##### 









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




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Form 10-K/A

Amendment No. 1


To


Form 10-K




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|                                                |  |                                                                                             
|----------------------------------------------- |  | --------------------------------------------------------------------------------------------
|þ                                               |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|                                               
|For the fiscal year ended December 31,
    2003
|                                               
|o                                               |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                               
|                                                |  | For the transition period
    from           to           .                                 

Commission file number: 0-1100



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Hawthorne Financial Corporation

(Exact name of registrant as specified in its
charter)


|                                                                                                        |  |                                         
|------------------------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                                |  | 95-2085671                              
|(State or other jurisdiction of
    incorporation or organization)                                      |  | (I.R.S. Employer
    Identification No.)
|                                                                                                       
|2381 Rosecrans Avenue, 2nd Floor
    El Segundo, California(Address of principal executive
    offices) |  | 90245(Zip Code)                         

Registrants telephone number, including
area
code:     (310) 725-5000

Securities registered pursuant to
Section 12(b) of the Act:

None


Securities registered pursuant to
Section 12(g) of the Act:

Common Stock, par value $0.01 per
share


(Title of class)


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 period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days.     Yes þ          No o

Indicate by check
mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K
or any amendment to this
Form 10-K.     þ

As of June 30,
2003 (the last business day of the most recently completed
second fiscal quarter), the aggregate market value of voting and
non-voting stock held by nonaffiliates of the registrant was
approximately $243,941,536 (based upon the last reported sales
price of the Common Stock as reported by the Nasdaq National
Market). Shares of Common Stock held by each executive officer,
director, and shareholders with beneficial ownership of greater
than 10% of the outstanding Common Stock of the registrant and
persons or entities known to the registrant to be affiliates of
the foregoing have been excluded in that such persons may be
deemed to be affiliates. This assumption regarding affiliate
status is not necessarily a conclusive determination for other
purposes.

Indicate by check
mark whether the registrant is an accelerated filer as defined
in Rule 12b-2 of the
Act.     Yes þ          No o

The number of
shares of Common Stock, par value $0.01 per share, of the
Registrant outstanding as of March 1, 2004 was
11,799,221 shares.

DOCUMENTS INCORPORATED BY REFERENCE

None.



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##### 



EXPLANATORY NOTE

Hawthorne Financial Corporation
(Company) files this Amendment No. 1 to its
Annual Report on Form 10-K to include
Part III, Item 10, Item 11, Item 12, Item
13 and Item 14, and Exhibit 23.1, Independent
Auditors Consent. A correction was made to fix a clerical
error on the signature date on Exhibit 23.1 from
March 5, 2004 to March 12, 2004, which reflects the
date shown on the manually signed consent.

PART III



|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant



| |          
| | ---------
| | Directors

The following table sets forth certain
information concerning the Board of Directors of the Company.
Each of the directors of the Company is also a director of
Hawthorne Savings, F.S.B. (the Bank), a wholly owned
subsidiary of the Company.

In December 1995, the Company sold
investment units in a private placement offering.
Pursuant to an agreement entered into in connection with the
offering, the Fort Pitt Fund, L.P. is entitled to recommend
one person for nomination by the Board of Directors for election
as a director. The Fort Pitt Fund, L.P. recommended Harry
F. Radcliffe pursuant to its rights under the unit purchase
agreement. In connection with the Agreement and Plan of Merger,
Fort Pitt Fund, L.P. agreed to terminate its right to
nominate a director.

|                    |  |     |    |                |  |  |      | 
|------------------- |  | --- | -- | -------------- |  |  | ---- | 
|Name                |  | Age |    | Director Since
|                    |  |     |    |               
|Gary W. Brummett    |  |     | 46 |                |  |  | 1999 | 
|Timothy R. Chrisman |  |     | 57 |                |  |  | 1994 | 
|Carlton J. Jenkins  |  |     | 48 |                |  |  | 2002 | 
|Simone Lagomarsino  |  |     | 42 |                |  |  | 1999 | 
|Anthony W. Liberati |  |     | 71 |                |  |  | 1996 | 
|Harry F. Radcliffe  |  |     | 53 |                |  |  | 1996 | 
|Howard E. Ritt      |  |     | 79 |                |  |  | 1993 | 



| |                         
| | ------------------------
| | Biographical Information

GARY W. BRUMMETT is a managing director of Peak
View Advisors, LLP, formerly known as Brummett Consulting Group,
a consulting firm serving the financial services industry since
February 1997. Prior to that, he had been Executive Vice
President and Chief Operating Officer, of Cal Fed Bancorp, and a
member of the Board of Directors of California Federal Bank,
where he was employed since April 1985. From 1980 to 1985,
Mr. Brummett was employed at KPMG LLP as a certified public
accountant. Mr. Brummett served as the Companys
interim Chief Executive Officer from November 17, 1999 to
December 7, 1999.

TIMOTHY R. CHRISMAN has been the President and
owner of Chrisman & Company, Inc., an executive
search firm specializing in the placement of senior executives
in the financial services industry, for more than the past five
years. Mr. Chrisman has been Chairman of the Board of the
Company and the Bank since February 1996. Mr. Chrisman is
also Chairman of MCSi, Inc., a publicly traded computer
peripherals and audio-visual supply corporation.

CARLTON J. JENKINS is a Partner in the Yucaipa
Corporate Initiatives Fund, a private equity investment fund
focused on partnering with major corporations in the delivery of
equity capital into investment opportunities located in
underserved communities throughout the United States.
Mr. Jenkins was chairman, president and chief executive
officer of Founders National Bank of Los Angeles, one of the
countrys premier minority-owned financial institutions,
from January 1991 to 1999. Mr. Jenkins was a principal and
chief executive officer of OneNetNow.com, LLC, an internet
company from 1999 until its successful sale in early 2001.
Mr. Jenkins served as a director of The Fred Meyer Company
and The Kroger Company; and continues

1



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##### 



to serve as a director of Dryades Bancorp and its
subsidiary, Dryades Savings Bank, New Orleans, Louisiana.
Mr. Jenkins was a member of the California Board of
Education and was a trustee of the University of West Los
Angeles School of Law.


SIMONE LAGOMARSINO has been a director and the
President and Chief Executive Officer of the Company and the
Bank since December 1999. Prior to that, Ms. Lagomarsino
was Executive Vice President and Chief Financial Officer of the
Company and the Bank since February 1999. She previously was
Executive Vice President and Chief Financial Officer of First
Plus Bank from March 1998 to February 1999, Senior Vice
President of Imperial Financial Group from March 1997 to March
1998 and Senior Vice President and Chief Financial Officer of
Ventura County National Bancorp from March 1995 to March 1997.

ANTHONY W. LIBERATI was the Chairman of the Board
of Directors of MCSi Inc. from May 1996 until his retirement in
February 2000. Mr. Liberati retired in 1995 from the Edward
J. DeBartolo Corporation, Youngstown, Ohio where he was the
Chief Operating Officer. Prior to his appointment as Chief
Operating Officer, he was the DeBartolo Corporations Chief
Financial Officer. Mr. Liberati is a former member of the
Board of Directors of DeBartolo Realty Corporation, Youngstown,
Ohio, a real estate investment trust. Mr. Liberati is a
Limited Partner in the Fort Pitt Fund, L.P.

HARRY F. RADCLIFFE is an investment manager. He
was President and Chief Executive Officer of Fort Pitt
Capital Management Corp. from April 1997 through August 2000.
From December 1993 through March 1997, Mr. Radcliffe was
the President, Chief Executive Officer and a Director of First
Home Bancorp, Inc., Pittsburgh, Pennsylvania, and was
President and Chief Executive Officer of its subsidiary First
Home Savings Bank, F.S.B., from December 1993 and a Director
from May 1993 until March 1997. He was a Director and President
of First South Savings Association from April 1989 to December
1993, and was its Chief Executive Officer from June 1989 to
December 1993 and Director, President and Chief Executive
Officer from May 1990 to December 1993. He also was a Director
of Home Bancorp, Inc. and Home Savings Bank, F.S.B.,
Norfolk, Virginia from October 1994 to September 1995.
Mr. Radcliffe is a Director of Essex Savings Bank, F.S.B.,
Virginia Beach, Virginia, FNB Corp., Naples, Florida, and MCSi
Inc.

HOWARD E. RITT retired in 1990 as an Executive
Vice President of Sanwa Bank.



| |                   
| | ------------------
| | Executive Officers

For information concerning executive officers of
the Company, see Item 4(A). Executive Officers Of The
Registrant.



| |                
| | ---------------
| | Audit Committee

Messrs. Ritt (Chair), Brummett, Chrisman,
Jenkins, Liberati and Radcliffe each served on Hawthorne
Financials Audit Committee during 2003. The board of
directors has determined that Mr. Brummett qualifies as an
audit committee financial expert as defined by
applicable regulations of the SEC and that he is
independent as defined by the applicable rules under
the Nasdaq National Market.



| |                                                                
| | ---------------------------------------------------------------
| | Compensation Committee Interlocks and
    Insider Participation

Messrs. Liberati (Chair), Brummett,
Chrisman, Jenkins, Radcliffe and Ritt each served on Hawthorne
Financials Compensation Committee during 2003. Except for
Mr. Brummett, who served as Hawthorne Financials
interim Chief Executive Officer for three weeks from
November 17, 1999 to December 7, 1999, none of the
Compensation Committee members were officers or employees of
Hawthorne Financial or Hawthorne Savings during or prior to 2003.



| |                                                  
| | -------------------------------------------------
| | Section 16(a) Reports of Beneficial
    Ownership

Based solely on its review of copies of reports
filed by reporting persons of the Company pursuant to
Section 16(a) of the Exchange Act, or written
representations from reporting persons that no Form 5
filing was required for such person, the Company believes that
all filings required to be made by reporting persons of the
Company were timely made in accordance with requirements of the
Exchange Act.

2



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##### 





| |               
| | --------------
| | Code of Ethics

The Company has adopted the Hawthorne Financial
Corporation Code of Conduct, a code of ethics that applies to
our employees and officers. The code of conduct is publicly
available as Exhibit 99.3 to our Annual Report on
Form 10-K for the year ended December 31, 2002, which
is available at our website at www.hawthornesavings.com. If we
make any substantive amendments to the code of conduct or grant
any waiver, including any implicit waiver, from a provision of
the code to our Chief Executive Officer, Chief Financial Officer
or Corporate Controller, we will disclose the nature of such
amendment or waiver on that website or in a report on
Form 8-K.



|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

The following table sets forth the compensation
paid to the Chief Executive Officer during 2003, and the three
other individuals who were serving as executive officers of the
Company and the Bank at December 31, 2003 (the Named
Executive Officers).



| |                           
| | --------------------------
| | Summary Compensation Table

|                   |                               |                     |      |              |  |            |         |              |  |            |         |                 |  |   |     |       |     |  |        |        |  |   |        |        | 
|------------------ | ----------------------------- | ------------------- | ---- | ------------ |  | ---------- | ------- | ------------ |  | ---------- | ------- | --------------- |  | - | --- | ----- | --- |  | ------ | ------ |  | - | ------ | ------ | 
|                   |                               |                     |      |              |  |            |         |              |  | Long-Term  |         |                
|                   |                               |                     |      | Compensation |  |           
|                   |                               | Annual Compensation |      | Awards       |  |           
|                   |                               |                     |      | Securities   |  |           
|                   |                               |                     |      | Other Annual |  | Underlying |         | Other       
|Name and Position  |                               | Year                |      | Salary       |  | Bonus(1)   |         | Compensation |  | Options(#) |         | Compensation(2)
|                   |                               |                     |      |              |  |            |         |              |  |            |         |                
|Simone Lagomarsino |                               |                     | 2003 |              |  | $          | 440,000 |              |  | $          | 200,000 |                 |  | $ | 678 | (3)   |     |  | 15,000 |        |  | $ | 10,000 |       
|                   | President and Chief Executive |                     |      | 2002         |  |            |         | 340,000      |  |            |         | 225,000         |  |   |     | 1,021 | (3) |  |        | 25,000 |  |   |        | 10,000 | 
|                   | Officer                       |                     |      | 2001         |  |            |         | 325,000      |  |            |         | 150,000         |  |   |     | 331   | (3) |  |        |       |  |   |        | 8,500  | 
|Chuck Stoneburg(4) |                               |                     | 2003 |              |  | $          | 235,000 |              |  | $          | 95,000  |                 |  |   |    |       |     |  | 7,500  |        |  | $ | 10,000 |       
|                   | Executive Vice President and  |                     |      | 2002         |  |            |         | 226,440      |  |            |         | 160,000         |  |   | $   |      |     |  |        | 15,000 |  |   |        | 8,048  | 
|                   | Chief Administrative Officer  |                     |      | 2001         |  |            |         | 219,440      |  |            |         | 100,000         |  |   |     |      |     |  |        |       |  |   |        |       | 
|David Rosenthal(5) |                               |                     | 2003 |              |  | $          | 248,500 |              |  | $          | 50,000  |                 |  | $ | 416 | (3)   |     |  | 7,500  |        |  | $ | 7,811  |       
|                   | Executive Vice President and  |                     |      | 2002         |  |            |         | 240,000      |  |            |         | 40,000          |  |   |     |      |     |  |        | 60,000 |  |   |        |       | 
|                   | Chief Financial Officer       |                     |      | 2001         |  |            |         |             |  |            |         |                |  |   |     |      |     |  |        |       |  |   |        |       | 
|Eileen Lyon        |                               |                     | 2003 |              |  | $          | 198,000 |              |  | $          | 80,000  |                 |  |   |    |       |     |  | 4,500  |        |  | $ | 4,188  |       
|                   | Senior Vice President         |                     |      | 2002         |  |            |         | 191,260      |  |            |         | 138,000         |  |   | $   | 1,077 | (6) |  |        | 7,500  |  |   |        | 7,207  | 
|                   | and General Counsel           |                     |      | 2001         |  |            |         | 183,015      |  |            |         | 100,000         |  |   |     |      |     |  |        |       |  |   |        | 4,612  | 



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|    |                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Amounts were earned in the years indicated.
    Bonuses were paid in the year earned or in the first quarter of
    the following year.      
|   
|(2) | Other Compensation is comprised solely of 401(k)
    matching contributions made by the Company.                                             
|   
|(3) | Represents above-market portion of interest
    credited to the Named Executives deferred compensation
    account.                         
|   
|(4) | Mr. Stoneburg was appointed Chief
    Administrative Officer effective December 31, 2002. Prior
    to that, he was Chief Operations Officer.
|   
|(5) | Mr. Rosenthal joined the Company in his
    current position on October 1, 2002.                                                             
|   
|(6) | Represents tax gross-up on non-cash bonus.                                                                                                   

3



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##### 





| |                                      
| | -------------------------------------
| | Option Grants in Last Fiscal
    Year

The table below sets forth certain information
regarding stock options granted during 2003 to the Named
Executive Officers.

|                   |  |            |        |            |  |          |      |            |  |                      |        |     |  |  |         |  |  |   |         |  |  |   |         | 
|------------------ |  | ---------- | ------ | ---------- |  | -------- | ---- | ---------- |  | -------------------- | ------ | --- |  |  | ------- |  |  | - | ------- |  |  | - | ------- | 
|                   |  |            |        |            |  |          |      |            |  |                     
|                   |  |            |        | Percent of |  |          |      |            |  | Potential Realizable
|                   |  |            |        | Total      |  |          |      |            |  | Value at Assumed    
|                   |  | Number of  |        | Options    |  |          |      |            |  | Rate of Stock       
|                   |  | Securities |        | Granted to |  |          |      |            |  | Price Appreciation  
|                   |  | Underlying |        | Employees  |  | Exercise |      |            |  | for Option Term(l)  
|                   |  | Option     |        | in Fiscal  |  | or Base  |      | Expiration |  |                     
|Name               |  | Granted(2) |        | Year(3)    |  | Price(4) |      | Date(5)    |  | 5%                   |        | 10%
|                   |  |            |        |            |  |          |      |            |  |                      |        |    
|Simone Lagomarsino |  |            | 15,000 |            |  |          | 11.0 | %          |  | $                    | 24.357 |     |  |  | 7/22/13 |  |  | $ | 217,950 |  |  | $ | 235,500 | 
|Chuck Stoneburg    |  |            | 7,500  |            |  |          | 5.5  | %          |  |                      | 24.357 |     |  |  | 7/22/13 |  |  |   | 108,975 |  |  |   | 117,750 | 
|David Rosenthal    |  |            | 7,500  |            |  |          | 5.5  | %          |  |                      | 24.357 |     |  |  | 7/22/13 |  |  |   | 108,975 |  |  |   | 117,750 | 
|Eileen Lyon        |  |            | 4,500  |            |  |          | 3.3  | %          |  |                      | 24.357 |     |  |  | 7/22/13 |  |  |   | 65,385  |  |  |   | 70,650  | 



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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The potential realizable value is based on the
    Black-Scholes option-pricing model. These amounts are calculated
    pursuant to applicable requirements of the Securities and
    Exchange Commission and do not represent a forecast of the
    future appreciation of the Common Stock.                                                                                                                                                                                                                                                         
|   
|(2) | All options granted become exercisable in
    installments beginning on the first anniversary date of the date
    of grant, and becoming 100% vested on the fifth anniversary date
    of the date of grant. The exercise price and tax withholding
    obligations may be paid by delivery of already owned shares,
    subject to certain conditions. All options were granted for
    terms of 10 years, subject to earlier termination in
    certain events related to termination of employment, and
    acceleration upon a change in control.
|   
|(3) | Options covering an aggregate of
    136,250 shares were granted to employees during 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                            



| |                                                                                     
| | ------------------------------------------------------------------------------------
| | Aggregate Option Exercises in Last Fiscal
    Year and Fiscal Year-End Option Values

The following table sets forth, for each of the
Named Executive Officers, certain information regarding options
exercised in 2003 and options held at December 31, 2003:

|                   |  |              |        |              |  |                           |         |                              |  |  |         |  |  |  |        |  |  |  |           |  |  |  |         | 
|------------------ |  | ------------ | ------ | ------------ |  | ------------------------- | ------- | ---------------------------- |  |  | ------- |  |  |  | ------ |  |  |  | --------- |  |  |  | ------- | 
|                   |  |              |        |              |  |                           |         |                              |  | 
|                   |  |              |        |              |  | Number of Securities      |         |                             
|                   |  |              |        |              |  | Underlying Unexercised    |         | Value of Unexercised        
|                   |  | Shares       |        |              |  | Options at Fiscal         |         | in-the-Money Options at     
|                   |  | Acquired on  |        | Value        |  | Year-End (#)              |         | Fiscal Year-End ($)         
|Name               |  | Exercise (#) |        | Realized ($) |  | Exercisable/Unexercisable |         | Exercisable/Unexercisable(1)
|                   |  |              |        |              |  |                           |         |                             
|                   |  |              |        |              |  |                           |         |                              |  |  |         | 
|Simone Lagomarsino |  |              |       |              |  |                           |        |                              |  |  | 180,000 |  |  |  | 45,000 |  |  |  | 3,498,701 |  |  |  | 394,092 | 
|Chuck Stoneburg    |  |              | 25,500 |              |  | $                         | 293,400 |                              |  |  | 34,500  |  |  |  | 25,500 |  |  |  | 688,044   |  |  |  | 241,266 | 
|David Rosenthal    |  |              |       |              |  |                           |        |                              |  |  | 12,000  |  |  |  | 55,500 |  |  |  | 133,980   |  |  |  | 563,100 | 
|Eileen Lyon        |  |              |       |              |  |                           |        |                              |  |  | 24,750  |  |  |  | 13,500 |  |  |  | 507,653   |  |  |  | 246,956 | 



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|    |                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------
|(1) | Based on the closing sale price of $27.981 for
    the Common Stock on December 31, 2003, less the option
    exercise price.



| |                      
| | ---------------------
| | Director Compensation

Non-employee directors, other than the Chairman
of the Board, receive an annual retainer of $30,000, an
additional $1,750 for each Hawthorne Financial board meeting
attended and reimbursement of reasonable Company-related
expenses. The Chairman of the Board receives an annual retainer
of $125,000, and does not receive separate meeting fees or
reimbursement for expenses, with certain limited exceptions. All
of the directors of Hawthorne Financial are also directors of
Hawthorne Savings and receive only the above-described fees for
their combined service. Non-employee directors also received
grants of stock options under Hawthorne Financials 2001
Stock Incentive Plan, and are eligible to participate in the
Companys welfare benefit plans, Deferred Compensation Plan
and Employee Stock Purchase Plan. Non-employee directors and
their dependents, also have the right to receive, for a period
of five years following a change in control, benefits under
welfare plans, practices, policies and programs that were
provided by Hawthorne

4



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##### 



Financial to the directors and their families at
any time during the 120-day period immediately preceding the
consummation of the merger. Such benefits may include medical,
prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and
programs.




| |                                                             
| | ------------------------------------------------------------
| | Employment Agreements and Change in Control
    Arrangements

On February 22, 2000, the Compensation
Committee of the Board of Directors approved a change of control
pay plan providing for the payment of three years base
salary and bonus, including an excise tax gross-up payment, for
the Chief Executive Officer of the Company, and providing for
two years base salary and bonus, including an excise tax
gross-up payment, for all Executive Vice Presidents of the
Company (at present, 2 persons) and all Senior Vice
Presidents reporting directly to the President (at present,
1 person). In addition, all other Senior Vice Presidents
(at present, 14 persons) have agreements providing for one
years base salary and bonus following a change in control.
See also, benefits payable to directors following a change of
control discussed in  Director
Compensation.



| |                                      
| | -------------------------------------
| | Compensation Committee
    Interlocks

The functions of the compensation committee
include reviewing and approving the goals and objectives
relevant to compensation of the Chief Executive Officer,
evaluating the Chief Executive Officers performance in
light of those goals and objectives and determining and
approving the Chief Executive Officers compensation level
based on this evaluation. The compensation committee also
approves compensation of the other executive officers,
incentive-compensation plans and equity-based plans.
Messrs. Brummett, Chrisman, Jenkins, Liberati, Radcliffe
and Ritt each served on Hawthorne Financials Compensation
Committee during fiscal year 2003. Except for Mr. Brummett,
who served as Hawthorne Financials interim Chief Executive
Officer for three weeks from November 17, 1999 to
December 7, 1999, none of the Compensation Committee
members were officers or employees of Hawthorne Financial or
Hawthorne Savings during or prior to 2003.



|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
    Owners and Management

The following table sets forth as of
March 1, 2004 certain information regarding the ownership
of the Companys Common Stock by each person known by the
Company to be the beneficial owner of more than 5% of the
outstanding shares of the Common Stock.

|                                             |  |              |           |            |  |  |      |  
|-------------------------------------------- |  | ------------ | --------- | ---------- |  |  | ---- | -
|                                             |  | Shares       |           |           
|                                             |  | Beneficially |           | Percent of
|Name of Beneficial Owner(1)                  |  | Owned        |           | Class(2)  
|                                             |  |              |           |           
|Fidelity Management & Research(3)            |  |              | 1,087,250 |            |  |  | 9.22 | %
|Fort Pitt Fund, L.P./ Harry F. Radcliffe(4)  |  |              | 796,295   |            |  |  | 6.73 |  
|Wellington Management Company, LLP(5)        |  |              | 727,000   |            |  |  | 6.16 |  
|Friedman, Billings, Ramsey Investment Mgt(6) |  |              | 678,399   |            |  |  | 5.75 |  
|Columbia Wanger Asset Management, L.P.(7)    |  |              | 660,000   |            |  |  | 5.59 |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | Less than 1 %.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(1) | As of March 1, 2004. Beneficial ownership
    has been determined in accordance with Rule 13d-3 under the
    Securities Exchange Act of 1934, as amended (the Exchange
    Act). Shares are deemed to be beneficially owned by a
    person if the person has the right to acquire the shares (for
    example, upon exercise of an option) within 60 days of the
    date as of which information is provided; in computing the
    percentage ownership of any person, the amount of shares
    outstanding is deemed to include the amount of shares
    beneficially owned by such person (and only such person) by
    reason of these acquisition rights.
|   
|(2) | The percentage of outstanding shares owned by
    holders of stock options and warrants was computed based upon
    the number of shares that would have been outstanding if such
    options or warrants had been exercised.                                                                                                                                                                                                                                                                                                                                                                                                                                     

5



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##### 





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | This information is based on the
    Schedule 13G/A filed on February 17, 2004 by FMR
    Corp., Edward C. Johnson 3d and Abigail P. Johnson. The
    Schedule 13G/A indicates that various persons have the
    right to receive or the power to direct the receipt of dividends
    from, or the proceeds from the sale of, the common stock. The
    shares of common stock are beneficially owned by Fidelity Low
    Priced Stock Fund, an investment company registered under the
    Investment Company Act of 1940 (the Fund). Fidelity
    Management & Research Company, a subsidiary of FMR
    Corp. (Fidelity), and a registered investment
    advisor, is deemed to be the beneficial owner of such
    securities. Mr. Johnson, FMR Corp. through its control of
    Fidelity, and the Fund, each have the power to dispose of the
    securities. Power to vote the securities is held by Fidelity
    Funds Board of Trustees. Mr. Johnson and
    Ms. Johnson are Chairman of the Board and a director,
    respectively, of FMR Corp., and members of the Johnson family,
    through their stock ownership and stockholder voting agreement,
    form a controlling group with respect to FMR Corp. The address
    for FMR Corp., Fidelity, the Fund and Mr. Johnson and
    Ms. Johnson is 82 Devonshire Street, Boston MA 02109.
|   
|(4) | Includes 37,500 shares which
    Mr. Radcliffe has the right to acquire within 60 days
    of March 1, 2004. 676,062 shares are owned by the
    Fort Pitt Fund, L.P. and 82,733 shares are owned by
    Mr. Radcliffe and his wife individually. The address for
    the Fort Pitt Fund, L.P. is 40 Wiggins Lane,
    Uniontown, Pennsylvania 15401.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(5) | This information is based on the
    Schedule 13G filed February 12, 2004 by Friedman,
    Billings, Ramsey Group, Inc., Eric Billings and Emanuel J.
    Friedman. The shares are owned by various registered investment
    companies under The FBR Family of Funds, which is managed by FBR
    Fund Advisers, Inc., a registered investment advisor.
    Messrs. Billings and Friedman, through their control of the
    FBR Companies, have the power to dispose of the securities and
    are deemed to beneficially own them. The address for Friedman,
    Billings, Ramsey Group, Inc., and Messrs. Billings and
    Friedman, is 1001 19th Street, North, Arlington, Virginia
    22209-1710.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(6) | This information is based on the
    Schedule 13G/A filed February 12, 2004 by Wellington
    Management Company, LLP. The address for Wellington Management
    Company, LLP is 75 State Street, Boston, MA 02109. The
    shares are owned of record by advisory clients of Wellington
    Management Company LLP, none of which owns in excess of 5% of
    the Common Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(7) | This information is based on the
    Schedule 13G filed February 12, 2004 by Columbia
    Wanger Asset Management, L.P., WAM Acquisition GP, Inc. and
    Columbia Acorn Trust (the Reporting Persons). The
    address for the Reporting Persons is 227 West Monroe
    Street, Suite 3000, Chicago, IL 60606. The shares are
    beneficially owned by advisory clients of Columbia Wanger Asset
    Management, L.P., which is a registered investment adviser, and
    Columbia Acorn Trust is the only person known to be entitled to
    all dividends from and proceeds from the sale of more than 5% of
    the Common Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

6



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##### 



The following table sets forth as of
March 1, 2004 certain information regarding the ownership
of the Companys Common Stock by (i) each director of
the Company, (ii) each executive officer named in the
Summary Compensation Table in this Proxy Statement (the
Named Executive Officers), and (iii) all of the
Companys executive officers and directors as a group.

|                                                                          |  |              |         |             |  |               |         |  |  |  |       |  
|------------------------------------------------------------------------- |  | ------------ | ------- | ----------- |  | ------------- | ------- |  |  |  | ----- | -
|                                                                          |  | Shares of    |         |             |  | Percentage of
|                                                                          |  | Common Stock |         | Exercisable |  | Outstanding  
|                                                                          |  | Beneficially |         | Options/    |  | Common       
|Name                                                                      |  | Owned(1)     |         | Warrants(2) |  | Stock        
|                                                                          |  |              |         |             |  |              
|Gary W. Brummett                                                          |  |              | 3,000   |             |  |               | 37,500  |  |  |  | *     |  
|Timothy R. Chrisman(3)                                                    |  |              | 33,039  |             |  |               | 54,516  |  |  |  | *     |  
|Carlton J. Jenkins                                                        |  |              | 176     |             |  |               | 16,500  |  |  |  | *     |  
|Simone Lagomarsino(4)(5)                                                  |  |              | 4,313   |             |  |               | 184,500 |  |  |  | 1.58  | %
|Anthony W. Liberati                                                       |  |              | 36,902  |             |  |               | 37,500  |  |  |  | *     |  
|Harry F. Radcliffe(6)                                                     |  |              | 758,795 |             |  |               | 37,500  |  |  |  | 6.73  | %
|Howard E. Ritt                                                            |  |              | 11,250  |             |  |               | 24,000  |  |  |  | *     |  
|Charles Stoneburg(5)(7)                                                   |  |              | 1,721   |             |  |               | 37,500  |  |  |  | *     |  
|David Rosenthal                                                           |  |              |        |             |  |               | 12,000  |  |  |  | *     |  
|Eileen Lyon(5)                                                            |  |              | 100     |             |  |               | 26,250  |  |  |  | *     |  
|All directors and executive officers as a group
    (11 persons)(5)(8)(9) |  |              | 849,296 |             |  |               | 467,766 |  |  |  | 10.74 | %



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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*   | Less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(1) | Except as may be indicated in the footnotes to
    the table and subject to applicable community property laws,
    each of such persons has the sole voting and investment power
    with respect to the shares owned. Beneficial ownership has been
    determined in accordance with Rule 13d-3 under the Exchange
    Act. Under this Rule, certain shares may be deemed to be
    beneficially owned by more than one person (such as where
    persons share voting power or investment power).
|   
|(2) | Except as indicated below, represents options
    which the person has the right to acquire within 60 days
    after March 1, 2004.                                                                                                                                                                                                                                                                                                                                                                  
|   
|(3) | Includes 9,516 shares that Mr. Chrisman
    may acquire upon the exercise of Warrants.                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(4) | Shares beneficially owned by these Named
    Executive Officers (or group) do not include 103,648 shares
    held of record by the ESOP which have been allocated to
    participants accounts and which are voted by them as
    trustees at the direction of the participants or, if no
    direction is given, by them as trustees in their discretion. The
    Named Executive Officers (and group) disclaim beneficial
    ownership of such shares.                                           
|   
|(5) | Includes 372 shares allocated to
    Ms. Lagomarsinos 401(k) Plan account.                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(6) | Includes 676,062 shares that are owned by
    the Fort Pitt Fund, L.P., of which Mr. Radcliffe is
    the general partner.                                                                                                                                                                                                                                                                                                                                                                           
|   
|(7) | Includes 221 shares allocated to
    Mr. Stoneburgs ESOP account.                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(8) | In addition to the Named Executive Officers,
    current executive officers include JoLene Wryn, Senior Vice
    President, Director of Human Resources, who joined the Bank in
    October 2003.                                                                                                                                                                                                                                                                                                    
|   
|(9) | Includes (i) 9,516 shares which members
    of the group may acquire within 60 days of March 1,
    2004 upon the exercise of Warrants and (ii) 593 shares
    held by the 401(k) Plan or ESOP which have been allocated to the
    accounts of executive officers. Also includes shares owned by
    the Fort Pitt Fund, L.P. See footnote (6).                                                                                                                                                     

7



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##### 



The following table summarizes information as of
December 31, 2003 relating to equity compensation plans of
the Company pursuant to which grants of options, restricted
stock, or other rights to acquire shares may be granted from
time to time. As of December 31, 2003, the Company had no
equity compensation plans that were not approved by security
holders.

|                                                           |  |                            |         |                     |  |                                |       |  |  |  |         | 
|---------------------------------------------------------- |  | -------------------------- | ------- | ------------------- |  | ------------------------------ | ----- |  |  |  | ------- | 
|                                                           |  |                            |         |                     |  | Number of Securities Remaining
|                                                           |  |                            |         |                     |  | Available for Future Issuance 
|                                                           |  | Number of Securities to    |         | Weighted-Average    |  | Under Equity Compensation     
|                                                           |  | be Issued upon Exercise of |         | Exercise Price of   |  | Plans (excluding securities   
|Plan Category                                              |  | Outstanding Options        |         | Outstanding Options |  | reflected in the first column)
|                                                           |  |                            |         |                     |  |                               
|Equity compensation plans approved by security
    holders |  |                            | 911,125 |                     |  | $                              | 14.25 |  |  |  | 169,386 | 



|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

None of the directors of the company, or any
associates or affiliates of any of them, is or has been indebted
to the Company at any time since the beginning of the last
completed fiscal year, and there are no outstanding loans to any
directors of the Company. Some of the executive officers of the
Company were customers of and had banking transactions with the
Bank in the ordinary course of the Banks business during
2003 and the Bank expects to conduct similar banking
transactions in the future. All such loans and commitments were
made on substantially the same terms, including interest rates,
collateral and repayment terms, as those prevailing at the time
for comparable transactions with other persons of similar
creditworthiness, and in the opinion of management of the Bank,
did not involve more than a normal risk of collectibility or
present other unfavorable features.



|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal Accountant Fees and
    Services

Deloitte & Touche LLP, certified public
accountants, audited the consolidated financial statements of
the Company for the year ending December 31, 2003.

The following table summarizes the aggregate fees
billed to the Company by Deloitte & Touche LLP:

|                      |  |      |         |      |  |   |         | 
|--------------------- |  | ---- | ------- | ---- |  | - | ------- | 
|                      |  | 2003 |         | 2002
|                      |  |      |         |     
|Audit Fees(a)         |  | $    | 275,000 |      |  | $ | 344,058 | 
|Audit Related Fees(b) |  |      | 70,300  |      |  |   | 131,327 | 
|Tax Fees(c)           |  |      | 252,568 |      |  |   | 246,100 | 
|All Other Fees(d)     |  |      | 43,343  |      |  |   | 10,000  | 



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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Audit Fees represent aggregate fees charged in
    2002 and 2003 for annual audits and quarterly reviews.                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(b) |  | Audit-Related Fees consist of aggregate fees
    charged for assurance and related services that are reasonably
    related to the performance of the audit and are not reported as
    Audit Fees. Audit Related Fees in 2003 included information
    technology (IT) assurance services, and employee
    benefit plan audits. Audit Related Fees in 2002 included IT
    assurance services, employee benefit plan audits and services
    related to purchase accounting associated with an acquisition.
|   
|(c) |  | Tax Fees consists of aggregate fees charged for
    professional services for tax compliance, tax advice, tax
    planning and assistance with tax audits.                                                                                                                                                                                                                                                                                                                                                     
|   
|(d) |  | All Other Fees represent aggregate fees charged
    for products and services other than those services previously
    reported. In 2003, these services included forensic fact finding
    for the audit committee. In 2002, these services included
    strategic planning assistance.                                                                                                                                                                                                                       

In considering the nature of the services
provided by the independent auditor, the Audit Committee
determined that such services are compatible with the provision
of independent audit services. The Audit Committee discussed
these services with the independent auditor and Company
management to determine that they are permitted under the rules
and regulations concerning auditor independence promulgated by
the U.S. Securities and Exchange Commission (the
SEC) to implement the Sarbanes-Oxley Act of 2002, as
well as the American Institute of Certified Public Accountants.

8



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##### 





| |                    
| | -------------------
| | Pre-Approval Policy

The services performed by the independent auditor
in 2003 were pre-approved in accordance with the pre-approval
policy and procedures adopted by the Audit Committee at its
January 23, 2003 meeting. This policy describes the
permitted audit, audit-related, tax, and other services
(collectively, the Disclosure Categories) that the
independent auditor may perform. The policy requires that prior
to the beginning of each fiscal year, a description of the
services (the Service List) expected to be performed
by the independent auditor in each of the Disclosure Categories
in the following fiscal year be presented to the Audit Committee
for approval.

Services provided by the independent auditor
during the following year that are included in the Service List
were pre-approved following the policies and procedures of the
Audit Committee.

Any requests for audit, audit-related, tax, and
other services not contemplated on the Service List must be
submitted to the Audit Committee for specific pre-approval and
cannot commence until such approval has been granted. Normally,
pre-approval is provided at regularly scheduled meetings.
However, the authority to grant specific pre-approval between
meetings, as necessary, has been delegated to the Chairman of
the Audit Committee. The Chairman must update the Audit
Committee at the next regularly scheduled meeting of any
services that were granted specific pre-approval.

In addition, although not required by the rules
and regulations of the SEC, the Audit Committee generally
requests a range of fees associated with each proposed service
on the Service List and any services that were not originally
included on the Service List. Providing a range of fees for a
service incorporates appropriate oversight and control of the
independent auditor relationship, while permitting the Company
to receive immediate assistance from the independent auditor
when time is of the essence.

On a quarterly basis, the Audit Committee reviews
the status of services and fees incurred year-to-date against
the original Service List and the forecast of remaining services
and fees for the fiscal year.

The policy contains a de minimis provision that
operates to provide retroactive approval for permissible
non-audit services under certain circumstances. The provision
allows for the pre-approval requirement to be waived if all of
the following criteria are met:



| |                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. The service is not an audit, review or
    other attest service;                                                                                                                                                                                                                                                                      
|
| | 2. The aggregate amount of all tax
    consulting services provided under this provision does not
    exceed $50,000 per project or $125,000 in the aggregate on
    an annual basis and all non-audit services provided under this
    provision does not exceed $25,000 per project or $75,000 in
    the aggregate on an annual basis;
|
| | 3. Such services were not recognized at the
    time of the engagement to be non-audit services;                                                                                                                                                                                                                                         
|
| | 4. Such services are promptly brought to the
    attention of the Audit Committee and approved by the Audit
    Committee or its designee; and                                                                                                                                                                                           
|
| | 5. The service and fee are specifically
    disclosed in the Proxy Statement as meeting the de minimis
    requirements.                                                                                                                                                                                                                 

During 2003, no fees were approved under the
de minimis provision.

9



---



##### 



SIGNATURES

Pursuant to the requirements of section 13
or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this amended report to be signed on its behalf
by the undersigned, thereunto duly authorized.



| |                                
| | -------------------------------
| | HAWTHORNE FINANCIAL CORPORATION



| |     |                      
| | --- | ---------------------
| | By: | /s/SIMONE LAGOMARSINO

| |                                          
| | -----------------------------------------
| |                                          
| | Simone Lagomarsino                       
| | President and Chief Executive
    Officer

DATED: March 30, 2004

10