================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (MARK ONE)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
    EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
    EXCHANGE ACT OF 1934. FOR THE TRANSITION PERIOD FROM

     _______________________________ TO ______________________

                        COMMISSION FILE NUMBER : 0-12499

                             FIRST FINANCIAL BANCORP
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                      CALIFORNIA                               94-28222858
            (STATE OR OTHER JURISDICTION OF                 (I.R.S. EMPLOYER
            INCORPORATION OR ORGANIZATION)                 IDENTIFICATION NO.)

        701 SOUTH HAM LANE,  LODI,  CALIFORNIA                    95242
       (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                (ZIP CODE)

                                 (209) 367-2000
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                                       NA
              (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                         IF CHANGED SINCE LAST REPORT.)

     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.

                                                                  [X] Yes [ ] No

     Indicate by check mark whether the Registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act).

                                                                  [ ] Yes [X] No

     As of November 9, 2004 there were  1,824,929  shares of Common Stock no par
value, outstanding.


================================================================================


<PAGE>



                             FIRST FINANCIAL BANCORP

                                    FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2004
                                TABLE OF CONTENTS


                                                                           PAGE
                                                                           ----
                                     PART I

Item 1.  Financial Statements.............................................. 1

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations ............................................ 9

Item 3.  Quantitative and Qualitative Disclosures about Market Risk .......18

Item 4.  Controls and Procedures ..........................................18



                                     PART II

Item 1.  Legal Proceedings ................................................18

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.......19

Item 3.  Defaults Upon Senior Securities ..................................19

Item 4.  Submission of Matters to a Vote of Security Holders...............19

Item 5.  Other Information ................................................19

Item 6.  Exhibits..........................................................20


Signatures ................................................................21
Index to Exhibits .........................................................22


                                       i

<PAGE>



ITEM 1. FINANCIAL STATEMENTS


                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                       (in thousands except share amounts)

<TABLE>
<CAPTION>
                                                                    (Unaudited)
                                                                     September 30, December 31,
ASSETS                                                                   2004         2003
                                                                      ---------    ---------
<S>                                                                   <C>          <C>
Cash and due from banks                                               $  13,072    $  17,497
Federal funds sold and securities purchased under resale agreements      12,564        8,034
Investment securities available for sale, at fair value                  65,021       90,270
Loans held for sale                                                       2,711        3,076
Loans, net of deferred loan fees                                        214,313      178,711
Less allowance for loan losses                                           (2,964)      (3,262)
                                                                      ---------    ---------
  Net loans                                                             211,349      175,449

Premises and equipment, net                                               6,694        6,903
Accrued interest receivable                                               1,382        1,322
Other assets                                                             20,472       19,262
                                                                      ---------    ---------
          Total Assets                                                $ 333,265    $ 321,813
                                                                      =========    =========
LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
    Deposits:
       Noninterest bearing                                            $  51,529    $  47,765
       Interest bearing                                                 224,454      230,390
                                                                      ---------    ---------
          Total deposits                                                275,983      278,155

    Accrued interest payable                                                104          205
    Short term borrowings                                                25,258       14,100
    Other liabilities                                                     4,847        4,231
    Junior subordinated debentures                                        5,155        5,155
                                                                      ---------    ---------
          Total liabilities                                             311,347      301,846
                                                                      ---------    ---------
Stockholders' equity:
    Preferred stock - no par value; authorized 1,000,000 shares;
          no shares issued and outstanding                                 --           --
    Common stock - no par value; authorized 9,000,000 shares;
          issued and outstanding in 2004 and 2003, 1,824,929
          and 1,782,983, respectively                                    13,129       12,950
    Retained earnings                                                     8,680        7,004
    Accumulated other comprehensive income                                  109           13
                                                                      ---------    ---------
          Total stockholders' equity                                     21,918       19,967
                                                                      ---------    ---------

          Total liabilities and stockholders' equity                  $ 333,265    $ 321,813
                                                                      =========    =========
</TABLE>

See accompanying notes.

                                       1
<PAGE>



                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                     (in thousands except per share amounts)


<TABLE>
<CAPTION>
                                                        Three Months Ended         Nine Months Ended
                                                           September 30,              September30,
                                                     ------------------------    ---------------------
                                                        2004           2003        2004          2003
                                                     ----------      --------    --------      -------
Interest income:
<S>                                                     <C>          <C>          <C>          <C>
    Loans, including fees                               $ 3,661      $ 2,996      $10,168      $ 9,248
    Investment securities:
       Taxable                                              553          110        1,795          563
       Exempt from federal taxes                             62           65          201          128
    Federal funds sold                                       25           25           54           94
                                                        -------       -------      -------      -------
            Total interest income                         4,301        3,196       12,218       10,033

Interest expense:
    Deposit accounts                                        499          680        1,654        1,880
    Other borrowings                                        162           70          396          206
                                                        -------      -------      -------      -------
            Total interest expense                          661          750        2,050        2,086
                                                        -------      -------      -------      -------
         Net interest income                              3,640        2,446       10,168        7,947
Provision for loan losses                                   326         --            561          312
                                                        -------      -------      -------      -------
        Net interest income after provision for           3,314        2,446        9,607        7,635
           loan losses
Noninterest income:
     Gain on sale of securities available for sale           21         --             86           88
     Gain on sale of other real estate owned               --           --           --              5
     Gain on sale of loans                                  102          313          449          939
     Service charges                                        444          424        1,307        1,233
     Premiums and fees from SBA and mortgage
         operations                                         107          135          325          376
     Increase in cash surrender value of life
         insurance                                          138          121          471          404
     Miscellaneous                                          128           98          345          316
                                                        -------      -------      -------      -------
        Total noninterest income                            940        1,091        2,983        3,361

Noninterest expense:
     Salaries and employee benefits                       1,977        1,756        5,515        5,276
     Occupancy                                              364          289        1,036          795
     Equipment                                              200          207          579          645
     Other                                                1,121        1,081        3,111        3,106
                                                        -------      -------      -------      -------
        Total noninterest expense                         3,662        3,333       10,241        9,822
                                                        -------      -------      -------      -------
Income before provision for income taxes                    592          204        2,349        1,174
Provision for income tax expense                            147           13          659          282
                                                        -------      -------      -------      -------
        Net income                                      $   445      $   191      $ 1,690      $   892
                                                        =======      =======      =======      =======
Earnings per share:
         Basic                                          $  0.25      $  0.11      $  0.94      $  0.50
                                                        =======      =======      =======      =======
         Diluted                                        $  0.23      $  0.10      $  0.88      $  0.47
                                                        =======      =======      =======      =======
</TABLE>

See accompanying notes.
                                       2

<PAGE>



                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                 (Unaudited) (in thousands except share amounts)


NINE MONTHS ENDED SEPTEMBER 30, 2004
<TABLE>
<CAPTION>
                                                                                                Accumulated
                                        Common       Common                                        Other
                                         Stock        Stock     Comprehensive     Retained     Comprehensive
            Description                 Shares       Amounts        Income        Earnings         Income           Total
------------------------------------- ------------ ------------ --------------- ------------- ----------------- ---------------
<S>                                    <C>          <C>         <C>            <C>             <C>              <C>
Balance at December 31, 2003           1,782,983    $  12,950                          7,004                13        19,967



Comprehensive income:
   Net income                                                     $     1,690          1,690                           1,690
                                                                  -------------
   Other comprehensive income:
      Unrealized holding gain
          arising
          during the current                                              147
          period, net of
          tax benefit of $102
      Reclassification adjustment
          due to gains realized,
          net of tax benefit of $35                                       (51)
                                                                  -------------
      Total other comprehensive
          gain, net of
          tax benefit of $67                                               96                                96            96
                                                                  -------------
      Comprehensive income                                        $     1,786
                                                                  =============
Options exercised, including tax          51,321          315                                                            315
benefits
Cash issued in lieu of stock                                                            (14)                             (14)
dividend
                                                                                                                           )
Stock-based compensation and
related tax benefits                                       30                                                             30
Stock repurchases                         (9,375)        (166)                                                          (166)
                                      ------------ ------------   ------------- ------------  ----------------  ---------------
Balance at September 30, 2004          1,824,929    $  13,129                          8,680               109        21,918
                                      ============ ============                 ============= ================= ===============
</TABLE>

See accompanying notes.

                                       3

<PAGE>



                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)
                         NINE MONTHS ENDED SEPTEMBER 30,

<TABLE>
<CAPTION>
                                                                                        2004            2003
                                                                                      --------       ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                   <C>            <C>
Net income                                                                            $  1,690       $    892
     Adjustments  to  reconcile  net income to net cash  provided
       by  operating activities:
          Increase (decrease) in deferred loan income                                      168            (60)
          Depreciation and amortization                                                  1,659          2,103
          Stock-based compensation                                                          30           --
          Provision for loan losses                                                        561            312
          Gain on sale of securities available for sale                                    (86)           (88)
          Loans originated for sale                                                    (23,311)       (56,298)
          Proceeds from loans sold                                                      24,125         59,205
          Gain on sale of loans                                                           (449)          (939)
          Gain on sale of other real estate owned                                         --               (5)
          Increase in accrued interest receivable                                          (60)          (475)
          (Decrease) increase in accrued interest payable                                 (101)            41
          Increase (decrease) in other liabilities                                         616           (188)
          Increase in cash surrender value of life insurance                              (471)          (404)
          (Increase) decrease in other assets                                             (936)            77
                                                                                      --------       --------
                  Net cash provided by operating activities                              3,435          4,173

CASH FLOWS FROM INVESTING ACTIVITIES:
    Investment securities available for sale:
       Purchases                                                                          (290)       (62,474)
       Proceeds from prepayments                                                        15,913         24,149
       Proceeds from sale                                                                9,100          1,056
    Increase in loans made to customers, net                                           (36,629)       (14,777)
    Proceeds from sale of other real estate                                               --              334
    Purchases of bank premises and equipment                                              (545)          (690)
                                                                                      --------       --------
                  Net cash used in investing activities                                (12,451)       (52,402)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net (decrease) increase in deposits                                                 (2,172)        49,282
    Increase (decrease) in short term borrowings                                        11,158        (14,885)
    Dividends paid                                                                         (14)          --
    Payments for repurchase of common stock                                               (166)          (152)
    Proceeds from issuance of common stock                                                 315            101
                                                                                      --------       --------
                  Net cash provided by financing activities                              9,121         34,346

                  Net increase (decrease) in cash and cash equivalents                     105        (13,883)

Cash and cash equivalents at beginning of period                                        25,531         34,622
                                                                                      --------       --------
Cash and cash equivalents at end of period                                            $ 25,636       $ 20,739

Supplemental Disclosures of Cash Flow Information:
    Cash paid for interest payments                                                   $  2,151          2,045
    Cash paid for income taxes                                                             175            230
    Unrealized gain (loss) on available-for-sale securities, net of tax                    147           (338)
    Loans transferred to other real estate owned                                          --               73
</TABLE>

See accompanying notes.

                                       4
<PAGE>



                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               September 30, 2004
                                   (Unaudited)

(1) Summary of Significant Accounting Policies


     First  Financial  Bancorp (the  "Company")  operates  principally as a bank
     holding  company for its wholly owned  subsidiary,  Bank of Lodi, N.A. (the
     "Bank").  The Bank is the principal  source of income for the Company.  The
     Company  also  holds  all of the  capital  stock of its  other  subsidiary,
     Western  Auxiliary  Corporation.  All  references  herein to the  "Company"
     include the Bank and all other  subsidiaries,  unless the context otherwise
     requires.

     BASIS OF PRESENTATION

     The accompanying unaudited consolidated financial statements of the Company
     have been  prepared in  accordance  with  accounting  principles  generally
     accepted in the United States of America for interim financial  information
     and with the  instructions  to Form 10-Q and Rule 10-01 of Regulation  S-X.
     Accordingly,  they do not  include  all of the  information  and  footnotes
     required by accounting  principles  generally accepted in the United States
     of America for complete financial statements. In the opinion of management,
     the  consolidated   financial   statements  reflect  all  normal  recurring
     adjustments  necessary  for a fair  presentation  of the  results  for  the
     interim periods.

     Certain  amounts in the prior year have been  reclassified  to conform with
     the  current  presentation.  These  reclassifications  have  no  effect  on
     previously reported income.

     These   statements   should  be  read  in  conjunction   with  the  audited
     consolidated  financial  statements  and  related  notes  included  in  the
     Company's 2003 Annual Report on Form 10-K.  Operating  results for the nine
     months  ended  September  30, 2004 are not  necessarily  indicative  of the
     results that may be expected for the year ending December 31, 2004.

     In December 2003, FASB issued Statement No. 132 (revised 2003),  Employers'
     Disclosures  about  Pensions  and  Other  Postretirement   Benefits.   This
     Statement prescribes  employers'  disclosures about pension plans and other
     postretirement  benefit  plans;  it does  not  change  the  measurement  or
     recognition  of  those  plans.  The  Statement   retains  and  revises  the
     disclosure  requirements  contained in the original  Statement 132. It also
     requires additional disclosures about the assets, obligations,  cash flows,
     and  net  periodic   benefit  cost  of  defined  benefit  plans  and  other
     postretirement  benefit  plans.  The  Statement  generally is effective for
     fiscal years ending after  December  15, 2003.  The Company  currently  has
     postretirement  benefit plans that are within the scope of this  Statement.
     Management  has  done  an  analysis  of  the  impact  of  this   accounting
     pronouncement  and this  has  been  disclosed  in the  Notes  To  Unaudited
     Condensed Consolidated Financial Statements entitled "RETIREMENT PLANS".

     In March, 2004, the Emerging Issues Task Force ("EITF") Issue No. 03-1 "The
     Meaning of  Other-Than-Temporary  Impairment and its Application to Certain
     Investments" consensus was published. Issue No. 03-1 contained new guidance
     effectively  codifying the provisions of SEC Staff Accounting  Bulletin No.
     59 and  creates a new model that  calls for new  judgments  and  additional
     evidence  gathering.  The Company does not expect the adoption of this EITF
     to  have  a  material  impact  on  the  Company's   Consolidated  Financial
     Statements.


(2) Pending Merger

     On September 7, 2004, the Company  entered into a definitive  Agreement and
     Plan of Merger with Placer Sierra Bancshares,  headquartered in Sacramento,
     California,  pursuant to which the Company  will merge with and into Placer
     Sierra   Bancshares,   with  Placer  Sierra  Bancshares  as  the  surviving
     corporation.  On November 3, 2004,  the  shareholders  approved  the merger
     agreement  and the  Company is now  awaiting  regulatory  approval.  If the
     merger is approved,  the Company's stockholders will receive $25.40 in cash
     in exchange for each share of the Company's common stock held. The proposed
     merger is expected to close by the end of 2004 or early 2005.

                                       5

<PAGE>



(3) Outstanding Shares and Earnings Per Share

     On March 25, 2004,  the Board of  Directors  of the Company  declared a 10%
     stock dividend  payable as of May 14, 2004. All share and per share amounts
     have  been  adjusted  to  reflect  the  effect of the  stock  dividend.  In
     addition,  the December 31, 2003 number of shares  outstanding was adjusted
     to properly reflect the stock dividend.

     Per share  information  is based on  weighted  average  number of shares of
     common stock  outstanding  during each  three-month  and nine month period.
     Basic  earnings  per share (EPS) is computed by dividing  net income by the
     weighted  average  common  shares  outstanding  during the period.  Diluted
     earnings  per share is  computed  by  dividing  net income by the  weighted
     average common shares  outstanding  during the period plus potential common
     shares  outstanding.  Diluted  earnings per share  reflects  the  potential
     dilution that could occur if securities or other  contracts to issue common
     stock were  exercised  or  converted  into common  stock or resulted in the
     issuance of common stock that then shared in the earnings of the Company.

     The  following  tables  provide  a  reconciliation  of  the  numerator  and
     denominator of the basic and diluted earnings per share  computation of the
     three and nine month periods ended September 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                         Income              Shares         Per Share
         Three months ended September 30, 2004                         (numerator)       (denominator)        Amount
         ---------------------------------------------------------- ------------------ ------------------- -------------
<S>                                                                  <C>                 <C>              <C>
         Basic earnings per share                                           $ 445,000           1,815,658        $ 0.25
         Effect of dilutive securities                                                            140,803             -
                                                                    ------------------ -------------------
         Diluted earnings per share                                         $ 445,000           1,956,461        $ 0.23
                                                                    ================== ===================

                                                                         Income              Shares         Per-Share
         Three months ended September 30, 2003                         (numerator)       (denominator)        Amount
         ---------------------------------------------------------- ------------------ ------------------- -------------
         Basic earnings per share                                           $ 191,000           1,789,582        $ 0.11
         Effect of dilutive securities                                                            126,247             -
                                                                    ------------------ -------------------
         Diluted earnings per share                                         $ 191,000           1,915,829        $ 0.10
                                                                    ================== ===================


                                                                         Income              Shares         Per-Share
         Nine months ended September 30, 2004                          (numerator)       (denominator)        Amount
         ---------------------------------------------------------- ------------------ ------------------- -------------
         Basic earnings per share                                         $ 1,690,000           1,793,590        $ 0.94
         Effect of dilutive securities                                                            127,047             -
                                                                    ------------------ -------------------
         Diluted earnings per share                                       $ 1,690,000           1,920,637        $ 0.88
                                                                    ================== ===================

                                                                         Income              Shares         Per-Share
         Nine months ended September 30, 2003                          (numerator)       (denominator)        Amount
         ---------------------------------------------------------- ------------------ ------------------- -------------
         Basic earnings per share                                           $ 892,000           1,791,797        $ 0.50
         Effect of dilutive securities                                                            102,444             -
                                                                    ------------------ -------------------
         Diluted earnings per share                                         $ 892,000           1,894,241        $ 0.47
                                                                    ================== ===================
</TABLE>

All share  and per  share  data has been  adjusted  for the 10%  stock  dividend
declared on March 25, 2004.

(4) Allowance for Loan Losses

     The following  summarizes  changes in the allowance for loan losses for the
     nine-month  periods ended  September 30, 2004 and 2003 and the twelve month
     period ended December 31, 2003:


<TABLE>
<CAPTION>
         (in thousands)                      9/30/04        9/30/03      12/31/03
                                             -------       --------      -------
<S>                                          <C>             <C>           <C>
Balance at beginning of period               $ 3,262         3,057         3,057
  Loans charged off                             (879)         (134)         (143)
  Recoveries                                      20            29            36
  Provisions charged to operations               561           312           312
                                             -------       -------       -------
Balance at end of period                     $ 2,964         3,264         3,262
                                             =======       =======       =======
</TABLE>

                                       6


<PAGE>



(5) Stock Based Compensation

     Effective  as of  January  1,  2003,  the  Company  adopted  the fair value
     recognition   provisions  of  FASB   Statement  No.  148,   Accounting  for
     Stock-Based  Compensation  (SFAS No. 148). Under the prospective  method of
     adoption selected by the Company,  stock-based employee  compensation costs
     are recognized as awards are granted, modified or settled. Prior to January
     1, 2003, these plans were accounted for under the intrinsic value method as
     prescribed in APB Opinion No. 25, Accounting for Stock Issued to Employees.
     Under the intrinsic  value method,  compensation  expense was recognized on
     the date of grant only if the market price of the underlying stock exceeded
     the exercise price on that date.

     The  following  table  presents  the effect on net income and  earnings per
     share as if the fair value based method had been applied to all outstanding
     and unvested awards in each period.

<TABLE>
<CAPTION>
                                                                   Three Month Period   Nine Month Period
                                                                    Ended September 30, Ended September 30,
                                                                    2004       2003       2004      2003
                                                                  --------    ------    -------    -----
<S>                                                               <C>            <C>       <C>        <C>
Net income, as reported (in thousands)                            $    445       191       1,690      892
     Add: Stock based employee compensation expense included
     In reported net income, net of tax effect                          6         2          18         6
     Deduct: Stock based employee compensation determined under
     fair value based method for all awards, net of tax effect         (9)       (7)        (27)      (21)
                                                                  --------    ------    --------   ------
     Pro forma net income                                         $    442       186       1,681      877
                                                                  ========    ======    ========   ======
Earnings per share-basic
     As reported                                                  $   0.25      0.11        0.94     0.50
     Pro-forma                                                        0.24      0.10        0.94     0.49
Earnings per share-assuming dilution
     As reported                                                  $   0.23      0.10        0.88     0.47
     Pro-forma                                                        0.23      0.10        0.88     0.46
                                                                  ========    ======    ========   ======
</TABLE>

     All share and per share data has been  adjusted for the 10% stock  dividend
declared on March 25, 2004.

(6) Retirement Plans

     The  Company  has  a  supplemental  retirement  plan  for  directors  and a
     supplemental executive retirement plan covering key executives. These plans
     are non-qualified defined benefit plans and are unsecured and unfunded. The
     Company  has  purchased  insurance  on the  lives of the  participants  and
     intends  to use the cash  values of these  policies  to pay the  retirement
     obligations.

     The following table sets forth the net periodic benefit cost recognized for
the plans:
<TABLE>
<CAPTION>
                                                                    Nine months Ended September 30,
     (in thousands)                                                    2004                 2003
                                                               --------------------- --------------------
     Net pension cost included the following components:
<S>                                                            <C>                   <C>
     Service cost-benefits earned during the period            $              93     $               78
     Interest cost on projected benefit obligation                           111                     99
     Amortization of prior service cost                                       57                     54
     Recognized net actuarial loss                                             6                      4
                                                               -----------------------------------------
     Net periodic pension cost                                 $             267     $              235
                                                               =========================================
</TABLE>

     The Company  estimates at December  31, 2004 that the net periodic  benefit
     cost will be  $369,783.  This  compares to net  periodic  benefit  costs of
     $345,663 at December 31, 2003.  During the nine months ended  September 30,
     2004,  the Company  contributed  and paid out as benefits $20.0 thousand to
     participants  under the plans.  For the year ending  December 31, 2004, the
     Company  expects to contribute  and pay out as benefits  $27.5  thousand to
     participants under the plans.


                                       7
<PAGE>



(7) Legal Proceedings

     On March 23, 2004, a lawsuit was filed naming First Financial Bancorp, Bank
     of Lodi, N.A. and certain named directors and officers of the Company.  The
     suit was brought as a derivative  action  commenced by two  shareholders on
     behalf of the  Company.  It alleges  intentional  and  negligent  breach of
     fiduciary  duty,  abuse of  control,  waste  of  corporate  assets,  unjust
     enrichment and imposition of constructive trust. The matter was tendered to
     the  Company's  carrier for its director and officer  liability  insurance,
     which  accepted  the  tender of  defense.  The Boards of  Directors  of the
     Company and the Bank referred the matter to independent  Special Litigation
     Committees  composed  of two  disinterested  directors,  one of  whom  is a
     retired San  Joaquin  County  Judge,  to evaluate  the  allegations  of the
     Complaint  and  determine  what  action,  if any,  the Company and the Bank
     should  take with  respect  to the  action.  While the  Special  Litigation
     Committees were performing  their  investigations,  the matter was settled,
     with the sole monetary consideration being a payment of $25,000 towards the
     plaintiff's attorneys' fees. The Special Litigation Committees subsequently
     completed  their   investigations   and  recommended  that  the  matter  be
     dismissed.  On October  15,  2004,  the court  entered an order  dismissing
     plaintiff's complaint with prejudice.

     The Company is involved in various  legal  actions  arising in the ordinary
     course of business.  In the opinion of management,  after  consulting  with
     legal  counsel,  the ultimate  disposition of these matters will not have a
     material effect on the Company's consolidated  financial position,  results
     of operations, or liquidity.

(8) Stock Repurchase Program

     In April 2002, the Board of Directors authorized a stock repurchase program
     approving the repurchase of up to $2 million of the Company's stock.  Since
     the program's inception,  51,087 shares were repurchased at an average cost
     of  $13.93  per  share for a total of $712  thousand.  Year-to-date,  9,375
     shares were  repurchased at an average cost of $17.71 per share for a total
     of $166 thousand.

                                       8


<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

CAUTIONARY  STATEMENT  FOR THE  PURPOSES  OF THE SAFE HARBOR  PROVISIONS  OF THE
PRIVATE  SECURITIES  LITIGATION REFORM ACT OF 1995.  Certain  statements in this
Quarterly  Report on Form 10-Q include  forward-looking  information  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities  Exchange Act of 1934, as amended,  and are subject to the
"safe  harbor"  created  by those  sections.  These  forward-looking  statements
involve  certain  risks and  uncertainties  that could cause  actual  results to
differ materially from those in the forward-looking statements.  Forward-looking
statements,  which are based on certain  assumptions  and describe future plans,
strategies,  and  expectations,  are generally  identifiable by the use of words
such as "believe,"  "expect,"  "intend,"  "anticipate,"  "estimate,"  "project,"
"assume,"  "plan,"   "predict,"   "forecast"  or  similar   expressions.   These
forward-looking  statements  relate to, among other things,  expectations of the
business  environment  in which  the  Company  operates,  projections  of future
performance,  potential future performance,  potential future credit experience,
perceived  opportunities in the market,  and statements  regarding the Company's
mission and vision.

The  Company's  actual  results,   performance,   and  achievements  may  differ
materially from the results,  performance, and achievements expressed or implied
in  such   forward-looking   statements  due  to  a  wide  range  of  risks  and
uncertainties. Such risks and uncertainties include, but are not limited to, the
following factors:  competitive pressure in the banking industry; changes in the
interest rate  environment;  general  economic  conditions,  either  nationally,
internationally  or  regionally   becoming  less  favorable  than  expected  and
resulting  in, among other  things,  a  deterioration  in credit  quality and an
increase in the provision for possible  loan losses;  changes in the  regulatory
environment;  monetary and fiscal  policies of the U.S.  Government;  changes in
real estate  valuations;  changes in  business  conditions;  volatility  of rate
sensitive deposits; operational risks, including data processing system failures
or  fraud;  asset/liability  matching  risks  and  liquidity  risks;  impact  of
litigation;  the receipt of regulatory approval for the Placer Sierra Bancshares
acquisition;   the  ability  of  management   and  directors  to  work  together
cooperatively and efficiently;  civil  disturbances or terrorist threats or acts
or apprehension  about the possible future occurrences of acts of this type; and
changes in the securities markets. In addition,  other events have increased the
uncertainty  related to the national and California  economic  outlook and could
have an  effect  on the  future  operations  of the  Company  or its  customers,
including borrowers.

The Company does not undertake,  and specifically  disclaims any obligation,  to
update any  forward-looking  statements to reflect  occurrences or unanticipated
events or circumstances after the date of such statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's  discussion and analysis of its financial condition and results of
operations are based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting  principles  generally accepted
in the United States. The preparation of these financial statements requires the
Company to make  estimates  and  judgments  that affect the reported  amounts of
assets,  liabilities,  income and expenses, and related disclosure of contingent
assets  and  liabilities.  On an  on-going  basis,  the  Company  evaluates  its
estimates,  including those related to the allowance for loan losses, other real
estate owned,  investments and income taxes.  The Company bases its estimates on
historical  experience and on various other  assumptions that are believed to be
reasonable  under the  circumstances,  the  results  of which form the basis for
making  judgments about the carrying  values of assets and liabilities  that are
not readily  apparent from other  sources.  Actual results may differ from these
estimates under different assumptions or conditions.

The Company believes the following critical  accounting policies affect its more
significant  judgments and estimates used in the preparation of its consolidated
financial  statements.  The  Company  maintains  an  allowance  for loan  losses
resulting from the inability of borrowers to make required loan payments. If the
financial  conditions of the Company's customers were to deteriorate,  resulting
in an impairment of their ability to make payments, additional allowances may be
required.  The  Company  invests in debt and equity  securities.  If the Company
believes these securities have experienced a decline in value that is other than
temporary,  an investment impairment charge is recorded.  Future adverse changes
in market conditions or poor operating  results of underlying  investments could
result  in  losses  or an  inability  to  recover  the  carrying  value  of  the
investments that may not be reflected in an investment's carrying value, thereby
requiring an impairment charge in the future.

The  following  discussion  addresses  information  pertaining  to the financial
condition  and results of  operations  of the Company  that may not be otherwise
apparent  from a review of the  consolidated  financial  statements  and related
footnotes.  It should be read in  conjunction  with those  statements  and notes
found on pages 1 through 8, as well as other  information  presented  throughout
this report.

                                       9
<PAGE>

SUMMARY

For the quarter  ended  September 30, 2004,  the Company  recorded net income of
$445  thousand,  representing  an increase  of $254  thousand or 133.0% over net
income of $191 thousand for the same period in 2003.  Diluted earnings per share
for the third quarter of 2004 totaled  $0.23, a 130% increase from the $0.10 per
diluted share earnings for the third quarter in 2003. The increase resulted from
an increase  in net  interest  income of $1,194  thousand,  which was  partially
offset by an increase in noninterest  expense of $329  thousand,  an increase in
the provision for loan losses of $326 thousand, an increase in the provision for
income  tax of $134  thousand,  and a  decrease  in  noninterest  income of $151
thousand.

For the nine month period ended  September  30, 2004,  the Company  recorded net
income  totaling $1,690  thousand,  representing an increase of $798 thousand or
89.5% over net income of $892 thousand for the same period in 2003. The increase
resulted  primarily from an increase in net interest  income of $2,221  thousand
combined with a decrease in noninterest income of $378 thousand,  an increase in
noninterest expense of $419 thousand and an increase in the provision for income
tax of $377 thousand. Year to date diluted earnings per share for the first nine
months of 2004 totaled $0.88, an increase of 87% over the prior year per diluted
share earnings, which totaled $0.47.

Return on average  equity for the three and nine month periods  ended  September
30, 2004 totaled 8.58% and 10.78%, respectively, compared to 3.86% and 6.10% for
the same  periods in 2003.  Return on  average  assets  during the same  periods
totaled  0.55%  and  0.69%  in  2004  compared  to  0.27%  and  0.44%  in  2003,
respectively.

Included in net income  during the nine month  period ended  September  30, 2004
were gains on the sale of investment  securities  totaling $86 thousand.  During
the same period in 2003, gains on the sale of investment  securities totaled $88
thousand, a reduction of $2 thousand from the prior year. Additionally, included
in noninterest  expense  during 2004 are  year-to-date  costs totaling  $325,000
associated  with  responding  to  the  actions   initiated  by  three  dissident
directors.

CHANGES IN FINANCIAL CONDITION

Consolidated  total assets as of September 30, 2004 totaled $333 million,  which
represents  an increase of $11,452  thousand,  or 3.6% when compared to December
31, 2003. The increase in total assets was  attributable  primarily to a $11,158
thousand increase in short term borrowings.  Total gross loans increased $35,405
thousand,  or 19.4%  during the first nine  months of 2004.  The loan growth was
funded by a decrease of $25,249,  or 28.0%,  in the investment  portfolio due to
prepayments of mortgage-backed  securities  (including CMOs) of $15,914 thousand
and proceeds from the sale of  securities of $9,100  thousand and an increase of
$11,158 thousand, or 79.1%, in short term borrowings.

The net increase in gross loans is the result of increases of $32,057  thousand,
or 39.6%, $4,641 thousand,  or 15.3%, $2,378 thousand,  or 14.9%, in real estate
loans,  commercial loans and  construction  loans,  respectively,  combined with
decreases of $2,010 thousand, or 6.5%, $876 thousand, or 4.6%, $420 thousand, or
18.5%, and $365 thousand,  or 11.9%, in SBA loans,  agricultural loans, consumer
loans and loans held for sale, respectively.

During the first nine months of 2004,  non-interest  bearing deposits  increased
$3,764  thousand,  or  7.9%  and  interest  bearing  deposits  decreased  $5,936
thousand,  or 2.6%. The year-to-date  deposit decrease  consists of increases of
$3,764 thousand, or 7.9%, $2,831 thousand, or 6.2%, and $1,173 thousand, or 2.1%
in  non-interest  bearing,  savings  accounts  and NOW  accounts  combined  with
decreases  of  $9,258  thousand,  or  12.6%,  and $682  thousand,  or  1.2%,  in
certificates of deposit and money market accounts, respectively.



ALLOWANCE FOR LOAN LOSSES

The  allowance  for loan  losses  (the  "allowance")  is  established  through a
provision  for  possible  loan  losses  charged to  expense.  The  allowance  at
September  30,  2004  decreased  by $298  thousand,  or 9.1%,  when  compared to
December 31, 2003 as a result of a provision for $561 thousand combined with net
charge-offs of $859 thousand.  During the second and third quarters of 2004, the
Company  charged-off  $879 thousand in loans,  which were  primarily  related to
nonperforming  agricultural  loans of a single  borrower.  During the first nine
months of 2004,  nonperforming  loans  decreased by $2,733  thousand,  to $1,147
thousand  when compared to December 31, 2003.  Management  continues to actively
work to resolve the  nonperforming  loans,  the majority of which are secured by
real  estate  which,  in the  opinion  of  management,  renders  the loans  well
collateralized.  Management believes that the allowance at September 30, 2004 is
adequate to absorb known and reasonably  estimated loan losses.  However,  there
can be no assurances that future economic events will not negatively  impact the
Bank's borrowers, thereby causing loan losses to exceed the current allowance.

                                       10

<PAGE>




The  following  tables  depict  activity  in the  allowance  for loan losses and
allocation  of reserves  for the nine months ended  September  30, 2004 and year
ended December 31, 2003, respectively:



ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES


<TABLE>
<CAPTION>
                                     Nine months         Year
                                       Ended             Ended
                                      9/30/04          12/31/03
                                       -------         --------
<S>                                    <C>               <C>
Balance at beginning of period         $ 3,262           3,057
Charge-offs:
   Commercial                             (853)            (88)
   Consumer                                (26)            (55)
                                       -------         -------
   Total charge-offs                      (879)           (143)
Recoveries:
   Commercial                               16              27
   Consumer                                  4               9
                                       -------         -------
   Total recoveries                         20              36
                                       -------         -------
Net charge-offs                           (859)           (107)
Provision charged to operations            561             312
                                       -------         -------
Balance at end of period              $   2964         $ 3,262
                                       =======         =======
</TABLE>


ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES


<TABLE>
<CAPTION>
                                        9/30/04         9/30/04         12/31/03         12/31/03
Loan Category                           Amount        % of Loans         Amount        % of Loans
-------------                          -------         ---------        -------         ---------
<S>                                    <C>                <C>           <C>                <C>
Commercial and other real estate       $ 2,031           90.72%        $  2,381           89.99%
Real estate construction                   890            8.43%             828            8.76%
Installment and other                       43            0.85%              53            1.25%
                                       -------         ---------       ---------        --------
                                       $ 2,964          100.00%        $  3,262          100.00%
                                       =======         ========        =========         =======
</TABLE>



INVESTMENTS

Investment  securities  decreased $25,249 thousand,  or 28.0%, from December 31,
2003 to September 30, 2004. This decrease resulted primarily from prepayments of
mortgage-backed  securities (including CMOs) totaling $15,914 thousand and sales
of investment  securities  totaling $9,100 thousand.  The Company realized gross
gains  totaling $86  thousand on the sale of  investment  securities  during the
first nine months of 2004 which is a decrease of $2  thousand  when  compared to
the same period of 2003.



STOCKHOLDERS' EQUITY

Consolidated  stockholders'  equity  increased  $1,951  thousand,  from  $19,967
thousand  at December  31,  2003 to $21,918  thousand  at  September  30,  2004.
Consolidated  stockholders'  equity  represented 6.58% and 6.20% of consolidated
assets at September 30, 2004 and December 31, 2003,  respectively.  The increase
in equity  during  the first nine  months of 2004  resulted  primarily  from net
income of $1,690  thousand for the nine months ended September 30, 2004 and $315
thousand from the exercise of stock options.

In April 2002,  the Board of  Directors  authorized a stock  repurchase  program
approving the repurchase of up to $2 million of the Company's stock.  Originally
scheduled to terminate on December  31, 2003,  the  repurchase  program has been
extended  to December  31,  2004.  During the first nine  months of 2004,  9,375
shares of stock were repurchased at an average cost of $17.71 per share totaling
$166 thousand.

The total risk-based  capital ratio for the Company's  wholly owned  subsidiary,
Bank of Lodi,  was 10.18% at September  30, 2004  compared to 10.68% at December
31, 2003.


                                       11
<PAGE>




CHANGES IN RESULTS OF OPERATIONS - THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2004

SUMMARY OF EARNINGS PERFORMANCE


<TABLE>
<CAPTION>
                                        ------------------------------------------------------------
                                            Three Months Ended                 Nine Months Ended
                                               September 30,                    September 30,
                                        --------------------------      ----------------------------
                                           2004            2003             2004             2003
                                        ----------      ----------      ------------      ----------
<S>                                     <C>             <C>             <C>               <C>
Net income (in thousands)               $      445      $      191      $      1,690      $      892
Basic net income per share              $     0.25      $     0.11      $       0.94      $     0.50
Diluted net income per share            $     0.23      $     0.10      $       0.88      $     0.47
Return on average assets                      0.55%           0.27%             0.69%           0.44%
Return on average equity                      8.58%           3.86%            10.78%           6.10%
Average equity to average assets              6.37%           6.93%             6.42%           7.15%
</TABLE>


Net  income  for the three  months  ended  September  30,  2004  increased  $254
thousand,  or 133.0%,  compared to the same period of 2003. Net interest  income
increased  $1,194 thousand,  or 48.8% as a result of a $89 thousand  decrease in
interest  expense  combined with a $1,105 thousand  increase in interest income.
The provision for loan losses totaled $326 thousand  representing an increase of
$326  thousand  when  compared  to the same period in 2003.  Noninterest  income
decreased $151 thousand,  or 13.8%,  while  noninterest  expense  increased $329
thousand,  or 9.9%. The provision for income taxes increased $134 thousand.  Net
income for the nine months ended September 30, 2004 increased $798 thousand,  or
89.5%, compared to the same period of 2003. Net interest income increased $2,221
thousand,  or 27.9% as a result of a $36 thousand  decrease in interest  expense
combined with a $2,185 thousand  increase in interest income.  The provision for
loan losses totaled $561 thousand  representing an increase of $249 thousand, or
79.8%  when  compared  to the  first  nine  months of 2003.  Noninterest  income
decreased $378 thousand,  or 11.2%,  while  noninterest  expense  increased $419
thousand,  or 4.3%. The provision for income taxes  increased $377 thousand,  or
133.7%.  The  return on  average  equity  for the three  and nine  months  ended
September 30, 2004 was 8.58% and 10.78% compared to 3.86% and 6.10% for the same
periods of 2003.

                                       12

<PAGE>




NET INTEREST INCOME

The following table provides a detailed  analysis of the net interest spread and
net interest margin for the periods indicated:
<TABLE>
<CAPTION>

                                -----------------------------------------------------------------------------------------
                                                          FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                -----------------------------------------------------------------------------------------
                                                    2004                                             2003
                                --------------------------------------------   -------------------------------------------
                                  Average          Income/          Yield(1)      Average           Income/       Yield (1)
Dollars In Thousands              Balance          Expense                        Balance          Expense
                                -----------      ------------     ---------    ------------      -----------     ----------
EARNING ASSETS:
<S>                             <C>              <C>                   <C>     <C>               <C>                  <C>
Investment securities (1)(2)    $    69,462      $        615          3.55%   $      68,213     $        175         1.03%

Federal funds sold                    6,191                25          1.62%           9,938               25         1.01%

Loans (2)(3)                        216,851             3,661          6.77%         171,891            2,996         6.99%
                                -----------      ------------     ----------   -------------     ------------    ----------
TOTAL EARNING ASSETS            $   292,504      $      4,301          5.90%         250,042     $      3,196         5.13%
                                ===========      ============     =========    =============     ============    ==========
LIABILITIES:

Non-interest bearing deposits   $    51,920      $         --                  $      43,769     $        --

Savings, money market, &
NOW deposits                        160,889               251          0.63%         137,127              290         0.85%

Time deposits                        64,392               248          1.54%          76,948              390         2.03%

Other borrowings                     27,644               162          2.35%           8,541               70         3.29%
                                -----------      ------------     ---------    -------------     ------------    ---------
TOTAL LIABILITIES               $   304,845      $        661          0.87%   $     266,385     $        750         1.13%
                                ===========      ============     =========    =============     ============    ==========
NET INTEREST SPREAD                                                    5.03%                                          4.00%
                                                                  =========                                      ==========
                                -----------      ------------     ---------    -------------     ------------    ----------
                                  Earning          Income/                        Earning           Income/
                                  Assets           Expense          Yield          Assets           Expense         Yield
                                -----------      ------------     ---------    -------------     ------------    ---------
Yield on average earning        $   292,504      $      4,301          5.90%   $     250,042     $      3,196         5.13%
assets

Cost of funding average
earning assets                  $   292,504               661         (0.91%)  $     250,042              750        (1.20%)
                                                 ------------     ---------                      ------------    -----------
NET INTEREST MARGIN             $   292,504      $      3,640          4.99%   $     250,042     $      2,446          3.93%
                                                 ============     =========                      ============    ===========
</TABLE>


(1)  Yield for period annualized on actual number of days in period and based on
     a 365-day year.
(2)  Income on tax-exempt securities has not been adjusted to a tax equivalent
     basis.
(3)  Nonaccrual loans are included in the loan totals for each period; however,
     only collected interest on such loans is included in interest income.

Net interest income for the third quarter of 2004 increased $1,194 thousand,  or
48.8%, when compared to the same period of 2003. The increase is attributable to
the effects of increases in volumes of earning assets and  liabilities  combined
with the  effects of changes  in  interest  rates.  The  increase  in volumes of
average earning assets and  liabilities  resulted in an increase in net interest
income  totaling $617 thousand  while  interest rates resulted in an increase in
net interest  income  totaling $577 thousand when comparing the third quarter of
2004 to the same period last year.

Average earning assets  increased  $42,462  thousand during the third quarter of
2004 as compared to the third quarter of 2003.  Average loans increased  $44,960
thousand and investment securities increased $1,249 thousand while federal funds
sold decreased  $3,747  thousand.  The increase in the volume of average earning
assets  during the third  quarter of 2004 as compared to the same period of 2003
resulted in an increase in interest  income  totaling  $777  thousand.  Interest
rates on average earning assets  increased 77 basis points (from 5.13% to 5.90%)
when  compared to the same period in 2003,  resulting in an increase in interest
income totaling $328 thousand.

                                       13
<PAGE>

Average liabilities  increased $38,460 thousand during the third quarter of 2004
as  compared  to the same period  last year.  The  increase  consists of $16,795
thousand,  $8,151 thousand,  $3,655 thousand and $3,312 thousand in money market
accounts,   non-interest   bearing   deposits,   NOW,   and  savings   accounts,
respectively.   Certificates  of  deposit  decreased  $12,556  thousand.   Other
borrowings increased $19,103. The increase in average liabilities resulted in an
increase  in  interest  expense  totaling  $161  thousand.  The cost of interest
bearing liabilities decreased 26 basis points (from 1.13% to 0.87%) resulting in
a reduction in interest expense totaling $250 thousand.




<PAGE>

<TABLE>
<CAPTION>


                                -------------------------------------------------------------------------------------------
                                                         FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                -------------------------------------------------------------------------------------------
                                                   2004                                            2003
                                -------------------------------------------    -------------------------------------------
                                  Average          Income/        Yield (1)       Average           Income/       Yield (1)
Dollars In Thousands              Balance          Expense                        Balance          Expense
                                ------------     -------------    ---------    -------------     ------------    ----------
EARNING ASSETS:

<S>                             <C>              <C>                   <C>     <C>               <C>                  <C>
Investment securities (1)(2)    $    79,164      $      1,996          3.36%   $      47,359     $        691         1.95%

Federal funds sold                    6,175                54          1.16%          10,803               94         1.16%

Loans (2)(3)                        202,280            10,168          6.70%         170,133            9,248         7.27%
                                -----------      ------------     ---------    -------------     ------------    ----------
TOTAL EARNING ASSETS            $   287,619      $     12,218          5.66%   $     228,295     $     10,033         5.88%
                                ===========      ============     =========    =============     ============    ==========
LIABILITIES:

Non-interest bearing deposits   $    48,680      $                             $      38,030     $

Savings, money market, &
NOW deposits                        159,333               842          0.70%         129,121              788         0.81%

Time deposits                        68,308               812          1.58%          67,005            1,092         2.18%

Other borrowings                     24,311               396          2.17%           7,408              206         3.72%
                                -----------      ------------     ---------    -------------     ------------    ----------
TOTAL LIABILITIES               $   300,632      $      2,050          0.91%   $     241,563     $      2,086         1.15%
                                ===========      ============     =========    =============     ============    ==========
NET INTEREST SPREAD                                                    4.75%                                          4.73%
                                                                  =========                                      ==========

                                -----------      ------------     ---------     -----------      ------------    ----------
                                  Earning          Income/                        Earning          Income/
                                  Assets           Expense          Yield         Assets           Expense         Yield
                                -----------      ------------     ---------    -------------     ------------    ----------
Yield on average earning        $   287,619      $     12,218         5.66%    $     228,295     $     10,033          5.88%
assets

Cost of funding average
earning assets                  $   287,619      $      2,050         (0.95)%  $     228,295     $      2,086         (1.23)%
                                                 ------------     ---------                      ------------    ----------
NET INTEREST MARGIN             $   287,619      $     10,168          4.71%   $     228,295     $      7,947         4.65%
                                                 ============     =========                      ============    ==========
</TABLE>

(1)  Yield for period annualized on actual number of days in period and based on
     a 365-day year.
(2)  Income on tax-exempt securities has not been adjusted to a tax equivalent
     basis.
(3)  Nonaccrual loans are included in the loan totals for each period; however,
     only collected interest on such loans is included in interest income.

                                       14

<PAGE>




Net interest income for the first nine months of 2004 increased $2,221 thousand,
or 27.9%, when compared to the same period of 2003. The increase is attributable
to the  effects  of  increases  in volumes  of  earning  assets and  liabilities
combined with the effects of changes in interest rates.  The increase in volumes
of average  earning  assets  and  liabilities  resulted  in an  increase  in net
interest  income  totaling  $1,436  thousand while interest rates resulted in an
increase in net interest  income totaling $785 thousand when comparing the first
nine months of 2004 to the same period last year.

Average earning assets  increased  $59,324 thousand during the nine month period
ended  September 30, 2004 as compared to the same period of 2003.  Average loans
increased $32,147 thousand and investment  securities increased $31,805 thousand
while federal funds sold decreased $4,628  thousand.  The increase in the volume
of average  earning  assets  during the first nine months of 2004 as compared to
the same period of 2003  resulted in an  increase  in interest  income  totaling
$2,179 thousand. Changes in interest rates on average earning assets resulted in
an increase in interest  income  totaling $6 thousand  when compared to the same
period of 2003.

Average  liabilities  increased  $59,069  thousand  during the nine month period
ended  September 30, 2004 as compared to the same period last year. The increase
consists of $20,991 thousand, $10,650 thousand, $4,993 thousand, $4,229 thousand
and $1,303 thousand in money market accounts, non-interest bearing deposits, NOW
accounts,  savings  accounts and  certificates of deposit,  respectively.  Other
borrowings increased $16,903. The increase in average liabilities resulted in an
increase  in  interest  expense  totaling  $743  thousand.  As a  result  of the
declining  interest rate environment,  the cost of interest bearing  liabilities
decreased  25 basis  points  (from 1.15% to 0.91%)  resulting  in a reduction in
interest expense totaling $779 thousand.

Interest income is also affected by nonaccrual loan activity.  Nonaccrual  loans
at September 30, 2004 and September 30, 2003 totaled $1,147  thousand and $2,360
thousand,   respectively.   Interest   forgone  on   nonaccrual   loans  totaled
approximately $69 thousand and $244 thousand for the three and nine months ended
September  30, 2004  compared to $76  thousand  and $251  thousand  for the same
periods of 2003, respectively.



PROVISION FOR LOAN LOSSES

The provision for loan losses for the three and nine months ended  September 30,
2004 was $326  thousand  and $561  thousand  compared  with $0 thousand and $312
thousand for the three and nine months ended  September 30, 2003, an increase of
$326 thousand and $249 thousand. As of September 30, 2004 the allowance for loan
losses  was  $2,964  thousand  or 1.4% of total  loans,  which  compares  to the
allowance  for loan  losses  of  $3,262  thousand  or 1.8% of total  loans as of
December 31, 2003.  See  "Allowance  for Loan Losses"  contained  herein.  As of
September 30, 2004, nonperforming loans totaled $1,147 thousand or 0.5% of total
loans compared to $3,880 thousand or 2.1% at December 31, 2003. No assurance can
be given that  nonperforming  loans will not increase or that the  allowance for
loan losses will be adequate to cover losses inherent in the loan portfolio.



NONINTEREST INCOME

Noninterest  income  for the three and nine  months  ended  September  30,  2004
decreased by $151 thousand, or 13.8%, and $378 thousand, or 11.2%, when compared
to the same  periods  in  2003.  The  decreases  are  primarily  the  result  of
reductions in the gains realized on the sale of loans totaling $211 thousand and
$490  thousand  when  compared to the three and nine months ended  September 30,
2003.  During the third  quarter of 2004,  the Company  sold $4,955  thousand of
investment  securities for a gain of $21 thousand.  During the first nine months
of  2004,  the  Company  realized  gains on the  sale of  investment  securities
totaling $86 thousand  compared to $88 thousand for the same period of 2003.  In
addition, the Company realized gains from the sale of other real estate totaling
$0  thousand  and $5  thousand  during the first  nine  months of 2004 and 2003,
respectively.

Income from the sale and  servicing of loans  totaled $209  thousand  during the
third quarter of 2004, which decreased by $239 thousand,  or 53.3%,  compared to
the prior year  quarter.  During the first nine months of 2004,  income from the
sale and servicing of loans totaled $774  thousand,  a decrease of $541 thousand
or 41.1% over the same  period of 2003.  The  decreases  in income from sale and
servicing  of loans  are  principally  related  to a  decline  in the  Company's
residential  mortgage  lending  activity  during  2004  when  compared  to  2003
resulting from an increase in mortgage lending rates.

The income  recognized on the cash surrender  value of life insurance  increased
$17 thousand  and $67  thousand,  during the third  quarter and year to date for
2004,  respectively,  when  compared  to the same  periods  in 2003.  The income
recognized  from the increase in the cash  surrender  value of life insurance is
exempt from income taxes.  The tax  effective  yield of the increase in the cash
surrender  value of the life insurance  totaled 6.5% during the third quarter of
2004 as compared to 5.9% during the second  quarter of 2003.  For the first nine
months of 2004, the tax effective  yield totaled 7.6% as compared to 6.8% during
the same period in 2003.


                                       15


<PAGE>




NONINTEREST EXPENSE

Noninterest  expense  increased  $329 thousand,  or 9.9%, and $419 thousand,  or
4.3%,  when comparing the three and nine month periods ended  September 30, 2004
to the same periods of 2003.  When  comparing the third quarter of 2004 to 2003,
personnel expense increased $221 thousand, or 12.6% primarily as a result of the
addition of the  Sacramento  branch in September  2003.  When comparing the nine
month periods ended September 30, 2004 to 2003, personnel expense increased $239
thousand or 4.5%.  This increase is primarily due to addition of the  Sacramento
branch in September 2003 combined with a decrease of $93 thousand in commissions
due to the decreased volume of residential mortgage activity. When comparing the
three and nine  month  periods  ended  September  30,  2004,  occupancy  expense
increased $75 thousand, or 26.0% and $241 thousand, or 30.3%, respectively. This
is  primarily  the result of  increased  rent expense due to the addition of the
Sacramento  location and a Credit  Administration  office in Folsom.  During the
third quarter of 2004,  equipment expense  decreased $7 thousand,  or 3.4%, when
compared to the third quarter of 2003.  Equipment  expense during the first nine
months of 2004 decreased $66 thousand, or 10.2% when compared to 2003. Decreases
in both periods are due to a decrease in depreciation expense. For the three and
nine month periods ended September 30, 2004, other noninterest expense increased
$40 thousand, or 3.7% and $5 thousand, or 0.2%,  respectively,  when compared to
the same periods of 2003.

Included in other  noninterest  expense are costs  associated with responding to
the disruptive actions initiated by three dissident directors.  During the three
and nine month periods ended September 30,2004 these costs totaled $130 thousand
and $325  thousand  compared  to $64  thousand  and $158  thousand  for the same
periods  of  2003.  On  October  27,  2004,  the  dissident  directors  signed a
settlement and standstill agreement in which they agreed to support the proposed
merger of the bank with Placer  Sierra  Bancshares.  The Company  agreed to make
certain  payments to the three  directors  and the parties  agreed to take other
actions described in the agreement, including, if a 2004 annual meeting is held,
nominating the three directors as part of management's  slate of directors.  The
three  directors  and the Company  also agreed to a mutual  release of any legal
liability to the other  arising out of the matters  described in the  standstill
agreement.  The Company had filed the  standstill  agreement  with the SEC as an
exhibit to an 8-K report and  mailed it to the  Company's  shareholders  and the
agreement is incorporated by reference as an exhibit to this report


INCOME TAXES
-------------

In the three months ended  September 30, 2004,  taxes increased $134 thousand to
$147  thousand  from $13  thousand  for the same period in 2003.  The  Company's
effective  tax rate for the three  months  ended  September  30, 2004 was 24.8%,
compared to 6.4% for the same period in 2003. For the first nine months of 2004,
the  provision  for income  taxes  totaled  $659  thousand  as  compared to $282
thousand  during the same period  last year.  For the first nine months of 2004,
the  Company's  effective  tax rate was 28.1% as  compared to 24.0% for the same
period in 2003.


OFF-BALANCE SHEET COMMITMENTS
------------------------------

The following  table shows the  distribution of the Company's  undisbursed  loan
commitments at the dates indicated.

(IN THOUSANDS)                     September 30, 2004     December 31, 2003
---------------------------------------------------------------------------
   Commitments to extend credit      $      57,149                49,643
===========================================================================
   Standby letters of credit         $         312                   488

                                       16


<PAGE>




LIQUIDITY AND CAPITAL RESOURCES

One of the Company's goals is to provide  adequate funds to meet changes in loan
demand or any  potential  increase in the normal  level of deposit  withdrawals.
This goal is accomplished primarily by generating cash from operating activities
and maintaining sufficient short-term liquid assets. These sources, coupled with
a stable deposit base and a strong reputation in the capital markets,  allow the
Company  to  fund  earning  assets  and  maintain  the  availability  of  funds.
Management believes that the Company's traditional sources of maturing loans and
investment  securities,  sales  of loans  held for  sale,  cash  from  operating
activities and a strong base of core deposits are adequate to meet the Company's
liquidity needs for normal operations.

The Bank's  liquidity is managed on a daily basis by maintaining  cash,  federal
funds sold, and short-term investments at levels commensurate with the estimated
requirements  for loan  demand and  fluctuations  in  deposits.  Loan demand and
deposit  fluctuations  are affected by a number of factors,  including  economic
conditions,  seasonality  of the  borrowing and deposit  bases,  and the general
level  of  interest  rates.   The  Bank  maintains  two  lines  of  credit  with
correspondent  banks as a  supplemental  source of  short-term  liquidity in the
event that saleable  investment  securities  and loans or available new deposits
are not adequate to meet liquidity needs. The Bank has also established  reverse
repurchase  agreements  with two  brokerage  firms,  which allow for  short-term
borrowings that are secured by the Bank's  investment  securities.  Furthermore,
the Bank may also borrow on a short-term  basis from the Federal  Reserve in the
event that other liquidity sources are not adequate.

If the Company's traditional sources of liquidity were constrained,  the Company
would be forced to pursue  avenues of funding not typically  used by the Company
and the Company's net interest margin could be impacted negatively.  The Company
does  utilize,  among other  tools,  maturity  gap tables,  interest  rate shock
scenarios  and an active asset and  liability  management  committee to analyze,
manage  and plan  asset  growth  and to assist in  managing  the  Company's  net
interest  margin and  overall  level of  liquidity.  The  Company's  approach to
providing adequate liquidity has been successful in the past and management does
not anticipate any near- or long-term changes to its liquidity strategies.

At September 30, 2004, liquidity was considered adequate, and funds available in
the local deposit market and scheduled  maturities of investments are considered
sufficient  to meet  long-term  liquidity  needs.  Compared  to  2003  liquidity
increased $105 thousand in 2004.

As of  September  30,  2004,  the  Bank's  capital  ratios  exceeded  applicable
regulatory requirements. The following tables present the capital ratios for the
Bank, compared to the standards for well-capitalized depository institutions, as
of September 30, 2004 (amounts in thousands except percentage amounts).


<TABLE>
<CAPTION>
                                                         Actual
                                           -------------------------------------    Well Capitalized       Minimum Capital
                                           Capital                 Ratio           Ratio Requirement         Requirement
                                           --------                ------          -----------------       ---------------
<S>                                       <C>                        <C>                   <C>                    <C>
Leverage                                  $ 23,468                   7.2%                  5.0%                   4.0%

Tier 1 Risk-Based                         $ 23,468                   9.0%                  6.0%                   4.0%

Total Risk-Based                          $ 26,433                  10.2%                 10.0%                   8.0%
</TABLE>


RECENT ACCOUNTING PRONOUNCEMENTS
---------------------------------

In December  2003,  FASB issued  Statement  No. 132 (revised  2003),  Employers'
Disclosures  about Pensions and Other  Postretirement  Benefits.  This Statement
prescribes  employers'  disclosures about pension plans and other postretirement
benefit plans; it does not change the measurement or recognition of those plans.
The Statement retains and revises the disclosure  requirements  contained in the
original  Statement  132.  It also  requires  additional  disclosures  about the
assets,  obligations,  cash  flows,  and net  periodic  benefit  cost of defined
benefit plans and other postretirement benefit plans. The Statement generally is
effective for fiscal years ending after December 15, 2003. The Company currently
has  postretirement  benefit plans that are within the scope of this  Statement.
Management has done an analysis of the impact of this  accounting  pronouncement
and this has been  disclosed  in the Notes To Unaudited  Condensed  Consolidated
Financial Statements entitled "RETIREMENT PLANS".

In March,  2004,  the Emerging  Issues Task Force  ("EITF")  Issue No. 03-1 "The
Meaning  of  Other-Than-Temporary  Impairment  and its  Application  to  Certain
Investments"  consensus  was  published.  Issue No. 03-1  contained new guidance
effectively codifying the provisions of SEC Staff Accounting Bulletin No. 59 and
creates a new  model  that  calls  for new  judgments  and  additional  evidence
gathering.  The  Company  does not  expect the  adoption  of this EITF to have a
material impact on the Company's Consolidated Financial Statements.

                                       17

<PAGE>




ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

While there are several  varieties of market risk,  the market risk  material to
the Company and the Bank is interest  rate risk.  Within the context of interest
rate risk,  market  risk is the risk of loss due to  changes in market  interest
rates that have an adverse effect on net interest income,  earnings,  capital or
the fair  value of  financial  instruments.  Exposure  to this type of risk is a
regular part of a financial institution's operations. The fundamental activities
of making  loans,  purchasing  investment  securities,  and  accepting  deposits
inherently  involve  exposure to interest  rate risk.  The Company  monitors the
repricing  differences  between  assets and  liabilities  on a regular basis and
estimates  exposure to net interest income,  net income,  and capital based upon
assumed  changes in the market yield curve.  As of and for the nine months ended
September 30, 2004, there were no material changes in the market risk profile of
the Company or the Bank as described in the Company's 2003 Form 10-K.


ITEM 4.           CONTROLS AND PROCEDURES

The Company's  management  evaluated,  with the  participation  of the Company's
principal executive and principal  financial officers,  the effectiveness of the
Company's  disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e)  under the Securities  Exchange Act of 1934, as amended (the "Exchange
Act"),  as of  September  30, 2004.  Based on their  evaluation,  the  Company's
principal   executive  and  principal  financial  officers  concluded  that  the
Company's  disclosure controls and procedures were effective as of September 30,
2004.

There  has been no change  in the  Company's  internal  control  over  financial
reporting (as defined in Rules  13a-15(f) and 15d-15(f)  under the Exchange Act)
that occurred during the Company's fiscal quarter ended September 30, 2004, that
has  materially  affected,  or is reasonably  likely to materially  affect,  the
Company's internal control over financial reporting.


PART II -- OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS
                  On March 23, 2004, a lawsuit was filed naming First  Financial
                  Bancorp,  Bank of Lodi,  N.A. and certain named  directors and
                  officers of the Company.  The suit was brought as a derivative
                  action commenced by two shareholders on behalf of the Company.
                  It alleges intentional and negligent breach of fiduciary duty,
                  abuse of control, waste of corporate assets, unjust enrichment
                  and imposition of constructive  trust. The matter was tendered
                  to  the  Company's   carrier  for  its  director  and  officer
                  liability insurance, which accepted the tender of defense. The
                  Boards of Directors  of the Company and the Bank  referred the
                  matter to independent  Special Litigation  Committees composed
                  of two disinterested  directors,  one of whom is a retired San
                  Joaquin  County  Judge,  to evaluate  the  allegations  of the
                  Complaint and determine  what action,  if any, the Company and
                  the Bank  should take with  respect to the  action.  While the
                  Special   Litigation    Committees   were   performing   their
                  investigations, the matter was settled, with the sole monetary
                  consideration   being  a  payment  of  $25,000   towards   the
                  plaintiff's attorneys' fees. The Special Litigation Committees
                  subsequently  completed their  investigations  and recommended
                  that the matter be dismissed.  On October 15, 2004,  the court
                  entered  an  order  dismissing   plaintiff's   complaint  with
                  prejudice.

                  The Company is involved in various  legal  actions  arising in
                  the ordinary course of business. In the opinion of management,
                  after consulting with legal counsel,  the ultimate disposition
                  of  these  matters  will  not have a  material  effect  on the
                  Company's   consolidated   financial   position,   results  of
                  operations, or liquidity.

                                       18

<PAGE>



ITEM 2.           UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

                  The table  below sets forth the  information  with  respect to
                  purchases made by or on behalf of First  Financial  Bancorp or
                  any  "affiliated  purchaser" (as defined in Rule  10b-18(a)(3)
                  under the Securities  Exchange Act of 1934),  of the Company's
                  common stock during the three months ended September 30, 2004.

<TABLE>
<CAPTION>
                                                                               Approximate Dollar
                                                             Total Number        Value of Shares
                                                              of Shares               That
                                                          Purchased as Part        May Yet Be
                                                                  of             Purchased Under
                            Total Number      Average     Publicly Announced      the Plans or
                              of Shares     Price Paid    Plans or Programs       Programs(1)
          Period              Purchased      Per Share           (1)             (in thousands)
--------------------------- -------------- -------------- ------------------- ---------------------
<S>                         <C>             <C>           <C>                              <C>
Month #1                               --             --                  --                $1,296
(July 1, 2004 to
July 31, 2004)
Month #2                              484        $ 15.59                 484                $1,288
(August 1, 2004 to
August 31, 2004)
Month #3                               --             --                  --                $1,288
(September 1, 2004 to
September 30, 2004)
                            -------------- -------------- -------------------
Total                                 484        $ 15.59                 484
                            ============== ============== ===================
</TABLE>

                  (1) On April 4, 2002, the Company  announced that the Board of
                  Directors had approved a share repurchase program, pursuant to
                  which up to $2 million of its common stock may be repurchased.
                  The  repurchase  program is being  effected from time to time,
                  depending on market conditions and other factors, through open
                  market purchases and privately  negotiated  transactions.  The
                  total remaining authorization under the repurchase program was
                  $1,168 thousand as of September 30, 2004. Originally scheduled
                  to terminate on December 31, 2003, the repurchase  program has
                  been extended to December 31, 2004.


ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

                  Not Applicable.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  On November 3, 2004,  the  Company  held a special  meeting of
                  shareholders  to vote on the approval of the  proposed  merger
                  with Placer Sierra Bancshares.  The merger was approved by the
                  following vote:

                    VOTES FOR           VOTES AGAINST       ABSTENTIONS
                    ---------           -------------       -----------
                      1,378,868            50,746              6,349
                   (75.6% of shares    (2.8% of shares    (0.3% of shares
                    outstanding)         outstanding)      outstanding)

                  The proposed merger is expected to close by the end of 2004 or
                  early 2005.

ITEM 5.           OTHER INFORMATION

                  SHAREHOLDERS' PROPOSALS FOR 2004 ANNUAL MEETING;
                  DISCRETIONARY VOTING

                  Any proposal of a shareholder  intended to be presented at the
                  Company's  2004 Annual Meeting must be received by the Company
                  a reasonable  time before the Company begins to print and mail
                  its proxy materials for the meeting for inclusion in the Proxy
                  Statement and form of proxy for that meeting and must meet the
                  requirements  of the  SEC's  proxy  rules.  Any such  proposal
                  should be directed to the  attention of the  President,  First
                  Financial Bancorp, 701 South Ham Lane, Lodi, California 95242.


                  The proxy  holders  may vote in their  discretion  all proxies
                  solicited for the Company's  2004 Annual Meeting on any matter
                  raised  at that  meeting  of which  the  Company  did not have
                  notice  by the  close of  business  on the  tenth  (10th)  day
                  following  the day on which the notice of the  annual  meeting
                  date was mailed to shareholders.



                                       19

<PAGE>




ITEM 6.           EXHIBITS

                           EXHIBITS

                           The   exhibit   list   required   by  this   item  is
                           incorporated  by  reference  to the Index to Exhibits
                           filed as part of this report.



                                       20

<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                 FIRST FINANCIAL BANCORP

                                 By:


Date: NOVEMBER 12, 2004          /S/ ALLEN R. CHRISTENSON
      -----------------          ------------------------
                                 Allen R. Christenson
                                 Executive Vice President
                                 Chief Financial Officer
                                 (Principal Accounting and Financial Officer)

                                       21
<PAGE>



                                                           INDEX TO EXHIBITS


EXHIBIT                    DESCRIPTION

10       Settlement and Standstill Agreement dated as of October 27, 2004, by
         First Financial Bancorp, Bank of Lodi, N.A. , Angelo Anagnos, Steven
         Coldani, Kevin Van Steenberge and Placer Sierra Bancshares
         (incorporated by reference to Exhibit 10 to Current Report on Form 8-K
         dated October 27, 2004)

31.1     Certification of Registrant's Chief Executive Officer Pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002

31.2     Certification of Registrant's Chief Financial Officer Pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002

32.1     Certification of Registrant's Chief Executive Officer Pursuant to 18
         U.S.C. Section 1350

32.2     Certification of Registrant's Chief Financial Officer Pursuant to 18
         U.S.C. Section 1350


                                       22