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

                                  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 JUNE 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 August 9, 2004 there  were  1,830,692  shares of Common  Stock no par
value, outstanding.
================================================================================

<PAGE>

                             FIRST FINANCIAL BANCORP
                                    FORM 10-Q

                       FOR THE QUARTER ENDED JUNE, 30 2004
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                      PAGE

                                     PART I
<S>                                                                                                   <C>
Item 1.           Financial Statements................................................................    1

Item 2.           Management's Discussion and Analysis of Financial Condition and
                  Results of Operations ..............................................................    8

Item 3.           Quantitative and Qualitative Disclosures about Market Risk .........................   17

Item 4.           Controls and Procedures ............................................................   17


                                     PART II

Item 1.           Legal Proceedings ..................................................................   17

Item 2.           Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities....   18

Item 3.           Defaults Upon Senior Securities ....................................................   18

Item 4.           Submission of Matters to a Vote of Security Holders.................................   18

Item 5.           Other Information ..................................................................   18

Item 6.           Exhibits and Reports on Form 8-K ...................................................   18


Signatures ...........................................................................................   19
Index to Exhibits ....................................................................................   20

</TABLE>

                                       i
<PAGE>

ITEM 1. FINANCIAL STATEMENTS
                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                       (in thousands except share amounts)
<TABLE>
<CAPTION>
                                                                             JUNE 30,         DECEMBER 31,
ASSETS                                                                         2004               2003
                                                                            ----------         ---------
<S>                                                                         <C>                <C>
Cash and due from banks                                                     $  11,990          $  17,497
Federal funds sold and securities purchased under resale agreements             6,337              8,034
Investment securities available for sale, at fair value                        73,215             90,270
Loans held for sale                                                             3,443              3,076


Loans, net of deferred loan fees                                              204,835            178,711
Less allowance for loan losses                                                 (2,890)            (3,262)
                                                                            ---------          ---------
  Net loans                                                                   201,945            175,449

Premises and equipment, net                                                     6,698              6,903
Accrued interest receivable                                                     1,243              1,322
Other assets                                                                   19,267             19,262
                                                                            ---------          ---------
    Total Assets                                                            $ 324,138          $ 321,813
                                                                            =========          =========
LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
    Deposits:
       Noninterest bearing                                                  $  49,383          $  47,765
       Interest bearing                                                       225,364            230,390
                                                                            ---------          ---------
          Total deposits                                                      274,747            278,155


    Accrued interest payable                                                       95                205
    Short term borrowings                                                      19,278             14,100
    Other liabilities                                                           4,339              4,231
    Junior subordinated debentures                                              5,155              5,155
                                                                            ---------          ---------
    Total liabilities                                                         303,614            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, 1,779,804
          and 1,782,983, respectively                                          12,867             12,950
    Retained earnings                                                           8,235              7,004
     Accumulated other comprehensive (loss) income                               (578)                13
                                                                            ---------          ---------
          Total stockholders' equity                                           20,524             19,967
                                                                            ---------          ---------

                                                                            $ 324,138          $ 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           SIX MONTHS ENDED
                                                                  JUNE 30,                     JUNE 30,
                                                           ---------------------         ---------------------
                                                            2004           2003           2004           2003
                                                           ------         ------         ------         ------
Interest income:
<S>                                                        <C>            <C>            <C>            <C>
    Loans, including fees                                  $3,383         $3,298         $6,507         $6,252
    Investment securities:
       Taxable                                                530            201          1,242            453
       Exempt from federal taxes                               62             26            139             63
    Federal funds sold                                         19             36             29             69
                                                           ------         ------         ------         ------
            Total interest income                           3,994          3,561          7,917          6,837

Interest expense:
    Deposit accounts                                          515            619          1,155          1,200
    Other borrowings                                          131             70            234            136
                                                           ------         ------         ------         ------
            Total interest expense                            646            689          1,389          1,336
                                                           ------         ------         ------         ------
        Net interest income                                 3,348          2,872          6,528          5,501
Provision for loan losses                                     165             55            235            312
                                                           ------         ------         ------         ------
        Net interest income after provision for             3,183          2,817          6,293          5,189
           loan losses
Noninterest income:
     Gain on sale of securities available for sale           --             --               65             88
     Gain on sale of other real estate owned                 --                5           --                5
     Gain on sale of loans                                    203            320            347            626
     Service charges                                          441            412            863            809
     Premiums and fees from SBA and mortgage
         operations                                           108            112            218            241
     Increase in cash surrender value of life
         insurance                                            175            142            333            283
     Miscellaneous                                            131            101            217            218
                                                           ------         ------         ------         ------
        Total noninterest income                            1,058          1,092          2,043          2,270

Noninterest expense:
     Salaries and employee benefits                         1,742          1,868          3,538          3,520
     Occupancy                                                354            251            672            506
     Equipment                                                185            212            379            438
     Other                                                    992          1,074          1,990          2,025
                                                           ------         ------         ------         ------
        Total non-interest expense                          3,273          3,405          6,579          6,489
                                                           ------         ------         ------         ------
Income before provision for income taxes                      968            504          1,757            970
Provision for income tax expense                              290            145            512            269
                                                           ------         ------         ------         ------
        Net income                                         $  678         $  359         $1,245         $  701
                                                           ======         ======         ======         ======
Earnings per share:
         Basic                                             $ 0.38         $ 0.20         $ 0.70         $ 0.39
                                                           ======         ======         ======         ======
         Diluted                                           $ 0.35         $ 0.19         $ 0.65         $ 0.37
                                                           ======         ======         ======         ======
</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)

<TABLE>
<CAPTION>

SIX MONTHS ENDED JUNE 30, 2004

                                                                                                Accumulated
                                        Common       Common                                        Other
                                         Stock        Stock      Comprehensive     Retained     Comprehensive
            Description                 Shares       Amounts        Income         Earnings     Income (Loss)      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                                                     $     1,245        1,245                           1,245
                                                                  -----------
   Other comprehensive income:
      Unrealized holding loss
          arising during the current
          period, net of tax
          benefit of $384                                                (553)
      Reclassification adjustment
          due to gains realized,
          net of tax benefit of $27                                       (38)
                                                                  ------------
      Total other comprehensive
          loss, net of
          tax benefit of $411                                            (591)                          (591)         (591)
                                                                  ------------
      Comprehensive income                                        $       654
                                                                  ============
Options exercised, including tax
benefits                                   5,712           55                                                           55

Cash issued in lieu of stock                                                          (14)                             (14)
dividend

Stock-based compensation and
related tax benefits                                       20                                                           20
Stock repurchases                         (8,891)        (158)                                                        (158)
                                      ----------    ---------                 ------------     -------------      ---------
Balance at June 30, 2004               1,779,804    $  12,867                        8,235             (578)        20,524
                                      ==========    =========                 ============     =============      =========
</TABLE>

See accompanying notes.


                                       3
<PAGE>

                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)
                            SIX MONTHS ENDED JUNE 30,
<TABLE>
<CAPTION>
                                                                                       2004                2003
                                                                                     --------            --------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                               <C>                    <C>
Net income                                                                        $     1,245            $    701
     Adjustments to reconcile net income to net cash provided by operating
     activities:
          Increase (decrease) in deferred loan income                                     164                 (62)
          Depreciation and amortization                                                 1,154               1,113
          Stock-based compensation                                                         20                  --
          Provision for loan losses                                                       235                 312
          Gain on sale of securities available for sale                                   (65)                (88)
          Loans originated for sale                                                   (17,314)            (40,220)
          Proceeds from loans sold                                                     17,294              41,184
          Gain on sale of loans                                                          (347)               (626)
          Gain on sale of other real estate owned                                          --                  (5)
          Decrease (increase) in accrued interest receivable                               79                (165)
          (Decrease) increase in accrued interest payable                                (110)                 22
          Increase (decrease) in other liabilities                                        108              (1,617)
          Increase in cash surrender value of life insurance                             (333)               (283)
          Decrease in other assets                                                        652                 270
                                                                                     --------            --------
                  Net cash provided by operating activities                             2,782                 536


CASH FLOWS FROM INVESTING ACTIVITIES:
     Investment securities available for sale:
       Purchases                                                                         (290)            (25,112)
       Proceeds from prepayments                                                       11,700               8,400
       Proceeds from sale                                                               4,145               1,056
    Increase in loans made to customers, net                                          (26,895)             (7,219)
    Proceeds from sale of other real estate                                                --                 334
    Purchases of bank premises and equipment                                             (299)               (193)
                                                                                     --------            --------
                  Net cash used in investing activities                               (11,639)            (22,734)


CASH FLOWS FROM FINANCING ACTIVITIES:
    Net (decrease) increase in deposits                                                (3,408)             35,860
    Increase (decrease) in short term borrowings                                        5,178              (9,546)
    Dividends paid                                                                        (14)                 --
    Payments for repurchase of common stock                                              (158)                 (2)
    Proceeds from issuance of common stock                                                 55                  93
                                                                                     --------            --------
                  Net cash provided by financing activities                             1,653              26,405

                  Net (decrease) increase in cash and cash equivalents                 (7,204)              4,207
Cash and cash equivalents at beginning of period                                       25,531              34,622
                                                                                     --------            --------
Cash and cash equivalents at end of period                                        $    18,327            $ 38,829
                                                                                     ========            ========

Supplemental Disclosures of Cash Flow Information:
    Cash paid for interest payments                                               $     1,499               1,314
    Cash paid for taxes                                                                   175                  50
    Unrealized (loss) on available-for-sale securities, net of tax                       (553)               (193)
    Loans transferred to other real estate owned                                           --                  73
</TABLE>

See accompanying notes.


                                       4
<PAGE>

                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 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 six
     months ended June 30, 2004 are not  necessarily  indicative  of the results
     that may be expected for the year ending December 31, 2004.

(2) 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 six 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 six month periods ended June 30, 2004 and 2003:
<TABLE>
<CAPTION>

                                                                         Income              Shares         Per Share
         Three months ended June 30, 2004                              (numerator)       (denominator)        Amount
         -------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                 <C>              <C>
         Basic earnings per share                                        $ 678,000           1,785,657        $ 0.38
         Effect of dilutive securities                                                         139,403             -
                                                                    -------------------------------------
         Diluted earnings per share                                      $ 678,000           1,925,060        $ 0.35
                                                                    =====================================

                                                                         Income              Shares         Per-Share
         Three months ended June 30, 2003                              (numerator)       (denominator)        Amount
         -------------------------------------------------------------------------------------------------------------
         Basic earnings per share                                        $ 359,000           1,792,859        $ 0.20
         Effect of dilutive securities                                                         104,980             -
                                                                    -------------------------------------
         Diluted earnings per share                                      $ 359,000           1,897,839        $ 0.19
                                                                    =====================================

</TABLE>


                                       5
<PAGE>

<TABLE>
<CAPTION>
                                                                         Income              Shares         Per-Share
         Six months ended June 30, 2004                                (numerator)       (denominator)        Amount
         ------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                   <C>              <C>
         Basic earnings per share                                      $ 1,245,000           1,782,254        $ 0.70
         Effect of dilutive securities                                           -             135,618             -
                                                                    -------------------------------------
         Diluted earnings per share                                    $ 1,245,000           1,917,872        $ 0.65
                                                                    =====================================

                                                                         Income              Shares         Per-Share
         Six months ended June 30, 2003                                (numerator)       (denominator)        Amount
         ---------------------------------------------------------- ------------------ ------------------- -------------
         Basic earnings per share                                        $ 701,000           1,792,923         $ .39
         Effect of dilutive securities                                           -              87,494             -
                                                                    -------------------------------------
         Diluted earnings per share                                      $ 701,000           1,880,417         $ .37
                                                                    =====================================
</TABLE>

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

(3) Allowance for Loan Losses

     The following  summarizes  changes in the allowance for loan losses for the
     six-month  periods ended June 30, 2004 and 2003 and the twelve month period
     ended December 31, 2003:
<TABLE>
<CAPTION>

         ----------------------------------------------------------------------------------------------------------
<S>                                                                    <C>  <C>            <C>  <C>        <C>   <C>
         (in thousands)                                                6/30/04             6/30/03         12/31/03
         Balance at beginning of period                          $        3,262            3,057             3,057
           Loans charged off                                               (624)            (119)             (143)
           Recoveries                                                        17               10                36
           Provisions charged to operations                                 235              312               312
                                                                    ------------         ------------  ------------
         Balance at end of period                                $         2,890            3,260             3,262
                                                                    ============         ============  ============
</TABLE>

(4) 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              SIX MONTH PERIOD
                                                                                 ENDED JUNE 30,                 ENDED JUNE 30,
                                                                              2004            2003           2004            2003
                                                                              ----            ----           ----            ----
<S>                                                                           <C>               <C>          <C>              <C>
    Net income, as reported (in thousands)                                   $  678             359          1,245            701
         Add: Stock based employee compensation expense included
         In reported net income, net of tax effect                                6               2             12              4
         Deduct: Stock based employee compensation determined under
         fair value based method for all awards, net of tax effect               (9)             (7)           (18)            (14)
                                                                              ------------------------------------------------------
         Pro forma net income                                                $  675             354          1,239            691
                                                                              ======================================================
    Earnings per share-basic
         As reported                                                         $ 0.38            0.20           0.70            0.39
         Pro-forma                                                             0.38            0.20           0.70            0.39
    Earnings per share-assuming dilution
         As reported                                                         $ 0.35            0.19           0.65            0.37
         Pro-forma                                                             0.35            0.19           0.65            0.37
</TABLE>

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


                                       6
<PAGE>

(5) 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>

                                                                       Six Months Ended June 30,
     (in thousands)                                                    2004                 2003
                                                               ----------------------------------------
     Net pension cost included the following components:
<S>                                                            <C>                   <C>
     Service cost-benefits earned during the period            $              57     $               44
     Interest cost on projected benefit obligation                            68                     55
     Amortization of prior service cost                                       35                     30
     Recognized net actuarial loss                                             3                      2
                                                               ----------------------------------------
     Net periodic pension cost                                 $             163     $              131
                                                               ========================================
</TABLE>

     During the six months ended June 30, 2004, the Company contributed and paid
     out as benefits $12.5  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.

(6) 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 have appointed  independent
     Special Litigation Committees composed of two new 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. If the allegations are proven,  any
     recovery in the suit will benefit the Company.

     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 financial position, results of operations,
     or liquidity.

(7) 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,  8,891
     shares were  repurchased at an average cost of $17.77 per share for a total
     of $158 thousand.


                                       7
<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 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 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 7, as well as other  information  presented  throughout
this report.


                                       8
<PAGE>

SUMMARY

For the quarter  ended June 30,  2004,  the Company  recorded net income of $678
thousand,  representing an increase of $319 thousand or 88.9% over net income of
$359  thousand for the same period in 2003.  Diluted  earnings per share for the
second quarter of 2004 totaled $0.35, an 84% increase from the $0.19 per diluted
share  earnings for the second  quarter in 2003.  The increase  resulted from an
increase in net interest  income of $476  thousand  combined  with a decrease in
noninterest expense of $132 thousand,  which was partially offset by an increase
in the provision for income tax of $145  thousand,  an increase in the provision
for loan losses of $110  thousand  and a decrease in  noninterest  income of $34
thousand.

For the six month period ended June 30,  2004,  the Company  recorded net income
totaling  $1,245  thousand,  representing  an increase of $544 thousand or 77.6%
over net  income of $701  thousand  for the same  period in 2003.  The  increase
resulted  primarily from an increase in net interest  income of $1,027  thousand
combined with a decrease in noninterest  income of $227 thousand and an increase
in the provision for income tax of $243 thousand.  Year to date diluted earnings
per share for the first six months of 2004  totaled  $0.65,  an  increase of 76%
over the prior year per diluted share earnings, which totaled $0.37.

Return on average equity for the three and six month periods ended June 30, 2004
totaled  13.07% and  12.12%,  respectively,  compared to 7.29% and 7.17% for the
same periods in 2003.  Return on average assets during the same periods  totaled
0.83% and 0.77% in 2004 compared to 0.53% and 0.52% in 2003, respectively.

Included in net income  during the six month  period  ended June,  30, 2004 were
gains on the sale of investment  securities  totaling $65  thousand.  During the
same  period in 2003,  gains on the sale of  investment  securities  totaled $88
thousand,  a  reduction  of $23  thousand  from the  prior  year.  Additionally,
included in  noninterest  expense  during 2004 are  year-to-date  costs totaling
$195,000  associated with responding to the actions initiated by three dissident
directors.

CHANGES IN FINANCIAL CONDITION

Consolidated  total  assets as of June 30,  2004  totaled  $324  million,  which
represents an increase of $2,325 thousand, or 0.7% when compared to December 31,
2003.  The  increase  in total  assets was  attributable  primarily  to a $5,178
thousand,  or 36.7%,  increase in short term  borrowings,  which was offset by a
$3,408  thousand,  or  1.2%,  decrease  in total  deposits.  Total  gross  loans
increased  $26,655  thousand,  or 14.6% during the first six months of 2004. The
loan growth was funded by a reduction of federal funds sold of $1,697  thousand,
or 21.1%, a decrease of $17,055,  or 18.9%,  in the investment  portfolio due to
prepayments of mortgage-backed  securities  (including CMOs) of $11,700 thousand
and proceeds from the sale of  securities of $4,145  thousand and an increase of
$5,178 thousand, or 36.7%, in short term borrowings.

The net increase in gross loans is the result of increases of $21,822  thousand,
or 27.0%, $4,295 thousand,  or 14.1%, $875 thousand,  or 5.5%, $635 thousand, or
2.0%,  and $367  thousand,  or 11.9%,  in real estate loans,  commercial  loans,
construction  loans, SBA loans and loans held for sale,  respectively,  combined
with  decreases of $1,155  thousand,  or 6.1%,  and $184  thousand,  or 8.1%, in
agricultural and consumer loans, respectively.

During the first six months of 2004,  non-interest  bearing  deposits  increased
$1,618  thousand,  or  3.4%  and  interest  bearing  deposits  decreased  $5,026
thousand,  or 2.2%. The year-to-date  deposit decrease  consists of increases of
$1,951 thousand, or 4.3%, $1,618 thousand, or 3.4%, and $1,990 thousand, or 3.5%
in savings,  non-interest  bearing and NOW accounts  combined with  decreases of
$3,157 thousand, or 5.7%, and $5,810 thousand, or 7.9%, in money market accounts
and certificates of deposit, 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 June 30,
2004 decreased by $372 thousand, or 11.4%, when compared to December 31, 2003 as
a result of a provision for $235 thousand  combined with net charge-offs of $607
thousand.  During  the second  quarter of 2004,  the  Company  charged-off  $587
thousand in loans,  which were primarily  related to nonperforming  agricultural
loans of a single borrower.  During the first six months of 2004,  nonperforming
loans decreased by $2,030 thousand, to $1,850 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 that, in the opinion of
management,  are well collateralized.  Management believes that the allowance at
June 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.


                                       9
<PAGE>

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

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

                                                Six Months              Year
                                                     Ended             Ended
                                                   6/30/04          12/31/03
                                                   -------          --------
Balance at beginning of period                   $   3,262             3,057
Charge-offs:
   Commercial                                         (598)              (88)
   Consumer                                            (26)              (55)
                                                   -------          --------
   Total charge-offs                                  (624)             (143)
Recoveries:
   Commercial                                           15                27
   Consumer                                              2                 9
                                                   -------          --------
   Total recoveries                                     17                36
                                                   -------          --------
Net charge-offs                                       (607)             (107)
Provision charged to operations                        235               312
                                                   -------          --------
Balance at end of period                         $   2,890         $   3,262
                                                   =======          ========

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

                                   6/30/04     6/30/04   12/31/03    12/31/03
LOAN CATEGORY                       AMOUNT   % OF LOANS    AMOUNT   % OF LOANS
                                  --------   ----------  --------   ----------
Commercial and other real estate  $  2,038      90.94%   $  2,381      89.99%
Real estate construction               809       8.06%        828       8.76%
Installment and other                   43       1.00%         53       1.25%
                                  --------   ----------  --------   ----------
                                  $  2,890     100.00%   $  3,262     100.00%
                                  ========   ==========  ========   ==========

INVESTMENTS

Investment  securities  decreased $17,055 thousand,  or 18.9%, from December 31,
2003 to June 30, 2004.  This decrease  resulted  primarily  from  prepayments of
mortgage-backed  securities (including CMOs) totaling $11,700 thousand and sales
of investment  securities  totaling $4,145 thousand.  The Company realized gross
gains  totaling $65  thousand on the sale of  investment  securities  during the
first six months of 2004 which is a decrease of $23  thousand  when  compared to
the same period of 2003.

STOCKHOLDERS' EQUITY

Consolidated stockholders' equity increased $557 thousand from December 31, 2003
to June 30, 2004. Consolidated  stockholders' equity represented 6.33% and 6.20%
of consolidated assets at June 30, 2004 and December 31, 2003, respectively. The
increase in equity during the first six months of 2004 resulted  primarily  from
net income of $1,245  thousand for the six months ended June 30, 2004 and a $591
thousand  decrease  resulting  from the after-tax  market value  decrease in the
available-for-sale investment securities portfolio.

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 six months of 2004, 8,891 shares
of stock were  repurchased  at an average cost of $17.77 per share totaling $158
thousand.

The total risk-based  capital ratio for the Company's  wholly owned  subsidiary,
Bank of Lodi was 10.30% at June 30,  2004  compared  to 10.68% at  December  31,
2003.


                                       10
<PAGE>

CHANGES IN RESULTS OF OPERATIONS - THREE AND SIX MONTHS ENDED JUNE 30, 2004

SUMMARY OF EARNINGS PERFORMANCE
<TABLE>
<CAPTION>

                                      ----------------------------------------------------------------------------------
                                                 THREE MONTHS ENDED                         SIX MONTHS ENDED
                                                      JUNE 30,                                  JUNE 30,
                                      ----------------------------------------------------------------------------------
                                             2004                 2003                 2004                 2003
                                             ----                 ----                 ----                 ----
<S>                                        <C>                  <C>                 <C>                   <C>
Net income (in thousands)                  $  678               $  359              $ 1,245               $  701
Basic net income per share                 $ 0.38               $ 0.20              $  0.70               $ 0.39
Diluted net income per share               $ 0.35               $ 0.19              $  0.65               $ 0.37
Return on average assets                     0.83%                0.53%                0.77%                0.52%
Return on average equity                    13.07%                7.29%               12.12%                7.17%
Average equity to average assets             6.37%                7.29%                6.35%                7.30%
</TABLE>


Net income for the three months ended June 30, 2004 increased $319 thousand,  or
88.9%,  compared to the same period of 2003. Net interest income  increased $476
thousand,  or 16.6% as a result of a $43 thousand  decrease in interest  expense
combined with a $433  thousand  increase in interest  income.  The provision for
loan losses totaled $165 thousand  representing an increase of $110 thousand, or
200.0% when compared to the same period in 2003.  Noninterest  income  decreased
$34 thousand,  or 3.1%, while noninterest  expense  decreased $132 thousand,  or
3.9%. The provision for income taxes  increased $145  thousand,  or 100.0%.  Net
income for the six months ended June 30, 2004 increased $544 thousand, or 77.6%,
compared  to the same  period of 2003.  Net  interest  income  increased  $1,027
thousand,  or 18.7% as a result of a $53 thousand  increase in interest  expense
combined with a $1,080 thousand  increase in interest income.  The provision for
loan losses totaled $235 thousand  representing  a decrease of $77 thousand,  or
24.7%  when  compared  to the  first  six  months  of 2003.  Noninterest  income
decreased $227  thousand,  or 10.0%,  while  noninterest  expense  increased $90
thousand,  or 1.4%. The provision for income taxes  increased $243 thousand,  or
90.3%.  The return on average equity for the three and six months ended June 30,
2004 was 13.07 and  12.12%  compared  to 7.29 and 7.17% for the same  periods of
2003.


                                       11
<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 JUNE 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>                    <C>
Investment securities(1)(2)  $       77,570   $           592          3.06%   $      42,185   $          227         2.16%
Federal funds sold                    7,883                19          0.97%          11,822               36         1.22%
Loans (2) (3)                       206,128             3,383          6.58%         171,216            3,298         7.73%
                                ------------     -------------    ------------    -----------     ------------    -----------
TOTAL EARNING ASSETS         $      291,581   $         3,994          5.49%   $     225,223   $        3,561         6.34%
                                ============     =============    ============    ===========     ============    ===========
LIABILITIES:
Non-interest bearing
deposits                     $       50,308   $            --                  $      40,494   $           --

Savings, money market, &
NOW deposits                        159,149               249          0.63%         128,284              259         0.81%
Time deposits                        69,659               266          1.53%          65,276              360         2.21%
Other borrowings                     20,258               131          2.59%           7,395               70         3.80%
                                ------------     -------------    ------------    -----------     ------------    -----------
TOTAL LIABILITIES            $      299,374   $           646          0.87%   $     241,449   $          689         1.14%
                                ============     =============    ============    ===========     ============    ===========
NET INTEREST SPREAD                                                    4.62%                                          5.20%
                                                                  ============                                    ===========

                                ---------------------------------------------------------------------------------------------
                                  Earning           Income                        Earning           Income
                                  Assets          (Expense)          Yield          Assets         (Expense)        Yield
                                ------------     -------------    ------------    -----------     ------------    -----------
Yield on average earning     $      291,581   $        3,994           5.49%   $     225,223   $       3,561          6.34%
   assets
Cost of funding average
   earning assets            $      291,581              646          (0.88%)  $     225,223             689         (1.23%)
                                                 -------------    ------------                    ------------    -----------
NET INTEREST MARGIN          $      291,581   $        3,348           4.61%   $     225,223   $       2,872          5.11%
                                                 =============    ============                    ============    ===========
</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 second quarter of 2004 increased $476 thousand,  or
16.6%, 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 $620 thousand while interest rates resulted in a decrease in net
interest income totaling $144 thousand when comparing the second quarter of 2004
to the same period last year.

Average earning assets  increased  $66,358 thousand during the second quarter of
2004 as compared to the second quarter of 2003.  Average loans increased $34,912
thousand and  investment  securities  increased  $35,385  thousand while federal
funds sold  decreased  $3,939  thousand.  The  increase in the volume of average
earning  assets during the second quarter of 2004 as compared to the same period
of 2003  resulted  in an increase in interest  income  totaling  $851  thousand.
However, interest rates on average earning assets declined 85 basis points (from
6.34% to  5.49%)  when  compared  to the same  period  in 2003,  resulting  in a
decrease in interest income totaling $418 thousand.


                                       12
<PAGE>

Average liabilities increased $57,925 thousand during the second quarter of 2004
as  compared  to the same period  last year.  The  increase  consists of $22,007
thousand,  $9,814 thousand, $4,778 thousand, $4,383 thousand and $4,080 thousand
in money market accounts,  non-interest bearing deposits,  NOW,  certificates of
deposit and savings accounts,  respectively. Other borrowings increased $12,863.
The increase in average liabilities  resulted in an increase in interest expense
totaling $231 thousand.  As a result of the declining interest rate environment,
the cost of interest bearing  liabilities  decreased 27 basis points (from 1.14%
to 0.87%) resulting in a reduction in interest expense totaling $274 thousand.
<TABLE>
<CAPTION>

                                -------------------------------------------------------------------------------------------
                                                            FOR THE SIX MONTHS ENDED JUNE 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>                    <C>
Investment securities(1)(2)  $       83,298   $         1,381        3.32%   $      36,774   $          516         2.83%
Federal funds sold                    5,962                29        0.98%          11,208               69         1.24%
Loans (2) (3)                       196,065             6,507        6.66%         169,254            6,252         7.45%
                                ------------     -------------    ----------    -----------     ------------    -----------
TOTAL EARNING ASSETS         $      285,325   $         7,917        5.56%   $     217,236   $        6,837         6.35%
                                ============     =============    ==========    ===========     ============    ===========
LIABILITIES:
Non-interest bearing
  deposits                   $       47,199   $                              $      36,277   $
Savings, money market, &
  NOW deposits                      159,085               591        0.75%         125,072              498         0.80%
Time deposits                        69,975               564        1.62%          61,950              702         2.29%
Other borrowings                     22,641               234        2.07%           6,734              136         4.07%
                                ------------     -------------    ----------    -----------     ------------    -----------
TOTAL LIABILITIES            $      298,900   $         1,389        0.93%   $     230,033   $        1,336         1.17%
                                ============     =============    ==========    ===========     ============    ===========
NET INTEREST SPREAD                                                  4.63%                                          5.18%
                                                                  ==========                                    ===========

                                -------------------------------------------------------------------------------------------
                                  Earning           Income                       Earning           Income
                                  Assets          (Expense)         Yield         Assets         (Expense)        Yield
                                ------------     -------------    ----------    -----------     ------------    -----------
Yield on average earning     $      285,325   $        7,917         5.56%   $     217,236   $       6,837          6.35%
   assets
Cost of funding average
   earning assets            $      285,325   $       (1,389)       (0.97)%  $     217,236   $      (1,336)        (1.24)%
                                                 -------------    ----------                    ------------    -----------
NET INTEREST MARGIN          $      285,325   $        6,528         4.59%   $     217,236   $       5,501          5.11%
                                                 =============    ==========                    ============    ===========
</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.


                                       13
<PAGE>

Net interest income for the first six months of 2004 increased  $1,027 thousand,
or 18.7%, 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  $1,019  thousand while interest rates resulted in an
increase in net interest  income  totaling $8 thousand when  comparing the first
six months of 2004 to the same period last year.

Average earning assets  increased  $68,089  thousand during the six month period
ended  June 30,  2004 as  compared  to the same  period of 2003.  Average  loans
increased $26,811 thousand and investment  securities increased $46,524 thousand
while federal funds sold decreased $5,246  thousand.  The increase in the volume
of average earning assets during the first six months of 2004 as compared to the
same period of 2003 resulted in an increase in interest  income  totaling $1,620
thousand.  However,  interest rates on average  earning assets declined 79 basis
points (from 6.35% to 5.56%) when compared to the same period in 2003, resulting
in a decrease in interest income totaling $540 thousand.

Average liabilities increased $68,867 thousand during the six month period ended
June 30, 2004 as compared to the same period last year. The increase consists of
$23,891 thousand,  $10,922 thousand, $8,025 thousand, $5,294 thousand and $4,828
thousand in money market accounts,  non-interest bearing deposits,  certificates
of deposit, NOW and savings accounts,  respectively.  Other borrowings increased
$15,907. The increase in average liabilities resulted in an increase in interest
expense  totaling  $601  thousand.  As a result of the  declining  interest rate
environment,  the cost of interest bearing liabilities decreased 24 basis points
(from 1.17% to 0.93%) resulting in a reduction in interest expense totaling $548
thousand.

Interest income is also affected by nonaccrual loan activity.  Nonaccrual  loans
at June 30, 2004 and June 30, 2003 totaled $1,850 thousand and $2,350  thousand,
respectively.  Interest  forgone on nonaccrual loans totaled  approximately  $82
thousand  and $174  thousand  for the three and six months  ended June 30,  2004
compared  to $106  thousand  and $175  thousand  for the same  periods  of 2003,
respectively.

PROVISION FOR LOAN LOSSES

The  provision  for loan losses for the three and six months ended June 30, 2004
was $165 thousand and $235 thousand compared with $55 thousand and $312 thousand
for the three and six months ended June 30, 2003, an increase of $110  thousand,
or 200.0%,  and a decrease of $77  thousand,  or 24.7%.  As of June 30, 2004 the
allowance  for loan  losses was $2,890  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 June 30, 2004,  nonperforming  loans  totaled  $1,850  thousand or 0.9% 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 six months ended June 30, 2004 decreased by
$34 thousand,  or 3.1%, and $227 thousand,  or 10.0%,  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  $117  thousand and $279 thousand
during the three and six months ended June 30, 2003.  During the second  quarter
of 2004,  the Company did not sell any investment  securities.  During the first
six  months  of 2004,  the  Company  realized  gains  on the sale of  investment
securities totaling $65 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 six months of 2004 and
2003, respectively.

Income from the sale and  servicing of loans  totaled $311  thousand  during the
second quarter of 2004, which decreased by $121 thousand,  or 28.0%, compared to
the prior year  quarter.  During the first six months of 2004,  income  from the
sale and servicing of loans totaled $565  thousand,  a decrease of $302 thousand
or 34.8% 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
$33 thousand and $50  thousand,  during the second  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 8.5% during the second quarter of
2004 as compared to 7.1%  during the second  quarter of 2003.  For the first six
months of 2004, the tax effective  yield totaled 8.1% as compared to 7.2% during
the same period in 2003.


                                       14
<PAGE>

NONINTEREST EXPENSES

Noninterest  expenses  decreased  $132  thousand,  or 3.9%,  and  increased  $90
thousand, or 1.4%, when comparing the three and six month periods ended June 30,
2004 to the same periods of 2003.  When  comparing the second quarter of 2004 to
2003,  personnel expense decreased $126 thousand,  or 6.7% primarily as a result
of reduced  commissions  due to the  decline  in  residential  mortgage  lending
activity.  When  comparing  the six month  periods  ended June 30, 2004 to 2003,
personnel expense increased $18 thousand or 0.5%. This increase is primarily due
to general merit increases for existing personnel.  When comparing the three and
six  month  periods  ended  June 30,  2004,  occupancy  expense  increased  $103
thousand, or 41.0% and $166 thousand, or 32.8%, 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 second quarter
of 2004,  equipment expense  decreased $27 thousand,  or 12.7%, when compared to
the second  quarter of 2003.  Equipment  expense  during the first six months of
2004 decreased $59 thousand,  or 13.5% when compared to 2003.  Decraeses in both
periods are due to a decrease  in  depreciation  expense.  For the three and six
month  periods  ended June 30, 2004,  other  noninterest  expense  decreased $82
thousand, or 7.6% and $35 thousand, or 1.7%, respectively,  when compared to the
same periods of 2003.

Included in other  noninterest  expense  during the three and six month  periods
ended  June  30,  2004 are  costs  totaling  $129  thousand  and  $195  thousand
associated  with  responding  to  the  disruptive  actions  initiated  by  three
dissident  directors.  Without these expenses,  other noninterest  expense would
have decreased $211 thousand,  or 19.6% and $230 thousand,  or 11.4%, during the
three and six month  periods  during  2004 when  compared  to the same period in
2003.

INCOME TAXES

In the three months ended June 30, 2004,  taxes  increased $145 thousand to $290
thousand from $145 thousand for the same period in 2003. The Company's effective
tax rate for the three months  ended June 30, 2004 was 30.0%,  compared to 28.8%
for the same period in 2003. For the first six months of 2004, the provision for
income taxes totaled $512 thousand as compared to $269 thousand  during the same
period last year. For the first six months of 2004, the Company's  effective tax
rate was 29.1% as compared to 27.7% 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.

                                        June 30, 2004      December 31, 2003
--------------------------------------------------------------------------------
        Commitments to extend credit    $        52,071               49,643
================================================================================
        Standby letters of credit       $           158                  488
================================================================================


                                       15
<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 June 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
decreased in 2004 as a result of the growth in the loan  portfolio and purchases
of available-for-sale investment securities.

                           ACTUAL
                     ---------------------   WELL CAPITALIZED   MINIMUM CAPITAL
                     CAPITAL    RATIO        RATIO REQUIREMENT    REQUIREMENT
                     -------    -----        -----------------    -----------
Leverage             $ 22,813     7.0%            5.0%                 4.0%
Tier 1 Risk-Based    $ 22,813     9.1%            6.0%                 4.0%
Total Risk-Based     $ 25,703    10.3%           10.0%                 8.0%


                                       16
<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 six months ended
June 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 June 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 June 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 June 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 has been 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  have  appointed   independent   Special  Litigation
                  Committees  composed  of two new  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.
                  If the allegations  are proven,  any recovery in the suit will
                  benefit the Company.

                  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  financial  position,   results  of  operations,  or
                  liquidity.


                                       17
<PAGE>

ITEM 2.   CHANGES IN  SECURITIES,  USE OF PROCEEDS  AND ISSUER  PURCHASES OF
          EQUITY SECURITIES

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 June 30, 2004.

<TABLE>
<CAPTION>
                                                              Total Number           Approximate Dollar
                                                               of Shares            Value of Shares That
                            Total Number      Average     Purchased as Part of    May Yet Be Purchased Under
                              of Shares     Price Paid    Publicly Announced       the Plans or Programs(1)
          Period              Purchased      Per Share    Plans or Programs(1)          (in thousands)
------------------------------------------------------------------------------------------------------------
<S>    <C>                                                                                  <C>
Month #1                               --             --                  --                $1,453
(April 1, 2004 to
 April 30, 2004)
Month #2                               --             --                  --                $1,453
(May 1, 2004 to
 May 31, 2004)
Month #3                            8,891        $ 17.77               8,891                $1,288
(June 1, 2004 to
 June 30, 2004)
                            -------------------------------------------------
Total                               8,891        $ 17.77               8,891
                            =================================================
</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 $1,288  thousand as of June 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
                  Not Applicable

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.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                  (A)      EXHIBITS

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


                                       18
<PAGE>

                  (B)      REPORTS ON FORM 8-K

                           During  the  second  quarter  of  2004,  the  Company
                           furnished a Current Report on 8-K dated April 9, 2004
                           (Items 7 and 9).

                           During  the  second  quarter  of  2004,  the  Company
                           furnished  a Current  Report  on 8-K dated  April 13,
                           2004 (Items 7 and 9).


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


                                       19
<PAGE>

                                INDEX TO EXHIBITS

EXHIBIT        DESCRIPTION
-------        -----------

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


                                       20