Pacific State Bank - Stockton, California

April 20, 2006; Steven A. Rosso, President and CEO of Pacific State Bancorp, (NASDAQ/PSBC), the parent company of Pacific State Bank, announced record earnings for the first quarter of 2006. The Company reported record first quarter 2006 earnings of $1,207,000, an increase of $259,000 or 27.3% over the first quarter ending March 31, 2005. Total assets as of March 31, 2006 were $317,644,000, an increase of $45,818,000 or 16.9% over the period ending March 31, 2005. Net loans as of March 31, 2006 were $253,809,000 an increase of $56,992,000 or 29.0% compared to the period ending March 31, 2005. Total deposits as of March 31, 2006 were $265,563,000 an increase of $25,129,000 or 10.5% compared to March 31, 2005.

The Company also saw an improvement in its return on average assets for the first quarter 2006, reporting a ROA of 1.59% up from 1.42% as of March 31, 2005. The Company also generated an improvement in its return of average equity for the first quarter, reporting a ROE of 22.68% compared to 22.11% for the period ending March 31, 2005.

The Company’s basic earnings per share for the first quarter also improved by $0.09 or 34.6% to $0.35 per share. The first quarter’s diluted earning per share improved by $0.07 or 29.2% to $0.31. The weighted average common shares outstanding were 3,477,314 at March 31, 2006 while the weighted average common and common equivalent shares outstanding were 3,895,844.

Income Statement:

Interest income for the quarter was $5,794,000 an increase of $1,864,000 over $3,928,000 or 47.5% from the first quarter of 2005.
Interest income on loans for the quarter was$5,461,000 an increase of $1,814,000 or 49.7% from the first quarter of 2005.
Total interest expense for the quarter was $1,720,000 an increase of $645,000 or 60.2% from the first quarter of 2005.
Net interest income for the quarter was $4,072,000 an increase of $1,219,000 or 42.7% from the first quarter of 2005.
Total non-interest income for the quarter was $599,000 a decrease of $170,000 or 22.1% from the first quarter of 2005.
Total non-interest expense for the quarter was $2,587,000; an increase of $555,000 or 27.3% from the first quarter of 2005.
Income tax expense for the quarter was $787,000; an increase of $205,000 or 35.2% over the same period in 2005.

The following balance sheet information is a comparison of March 31, 2006 to December 31, 2005:

Cash and due from banks, Federal funds sold and investments totaling $43,350,000 reflect a decline of $4,309,000 or 9.0% from year end
Net loans increased to $253,809,000; an increase of $12,253,000 or 5.1% from year end
Total assets increased to $317,644,000; an increase of $8,032,000 or 2.6%
Total deposits declined to $265,563,000, a decline of $7,511,000 or 2.8%
Non-interest bearing deposits declined to $60,234,000; a decline of $8,423,000 or 12.3%
Other borrowings increased to $18,000,000; an increase of $14,000,000 or 350%

Total liabilities increased to $295,013,000; an increase of $6,775,000 or 2.4%
Shareholder’s equity increased to $22,631,000; an increase of $1,258,000 or 5.9%

During the first quarter of 2006, management expanded other borrowings to provide funding for the escalating loan demand with the seasonal decline in total deposits. The majority of the deposits with declining balances were transactional demand deposits which are expected to return to the bank in the coming months. The first quarter loan growth reflects a steady increase that management feels will remain throughout 2006.

SAFE HARBOR : Except for historical information contained herein, the statements contained in this press release include forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those set forth in or implied by forward-looking statements. These risks are described from time to time in Pacific State Bancorp’s Securities and Exchange Commission filings, including its Annual Reports on Form 10-K, quarterly reports on Form 10-Q and Current Reports on Form 8-K. Pacific State Bancorp disclaims any intent or obligation to update these forward-looking statements.

PACIFIC STATE BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except share amounts)	March 31	December 31
Assets	2006	2005
Assets	2006	2005
Cash and due from banks	$16,972	$14,453
Federal funds sold	0	4,667
Investment securities – available for sale (carrying value of $26,572 in 2006 and $28,696 in 2005)	26,378	28,539
Loans, less allowance for loan losses of $2,441 in 2006 and $2,356 in 2005	253,809	241,556
Bank premises and equipment, net	9,443	9,511
Company owned life insurance	4,446	4,411
Accrued interest receivable and other assets	6,596	6,474
Total assets	$317,644	$309,611

Liabilities and Shareholders’ Equity

Deposits:
Non-interest bearing	$60,234	$68,657
Interest bearing	205,329	204,417
Total deposits	265,563	273,074
Other borrowings	18,000	4,000
Subordinated debentures	8,764	8,764
Accrued interest payable and other liabilities	2,686	2,400
Total liabilities	295,013	288,238
Shareholders’ equity:
Preferred stock – no par value; 2,000,000 shares authorized;
Common stock – no par value; 24,000,000 shares authorized;
shares issued and outstanding 3,524,322 in 2006 and 3,514,982 in 2005	7,627	7,556
Retained earnings	15,118	13,912
Accumulated other comprehensive loss, net of tax	(114)	(95)
Total shareholders’ equity	22,631	21,373
Total liabilities and shareholders’ equity	$317,644	$309,611

PACIFIC STATE BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except share amounts)	March 31	March 31
Assets	2006	2005
Assets	2006	2005
Cash and due from banks	$16,972	$15,830
Federal funds sold	0	16,732
Interest –bearing deposits in banks	0	5,000
Investment securities – available for sale (carrying value of $26,572 in 2006 and $18,236 in 2005)	26,378	18,162
Loans, less allowance for loan losses of $2,441 in 2006 and $2,276 in 2005	253,809	196,817
Bank premises and equipment, net	9,443	9,658
Company owned life insurance	4,446	4,312
Accrued interest receivable and other assets	6,596	5,315
Total assets	$317,644	$271,826

Liabilities and Shareholders’ Equity

Deposits:
Non-interest bearing	$60,234	$50,316
Interest bearing	205,329	190,118
Total deposits	265,563	240,434
Other borrowings	18,000	4,000
Subordinated debentures	8,764	8,764
Accrued interest payable and other liabilities	2,686	924
Total liabilities	295,013	254,122
Shareholders’ equity:
Preferred stock – no par value; 2,000,000 shares authorized;
Common stock – no par value; 24,000,000 shares authorized;
shares issued and outstanding 3,524,322 in 2006 and 3,454,922 in 2005	7,627	7,174
Retained earnings	15,118	10,574
Accumulated other comprehensive loss, net of tax	(114)	(44)
Total shareholders’ equity	22,631	17,704
Total liabilities and shareholders’ equity	$317,644	$271,826

PACIFIC STATE BANCORP
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
	Three months ended
Unaudited	Marc h 31
(in thousands, except share amounts)	2006	2005
Interest income:
Interest and fees on loans	$5,461	$3,647
Interest on federal funds sold	11	58
Interest on investment securities	320	223
Total interest income	5,792	3,928
Interest expense:
Interest on deposits	1,485	935
Interest on subordinated debentures securities	164	121
Interest on borrowings	71	19
Total interest expense	1,720	1,075
Net interest income	4,072	2,853
Provision for loan losses	90	60
Net interest income after
provision for loan losses	3,982	2,793
Non-interest income:
Service charges	208	181
Other fee income	231	370
Gain from sale of loans	160	218
Total non-interest income	599	769
Non-interest expenses:
Salaries and employee benefits	1,349	1,117
Occupancy	199	197
Furniture and equipment	178	132
Other	861	586
Total other expenses	2,587	2,032
Income before income taxes	1,994	1,530
Income tax expense	787	582
Net income	$1,207	$948
Basic earnings per share	$0.35	$0.26
Diluted earnings per share	$0.31	$0.24
Weighted average common shares outstanding	3,477,314	3,452,601
Weighted average common and common equivalent shares outstanding
	3,895,844	3,898,120

Yield Analysis
For Quarter Ended March 31, 2006


			For the Three Months Ended			For the Three Months Ended
			Ended March 31, 2006			Ended March 31, 2005
				Interest	Average		Interest Income or Expense	Average Yield or Cost
			Average	Income or	Yield or	Average
Assets:			Balance	Expense	Cost	Balance
Interest-earning assets:
Loans			251,153	5,461	8.82%	203,198	3,647	7.28%
Investment securities			27,692	320	4.69%	18,191	195	4.35%
Federal funds sold			928	11	4.81%	10,460	58	2.25%
Interest Bearing Deposits in Banks			0	0	0.00%	6,088	28	1.87%
		Total average earning assets	279,773	5,794	8.40%	237,937	3,928	6.70%

Non-earning assets:
Cash and due from banks			12,277			13,450
Other assets			15,086			18,839
		Total average assets	307,136			270,226


Liabilities and Shareholders' Equity:
Interest-bearing liabilities:
Deposits

	Interest-bearing Demand		102,033	610	2.42%	101,019	542	2.18%
	Savings		6,534	10	0.62%	7,286	9	0.50%
	Time Deposits		97,369	865	3.60%	72,264	384	2.16%
	Other borrowing		16,724	235	5.70%	12,764	140	4.45%

		Total average interest-bearing liabilities	222,660	1,720	3.13%	193,333	1,075	2.26%

Non interest-bearing liabilities:
	Demand deposits		61,347			55,229
	Other liabilities		1,537			4,284
		Total liabilities	285,550			252,846
Shareholders' equity:			21,592			17,380
Total average liabilities and shareholders' equity			307,136			270,226

Net interest income				4,072			2,853

Yield on interest-earning assets					8.40%			6.70%
Cost of funding interest-earning assets					2.50%			1.83%
Net interest margin					5.90%			4.86%

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