The first quarter of 2003 has been completed and Pacific State Bancorp and Pacific State Bank are off and running.  The first quarter of 2003 generated net profits of $405,974 and basic earnings per share of $0.49.  Both of these financial figures were substantial increases over the same period in 2002.  In fact, earnings are up 102.8% in 2003.  The contributing factors for this growth in earnings were an increase in net interest  income after provision for loan losses of $434,080 or 35.0% and an increase in non-interest income of $139,323 or 35.1% over the first quarter in 2002.  Some of the fundamentals that helped spark Pacific State Bancorp?s jump in revenue were an increase in earning assets to $170,109,568, and continued growth in total loans to $141,542,674 for Pacific State Bank.

Other important growth figures for the first quarter of 2003 were an increase in total assets of 5.58% or $10,058,619, closing the books on March 31, 2003 at $190,199,103.  The total asset figure for Pacific State Bancorp was the highest total assets amount in the history of our company.  Pacific State Bancorp is rapidly closing in on the $200,000,000 total asset level.  Management hopes to cross this threshold prior to the end of the 2nd quarter of 2003.  Look for this important milestone to be broken in the near future.  The Company has also reported improvements in return on assets (ROA),  return on equity (ROE), and our Efficiency Ratio.  Pacific State Bancorp?s first quarter ROA  was 0.90%, our ROE for the quarter was 14.46% and the Efficiency Ratio was lowered to 67.75%.  Management is reviewing ways to continue to improve these ratios.