requirements prescribed by applicable regulatory agencies and that the Bank's capital was impaired under the California Financial Code. The report also stated that the Company had entered into a memorandum of understanding with the Federal Reserve Bank of San Francisco and that the Bank was operating under a cease and desist order with the FDIC. Based on these factors, Deloitte expressed substantial doubt about the Company's ability to continue as a going concern.

Deloitte's 1992 report stated that the Bank had entered into a memorandum of understanding with the FDIC, pursuant to which the Bank was required to increase its capital to certain minimum levels. The report also stated that the financial impact of the Bank's inability to comply with the terms of the memorandum could not be determined and, accordingly, no adjustments to the financial statements were made in such report.

During 1992 and 1993 and up to the date that Deloitte was replaced by the Company, there were no disagreements with Deloitte on any matter of accounting principles or practices, financial statement disclosure or auditing scope of procedure, which disagreements, if not resolved to the satisfaction of Deloitte, would have caused it to make a reference to the subject matter of the disagreement in connection with its reports. During the same period, there were also no reportable events involving the Company and Deloitte.

PROPOSALS OF SHAREHOLDERS

Under certain circumstances, shareholders are entitled to present proposals at shareholder meetings. Any such proposal to be included in the Proxy Statement for the Company's 1995 Annual Meeting of Shareholders (or the Bank's 1996 Annual Meeting of Shareholders if the Merger is approved and consummated) must be submitted by a shareholder so that it is received prior to April 26, 1996 in a form that complies with applicable regulations.

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UPON WRITTEN REQUEST TO KAREN B. SITEMAN, VICE-PRESIDENT AND GENERAL COUNSEL AT 9601 WILSHIRE BOULEVARD, CALIFORNIA 90210. THE COMPANY WILL PROVIDE FREE OF CHARGE TO ANY SHAREHOLDER HEREBY SOLICITED, A COPY OF THE COMPANY'S 1994 ANNUAL

REPORT ON FORM 10-K (WITHOUT EXHIBITS) INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. IF A SHAREHOLDER DESIRES COPIES OF THE EXHIBITS TO THE REPORT, THEY WILL BE PROVIDED UPON PAYMENT BY THE SHAREHOLDER OF THE COST OF FURNISHING THE EXHIBITS. A COPY OF THE BANK'S ANNUAL DISCLOSURE STATEMENT PREPARED PURSUANT TO PART 350 OF THE FEDERAL DEPOSIT INSURANCE CORPORATION'S RULES AND REGULATIONS WILL BE FURNISHED UPON REQUEST BY WRITING TO THE CONTROLLER AT THE ADDRESS SHOWN ABOVE OR BY CALLING THE BANK AT (310) 843-1474.

INDEPENDENT AUDITORS

The consolidated financial statements of the Company and its subsidiary, the Bank, as of December 31, 1994 and for each of the three years in the period ended December 31, 1994 included in this prospectus, have been audited by independent auditors.

The financial statements as of and for the year ended December 31, 1994 were audited by Grant Thornton LLP which report is incorporated herein by reference and appears in Exhibit "B." Their report expresses an unqualified opinion.

The financial statements as of December 31, 1993 included in this prospectus were audited by Deloitte & Touche LLP, which report is incorporated by reference herein and appears as Exhibit "C" and has been so included in reliance upon the report of such firm given upon their authority as independent auditors in accounting and auditing.

OTHER BUSINESS

The Board of Directors knows of no other business which will be presented for consideration at the Meeting other than as stated in the Notice of the Meeting. If, however, other matters are properly brought before the Meeting, it is the intention of the Proxy holders named in the accompanying form of Proxy to vote the shares represented thereby at their discretion, and authority to do so is included in the Proxy.

DATED: August 30, 1995            BANK OF LOS ANGELES

/s/ MAURICE J. BURFORD

MAURICE J. BURFORD Chief Executive Officer

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EXHIBIT A PLAN OF REORGANIZATION AND MERGER AGREEMENT

This Plan of Reorganization and Merger Agreement ("Agreement") is entered into as of this 11th day of July, 1995 by and between Bank of Los Angeles (the "Bank") and BKLA Bancorp ("Bancorp").

RECITALS AND UNDERTAKINGS

A. The Bank is a California banking corporation with its head banking office in West Hollywood, California. Bancorp is a corporation duly organized and existing under the laws of the State of California with it principal offices in West Hollywood, California, and owns all of the outstanding Capital Stock of the Bank.

B. The Boards of Directors of the Bank and Bancorp have, respectively, approved this Agreement and authorized its execution.

C. The parties intend by this Agreement to set forth the terms and conditions of a "reorganization" under Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "Code").

NOW, THEREFORE, in consideration of the mutual agreements of the parties contained herein, the parties hereby agree as follows:

SECTION 1 - GENERAL

1.1 THE MERGER. At the Effective Time (as hereinafter defined), Bancorp shall be merged into the Bank (the "Merger"), and the Bank shall be the surviving corporation (the "Surviving

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Corporation"), and its name shall continue to be "Bank of Los Angeles" and the separate corporate existence of Bancorp shall cease.

1.2 EFFECTIVE DATE. This Merger Agreement shall become effective when this Agreement, together with all requisite accompanying certificates, shall have been filed with the Secretary of the State of California in accordance with Section 1103 of the California General Corporation Law (the "Effective Time").

1.3 ARTICLES OF INCORPORATION AND BYLAWS. At the Effective Time, the Articles of Incorporation, as amended and Bylaws, as amended of the Bank shall be and remain the Articles of Incorporation and Bylaws of the Surviving Corporation until altered, amended or repealed, the certificate of authority of the Bank issued by the Superintendent of Banks of the State of California shall be and remain the certificate of authority of the Surviving Corporation, and the Bank's insurance of deposits coverage by the Federal Deposit Insurance Corporation shall be and remain the deposit insurance of the Surviving Corporation.

1.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. At the Effective Time, the directors and officers of the Bank immediately prior to the Effective Time shall be and remain the directors and officers of the Surviving Corporation. Directors of the Surviving Corporation shall serve until the next Annual Meeting of Shareholders of the Surviving Corporation or until such time as their successors are elected and have qualified.

1.5 EFFECT OF THE MERGER.

a. ASSETS AND RIGHTS. At and after the Effective Time, all rights, privileges, franchises and property of Bancorp, and all of its debts and liabilities due or to become due to Bancorp, including things in action and every interest or asset of conceivable value or benefit, shall be deemed fully and finally and without any right of reversion transferred to and vested in the Surviving Corporation without further act or deed, and the Surviving Corporation shall have and hold the same in its own right as fully as the same was possessed and held by Bancorp.

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b. LIABILITIES. At and after the Effective Time, all debts, liabilities, and obligations due or to become due of, and all claims or demands for any cause existing against Bancorp shall be and become the debts, liabilities, obligations of, and the claims and demands against, the Surviving Corporation in the same manner as if the Surviving Corporation had itself incurred or become liable for them

c. CREDITORS' RIGHTS AND LIENS. At and after the Effective Time, all rights of creditors and all liens upon the property of Bancorp and the Bank shall be preserved unimpaired, provided that such liens upon the property of Bancorp and the Bank shall be limited to the property affected by the liens immediately prior to the Effective Time.

d. PENDING ACTIONS. At and after the Effective Time, any action or proceeding pending by or against Bancorp, but may be prosecuted to judgment, which shall bind the Surviving Corporation may be substituted for Bancorp.

e. STOCK OPTIONS. (a) At and as of the Effective Time, and subject to the prior consent of the Superintendent of Banks of the State of California (the "Superintendent"), the Surviving Corporation shall assume each and every outstanding option ("Bancorp Stock Option") to purchase shares of common stock, no par value of Bancorp ("Bancorp Common Stock") and all obligations of Bancorp under Bancorp's 1988 Stock Option Plan (the "1988 Plan"). Each and every Bancorp Stock Option so assumed by the Surviving Corporation under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the 1988 Plan and in the other documents governing such Bancorp Stock Option immediately prior to the Effective Time, subject to such changes in the outstanding options and the 1988 Plan as may be necessary to conform the options and the plan to the rules and regulations of the Superintendent governing stock options and except that: (i) such Bancorp Stock Option shall be exercisable for that number of whole shares of common stock, no par value of the Surviving Corporation ("Surviving Corporation Common Stock") equal to the product of (A) the number of shares of Bancorp Common Stock that were purchasable under such 1988 Option immediately prior to the Effective Time multiplied by (B) .20, rounded down to the nearest whole number of shares of

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Surviving Corporation Common Stock; and (ii) the per share exercise price for the shares of Surviving Corporation Common Stock issuable upon exercise of such Bancorp Stock Option shall be equal to the product of (A) the exercise price per share of Bancorp Common Stock at which such Bancorp Stock Option was exercisable immediately prior to the Effective Time multiplied by (B) 5. After the Effective Time, the Surviving Corporation shall issue to each holder of an outstanding Bancorp Stock Option a document evidencing the assumption of such Bancorp Stock Option by the Surviving Corporation pursuant to this Section 1.5(e).

(b) The Surviving Corporation shall comply with the terms of the 1988 Plan and insure, to the extent required by, and subject to the provisions of, the 1988 Plan, that Bancorp Stock Options which qualify as incentive stock options prior to the Effective Time qualify as incentive stock options of the Surviving Corporation after the Effective Time.

f. WARRANTS. At and as of the Effective Time, all outstanding warrants of the Company shall be deemed to be warrants of the Surviving Corporation.

1.6 FURTHER ASSURANCES. The Bank and Bancorp each agree that at any time, or from time to time, as and when requested by the Surviving Corporation, or by its successors and assigns, it will execute and deliver, or cause to be executed and delivered in its name by its last acting officers, or by the corresponding officers of the Surviving Corporation, all such conveyances, assignments, transfers, deeds or other instruments, and will take or cause to be taken such further or other action as the Surviving Corporation, its successors or assigns may deem necessary or desirable in order to evidence the transfer, vesting or devolution of any property right, privilege or franchise to vest or perfect in or confirm to the Surviving Corporation, its successors and assigns, title to and possession of all the property, rights, privileges, powers, immunities, franchises and interests referred to in this Section 1 and otherwise to carry out the intent and purposes hereof.

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SECTION 2 - CAPITAL STOCK OF THE SURVIVING CORPORATION

2.1 BANCORP COMMON STOCK. At the Effective Time, each share of Bancorp Common Stock issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holders thereof, be automatically canceled and cease to be an issued and outstanding share of Bancorp Common Stock and shall be converted into .20 of a share of Surviving Corporation Common Stock.

2.2 BANK COMMON STOCK. At the Effective Time, each and every share of common stock, no par value, of the Bank ("Bank Common Stock") held by Bancorp shall, by virtue of the Merger and without any action on the part of Bancorp, be canceled.

2.3 FRACTIONAL SHARES. Notwithstanding any other provisions of this Agreement to the contrary, no fractional shares of Surviving Corporation Common Stock shall be issued in the Merger. In lieu thereof, each holder of Bancorp Common Stock who would otherwise be entitled to receive fractional shares (after aggregating all fractional shares of Surviving Corporation Common Stock, to be received by such holder) shall receive an amount in cash equal to the product (calculated to the nearest whole cent), obtained by multiplying (a) the product of (i) 5 and (ii) the Average Closing Price (as defined below) by (b) the fraction of the share of Surviving Corporation Common Stock to which such holder would otherwise be entitled.

2.4 EXCHANGE OF STOCK.

a. EXCHANGE RATIO. At the Effective Time, the shareholders of record of Bancorp shall be entitled to receive and shall be allocated .20 of a share of Surviving Corporation Common Stock for each share of Bancorp Common Stock.

b. EXCHANGE AGENT. At the Effective Time, each shareholder of an outstanding certificate or certificates which prior thereto represented shares of Bancorp Common Stock may surrender the same to U.S. Stock Transfer, exchange agent for all such shareholders (the "Exchange Agent"), and such shareholders shall be entitled upon

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such surrender to receive, in exchange therefor, certificates representing the number of shares of Surviving Corporation Common Stock into which the shares of Bancorp Common Stock represented by the certificate or certificates so surrendered shall have been converted. Until so surrendered, each outstanding certificate which, prior to the Effective Date, represented Bancorp Common Stock, shall be deemed for all corporate purposes (including the payment of dividends and issuance of any subscription rights) to evidence ownership of the number of shares of Surviving Corporation Common Stock into which the shares of Bancorp Common Stock (which were, prior to such Effective Date, represented thereby) shall have been so converted.

c. EXCHANGE FUND. As of the Effective Time, Bank shall deposit with the Exchange Agent for the benefit of the holders of shares of Bancorp Common Stock, for exchange in accordance with this Section 2.4 through the Exchange Agent, certificates representing the shares of Surviving Corporation Common Stock (such shares of Surviving Corporation Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Exchange Fund") issuable pursuant to Section 2.1 in exchange for shares of Bancorp Common Stock outstanding immediately prior to the Effective Time. To the extent Surviving Corporation owns shares of Surviving Corporation Common Stock as treasury stock, such shares may be deposited into the Exchange Fund.

d. EXCHANGE PROCEDURES. As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding shares of Bancorp Common Stock (the "Certificates") whose shares were converted into the right to receive shares of Surviving Corporation Common Stock pursuant to Section 2.1: (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as Surviving Corporation and Bancorp may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for certificates representing shares of Surviving Corporation Common Stock. Upon surrender of a Certificate for cancellation to the Exchange Agent or to such other agent or agents as may be

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appointed by Surviving Corporation, together with such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole shares of Surviving Corporation Common Stock which such holder has the right to receive pursuant to the provisions of this Section 2.4, and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of Bancorp Common Stock which is not registered in the transfer records of Bancorp, a certificate representing the proper number of shares of Surviving Corporation Common Stock may be issued to a transferee if the Certificate representing such Bancorp Common Stock is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid.

e. CASH PAYMENT WITH RESPECT TO UNEXCHANGED SHARES. No cash payment in lieu of fractional shares shall be paid to any holder of Company Common Stock pursuant to Section 2.3 until the holder of record of such Certificate shall surrender such Certificate. Subject to the effect of applicable laws, following surrender of any such Certificate, there shall be paid to the record holder of the certificates representing whole shares of Surviving Corporation Common Stock issued in exchange therefor, without interest, the time of such surrender, the amount of any cash payable in lieu of a fractional share of Surviving Corporation Common Stock to which such holder is entitled pursuant to Section 2.3.

f. NO FURTHER OWNERSHIP RIGHTS IN BANCORP COMMON STOCK. All shares of Surviving Corporation Common Stock issued upon the surrender for exchange of shares of Bancorp Common Stock in accordance with the terms hereof (including any cash paid pursuant to Sections 2.3) shall be deemed to have been issued in full satisfaction of all rights pertaining to such shares of Bancorp Common Stock, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Bancorp Common Stock which were outstanding immediately prior to the Effective Time. If, after the Effective time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Agreement.

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g. NO FRACTIONAL SHARES. Notwithstanding any other provision of this Agreement to the contrary, neither certificates nor scrip representing fractional shares of Surviving Corporation Common Stock shall be issued upon the surrender for exchange of Certificates, and such fractional share interests will not entitle the owner thereof to vote or to any rights of a shareholder of Surviving Corporation. From time to time at the request of the Exchange Agent after the determination of amounts of cash to be paid to holders of Bancorp Common Stock in lieu of any fractional share interests, Surviving Corporation shall make available such amounts to the Exchange Agent.

h. TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund which remains undistributed to the shareholders of Bancorp for six months after the Effective Time shall be delivered to Surviving Corporation, upon demand, and any shareholders of Bancorp who have not theretofore complied with this Section 2.4 shall thereafter look only to Surviving Corporation for payment of their claim for Surviving Corporation Common Stock, any cash in lieu of fractional shares of Surviving Corporation Common Stock and any dividends or distributions with respect to Surviving Corporation Common Stock.

i. AVERAGE CLOSING PRICE. The term "Average Closing Price" shall have the following meaning: the average of the closing bid and ask prices of Bancorp Common Stock reported on the OTC Bulletin Board and as confirmed with Bancorp's principal market maker, Black and Company, on the trading day (whether or not there were any trades in Bancorp Common Stock) (rounded to four digits to the right of the decimal point) prior to the day on which the Effective Time occurs. For purposes of determining the Average Closing Price, the term "trading day" shall mean a day on which trading generally takes place on the OTC Bulletin Board and on which trading in Bancorp Common Stock has not been halted or suspended.

j. NO LIABILITY. Neither Bancorp nor Surviving Corporation shall be liable to any holder of shares of Bancorp Common Stock or Surviving Corporation Common Stock, as the case may be, for such shares (or dividends or distributions with respect thereto) or cash from the Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

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SECTION 3 - APPROVALS

3.1 SHAREHOLDER APPROVAL. This Agreement shall be submitted to the shareholders of the Bank and Bancorp for ratification approval in accordance with the applicable provisions of law.

3.2 REGULATORY APPROVALS. The parties shall proceed expeditiously and cooperate fully in the procurement of any other consents and approvals and in the taking of any other action, and the satisfaction of all other requirements prescribed by law or otherwise necessary or desirable for consummation of this merger and plan or reorganization on the terms herein provided, including, without limitation, those consents and approvals referred to in Paragraph 4.1(b).

SECTION 4 - CONDITIONS PRECEDENT, TERMINATION, AMENDMENT AND PAYMENT OF EXPENSES

4.1 CONDITIONS PRECEDENT TO THE MERGER. Consummation of the merger is conditional upon:

a. Ratification and approval of this Agreement by the shareholders of the Bank and Bancorp, as required by law;

b. Obtaining all other consents and approvals, taking all actions, and satisfaction of all other requirements prescribed by law which are necessary for consummation of the merger, including, but not limited to, approval of the Federal Deposit Insurance Corporation, the Superintendent, and the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended;

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c. Obtaining all consents or approvals, governmental or otherwise, which are, or in the opinion of counsel for the Bank and Bancorp may be, necessary to permit or enable the Surviving Corporation, upon and after the Effective Time, to conduct all or any part of the business and activities of the Bank prior to the Effective Time, in the manner in which such activities and business are then conducted.

d. Receiving an opinion of Bancorp's independent public accountants, Grant Thornton LLP, in form and substance satisfactory to both Bancorp and the Bank, to the effect that: the merger of Bancorp with and into the Bank and the exchange of shares of Bancorp Common Stock for shares of Surviving Corporation Common Stock as provided for herein will be considered a reorganization within the meaning of Section 368(a)(1)A) of the Code; no gain or loss will be recognized by Bancorp pursuant to consummation of the Merger; and, no gain or loss will be recognized by the shareholders of Bancorp upon the exchange of their shares of Bancorp Common Stock for shares of Surviving Corporation Common Stock, as provided for herein; and

e. Performance by each party hereto of all its obligations hereunder to be performed prior to the Effective Time.

4.2 TERMINATION OF THE MERGER. If any condition in Paragraph 4.1 has not been fulfilled, or, if in the opinion of a majority of the Board of Directors of either of the parties:

a. Any action, suit, proceeding or claim has been instituted, made or threatened relating to the proposed merger which makes consummation of the merger inadvisable; or

b. For any other reason consummation of the Merger is inadvisable;

then this Agreement may be terminated by any time before the Effective Time. Upon termination, this Agreement shall be void and of no further effect, and there shall be no liability by reason of this Agreement or the termination thereof on the part of the parties or their respective directors, officers, employees, agents or shareholders, except as provided in Section 4.4 hereof.

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4.3 AMENDMENT OF THE AGREEMENT. Bancorp and the Bank, by action of their respective Boards of Directors, may amend the Agreement before or after approval by Bancorp's shareholders, provided that any such amendment made after approval of Bancorp's shareholders is obtained may not affect the rights of Bancorp's shareholders in a manner which is materially adverse to such shareholders without their further approval.

4.4 EXPENSES OF THE MERGER. Each party hereto shall pay its own costs and expenses in connection with this Agreement and the transactions covered and contemplated hereunder.

SECTION 5 - MISCELLANEOUS

5.1 ASSIGNMENT. Neither party shall have the right to assign its rights or obligations under this Agreement.

5.2 EXECUTION. This Agreement may be executed in counterparts, each of which when so executed shall be deemed an original and such counterparts shall together constitute one and the same instrument.

5.3 GOVERNING LAW. This Agreement is made and entered into in the State of California and the laws of said State shall govern the validity and interpretation hereof.

5.4 ENTIRE AGREEMENT. This Agreement embodies the entire understanding of the parties, and there are no further or other agreement or understandings, written or oral, in effect

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between the parties relating to the subject matter hereof. This Agreement supersedes all prior arrangements or understandings between the parties with respect to the subject matter hereof.

IN WITNESS WHEREOF, the parties have caused this Plan of Reorganization and Merger Agreement to be Executed by their duly authorized officers as of the day and year first written above.

BANK OF LOS ANGELES

By: ________________________

Maurice J. Burford Its: President

By: ________________________ Beverly A. Dyck Its: Secretary

BKLA BANCORP

By: ________________________

Maurice J. Burford Its: President

By: ________________________ Beverly A. Dyck Its: Secretary

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EXHIBIT B

[GRANT THORNTON LLP LETTERHEAD]

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders of BKLA Bancorp and Subsidiary West Hollywood, California

We have audited the accompanying consolidated balance sheet of BKLA Bancorp and subsidiary (the "Company") as of December 31, 1994, and the related consolidated statements of operations, changes in shareholders' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we place 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of BKLA Bancorp and its subsidiary as of December 31, 1994, and the consolidated results of their operations and their consolidated cash flows for the year then ended in conformity with generally accepted accounting principles.

B-1

As discussed in Note B to the consolidated financial statements, at December 31, 1994, the Company and its subsidiary, Bank of Los Angeles (the "Bank"), are not in compliance with enforcement actions entered into with the Federal Deposit Insurance Corporation, Federal Reserve Board and the California State Banking Department covering a wide range of business operations and procedures. The Federal Deposit Insurance Corporation, Federal Reserve Board and the California State Banking Department have not indicated what, if any, additional regulatory sanctions could be imposed. The financial statement impact, if any, of regulatory sanctions that may result from the failure of the Company and the Bank to comply with the enforcement actions cannot presently be determined. Accordingly, no adjustments that may result from the ultimate resolution of this uncertainty have been made in the accompanying consolidated financial statements.

/s/ GRANT THORNTON LLP

Los Angeles, California January 27, 1995 (except for the third, fourth and ninth paragraphs of Note B  and Note P, as to which the date is  March 31, 1995)

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EXHIBIT C

[DELOITTE & TOUCHE LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of BKLA Bancorp and Subsidiary West Hollywood, California:

We have audited the accompanying consolidated balance sheets of BKLA Bancorp and subsidiary (the "Company") as of December 31, 1993, and the related consolidated statements of operations, changes in shareholders' equity, and cash flows for each of the two years in the period ended December 31, 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of BKLA Bancorp and its subsidiary as of December 31, 1993, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 1993 in conformity with generally accepted accounting principles.

The accompanying 1993 consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note B to the consolidated financial statements, at December 31, 1993, the Company and its subsidiary, Bank of Los Angeles (the "Bank"), did not meet their minimum capital requirements prescribed by the Federal Deposit Insurance Corporation, Federal Reserve Board and the California State Banking Department. The Company has entered into a Memorandum of Understanding (the "MOU") with the Federal Reserve Bank of San Francisco. The Bank is operating under a Cease and Desist Order (the "Order") with the Federal Deposit Insurance Corporation that, among other things, requires it to meet prescribed capital requirements by no later than July 18, 1994. In addition, the Bank's capital is impaired under the California Financial Code of the State of California at December 31, 1993. If the Company or the Bank is unable to comply with the terms of the MOU or the Order, or cure the capital impairment, one or more regulatory sanctions may result, including restrictions as to the source of deposits, the appointment of a conservator or receiver and an assessment on, or sale of, the Bank's common stock.

C-1 [DELOITTE & TOUCHE TOHMATSU INTERNATIONAL LETTERHEAD]

These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note B. The consolidated financial statements do not include any adjustments relating to the recovery of reported asset amounts that might result from the outcome of this uncertainty.

/s/ DELOITTE & TOUCHE LLP

March 25, 1994 (April 11, 1994 as to Note B)

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PRELIMINARY COPY

REVOCABLE PROXY BKLA BANCORP ANNUAL MEETING OF SHAREHOLDERS - SEPTEMBER 20, 1995

The undersigned shareholder(s) of BKLA Bancorp (the "Company") hereby nominates, constitutes, and appoints Maurice J. Burford, Arlen Andelson, and Sherman Andelson each of them, the attorney, agent, and proxy of the undersigned, with full power of substitution, to vote all stock of the Company which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Company to be held at the Company's Beverly Hills branch, 9601 Wilshire Boulevard, Beverly Hills, California 90210 on September 20, 1995, at 5:30 p.m., and any and all adjournments thereof, as fully and with the same force and effect as the undersigned might or could do if personally present thereat, as follows:

1. PROPOSAL TO APPROVE THE MERGER OF BANK OF LOS ANGELES WITH AND INTO BKLA BANCORP PURSUANT TO THE TERMS OF THE PLAN OF REORGANIZATION AND MERGER AGREEMENT, DATED AS OF JULY 11, 1995, BETWEEN BANK OF LOS ANGELES AND BKLA BANCORP. [ ] FOR [ ] AGAINST [ ] ABSTAIN

2. ELECTION OF DIRECTORS

[ ] FOR all nominees listed               [ ]  WITHHOLD AUTHORITY below (except as marked to                to vote for all nominees     to the contrary below),                    listed below including discretionary authority to cumulate votes.

(INSTRUCTION: TO WITHHOLD authority to vote for any individual nominee, mark the box next to the nominee's name below.)

[ ]     Maurice J. Burford [ ]     Sherman Andelson [ ]     Arlen Andelson [ ]     Mary Anne Chalker [ ]     James Reimann

3. In their discretion, the Proxy Holders are authorized to vote upon such other business as may properly come before the Meeting and any and all adjournments thereof. Management at present knows of no other business to be presented by or on behalf of the Company or its Board of Directors at the Meeting.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE.

Please Sign and Date on Reverse.

Please Sign and Date Below

THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" PROPOSALS 1 AND 2. THE PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED "FOR" PROPOSALS 1 AND 2 UNLESS "WITHHOLD AUTHORITY," "AGAINST" OR "ABSTAIN" IS INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS.

IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF A MAJORITY OF THE BOARD OF DIRECTORS.

(Number of Shares) Please sign exactly as name appears on stock certificates. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.

DATED:________________, 1995

Signature

Signature if held jointly I (we) do [ ] do not [ ] expect to attend the Meeting. Number of Persons _______.

PLEASE MARK, DATE, AND SIGN THIS PROXY, AND RETURN IT PROMPTLY USING THE ENCLOSED RETURN ENVELOPE.

[BKLA BANCORP LETTERHEAD]

August 28, 1995

RE: ANNUAL SHAREHOLDERS' MEETING

Dear Shareholder:

The Bank is holding its' Annual Meeting on September 20, 1995 in Beverly Hills Branch located at 9601 Wilshire Boulevard, Beverly Hills, California 90210, at 5:30 p.m. Enclosed please find the following:

1. Notice of Shareholders' Meeting

2. Proxy Statement/Offering Circular with Exhibit "A"

3. Proxy Card

4. Annual Statement

Please review these documents carefully. If you cannot attend the Meeting, please return your Proxy Card in the envelope provided. I hope to see you at the Meeting and would like the opportunity to meet with you and discuss the future of our Bank.

Sincerely,

/s/ M.J. Burford

M.J. Burford

Chairman of the Board and Chief Executive Officer

MJB:bd

Enclosures