** **

**UNITED STATES**

**SECURITIES AND EXCHANGECOMMISSION**

**Washington,D.C.  20549**

**FORM 10-K/A**

**AmendmentNo. 1**

(Mark One)

**x**                              ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**Forthe fiscal year ended December 31, 2006**

**OR**

**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**Forthe transition period from                 to                 **

**Commissionfile number 000-52436**

**1**ST PACIFIC BANCORP

(Exact name of registrantas specified in its charter)

| **California**                            |   | **33-0905235**      |
|-------------------------------------------|--------|---------------------|
| (State or Other  Jurisdiction of          |   | (IRS Employer       |
| Incorporation or  Organization)           |   | Identification  No) |
|                                      |   |                |
| **4275  Executive Square #650**           |   |                |
| **La Jolla,  California**            |   | **92037**           |
| (Address of  Principal Executive Offices) |   | (Zip Code)          |

 

**(858) 875-2000**

(Issuer’s telephonenumber)

**Securitiesregistered under Section 12(b) of Exchange Act: **None

**Securitiesregistered under Section 12(g) of Exchange Act:**

Common Stock, No par value

(Title of Class)

Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes o No x

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes o No x

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the Registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days. Yes xNo o

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or a non-accelerated filer. Seedefinition of “accelerated filer and large accelerated filer” in Rule 12b-2 ofthe Exchange Act.

Large accelerated filer o   Accelerated Filer o    Non-accelerated filer x

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Act).Yes oNo x

The aggregate market value of the common stock held bynon-affiliates of the Registrant as of June 30, 2006 was approximately $49.5million. Number of Registrant’s shares of common stock outstanding at March 12,2007 was 3,893,312.

Documentsincorporated by reference: None.

 

 

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**1**st PACIFIC BANCORP

**TABLE OF CONTENTS**
|                      |                                                                                            | **Page**   |
|----------------------|-------------------------------------------------------------------------------------------------|------------|
| **EXPLANATORY NOTE** | ** **                                                                                      | **3**      |
|                 |                                                                                            |       |
| **PART III**         | ** **                                                                                      | ** ** | **3** |
| ITEM 10.             | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                          |       | 3 |
| ITEM 11.             | EXECUTIVE COMPENSATION                                                                          |       | 7 |
| ITEM 12.             | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  MANAGEMENT AND RELATED STOCKHOLDER MATTERS |       | 18 |
| ITEM 13.             | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                  |       | 20 |
| ITEM 14.             | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                          |       | 21 |
|                 |                                                                                            |       |   |
| **PART IV**          | ** **                                                                                      | ** ** | **22** |
| ITEM 15.             | EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                                         |       | 22 |
|                 |                                                                                            |       |   |
| **SIGNATURES**       | ** **                                                                                      | **25**     |

 

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**EXPLANATORYNOTE**

1st Pacific Bancorp is filing this Amendment No. 1 to amend Items 10through 14 of Part III of its Form 10-K filed on March 23, 2007 (the “OriginalFiling”) for the purpose of including the information required by these Itemsbecause, as a result of a previously-announced pending merger transaction, 1stPacific Bancorp’s definitive proxy statement involving such information willnot be filed before April 30, 2007 (i.e., within 120 days after the end of thefiscal year covered by the Original Filing). In connection with this Amendment No. 1, 1st Pacific Bancorp isincluding as exhibits updated certifications required under Section 302 of theSarbanes-Oxley Act of 2002.  Solely forthis reason, 1st Pacific Bancorp also has restated Part IV of the OriginalFiling in Part IV of this Amendment No. 1. Except as set forth in the immediately preceding sentence, thisAmendment No. 1 does not alter or restate any of the information set forth inthe Original Filing.

This Amendment  No.  1 continues to speak as of the date of theForm 10-K filed on March 23, 2007 and we have not updated the disclosurescontained herein to reflect events that have occurred since the filing of the OriginalFiling.  Accordingly, this Amendment No.1 should be read in conjunction with our other filings, if any, made with theSecurities and Exchange Commission subsequent to the filing of the OriginalFiling.

Unless the context requires otherwise, references in this Amendment No.1 to “1st Pacific Bancorp”, the “Company”, “we”, “our”, or “us” includes 1stPacific Bancorp, a California corporation, and its subsidiaries, including 1stPacific Bank of California.  A holdingcompany reorganization was completed on January 16, 2007, whereby alloutstanding shares of 1st Pacific Bank of California were converted into anequal number of shares of 1st Pacific Bancorp. Prior to the reorganization, 1stPacific Bancorp had minimal activity, which was primarily related to preparingfor the reorganization.  At present, 1stPacific Bancorp does not engage in any material business activities other thanownership of 1st Pacific Bank of California. References to 1st Pacific Bancorpfor periods prior to January 16, 2007, are references to 1st Pacific Bank ofCalifornia.

**PART III**

**ITEM 10.               DIRECTORS, EXECUTIVE OFFICERS ANDCORPORATE GOVERNANCE**

**Information ConcerningDirectors and Executive Officers**

The following table provides information with respect to each executiveofficer, current member of the board of directors and each nominee of 1stPacific Bancorp.  There is no familyrelationship among any of the nominees, directors and/or any of 1st PacificBancorp’s executive officers. Detailed information about director nominees andexecutive officers is provided below.
| **Name**               | ** ** | **Current Position with Bank**                       | ** ** | **Age** | ** ** | **Elected or  Appointed** |
|------------------------|------------|------------------------------------------------------|------------|---------|------------|---------------------------|
| Robert P. Cange        |       | Director                                             |       | 56      |       | 2000                      |
|                   |       |                                                 |       |    |       |                      |
| Albert Colucci         |       | Director                                             |       | 69      |       | 2000                      |
|                   |       |                                                 |       |    |       |                      |
| Veronica Z.  Froman    |       | Director                                             |       | 59      |       | 2004                      |
|                   |       |                                                 |       |    |       |                      |
| James G. Knight,  M.D. |       | Chairman of the Board, Director                      |       | 54      |       | 2000                      |
|                   |       |                                                 |       |    |       |                      |
| Susan Lew              |       | Director                                             |       | 59      |       | 2000                      |
|                   |       |                                                 |       |    |       |                      |
| Albert Logan,  CPA     |       | Director                                             |       | 64      |       | 2001                      |
|                   |       |                                                 |       |    |       |                      |
| A. Vincent  Siciliano  |       | President, Chief Executive Officer, Director         |       | 56      |       | 2002                      |
|                   |       |                                                 |       |    |       |                      |
| James H.  Burgess, CPA |       | Executive Vice President and Chief Financial Officer |       | 45      |       | 1999                      |
|                   |       |                                                 |       |    |       |                      |
| Larry A. Prosi         |       | Executive Vice President and Chief Banking Officer   |       | 59      |       | 2005                      |
|                   |       |                                                 |       |    |       |                      |
| Richard H Revier       |       | Executive Vice President and Chief Credit Officer    |       | 54      |       | 2000                      |

 

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The indicated year initially elected or appointed includes similarpositions held with 1st Pacific Bank of California prior to the formation of1st Pacific Bancorp.

The following is a brief summary of the background and businessexperience, including principal occupation, during the last five years, foreach of the director nominees and executive officers.

**A. VINCENT SICILIANO, President,Chief Executive Officer and Director**.  Mr. Siciliano joined 1st Pacific Bank ofCalifornia in September 2001, ten months after 1st Pacific Bank of California’sopening. Mr. Siciliano has over 20 years of commercial banking experience. Justprior to joining 1st Pacific Bank of California, he was a management consultantassisting companies with strategic planning and change management. From 1999 to2000, he served as Chief Administrative Officer of The Eastridge Group ofStaffing Companies, San Diego’s largest local staffing company.  From 1997 through early 1999, he served asChief Operating Officer of First National Bank. From 1995 to 1997, he served as President and Chief Executive Officer ofDanielson Trust Company, San Diego’s largest local trust company.  Prior to joining Danielson Trust Company, heserved eight years as President and CEO of International Savings Bank.  He also spent 10 years with Bank of America,where he managed their corporate lending activities in San Diego, and workedseven years with Bank of America’s Asian Division in Taiwan, Philippines andSingapore.

Mr. Siciliano graduated from Stanford University and the University ofCalifornia at Berkeley.  He has served asChairman of the San Diego Chamber of Commerce Foundation, the San Diego CountyInternational Trade Commission, and the LISC Affordable Housing Program. He hasalso served as a board member of the Greater San Diego Chamber of Commerce, theSan Diego Dialogue and several other civic organizations. On a national level,he has been a member of the Board of Governors of the Savings and CommunityBankers of America and the board of the California League of SavingsInstitutions. Currently Mr. Siciliano is on the board of the Ken Blanchard Centerfor Faith Walk Leadership, serves as a board member of the Community Bankers ofCalifornia, is on the Advisory Board of the International Community Foundationsand is a sponsor and Advisory Board Member for the EMC Family Business Forum atSan Diego State University.

**ROBERT P. CANGE, Director**— Mr. Cange is the President, Chief Executive Officer and founder of CangeInternational, Inc., an export management company formed in 1989 that providesinternational marketing and sales services to U.S. manufacturers of high-endconsumer goods and has sold products in more than 80 countries around theworld.  Mr. Cange has been appointed bythe U.S. Secretary of Commerce to serve on San Diego’s District ExportCouncil.  Previously, Mr. Cange served asthe Marketing Manager for the Foreign Credit InsuranceAssociation/Export-Import Bank of the United States and as an internationallending officer for banks in California and Missouri.  He holds a Bachelors Degree in Economics fromSaint Louis University and a Juris Doctor Degree from California Western Schoolof Law.

**ALBERT COLUCCI, Director**— Mr. Colucci is Chairman and President of CBC Investment, a company involvedprimarily in real estate investment, management and construction, which heco-founded in 1958 with his brother, Salvatore. From 1982 to 1998, he served as a founding Director of Rancho VistaNational Bank and, during 1999, he served as a Director for Bank of Commerce,which acquired Rancho Vista National Bank.

**VERONICA Z. FROMAN, Director**— Ms. Froman is currently the Chief Operating Officer of the City of San Diego.From 2003 to 2006 she was the Chief Executive Officer for the SanDiego/Imperial Counties Chapter of the American Red Cross.  Prior to that assignment, from 2001 to 2003,Ms. Froman was Chief of Business Operations for the San Diego CitySchools.  Previously, Ms. Froman servedover 31 years in the United States Navy retiring with the rank of RearAdmiral.  Her naval career includes beingCommanding Officer, Personnel Support Activity Hawaii, Pearl Harbor, Hawaiifrom 1988 to 1990; Head, General Unrestricted Line Assignment Branch, 

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Chief of Naval Personnel, Washington DC, 1990 to 1993;Commanding Officer, Naval Station Charleston, South Carolina, from 1993 to1995; Director of Manpower and Personnel, Joint Staff, Washington, DC from 1995to 1997; Commander, Navy Region Southwest, San Diego, California from 1997 to2000; and Director, Ashore Readiness Chief of Naval Operations, Washington, DCfrom 2000 to 2001.  Ms. Froman graduatedfrom Seton Hill College, Greensburg, Pennsylvania with a Bachelor of ArtsDegree in Political Science.  She hasreceived numerous awards, including the San Diego Press Club Headliners Award,San Diego Women Who Mean Business Award and the YWCA TWIN Award, Girl Scouts CoolWomen Award — YWCA.  Most recently shewas recognized as one of San Diego Magazine’s 50 People to Watch and receivedthe San Diego Mediation Center Peace Maker Award.

**JAMES G. KNIGHT, M.D., Chairman**— Dr. Knight has been a urologist in private practice in San Diego since 1988following five years of military service. Dr. Knight received a Bachelors Degree in Physics from Trinity Collegein Hartford, Connecticut, and his MD from Baylor College of Medicine in Houston,Texas, where he also completed his residency training.  He is CEO of Consumer Directed Health Care,Inc., Treasurer of Consumers for Health Care Choice (a national consumeradvocacy organization) and a past President of the San Diego County Medical Society.

**SUSAN LEW, Director**— Ms. Lew is the Founder and President of S. Lew & Associates, Inc., a realestate investment group formed in 1978. She has been a real estate investor, broker, manager, syndicator,developer and consultant for more than 30 years.  Ms. Lew is a Commissioner Emeritus of the SanDiego Port Commission, having served two full terms as Port Commissioner from1993 to 2001 and as Chairman in 1995. She served on the board of directors of Bank of Commerce from 1994 to1999.  Ms. Lew has served on numerousother boards and commissions, for which she has received many awards.  Currently, she serves as Commissioner of theSan Diego Library Commission and on the Advisory Board of U.C. San Diego’sGraduate School of International Relations / Pacific Studies. Ms. Lew serves astrustee for Sharp Memorial Hospital Group. She is also the Founder andPresident of San Diego’s “Emerald Chinese Seafood Restaurant” and “PearlChinese Cuisine.”

**ALBERT LOGAN, Director**—  Mr. Logan is a CPA and has been anaccounting professional since 1968 and became a Certified Public Accountant in1970.  Mr. Logan was the founding partnerof Logan Throop & Co., LLP, which after 15 years merged its practice withHutchinson and Bloodgood, LLP in 2001. Mr. Logan retired as a partner from Hutchinson and Bloodgood LLP on June30, 2007 and now provides accounting, taxation, consulting and strategicplanning services to privately owned businesses and high net worth individuals.Mr. Logan is a licensed CPA in the state of California and a member of both theAmerican Institute and California Society of Certified Public Accountants.

**JAMES H. BURGESS, CPA, Executive VicePresident and Chief Financial Officer.**  Prior to joining 1st Pacific Bank ofCalifornia during its organization in 1999, from 1998 to 1999, Mr. Burgess servedas First Vice President/Treasury Manager at Bank of Commerce in San Diego.  From 1995 to 1998, Mr. Burgess was SeniorVice President and Chief Financial Officer for Rancho Vista National Bank,which was acquired by Bank of Commerce. From 1990 to 1995, Mr. Burgess served as Chief Financial Officer for twoother community banks. Before joining the banking industry, Mr. Burgess was anAudit Manager for Deloitte & Touche, where he audited community banks.  Mr. Burgess is a graduate of California StateUniversity, Chico where he earned a Bachelors Degree in BusinessAdministration, Accounting Concentration. He is a Certified Public Accountant and a member of the AmericanInstitute of Certified Public Accountants.

**LARRY A. PROSI, Executive VicePresident and Chief Banking Officer.**  Mr. Prosi has been 1st Pacific Bank ofCalifornia’s Executive Vice President and Chief Banking Officer since July2005.  Prior to holding that position,Mr. Prosi worked as the Regional Manager and Senior Vice President of the InlandNorth County office.  Before joining 1stPacific Bank of California in 2004, Mr. Prosi was Senior Vice President andRegion Manager of commercial banking for Washington Mutual, where he spent twoyears overseeing all commercial and corporate banking operations in San DiegoCounty.  Mr. Prosi took a break frombanking from 1996-2002, when he was President and Chief Operating Officer ofBusiness Backers Management Corp., a national financial services insurance enterprise.Mr. Prosi has held numerous management positions at other banks, includingSenior Vice President at Union Bank of California, Regional Vice President atWells Fargo Bank and Corporate Banking Officer at The Bank of California. Mr.Prosi is a graduate of Dartmouth College’s graduate school of credit andfinancial management and has a Bachelor of Science degree in finance from SanDiego State University.

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**RICHARD H. REVIER, Executive VicePresident and Chief Credit Officer**.  Mr. Revier has been with 1st Pacific Bank ofCalifornia since organization and upon opening in November 2000 and has morethan 25 years experience in banking. Immediately prior to his becoming a member of the executive managementof 1st Pacific Bank of California, Mr. Revier was Vice President of U.S.Bancorp (formerly Bank of Commerce) in San Diego.  Prior to the acquisition of Bank of Commerceby U.S. Bancorp, Mr. Revier was a member of its Executive Management Team andExecutive Vice President, where he supervised the Real Estate, Corporate andHomeowner Association Departments.  From1989 to 1998, Mr. Revier was Executive Vice President and Chief Credit Officerfor Rancho Vista National Bank in Vista, for which he also served as Chairmanof the Loan Committee and was a member of the Asset and Liability ManagementCommittee.  From 1987 to 1989 he was VicePresident/Commercial Lending Officer to Overland Bank in Temecula, and was aVice President and Manager for First American Capital Bank in Laguna Beach.  Earlier in his career, he held various branchmanagement and lending positions with First National Bank of North County,located in Carlsbad; Southwest Bank, also located in Carlsbad; and Bank ofPrescott, located in Prescott, Arizona.

**Section 16(a) BeneficialOwnership Reporting Compliance**

To 1st Pacific Bancorp’s knowledge, based solely on its review offilings, and amendments, by directors, officers and beneficial owners of morethan 10% of a registered class of 1st Pacific Bank of California’s securitiesunder the reporting rules of Section 16(a) of the Exchange Act, furnished to1st Pacific Bank of California with respect to the 2006 fiscal year, there wereno instances of failure to comply with Section 16(a) filing requirements,except Larry Prosi, who was unintentionally late filing one (1)  Form 4, which related to a grant of stockoptions.  1st Pacific Bancorp has aprogram in effect to assist its directors and executive officers in complyingwith the reporting rules of Section 16(a) of the Exchange Act.  1st Pacific Bancorp believes that thisprogram effectively helps prevent most unintentional failures to comply withthe reporting provisions.

**Code of Ethics**

1st Pacific Bancorp has adopted a code of ethics that applies to 1stPacific Bancorp’s Chief Executive Officer, Chief Financial Officer, ChiefCredit Officer, Chief Banking Officer and senior managers, a copy of which isavailable on 1st Pacific Bank of California’s website at www.1stpacbank.com.

**Procedures forShareholders to Recommend Nominees**

1st Pacific Bancorp has adopted the same procedures as previously usedby 1st Pacific Bank of California by which shareholders may recommend nomineesto its board of directors.  TheNominating & Corporate Governance Committee of 1st Pacific Bancorp willconsider nominees for the board of directors recommended by 1st Pacific Bancorp’sshareholders if they submit the proposals to 1st Pacific Bancorp’s CorporateSecretary in accordance with established procedures set forth below regardingshareholder proposals and communications.

Under certain circumstances, shareholders are entitled to presentproposals at shareholder meetings. Shareholders of 1st Pacific Bancorp who intend to submit proposals,including proposals for director nominees, to 1st Pacific Bancorp’sshareholders at the 2008 Annual Meeting of Shareholders must submit suchproposals to 1st Pacific Bancorp no later than January 14, 2008 in order forthem to be included in 1st Pacific Bancorp’s proxy materials for suchmeeting.  Proposals received by 1stPacific Bancorp after such date are considered untimely.  Shareholder proposals should be directed tothe attention of the Corporate Secretary of 1st Pacific Bancorp, Robert Cange,at 4275 Executive Square, Suite 650, La Jolla, California 92037.  The submission by a shareholder of a proposaldoes not guarantee that it will be included in the proxy statement.  Shareholder proposals are subject to certainregulations and requirements under the federal securities laws.

Shareholders who intend to submit proposals to 1st Pacific Bancorp’sshareholders at the 2008 Annual Meeting of Shareholders but intend to submitsuch proposals on their own, either from the floor or through their own proxystatement and proxy, must, in order for such matters to be voted upon by 1stPacific Bancorp’s shareholders, give notice of such to the management of 1stPacific Bancorp by March 31, 2008 (at least 45 days before the date when 1stPacific Bancorp management mails its proxy material for the 2007 meeting, whichmailing is expected to be approximately May 14, 2007).  The persons named as proxies for the 2008Annual Meeting of Shareholders will have discretionary authority to vote on anyshareholder proposal not included in 1st Pacific Bancorp’s proxy 

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materials for the meeting, unless 1st Pacific Bancorpreceives notice of the proposal within such 45-day period.  If proper notice is received by that date,the proxy holders will not have discretionary voting authority except asprovided in federal regulations governing shareholder proposals.

**Audit Committee**

1st Pacific Bank of California and 1st Pacific Bancorp each has anaudit committee established in accordance with Section 3(a)(58)(A) of theSecurities Exchange Act of 1934, as amended, comprised of: Albert Logan, CPA(Committee Chair), James G. Knight, M.D., Susan Lew and Veronica Z. Froman.  Each member of the audit committee isindependent as defined under the applicable rules of the Securities andExchange Commission and NASDAQ Stock Market (“NASDAQ”) listing standards.  The board of directors has determined thatAlbert Logan, CPA, who serves on the audit committee, is an “audit committeefinancial expert” as defined under Item 401(h) of Regulation S-K.

**ITEM 11.               EXECUTIVE COMPENSATION**

The board of directors of 1st Pacific Bancorp has appointed aCompensation Committee (“the Committee”) which is tasked to establish,supervise and review policies involving 1st Pacific Bancorp’s personnelperformance, compensation and benefits.  1st Pacific Bank of California has an identical committee, composed ofthe same persons with the same responsibilities and during 2006 references tothe “Committee” should be understood to be references to that committee of 1stPacific Bank of California.

The Committee is made up of three independent outside directors.  The Committee meets on a regular basis toreview and approve both policy recommendations and compensation actions thatimpact the senior officers of the organization. The Committee has a definedCommittee Charter which provides for a broad scope of responsibilities to “establish,supervise and review all matters related to compensation within theorganization and in particular with regard to matters of compensation affectingofficers that hold the corporate title of Senior Vice President and above.”

In compliance with Securities and Exchange Commission requirements, thefollowing is the Compensation Discussion and Analysis as it pertains to the2006 fiscal year.  This discussion andanalysis is focused on the material principles that underlie 1st PacificBancorp’s executive compensation policies and decisions.

**Compensation Discussionand Analysis**

*Philosophy*

It is the philosophy of the Committee and the board of directors toinsure that 1st Pacific Bancorp has the policies and processes in place thatwill enable 1st Pacific Bancorp to attract, motivate and retain the highestquality workforce while at the same time balancing those needs with the duty toenhance shareholder value.  To achievethese goals the Committee reviews competitive market data and acts on it whenwarranted.

The Committee generally has a pay for performance philosophy.  This means that compensation actions approvedfor executives are consistent with results achieved against predeterminedobjectives that the board of directors believes lead to optimal enhancement ofshareholder value.  For 2006, theCommittee defined 1st Pacific Bank of California’s peer group as financialinstitutions operating in California that have assets ranging between $150million and $300 million.  1st PacificBancorp uses asset size and geographic location as key elements in determiningthe appropriate peer group.  1st PacificBancorp utilizes two survey sources to assist with this process.  They are the California Bankers AssociationCompensation and Benefits Benchmark Survey and the State of California,Department of Financial Institutions, Executive Officer and DirectorCompensation Survey.  1st Pacific Bank ofCalifornia’s asset size as of December 2006 was $318 million.

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*Objectives*

The objectives of the compensation program are based on the pay forperformance philosophy.  1st PacificBancorp’s focus is on objectives that align the executive compensation planwith the interests of shareholders.  Thepay for performance philosophy links company performance to individualperformance and is designed to support the company’s strategic plan.  It is 1st Pacific Bancorp’s intention, whereapplicable, to insure that measurable objectives are developed and communicatedto participants prior to the commencement of a plan year and that following thecompletion of the plan year the results achieved are tied directly to thecompensation received by plan participants.

1st Pacific Bancorp has targeted Return on Equity (“ROE”) as theprimary objective on which executive performance is currently judged.  This objective has been a key part of 1stPacific Bank of California’s long term objectives since 1st Pacific Bank ofCalifornia opened as a de novo bank on November 17, 2000.  It is the Committee’s belief that ROE remainsan important measure of the meaningful return to its shareholders.

1st Pacific Bank of California has also entered into individualemployment contracts with each named officer in this report.  The Committee’s compensation decisions arebased on compliance with the elements within the individual contracts and the informationobtained from the competitive market. Further, the provisions of the employment contracts themselves are basedon the Committee’s evaluation of internal fairness and objectives of theorganization as well as information obtained from the competitive market.

*Compensation Elements*

In developing its overall compensation strategy, the Committee reviewseach element of compensation and the purposes of each.  It then reviews the total of all elements ofcompensation in order to insure 1st Pacific Bancorp maintains an overallcompensation strategy that is competitive. The elements of compensation included in this discussion and reflectedin the charts are the following:

·                  BaseSalary

·                  Short-TermIncentive (Annual Bonus)

·                  TotalCash Compensation (Combination of Base Salary and Short-Term Incentive)

·                  Long-TermIncentives (Equity Awards)

·                  Benefits

·      Executive Perquisites/Executive EmploymentContracts

The strategy behind eachelement of compensation has been defined as follows.

*BaseSalary.*  The Committeehas defined base salary as the fixed direct compensation paid an executive forperforming specific job responsibilities. The Committee targets base salary between market median and the 65thpercentile.  The base salaries of theexecutives are reviewed from time to time against the competitive market andadjustments made in accordance with the market data and the requirements of theemployment contracts.

*Short-TermIncentives (Annual Bonus).* The Committee has defined short-term incentives as a bonus which is aform of variable pay paid in addition to base pay for results achieved over andabove that expected for normal job performance. The Committee approved the 1st Pacific Bank of California IncentiveCompensation Plan for Senior Management in 2005 (the “Senior IncentiveCompensation Plan”).  The SeniorIncentive Compensation Plan is designed to reward senior management forproductivity, high performance and implementing the business plan and vision of1st Pacific Bancorp.  The SeniorIncentive Compensation Plan is designed to share rewards between shareholdersand Senior Incentive Compensation Plan participants.  In order for the Senior IncentiveCompensation Plan participants to receive any form of payout, a minimum levelof financial performance by 1st Pacific Bancorp must be achieved.

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Under the terms of theSenior Incentive Compensation Plan, if earnings before incentive compensation (“EBIC”)is greater than the minimum Return on Average Equity (“ROAE”) for the relevantyear, part of the excess amount is allocated to the Plan, with the Planreceiving between 20% and 35% of such excess. The larger the excess between EBIC and the minimum ROAE for the relevantyear, the higher a percentage of the excess is payable to seniormanagement.  ROAE is based upon thegenerally accepted accounting principles definition of shareholder equity anddoes not include trust preferred securities or any debt instrument.  In 2006 the plan specifies that no incentivecompensation may be paid until 1st Pacific Bank of California achieves aminimum of nine percent (9%) ROAE before the payment of incentive compensationunder this plan (“Adjusted ROAE”).  In2007 the minimum ROAE is increased to 10%. In 2006, if the EBIC is greater thana 9% ROAE, the executive’s share of the excess amount attributable to EBIC is:

| **Adjusted**           | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|------------------------|------------|------------|------------|------------|------------|------------|------------|------------|------------|
| ROAE:                  |       | 9-11       | %          | 11-13      | %          | 13-14      | %          | 16         | %+         |
|                   |       |       |       |       |       |       |       |       |       |
| **Senior  Management** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Incentive              |       | 20         | %          | 25         | %          | 30         | %          | 35         | %          |

 

The Chief Executive Officer (“CEO”) reviews the pool established andmakes recommendations on all participants, including the CEO, to theCommittee.  The Committee reviews andapproves final payout.  The CEO isentitled to receive up to 40% of the pool. No participant shall be entitled to more than 40% without the approvalof the board of directors.

*Total Cash Compensation (Combinationof Base Salary and Short-Term Incentive).*  Total cash compensation is defined as the sumof base salary and short-term incentive received over an annual (12) monthreporting period.  The Committee’sphilosophy regarding total cash compensation is to insure that total cashcompensation exceeds the 65th percentile of the market in years in which theshort-term objectives have been achieved.

*Long-Term Objectives (Equity).*  The Committee defines long-term incentives toinclude all forms of equity compensation. Equity compensation is an incentive designed to reward and retainexecutives for long-term performance.  Thistype of compensation is linked to shareholder return and aligns the executives’rewards with those achieved by shareholders.

The Committee does not have a formal equity strategy in place butrather has used its discretion in the award of stock options.  The Committee’s strategy has evolved sinceits original de novo grants were made. Since that time, grants made have focused on new hires and executivepromotions.  The Committee decided to useonly non-qualified stock option grants for the 2006 plan year.  All options are priced based on the closingprice of the stock on the last trading day prior to the date of grant.

The Committee and the board of directors are submitting to shareholdersfor their approval a new omnibus equity incentive plan at the 2007 annualshareholders’ meeting.  The new plan, ifapproved, will enable 1st Pacific Bancorp to use other forms of stock basedawards like restricted stock and performance shares when desired.  To insure that stock option grants have beenvalued in accordance with Financial Accounting Standards Board (“FASB”)guidelines, 1st Pacific Bancorp uses the Black-Scholes Model to value the costof grants.

During 2006 the Committee authorized a grant of 10,000 non-qualifiedstock options to Mr. Prosi.  The grantwas made at the closing market price on the day prior to the date of the grant.  The grant was made on October 10, 2006 at aprice of $14.50.  The grant vests 20% peryear over a five (5) year period.  Thisgrant was made to Mr. Prosi in recognition of his promotion to Chief OperatingOfficer.

*Benefits.*  Benefits are defined as those plans notrelated to cash compensation or equity that are needed to insure that acompetitive compensation total package is maintained.  Benefits may be qualified or non-qualified.

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The Committee’s strategy regarding benefits has been to insure that theplans in place are competitive and assist 1st Pacific Bancorp in attracting thetalent needed.  They are designed toprovide for the basic health and welfare needs of employees.  This approach to benefits is in keeping withthe Committee’s desire to continue to foster a pay for performance rather thanan entitlement culture.  At the present,1st Pacific Bancorp has a basic benefit package, which includes health andinsurance benefits and a 401(k) with a discretionary matching provision.  1st Pacific Bancorp has no pension plan.

*Executive Perquisites/ExecutiveEmployment Contracts.* Executive perquisites are those benefits provided to senior executivesover and above the standard benefit package. These benefits are generally non-qualified.  1st Pacific Bancorp has no executiveperquisites in place other than under the current employment contracts betweenthe executives and 1st Pacific Bank of California.  Employment contracts are in place for thecurrent executive officers:

1.             President and ChiefExecutive Officer — A. Vincent Siciliano

2.             Executive VicePresident and Chief Credit Officer — Richard H. Revier

3.             Executive VicePresident and Chief Financial Officer — James H. Burgess

4.             Executive VicePresident and Chief Banking Officer — Larry Prosi

Each employment contract denotes the minimum annual salary of theexecutive at the commencement of the contract and may provide for annualincreases during the term of the contract. Other salary increases, if any, shall only be approved by 1st PacificBank of California board of directors in its sole discretion.  The contracts also provide for expensereimbursement, auto allowance when used for business purposes, andvacation.  Mr. Siciliano’s contractprovides for a golf club membership as well.

Each employment contract contains provisions that provide severancebenefits to the executives should their employment be terminated by 1st PacificBank of California without cause or without cause within 12 months after changeof control or by the executive for good cause within 12 months after a changeof control.  The Committee set thesevarious triggers and the amounts based on what it believes to be competitive inthe marketplace for each of the executive positions.

A change of control for these purposes is the acquisition of securitiesrepresenting a majority of the voting power (excluding the formation of aholding company), or a sale of substantially all of the assets of 1st PacificBank of California.  Good cause for thesepurposes is defined as a reduction in base salary below the rate then in effectin accordance with the employment agreement, requiring that the executive bebased more than 50 miles from 1st Pacific Bank of California’s headquarters onthe date of the employment agreement, a reduction in title or the continuation,after a change of control or imposition within six months after a change ofcontrol of a material reduction in the duties or authority of the executive sothat he is no longer performing substantially all of the duties associated withhis title under the employment agreement. See the section entitled “Employment Agreements” below for a fullerdiscussion of the amounts and calculations of the actual payments.

**Compensation CommitteeReport**

*The information contained in thisreport shall not be deemed to be “soliciting material” or “filed” with the SECor subject to the liabilities Section 18 of the Exchange Act, except to theextent that 1st Pacific Bancorp specifically incorporates by reference into adocument filed under the Securities Ac of 1933, as amended or the SecuritiesExchange Act of 1934, as amended.*

The Compensation Committee of 1st Pacific Bancorp has reviewed anddiscussed with management the Compensation Discussion and Analysis for fiscal2006. Based on the review and discussions, the Committee recommended to theboard of directors, and the board of directors has approved, that theCompensation Discussion and Analysis be included in 1st Pacific Bancorp’s ProxyStatement for its 2007 annual meeting of shareholders or Form 10-K for the fiscalyear 2006, as applicable.

10

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This report is submitted by the Committee.

Susan Lew (Chairman)James G. Knight, M.D.Veronica Z. Froman

**Compensation CommitteeInterlocks and Insider Participation**

During fiscal year 2006, the following individuals served as members ofthe Personnel/Compensation Committee: Susan Lew, James G. Knight, M.D., andVeronica Z. Froman. None of these individuals has ever served as an officer oremployee of 1st Pacific Bancorp or any of its subsidiaries or has anyrelationships with 1st Pacific Bancorp or any of its subsidiaries requiringdisclosure under “Transactions with Directors, Executive Officers and PrincipalShareholders” or “Other Material Transactions” below. ThePersonnel/Compensation Committee members have no interlocking relationshipsrequiring disclosure under the rules of the SEC.

**Summary Compensation**

The following table showscompensation information for fiscal 2006 for the named executive officers.
| Name and   Principal  Position | ** ** | **Year** | ** ** | **Salary  ($)** | ** ** | **Bonus  ($)** | ** ** | **Stock  Awards  ($)** | ** ** | **Option  Awards  ($)(2)** | ** ** | **Non-Equity  Incentive Plan  Compensation  ($)(3)** | ** ** | **Nonqualified  Deferred  Compensation  Earnings  ($)** | ** ** | **All Other  Compensation  ($)(4)** | ** ** | **Total  ($)** | ** ** |
|------------------------------------------|------------|----------|------------|-----------------|------------|----------------|------------|------------------------|------------|----------------------------|------------|-----------------------------------------------------------|------------|---------------------------------------------------------|------------|------------------------------------------|------------|----------------|------------|
| James H. Burgess                         |       | 2006     |       | 141,500         |       | 0              |       | n/a                    |       | 4,836                      |       | 61,977                                                    |       | n/a                                                     |       | 8,774                                    | (5)        | 217,087        |       |
| Executive Vice President,                |       | 2005     |       | 126,875         |       | 0              |       | n/a                    |       | 29,748                     |       | 39,681                                                    |       | n/a                                                     |       | 8,574                                    | (6)        | 204,878        |       |
| Chief Financial Officer                  |       | 2004     |       | 116,250         |       | 0              |       | n/a                    |       | 3,766                      |       | 23,450                                                    |       | n/a                                                     |       | 7,048                                    | (7)        | 150,514        |       |
| Larry A. Prosi                           |       | 2006     |       | 144,474         |       | 0              |       | n/a                    |       | 19,136                     |       | 48,750                                                    |       | n/a                                                     |       | 18,964                                   | (8)        | 231,324        |       |
| Executive Vice President,                |       | 2005     |       | 122,083         |       | 0              |       | n/a                    |       | 38,708                     |       | 48,926                                                    |       | n/a                                                     |       | 13,902                                   | (9)        | 223,619        |       |
| Chief Banking Officer                    |       | 2004     |       | 29,077          | (1)        | 0              |       | n/a                    |       | 2,100                      |       | 0                                                         |       | n/a                                                     |       | 3,168                                    | (10)       | 34,345         |       |
| Richard H. Revier                        |       | 2006     |       | 151,250         |       | 0              |       | n/a                    |       | 4,836                      |       | 61,977                                                    |       | n/a                                                     |       | 9,415                                    | (11)       | 227,478        |       |
| Executive Vice President,                |       | 2005     |       | 136,250         |       | 0              |       | n/a                    |       | 31,751                     |       | 39,681                                                    |       | n/a                                                     |       | 9,215                                    | (12)       | 216,897        |       |
| Chief Credit Officer                     |       | 2004     |       | 120,625         |       | 0              |       | n/a                    |       | 6,169                      |       | 25,326                                                    |       | n/a                                                     |       | 8,942                                    | (13)       | 161,062        |       |
| A. Vincent Siciliano                     |       | 2006     |       | 212,000         |       | 0              |       | n/a                    |       | 5,752                      |       | 92,973                                                    |       | n/a                                                     |       | 15,128                                   | (14)       | 325,853        |       |
| President,                               |       | 2005     |       | 200,000         |       | 0              |       | n/a                    |       | 121,848                    |       | 62,908                                                    |       | n/a                                                     |       | 12,319                                   | (15)       | 397,075        |       |
| Chief Executive  Officer                 |       | 2004     |       | 165,000         |       | 0              |       | n/a                    |       | 41,205                     |       | 38,693                                                    |       | n/a                                                     |       | 10,437                                   | (16)       | 255,335        |       |

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(1)             Mr. Prosi was hired October 1, 2004, asRegional Manager of the Inland North County Office and appointed Executive VicePresident and Chief Banking Officer on July 19, 2005

(2)             Amounts shown do not reflect compensationactually received by the named executive officer. Instead the amounts shown arethe compensation recognized by 1st Pacific Bank of California for option awardsas determined pursuant to Statement of Financial Accounting Standards No.123(R). These compensation costs reflect option awards granted in and prior tofiscal 2006 and an accelerated vesting that occurred in November 2005 (SeeOutstanding Equity Awards table below). The assumptions used to calculate thevalue of option awards are set forth under Note A of the Notes to ConsolidatedFinancial Statements included in the Original Filing.

(3)             Amounts consist of annual bonuses earnedfor services rendered in fiscal 2006.

(4)             The amounts in this column consist of matchingcontributions made by 1st Pacific Bank of California under the tax-qualified401(k) Plan, payment of the annualized group term life insurance premium andannualized auto allowance or, in the case of Mr. Siciliano, usage of a vehicleowned by the bank for personal travel. This column also includes, for Mr.Siciliano and Mr. Prosi, 1st Pacific Bank of California’s total annual expensesfor a Bank owned membership in a private golf club which is allocated equallybetween them as 1st Pacific Bank of California’s designees. See Notes (5)-(16)below for a detail by executive. No individual item included in this columnexceeds $10,000.

(5)             This amount consists of $374 for groupterm life insurance premiums, $1,200 for 401(k) matching contributions and$7,200 for automobile allowance.

(6)             This amount consists of $374 for groupterm life insurance premiums, $1,000 for 401(k) matching contributions and$7,200 for automobile allowance.

(7)             This amount consists of $148 for groupterm life insurance premiums, $750 for 401(k) matching contributions and $6,150for automobile allowance.

(8)             This amountconsists of $389 for group term life insurance premiums, $1,200 for 401(k)matching contributions, $7,800 for automobile allowance and $9,575 for Mr.Prosi’s use of 1st Pacific Bank of California’s golf club membership.

(9)             This amountconsists of $388 for group term life insurance premiums, $6,500 for automobileallowance and $7,014 for Mr. Prosi’s use of 1st Pacific Bank of California’sgolf club membership.

(10)       This amount consists of $168for group term life insurance premiums and $3,000 for automobile allowance.

11

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(11)       This amount consists of $415for group term life insurance premiums, $1,200 for 401(k) matchingcontributions and $7,800 for automobile allowance.

(12)       This amount consists of $415for group term life insurance premiums, $1,000 for 401(k) matchingcontributions and $7,800 for automobile allowance.

(13)       This amount consists of $392for group term life insurance premiums, $750 for 401(k) matching contributionsand $7,800 for automobile allowance.

(14)       This amount consists of $536for group term life insurance premiums, $1,200 for 401(k) matchingcontributions, $3,817 for automobile usage compensation and $9,575 for Mr.Siciliano’s use of 1st Pacific Bank of California’s golf club membership.

(15)       This amount consists of $536for group term life insurance premiums, $1,000 for 401(k) matchingcontributions, $3,769 for automobile usage compensation and $7,014 for Mr.Siciliano’s use of 1st Pacific Bank of California’s golf club membership.

(16)       This amount consists of $546for group term life insurance premiums, $750 for 401(k) matching contributionsand $9,141 for automobile allowance and usage compensation.

**Grants of Plan-BasedAwards**

The following table shows all plan-based awards granted to the namedexecutive officers during fiscal 2006.
|                | ** ** | ** **          | ** ** | **Estimated future payouts under   non-equity incentive plan awards** | ** ** | ** **               | ** ** | ** **                | ** ** |
|----------------|------------|---------------------|------------|----------------------------------------------------------------------------------------------------------|------------|--------------------------|------------|---------------------------|------------|
| ** **     | ** ** | **Grant Date** | ** ** | **Threshold  (#) (2)**                                                                              | ** ** | **Target  (#) (1)** | ** ** | **Maximum  (#) (2)** | ** ** | **All other stock awards:  Number of securities  underlying options  (#) (3)** | ** ** | **Exercise or base  price of  option awards  ($/Sh) (3)** | ** ** |
| Larry A. Prosi |       | 1/1/06              |       | n/a                                                                                                      |       | 45,000                   |       | n/a                       |       | n/a |   | n/a |   |
|                |       | 10/10/06            |       | n/a                                                                                                      |       | n/a                      |       | n/a                       |       | 10,000 |   | 14.50 |   |

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(1)             Amount shown is an estimated payout for2006. This amount is based on an Incentive Compensation Plan for SeniorManagement (“Senior Incentive Compensation Plan”) established in January 2005,whereby the incentive compensation for senior management increases as 1stPacific Bank of California’s profits increase above certain minimum thresholds.Mr. Prosi became a plan participant as part of his employment agreement whichbecame effective January 1, 2006. See “Short Term Incentives (Annual Bonus)”for a description of the Senior Incentive Compensation Plan. The actual awardsmade to each executive officer are reported in the Non-Equity Incentive PlanCompensation column in the Summary Compensation Table above and are discussedfurther in the “Compensation Discussion and Analysis” section.

(2)             The Senior Incentive Compensation Planparticipants are not awarded additional compensation unless 1st Pacific Bank ofCalifornia achieves a minimum level of financial performance. The SeniorIncentive Compensation Plan specifies that the criteria in Note (1) must be metand, in addition, certain loan quality and regulatory standards must be met inorder to receive a maximum payout.

(3)             On October 10, 2006, thePersonnel/Compensation Committee authorized a grant of 10,000 non-qualifiedstock options to Mr. Prosi. The grant was made at $14.50 which was the  closing market price on the day prior to thedate of grant. The grant vests 20% per year over a five (5) year period on theanniversary of the grant date. The grant was made to Mr. Prosi in recognitionof his promotion to Chief Operating Officer.

 

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**Outstanding EquityAwards**

The following table shows all outstanding equity awards held by thenamed executive officers at the end of fiscal 2006.
|                      | ** ** | **Outstanding Equity Awards at Fiscal Year-End  For Fiscal Year 2006** | ** ** |
|----------------------|------------|----------------------------------------------------------------------------------------------------------------|------------|
| ** **           | ** ** | **Option Awards (1)**                                                                                          | ** ** | **Stock Awards** | ** ** |
| ** **           | ** ** | **Number of  Securities  underlying  unexercised  Options**                                               | ** ** | **Number of  securities  underlying  options** | ** ** | **Equity  incentive   plan  awards;  Number of  securities  underlying  unexercised  unearned  options** | ** ** | **Option  exercise  price** | ** ** | **Option  expiration  date** | ** ** | **Number  of  shares  or units  of stock  that  have not  vested** | ** ** | **Market  value of  shares or  units of  stock that  have not  vested** | ** ** | **Equity  incentive  plan awards:  Number of  unearned  shares units  or other  rights that  have not  vested** | ** ** | **Equity  incentive  plan awards:  Market or  payout value  of unearned  shares units  or other  rights that  have not   vested** | ** ** |
| ** **           | ** ** | **Exercisable   (#)**                                                                                     | ** ** | **Unexercisable   (#)** | ** ** | **(#)** | ** ** | **($)** | ** ** | ** ** | ** ** | **(#)** | ** ** | **($)** | ** ** | **(#)** | ** ** | **($)** | ** ** |
| James H. Burgess     |       | 27,598                                                                                                         |       | 0 |   | n/a |   | 5.00 |   | 12/21/2010 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                      |       | 3,126                                                                                                          |       | 0 |   | n/a |   | 5.00 |   | 2/1/2011 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                      |       | 1,000                                                                                                          |       | 0 |   | n/a |   | 5.25 |   | 12/2/2012 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                      |       | 4,900                                                                                                          |       | 5,100 | (2) | n/a |   | 11.00 |   | 2/15/2015 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                 |       |                                                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Larry A. Prosi       |       | 13,200                                                                                                         |       | 6,800 |   | n/a |   | 10.50 |   | 10/19/2014 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                      |       | 2,000                                                                                                          |       | 8,000 |   | n/a |   | 12.90 |   | 12/8/2015 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                      |       | 0                                                                                                              |       | 10,000 | (3) | n/a |   | 14.50 |   | 10/10/2016 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                 |       |                                                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Richard H. Revier    |       | 27,598                                                                                                         |       | 0 |   | n/a |   | 5.00 |   | 12/21/2010 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                      |       | 2,886                                                                                                          |       | 0 |   | n/a |   | 5.00 |   | 2/1/2011 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                      |       | 1,000                                                                                                          |       | 0 |   | n/a |   | 5.25 |   | 12/12/2012 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                      |       | 4,900                                                                                                          |       | 5,100 | (4) | n/a |   | 11.00 |   | 2/15/2015 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                 |       |                                                                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| A. Vincent Siciliano |       | 57,500                                                                                                         |       | 0 |   | n/a |   | 5.00 |   | 2/14/2012 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                      |       | 10,000                                                                                                         |       | 0 |   | n/a |   | 5.25 |   | 12/12/2012 |   | n/a |   | n/a |   | n/a |   | n/a |   |
|                      |       | 46,626                                                                                                         |       | 9,550 | (5) | n/a |   | 7.98 |   | 6/17/2013 |   | n/a |   | n/a |   | n/a |   | n/a |   |

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(1)                                  DuringNovember 2005, 1st Pacific Bancorp accelerated the vesting of allunexpired outstanding stock options that would otherwise have vested at varioustimes during the two years ending December 31, 2007 (the “acceleratedvesting period”). Of the total options outstanding at the time, vesting wasaccelerated on approximately 128,000 options that were scheduled to vest atvarious times during the accelerated vesting period. Directors and executiveofficers held approximately 73,000 of these options that were accelerated. Thisaction did not affect options that would have already vested byDecember 31, 2005, which totaled approximately 585,000. With the consent ofthe individual optionees, 1st Pacific Bancorp has amended the option agreementssuch that the shares of common stock issued upon exercise of the options thatare accelerated will be subject to a holding period that will require optioneesto refrain from selling such shares until the date on which the options wouldhave been permitted to be exercised under the option’s original vesting terms.The decision to accelerate the vesting of these stock options was madeprimarily to reduce non-cash compensation expense that would have been recordedin future periods following 1st Pacific Bancorp’s adoption of Statement ofFinancial Accounting Standards No. 123(R).

(2)                                  Mr.Burgess was granted 10,000 stock options on February 15, 2005. The vestingschedule for these options was 15% upon grant and an additional 17% on each ofthe next five (5) anniversaries of the date of grant. In November 2005, thescheduled to vest options in 2006 and 2007 were accelerated and 51% remainunexercisable.

(3)                                  Mr.Prosi was granted 10,000 stock options on October 10, 2006. The vestingschedule for these options is 20% per year over a five (5) year period on theanniversary of the grant date.

(4)                                  Mrs.Revier was granted 10,000 stock options on February 15, 2005. The vestingschedule for these options was 15% upon grant and an additional 17% on the eachof the next five (5) anniversaries of the date of grant. In November 2005, thescheduled to vest options in 2006 and 2007 were accelerated and 51% remainunexercisable.

(5)                                  Mr.Siciliano was granted 10,000 stock options on June 17, 2003. The vestingschedule for these options was 15% upon grant and an additional 17% on the eachof the next five (5) anniversaries of the date of grant. In November 2005, thescheduled to vest options in 2006 and 2007 were accelerated and 17% remainunexercisable.

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**Option Exercisesand Stock Vested**

**Option Exercises and Stock VestedFor Fiscal Year 2006**
| ** **           | ** ** | **Option Awards(1)**                                                 | ** ** | **Stock Awards**                                | ** ** |
|----------------------|------------|---------------------------------------------------------------------------|------------|------------------------------------------------------|------------|
| **Name**             | ** ** | **Number of Shares   Acquired on Exercise  (#)** | ** ** | **Value Realized on   Exercise  ($)** | ** ** | **Number of   Shares Acquired  on Vesting  (#)** | ** ** | **Value Realized on  Vesting  ($)** | ** ** |
| James H. Burgess     |       | n/a                                                                       |       | n/a                                                  |       | n/a |   | n/a |   |
| Larry A. Prosi       |       | n/a                                                                       |       | n/a                                                  |       | n/a |   | n/a |   |
| Richard H.  Revier   |       | n/a                                                                       |       | n/a                                                  |       | n/a |   | n/a |   |
| A. Vincent Siciliano |       | n/a                                                                       |       | n/a                                                  |       | n/a |   | n/a |   |

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(1)                                  Noneof the named executives exercised any options during the fiscal year endedDecember 31, 2006.

**Pension Benefits**

1st Pacific Bank of California has no pension plan.

**NonqualifiedDeferred Compensation**

**Nonqualified Deferred CompensationFor Fiscal 2006**
| ** **           | ** ** | **Executive  Contributions   in Last  Fiscal Year** | ** ** | **Registrant  Contributions in   Last Fiscal  Year** | ** ** | **Aggregate   Earnings  in Last   Fiscal Year** | ** ** | **Aggregate  Withdrawals/  Distributions** | ** ** | **Aggregate Balance  at Last   Fiscal Year  End** | ** ** |
|----------------------|------------|--------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|--------------------------------------------|------------|-----------------------------------------------------------------------|------------|
| **Name**             | ** ** | **($)**                                                            | ** ** | **($)**                                                             | ** ** | **($)**                                                             | ** ** | **($)**                                    | ** ** | **($)**                                                               | ** ** |
| James H. Burgess     |       | n/a                                                                |       | n/a                                                                 |       | n/a                                                                 |       | n/a                                        |       | n/a                                                                   |       |
| Larry A. Prosi       |       | n/a                                                                |       | n/a                                                                 |       | n/a                                                                 |       | n/a                                        |       | n/a                                                                   |       |
| Richard H.  Revier   |       | n/a                                                                |       | n/a                                                                 |       | n/a                                                                 |       | n/a                                        |       | n/a                                                                   |       |
| A. Vincent Siciliano |       | n/a                                                                |       | n/a                                                                 |       | n/a                                                                 |       | n/a                                        |       | n/a                                                                   |       |

 

*Director Compensation*

1st Pacific Bancorp has developed a compensation strategy for its directorswhich is based on comparable pay for an appropriate peer group of banks.  A peer group of banks with assets between$150 million and $300 million is used to provide broad based guidelines ondirector’s total compensation.  1stPacific Bank of California provides compensation for service as a director onlyto outside directors and 1st Pacific Bancorp provides no compensation forservices at this time (although to the extent equity compensation may begranted in the future such compensation will be granted by 1st PacificBancorp).  Inside directors receive nofees for their service on the board of directors.

1st Pacific Bank of California has compensated its directors both incash and with non-qualified stock options. Each director, who is not a memberof the loan committee, receives an annual retainer of $18,000. Members of theloan committee receive a retainer of $20,000.

The board chairman’s retainer is $24,000; the vice chairman’s retaineris $22,000. The chairmen of the audit and loan committees receive retainers of$21,000.  All retainers are paid in lieuof individual meeting fees.

No equity was provided to directors during 2006.  Each director received a grant of 2,000shares on February 22, 2005.  This grantwas made at the price of the stock on the last trading day prior to the grantdate, which was $11.00 per share.

Directors receive only non-qualified stock options.

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The table below shows compensation information for 1st Pacific Bancorp’scurrent and former non-employee directors for fiscal 2006.

**Director Compensation TableFor Fiscal Year 2006**
| ** **             | ** ** | **Fees  Earned or  Paid in  Cash** | ** ** | **Stock  Awards** | ** ** | **Option  Awards** | ** ** | **Non-Equity  Incentive  Plan  Compensation** | ** ** | **Change in  Pension  Value and  Nonqualified   Deferred   Compensation  Earnings** | ** ** | **All Other  Compensation** | ** ** | **Total** | ** ** |
|------------------------|------------|----------------------------------------------|------------|-------------------|------------|--------------------|------------|-----------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|------------|----------------------------------|------------|-----------|------------|
| **Name**               | ** ** | **($)(1)**                                   | ** ** | **($)**           | ** ** | **($)(2)**         | ** ** | **($)**                                       | ** ** | **($)**                                                                                                 | ** ** | **($)**                          | ** ** | **($)**   | ** ** |
| Robert P Cange         |       | 18,000                                       |       | n/a               |       | 238                | (3)        | n/a                                           |       | n/a                                                                                                     |       | n/a                              |       | 18,238    |       |
| Albert Colucci         |       | 17,000                                       |       | n/a               |       | 238                | (4)        | n/a                                           |       | n/a                                                                                                     |       | n/a                              |       | 17,238    |       |
| Jeffrey A. Dunham      |       | 12,000                                       |       | n/a               |       | 238                | (5)        | n/a                                           |       | n/a                                                                                                     |       | n/a                              |       | 12,238    |       |
| Veronica Z.  Froman    |       | 15,000                                       |       | n/a               |       | 238                | (6)        | n/a                                           |       | n/a                                                                                                     |       | n/a                              |       | 15,238    |       |
| James G. Knight,  M.D. |       | 21,000                                       |       | n/a               |       | 238                | (7)        | n/a                                           |       | n/a                                                                                                     |       | n/a                              |       | 21,238    |       |
| Susan Lew              |       | 18,000                                       |       | n/a               |       | 238                | (8)        | n/a                                           |       | n/a                                                                                                     |       | n/a                              |       | 18,238    |       |
| Albert Logan, CPA      |       | 18,000                                       |       | n/a               |       | 238                | (9)        | n/a                                           |       | n/a                                                                                                     |       | n/a                              |       | 18,238    |       |

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(1)                                  EffectiveMay 2005, an annual stipend of $12,000 was approved for each outside directorwith additional amounts approved for the Chairman, the Vice Chairman, the AuditCommittee Chairman, the Loan Committee Chairman and other Loan Committeemembers of between $2,000 and $6,000 per year. This remuneration is paid to each director on a quarterly basis.Effective May 2006, 1st Pacific Bancorp approved a new compensation plan forits Directors based on a comparable peer group of banks. The Board Chairman’sretainer is $24,000; the Vice Chairman’s retainer is $22,000. Each Director,who is not a member of the Loan Committee, receives an annual retainer of$18,000. Members of the Loan Committee receive a retainer of $20,000, which ispaid in lieu of meeting fees. See “Director Compensation” above for furtherdetails.

(2)                                  Amountsshown do not reflect compensation actually received by the directors. Instead,the amounts shown are the compensation costs recognized by 1st Pacific Bank ofCalifornia in fiscal 2006 for option awards as determined pursuant to Statementof Financial Accounting Standards No. 123(R). These compensation costs reflectoption awards granted prior to fiscal year 2006. During 2005, there was anaccelerated vesting of stock options (see Outstanding Equity Awards table fordetail regarding this acceleration). The amounts in the table above reflect thecompensation costs recognized by 1st Pacific Bank of California in fiscal 2006for a stock option grant made on February 22, 2005 to each of its Directors:grant date fair value of $9,300 for a stock option grant to purchase 2,000shares of common stock made on February 22, 2005 at an exercise price of$11.00.

(3)                                  Mr.Cange had options to purchase an aggregate of 36,254 shares of common stockoutstanding as of December 31, 2006.

(4)                                  Mr.Colucci had options to purchase an aggregate of 42,962 shares of common stockoutstanding as of December 31, 2006.

(5)                                  OnSeptember 21, 2006, Mr.  Dunham resignedfrom the board of directors of 1st Pacific Bank of California. Mr. Dunham hadoptions to purchase an aggregate of 40,096 shares of common stock outstandingas of December 31, 2006.

(6)                                  Ms.Froman had options to purchase an aggregate of 9,000 shares of common stockoutstanding as of December 31, 2006.

(7)                                  Dr.Knight had options to purchase an aggregate of 48,580 shares of common stockoutstanding as of December 31, 2006.

(8)                                  Ms.Lew had options to purchase an aggregate of 38,988 shares of common stockoutstanding as of December 31, 2006.

(9)                                  Mr.Logan had options to purchase an aggregate of 36,218 shares of common stockoutstanding as of December 31, 2006.

*Employment Agreements*

1st Pacific Bank of California has written employment agreements witheach of A. Vincent Siciliano, Richard H. Revier, James H. Burgess and LarryProsi. These employment agreements contain terms 1st Pacific Bank of Californiabelieves are typical for agreements with senior executives of community banksand provide for the compensation disclosed in the preceding table.

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*Employment Agreement with Mr. Siciliano*

Mr. Siciliano has a written employment agreement with 1st Pacific Bankof California dated December 22, 2005. Mr. Siciliano and 1st Pacific Bank of California each have the right toterminate employment at will.  Unlessearlier terminated, Mr. Siciliano’s employment term expires December 31, 2007,subject to extension upon agreement between 1st Pacific Bank of California andMr. Siciliano.  Under the employmentagreement, Mr. Siciliano’s current annual salary, which became effective as ofJanuary 1, 2007, is $231,000 and will remain effective through expiration.  Mr. Siciliano is entitled to receiveincentive compensation if performance goals of 1st Pacific Bank of Californiaare met.  Fringe benefits include fiveweeks of vacation per year; the use of a bank-owned automobile; and life,disability and other insurance benefits 1st Pacific Bank of California providesto all employees.  Mr. Siciliano isrequired to protect 1st Pacific Bank of California’s confidential informationand trade secrets and to refrain from competing with 1st Pacific Bank ofCalifornia or soliciting 1st Pacific Bank of California’s employees during histerm of employment or any period thereafter in which he is receiving benefitsfrom 1st Pacific Bank of California upon termination of employment.

1st Pacific Bank of California may terminate Mr. Siciliano’s employmenton various specified grounds including failure to perform duties, malfeasanceor misfeasance, immoral or illegal conduct, disability or death.  Mr. Siciliano may also terminate hisemployment for “good cause” (as defined in the employment agreement) on 30 days’notice.  If employment is terminatedwithout cause by 1st Pacific Bank of California, due to disability or death, orby Mr. Siciliano for good cause, subject to Mr. Siciliano first entering into aseparation and consulting agreement, Mr. Siciliano (or his beneficiary) isentitled to: (i) payment in an amount equal to 18 months of his then-currentsalary; (ii) his portion of incentive compensation under the 1st Pacific Bankof California Incentive Compensation Plan for Senior Management; (iii) title to1st Pacific Bank of California-owned automobile used by Mr. Siciliano; (iv) apayout of all accrued but unused vacation as of the date of termination; and(v) continuation of the group medical and other insurance benefits, if any,then-provided under the agreement, for a period of nine months from the date oftermination, subject to the limitations of and to the extent permitted by thepolicy or policies under which such benefits are provided.  If employment is terminated for cause by 1stPacific Bank of California, 1st Pacific Bank of California shall provide Mr.Siciliano his base salary and benefits, if any, due him through the date oftermination.

In addition, if his employment is terminated within 12 months after achange of control either by 1st Pacific Bank of California without cause or byMr. Siciliano for good cause, subject to Mr. Siciliano first entering into aseparation and consulting agreement, Mr. Siciliano is entitled to (i) a lumpsum payment of an amount equal to (A) two times his base salary then in effect,plus (B) the amount actually paid by 1st Pacific Bank of California to Mr.Siciliano under the 1st Pacific Bank of California Incentive Compensation Planfor Senior Management for the immediately preceding year and (ii) continuationof medical and other insurance benefits for 12 months.  Should the amounts payable to Mr. Sicilianoin connection with a change of control result in his being subject to an excisetax under Sections 280G and 4999 of the Internal Revenue Code he would beentitled to whichever of the following would result in his having the higheramount after taxes:  (i) a reduced amountsuch that the excise tax would not be applicable, or (ii) the full amount towhich he would otherwise be entitled.

If Mr. Siciliano’s employment is terminated as a result of expirationof his employment agreement, he is entitled to a payout of all accrued butunused vacation as of the date of termination, continuation of the groupmedical and other insurance benefits, if any, for a period of six months andpayment of certain incentive compensation in compliance with the 1st PacificBank of California Incentive Compensation Plan for Senior Management.  Further, if Mr. Siciliano enters into aseparation and consulting agreement, 1st Pacific Bank of California is to payMr. Siciliano his base monthly salary at the rate then in effect for a periodof six months, or at the option of 1st Pacific Bank of California a lump sumpayment of such amount, and transfer title of the automobile to Mr.Siciliano.  If Mr. Siciliano does notenter into the separation and consulting agreement, 1st Pacific Bank ofCalifornia has the option to provide him with the same benefits as if he didenter into such agreement and Mr. Siciliano will be deemed bound by suchagreement, other than with respect to releases of claims and consideration forthose releases.

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*Employment Agreements with Mr.Burgess, Mr. Revier and Mr. Prosi*

Each of Mr. Burgess, Mr. Revier and Mr. Prosi (together, referred to inthis section as the “executives”) has a written employment agreement with 1stPacific Bank of California certain terms of which are outlined in the tablebelow:
| **Executive**     | ** ** | **Effective Date of   Most Recent   Employment  Agreement or   Amendment** | ** ** | **Expiration Date   of Employment   Agreement** | ** ** | **Current  Salary** | ** ** | **Number  of Weeks  Vacation** | ** ** | **Monthly  Automobile  Allowance** | ** ** |
|-------------------|------------|---------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|---------------------|------------|-------------------------------------|------------|------------------------------------|------------|
| James H. Burgess  |       | November 17, 2006                                                                                             |       | December 31, 2008                                                   |       | $                   | 152,000    |                                | 5          |                               | $          | 600 |   |
| Richard H. Revier |       | November 17, 2005                                                                                             |       | November 15, 2007                                                   |       | $                   | 160,000    |                                | 5          |                               | $          | 650 |   |
| Larry Prosi       |       | January 1, 2006                                                                                               |       | June 30, 2008                                                       |       | $                   | 160,000    |                                | 5          |                               | $          | 650 |   |

 

The executives and 1st Pacific Bank of California each have the rightto terminate employment at will.  Eachemployment agreement is substantially identical and includes the followingterms and conditions.

Each executive is entitled to receive incentive compensation ifperformance goals of 1st Pacific Bank of California are met.  Fringe benefits include vacation andautomobile allowance (see table above); group insurance benefits; retirementbenefits; profit sharing and other plans 1st Pacific Bank of California mayestablish with respect to all employees.

Each executive is entitled to certain payments and benefits if theirrespective employment is terminated.  Ifemployment is terminated for cause, each executive is entitled to the salarydue him and a payout of all accrued but unused vacation, each as of the date oftermination.

If employment is terminated due to disability or death, each executiveis entitled to (i) the salary due to him, payments due to him under the 1stPacific Bank of California Incentive Compensation Plan for Senior Managementand a payout of all accrued but unused vacation, each as of the date oftermination, and (ii) continuation of the group medical and other insurancebenefits, if any, then-provided under the agreement, for a period of threemonths from the date of termination, subject to the limitations of and to theextent permitted by the policy or policies under which such benefits areprovided.  In addition, if employment isterminated due to death, each executive is entitled to receive a lump sumpayment equal to three months of salary.

If employment is terminated without cause by 1st Pacific Bank of Californiaor by the executive for good reason, subject to such executive entering into aseparation agreement and such agreement being fully effective, such executiveis entitled to (i) continued salary and the automobile allowance then providedfor nine months from the date of notice of termination, (ii) payment due to himunder the 1st Pacific Bank of California Incentive Compensation Plan for SeniorManagement, (iii) a payout of all accrued but unused vacation as of the date oftermination, and (iv) continuation of the group medical and other insurancebenefits, if any, then-provided under the agreement, for a period of ninemonths from the date of termination, subject to the limitations of and to theextent permitted by the policy or policies under which such benefits areprovided.

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If employment is terminated as a result of expiration of the EmploymentAgreement of Mr. Prosi, Mr. Revier or Mr. Burgess, subject to such executiveentering into a separation agreement and such agreement being fully effective, suchexecutive is entitled to: (i) continued salary for six months from the date oftermination; (ii) payment due to him under the 1st Pacific Bank of CaliforniaIncentive Compensation Plan for Senior Management, (iii) payout of all accruedbut unused vacation as of the date of termination, and (iv) continuation of thegroup medical and other insurance benefits, if any, then-provided under theagreement, for a period of six months from the date of termination, subject tothe limitations of and to the extent permitted by the policy or policies underwhich such benefits are provided.

If employment is terminated within 12 months after a change of controlby 1st Pacific Bank of California without cause or by the executive for goodreason, subject to such executive entering into a separation agreement and suchagreement being fully effective, Mr. Prosi, Mr. Revier and Mr. Burgess,respectively, are entitled to (i) a lump sum payment of an amount equal to (A)one times his base salary then in effect, plus (B) the amount actually paid by1st Pacific Bank of California to such executive under the 1st Pacific Bank ofCalifornia Incentive Compensation Plan for Senior Management for theimmediately preceding year and (ii) continuation of medical and other insurancebenefits for 12 months.  Should theamounts payable to the executive in connection with a change of control resultin the executive being subject to an excise tax under Sections 280G and 4999 ofthe Internal Revenue Code the executive would be entitled to a reduced amountsuch that the excise tax would not be applicable.

The executive is required to protect 1st Pacific Bank of California’sconfidential information and trade secrets and not to solicit any customers oremployees of 1st Pacific Bank of California for a period of one year aftertermination for any reason.  1st PacificBank of California is required to indemnify him for all expenses incurred inactions relating to his acts arising out of and within the course and scope ofhis employment that are performed in good faith and in a manner reasonablybelieved to be in the best interests of 1st Pacific Bank of California.

**ITEM 12.**             SECURITY OWNERSHIP OFCERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

**SecuritiesAuthorized for Issuance Under Equity Compensation Plan**

The Second Amended and Restated 2000 Stock Option Plan of 1st PacificBank of California has been previously approved by 1st Pacific Bancorp’sshareholders.  1st Pacific Bancorp has noequity compensation plans not previously approved by shareholders.  The following table sets forth certaininformation concerning aggregate common stock options authorized for issuanceunder the Second Amended and Restated 2000 Stock Option Plan of 1st PacificBank of California.

**EQUITY COMPENSATIONPLAN INFORMATIONAT DECEMBER 31, 2006**
| **Number of Securities to be Issued  Upon Exercise of Outstanding  Options** | ** ** | **Weighted-Average Exercise  Price of Outstanding Options** | ** ** | **Number of Securities Remaining Available  for Future Issuance Under the Plan  (excluding securities reflected in Column 1)** |
|----------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 809,642                                                                                                              |       | $7.32                                                                           |       | 227,500                                                                                                                                                                                              |

 

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**SecuritiesOwnership of Officers, Directors and Principal Shareholders**

The following tables set forth information as of March 28, 2007,pertaining to beneficial ownership of common stock by management of 1st PacificBancorp, all director nominees, and all directors and executive officers of 1stPacific Bancorp as a group. As used throughout this section entitled “SecuritiesOwnership of Officers, Directors and Principal Shareholders”, the term “executiveofficer” means President/Chief Executive Officer, Executive VicePresident/Chief Credit Officer, Executive Vice President/Chief FinancialOfficer and Executive Vice President/Chief Operating Officer. 1st PacificBancorp is not aware of any other person(s) who own 5% or more of any class of1st Pacific Bancorp’s voting securities. The information contained herein hasbeen obtained from 1st Pacific Bancorp’s records and from information furnisheddirectly to 1st Pacific Bancorp by each individual or entity.
| **Name of Owner(1)**                                           | ** ** | **Amount and Nature of  Beneficial Ownership(2)** | ** ** | **Percent of Class(3)** | ** ** |
|--------------------------------------------------------------------------|------------|-----------------------------------------------------------------------|------------|-----------------------------------|------------|
| James H.  Burgess, Executive Vice President and  Chief Financial Officer |       | 54,624                                                                | (4)        | 1.39                              | %          |
|                                                                     |       |                                                                  |       |                              |       |
| Robert P. Cange,  Director                                               |       | 64,854                                                                | (5)        | 1.65                              | %          |
|                                                                     |       |                                                                  |       |                              |       |
| Albert Colucci,  Director                                                |       | 157,294                                                               | (6)        | 4.00                              | %          |
|                                                                     |       |                                                                  |       |                              |       |
| Veronica Z.  Froman, Director                                            |       | 11,516                                                                | (7)        | 0.30                              | %          |
|                                                                     |       |                                                                  |       |                              |       |
| James G. Knight,  M.D., Director                                         |       | 95,260                                                                | (8)        | 2.42                              | %          |
|                                                                     |       |                                                                  |       |                              |       |
| Susan Lew,  Director                                                     |       | 138,328                                                               | (9)        | 3.52                              | %          |
|                                                                     |       |                                                                  |       |                              |       |
| Albert Logan,  CPA, Director                                             |       | 71,558                                                                | (10)       | 1.82                              | %          |
|                                                                     |       |                                                                  |       |                              |       |
| Larry Prosi,  Executive Vice President and  Chief Operating Officer      |       | 15,200                                                                | (11)       | 0.39                              | %          |
|                                                                     |       |                                                                  |       |                              |       |
| Richard H.  Revier, Executive Vice President and  Chief Credit Officer   |       | 51,884                                                                | (12)       | 1.32                              | %          |
|                                                                     |       |                                                                  |       |                              |       |
| A. Vincent  Siciliano, Director, President and  Chief Executive Officer  |       | 130,326                                                               | (13)       | 3.25                              | %          |
|                                                                     |       |                                                                  |       |                              |       |
| Directors and Executive  Officers as a Group (10 Persons)                |       | 790,844                                                               | (14)       | 18.37                             | %          |

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(1)                                  Eachindividual may be contacted at 1st Pacific Bank of California, 4275 ExecutiveSquare, Suite 650, La Jolla, California 92037.

(2)                                  Includesall shares beneficially owned, whether directly and indirectly, individually ortogether with associates, jointly or as community property with a spouse, aswell as any shares as to which beneficial ownership may be acquired within 60days of March 28, 2007 by the exercise of options. Unless otherwise specifiedin the footnotes that follow, the indicated person has shared voting power andshared investment power with respect to the shares.

(3)                                  Eachpercentage is based upon the total number of shares beneficially owned and heldby each individual at March 28, 2007, plus the number of shares that suchindividual has the right to acquire within 60 days of March 28, 2007, by theexercise of that individual’s stock options.

(4)                                  Includes12,800 shares as to which Mr. Burgess has sole voting and investmentpower; 36,624 shares that may be acquired through exercise of stock options.

(5)                                  Includes6,560 shares as to which Mr. Cange has sole voting and investment power;35,594 shares that may be acquired through exercise of stock options.

(6)                                  Includes42,302 shares that may be acquired through exercise of stock options.

(7)                                  Includes3,176 shares as to which Ms. Froman has sole voting and investment power; 8,340shares that may be acquired through exercise of stock options.

(8)                                  Includes6,180 shares as to which Dr. Knight has sole voting and investment power;47,920 shares that may be acquired through exercise of stock options.

(9)                                  Includes38,328 shares that may be acquired through exercise of stock options.

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(10)                            Includes35,558 shares that may be acquired through exercise of stock options.

(11)                            All15,200 shares may be acquired through exercise of stock options.

(12)                            Includes14,300 shares as to which Mr. Revier has sole voting and investment power;36,384 shares that may be acquired through exercise of stock options.

(13)                            Includes2,000 shares as to which Mr. Siciliano has sole voting and investmentpower; 114,126 shares that may be acquired through the exercise of stockoptions.

(14)                            Includes410,376 shares that may be acquired through the exercise of stock options.

**ITEM 13.**             CERTAIN RELATIONSHIPSAND RELATED TRANSACTIONS

**Independence ofthe Board of Directors**

The board of directors has determined that a majority of the membersof, and nominees to, the board of directors qualify as “independent,” asdefined by the listing standards of the NASDAQ. Consistent with these considerations, after review of all relevanttransactions and relationships between each director and nominee, or any of hisor her family members, and 1st Pacific Bancorp, its senior management and itsindependent auditors, the board of directors has determined that all of ourdirectors and nominees are independent under the listing standards of NASDAQ,except for A. Vincent Siciliano.

*Audit Committee*.  1st Pacific Bank of California and 1stPacific Bancorp each has an audit committee established in accordance withSection 3(a)(58)(A) of the Exchange Act, comprised of: Albert Logan, CPA(Committee Chair), James G. Knight, M.D., Susan Lew and Veronica Z.Froman.  Each member of the auditcommittee is independent as defined under the applicable rules of theSecurities and Exchange Commission and NASDAQ listing standards.

*Personnel/Compensation Committee*.  1st Pacific Bank of California has apersonnel/compensation committee comprised of: Susan Lew  (Committee Chair), Veronica Z. Froman, andJames G. Knight, M.D.  Each member of thepersonnel/compensation committee is independent as defined under the applicablerules of the Securities and Exchange Commission and NASDAQ listing standards.

*Nominating & CorporateGovernance Committee*. 1st Pacific Bank of California and 1st Pacific Bancorp each has anominating & corporate governance committee comprised of the following,each of which is independent as defined under applicable NASDAQ rules:  Susan Lew (Committee Chair), Albert Colucci,Robert P. Cange and James G. Knight, M.D.

**Transactions WithDirectors, Executive Officers and Principal Shareholders**

Some of the 1st Pacific Bancorp’s and 1st Pacific Bank of California’sdirectors, executive officers and principal shareholders, as well as theirassociates, are customers of, and have had banking transactions with, 1stPacific Bank of California in the ordinary course of 1st Pacific Bank ofCalifornia’s business.  1st PacificBancorp expects 1st Pacific Bank of California to have such ordinary bankingtransactions with such persons in the future on terms and conditions identicalto those with unrelated third parties and to the extent permitted by regulations.  Neither 1st Pacific Bancorp, nor 1st PacificBank of California have made any loans or commitments to lend to, or engaged inany other transactions with, any executive officers, directors or principal shareholders.

**Other MaterialTransactions**

There are no existing or proposed material transactions between 1stPacific Bancorp or 1st Pacific Bank of California and any of its directors,executive officers, or beneficial owners of 5% or more of the common stock, orthe immediate family or associates of any of the foregoing persons.

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**ITEM 14.               PRINCIPALACCOUNTANT FEES AND SERVICES**

The firm of Vavrinek, Trine, Day & Co., LLP (“Vavrinek”) served as1st Pacific Bank of California’s independent public accountants for the fiscalyear ended December 31, 2006.  1stPacific Bancorp has selected Vavrinek to serve as its independent publicaccountants for the 2007 fiscal year. Representatives of Vavrinek will not be present at the 1st PacificBancorp annual shareholder meeting.

Under the procedures established by the audit committee of 1st PacificBank of California, all auditing services and all non-audit services performedby Vavrinek are to be pre-approved by the audit committee, subject to the deminimus exception provided under Section 202 of the Sarbanes-Oxley Act.  All of the services provided by Vavrinek werepre-approved by the audit committee.

**Audit Fees**

Aggregate fees, including out-of-pocket expenses, for professionalservices rendered by Vavrinek in connection with (i) the audit of 1st PacificBank of California’s consolidated financial statements as of and for the yearended December 31, 2006, and (ii) the reviews of its condensed consolidatedinterim financial statements as of September 30, 2006, June 30, 2006, and March31, 2006, were $45,000.

Aggregate fees, including out-of-pocket expenses, for professionalservices rendered by Vavrinek in connection with (i) the audit of 1st PacificBank of California’s consolidated financial statements as of and for the yearended December 31, 2005, and (ii) the reviews of its condensed consolidatedinterim financial statements as of September 30, 2005, June 30, 2005, and March31, 2005 were $39,000.

**Audit-Related Fees**

Aggregate fees, including out-of-pocket expenses, for professionalservices rendered by Vavrinek for audit-related services for the year endedDecember 31, 2006 were $6,000.  Auditrelated services in 2006 included a review of 1st Pacific Bank of California’squarterly reports on Form 10-Q.

Aggregate fees, including out-of-pocket expenses, for professionalservices rendered by Vavrinek  foraudit-related services for the year ended December 31, 2005 were $5,000.  Audit related services in 2005 included areview of 1st Pacific Bank of California’s quarterly reports on Form 10-QSB.

**Tax Fees**

Aggregate fees, including out-of-pocket expenses, for professionalservices rendered by Vavrinek  inconnection with tax compliance, tax advice and corporate tax planning for theyear ended December 31, 2006 were $5,000.

Aggregate fees, including out-of-pocket expenses, for professionalservices rendered by Vavrinek  inconnection with tax compliance, tax advice and corporate tax planning for theyear ended December 31, 2005 were $4,000.

**All Other Fees**

There were no additional fees paid to Vavrinek during the years endedDecember 31, 2006 and 2005.

**Audit CommitteePre-Approval Policies and Procedures**

The audit committee of 1st Pacific Bancorp’s board of directors hasconsidered whether the provision of services covered in the precedingparagraphs is compatible with maintaining Vavrinek’s independence. At theirregularly scheduled and special meetings, the audit committee considers andpre-approves any audit and non-audit services to be performed for 1st PacificBancorp by its independent registered public accounting firm.  For 2006, those pre-approved audit,audit-related, tax and all other services represented 80%, 11%, 9% and 0%,respectively, of all services that year.

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**PART IV**

**ITEM 15.               EXHIBITS,FINANCIAL STATEMENT SCHEDULES**

(a) (1)   Financial Statements.The consolidated financial statements were included in the Original Filing.

     (2)   Financial Statement Schedules. All financialstatement schedules have been omitted since the information is either notapplicable or required or was included in the financial statements or notesthereof included in the Original Filing.

      (3)  Exhibits. Those exhibits marked with a (*) refer to exhibits filed withthe Original Filing. Those exhibits marked with a (£) refer to exhibits filedherewith.  The other exhibits areincorporated herein by reference, as indicated in the following list. Thoseexhibits marked with a (†) refer to management contracts or compensatory plansor arrangements.

**EXHIBIT INDEX**
| Exhibit No. | ** ** | **Description** | ** ** |
|------------------|------------|-----------------|------------|
|             | 2.1        |            |       | Agreement and Plan of Reorganization and Merger by  and between 1st Pacific Bancorp, PBC Merger Company and 1st Pacific Bank of  California dated as of November 7, 2006, incorporated by reference to Exhibit  2 to 1st Pacific Bancorp’s Registration Statement on Form S-4EF filed on  November 9, 2006. |   |
|             | 2.2        |            |       | Agreement and Plan of Reorganization and Merger  dated February 22, 2007, by and among 1st Pacific Bancorp, 1st Pacific Bank  of California and Landmark National Bank incorporated by reference to Exhibit  10.2 to 1st Pacific Bancorp’s report on Form 8-K filed February 23, 2007. |   |
|             | 3.1        |            |       | Articles of Incorporation of 1st Pacific Bancorp  incorporated by reference to Exhibit 3.1 to 1st Pacific Bancorp’s  Registration Statement on Form S-4EF filed on November 9, 2006. |   |
|             | 3.2        |            |       | Bylaws of 1st Pacific Bancorp incorporated by  reference to Exhibit 3.2 to 1st Pacific Bancorp’s Registration Statement on  Form S-4EF filed on November 9, 2006. |   |
|             | 4.1        |            |       | Specimen form of Certificate for 1st Pacific Bancorp  Common Stock incorporated by reference to Exhibit 4 to 1st Pacific Bancorp’s  Registration Statement on Form S-4EF filed on November 9, 2006. |   |
|             | 4.2        | †          |       | Second Amended and Restated 2000 Stock Option Plan  of 1st Pacific Bank of California, as amended by Amendment No. 1,  incorporated by reference to Exhibit 4.1 to 1st Pacific Bancorp’s  Registration Statement on Form S-8 filed February 21, 2007. |   |
|             | 10.1       | *               |       | Sublease, dated December 30, 1999, among  Washington Mutual Bank, FA, 1st Pacific Bank of California and La Jolla  Association (7728 Regents Road, Suite 503, San Diego, California). |   |
|             | 10.2       | *               |       | Lease, dated March 26, 2001, among La Jolla  Investors, Larry Tucker, Trustee, and 1st Pacific Bank of California (7728  Regents Road, Suite 503, San Diego, California). |   |
|             | 10.3       | *               |       | Assumption, Affirmation and Amendment to Lease,  dated March 26, 2001, among La Jolla Investors, Larry Tucker as Trustee  of Larry Tucker Separate Property Trust dated September 17, 1987, and 1st  Pacific Bank of California (7728 Regents Road, Suite 503,  San Diego, California). |   |

 

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|        | 10.4  | *       |   | Shopping Center Lease, dated November 1, 1999,  among 95 College Plaza, Ltd., 1st Pacific Bank of California and La Jolla  Association (3500 College Boulevard, Oceanside, California).                                                                                                                     |   |
|--------|-------|---------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | 10.5  | *       |   | First Amendment to Shopping Center Lease, dated  November 17, 2004, among 95 College Plaza, Ltd., 1st Pacific Bank of  California and La Jolla Association (3500 College Boulevard, Oceanside,  California).                                                                                                     |   |
|   | 10.6  | *       |   | Lease dated April 15, 2003, between Griffin  Properties, LLC and 1st Pacific Bank of California (8889 Rio  San Diego Drive, San Diego, California).                                                                                                                                          |   |
|   | 10.7  | *       |   | First Amendment to Lease Agreement dated  July 25, 2003, between Griffin Properties, LLC and 1st Pacific Bank of  California (8889 Rio San Diego Drive, San Diego, California)                                                                                                                    |   |
|   | 10.8  | *       |   | Lease dated September 17, 2004, between FSP  Regents Square, LLC and 1st Pacific Bank of California (4275 Executive  Square, Suite 650, La Jolla, California).                                                                                                                                         |   |
|   | 10.9  | *       |   | Lease dated September 30, 2004, between Legacy Sabre  Springs, LLC and 1st Pacific Bank of California (13500 Evening Creek Drive  North, Suite 100, San Diego, California).                                                                                                                            |   |
|   | 10.10 | *       |   | Amendment No. 1 to Lease dated January 27,  2005, between Kilroy Realty, L.P., a Delaware Limited Partnership, Kilroy  Realty Corporation, a Maryland Corporation, General Partner and 1st Pacific Bank of California (13500 Evening  Creek Drive North, Suite 100, San Diego, California).  |   |
|   | 10.11 | *       |   | Indenture Agreement between 1st Pacific Bank of California and Wilmington  Trust Company, as Trustee, dated March 31, 2005, for Floating Rate Junior Subordinated  Debentures Due 2020.                                                                                                                     |   |
|   | 10.12 | *† |   | Employment Agreement, effective as of November 17,  2006, by and between 1st Pacific Bank of California and James H. Burgess.                                                                                                                                                                                    |   |
|   | 10.13 | *† |   | Form of Indemnification Agreement entered into by  and between 1st Pacific Bank of California and each of its directors and  officers.                                                                                                                                                                           |   |
|   | 10.14 | *† |   | 1st Pacific Bank of  California Incentive Compensation Plan - Senior Management.                                                                                                                                                                                                                            |   |
|   | 10.15 | *† |   | Employment Agreement, effective as of December 22,  2005, by and between 1st Pacific Bank of California and A. Vincent Siciliano.                                                                                                                                                                                |   |
|   | 10.16 | *† |   | Employment Agreement, effective as of  November 17, 2005, by and between 1st Pacific Bank of California and  Richard H. Revier.                                                                                                                                                                             |   |
|   | 10.17 | *† |   | Employment Agreement, effective as of  January 1, 2006, by and between 1st Pacific Bank of California and Larry  Prosi.                                                                                                                                                                                     |   |
|   | 10.18 | *       |   | Lease dated August 11 2006, among AMJ  Properties, LLC, and 1st Pacific Bank of California (343 East Main Street, El  Cajon, California).                                                                                                                                                                   |   |
|   | 10.19 |    |   | Standard Office Lease by and between Arden Realty  Limited Partnership and 1st Pacific Bank of California dated February 5,  2007, incorporated by reference to Exhibit 10.1 to 1st Pacific Bancorp’s  report on Form 8-K filed February 13, 2007.                                                          |   |
|   | 10.20 |    |   | Form of Landmark Director-Shareholder’s Agreement,  each dated February 22, 2007, incorporated by reference to Exhibit 10.3 to  1st Pacific Bancorp’s report on Form 8-K filed February 23, 2007.                                                                                                      |   |
|   | 10.21 |    |   | Landmark Director-Shareholder’s Agreement dated  February 22, 2007, between 1st Pacific Bancorp and 1st Pacific Bank of  California on one hand and F.J. “Rick” Mandelbaum, incorporated by reference  to Exhibit 10.4 to 1st Pacific Bancorp’s report on Form 8-K filed February  23, 2007. |   |

 

23

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|        | 10.22 |   |   | Form of Affiliates Agreement, each dated February  22, 2007, incorporated by reference to Exhibit 10.6 to 1st Pacific Bancorp’s  report on Form 8-K filed February 23, 2007.            |   |
|--------|-------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | 21.1  | *      |   | List of subsidiaries of 1st Pacific Bancorp.                                                                                                                                                 |   |
|   | 23.1  | *      |   | Consent of Vavrinek, Trine, Day & Co. LLP.                                                                                                                                               |   |
|   | 24    | *      |   | Power of Attorney.                                                                                                                                                                           |   |
|   | 31.1  | £ |   | Certification of the Chief Executive Officer  pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                          |   |
|   | 31.2  | £ |   | Certification of the Chief Financial Officer  pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                          |   |
|   | 32.1  | *      |   | Certification of  the Chief Executive Officer and Chief Financial Officer pursuant to 18 USC  Section 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |   |

 

(b)    See (a)3 above.

(c)    See (a)1 above.

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**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securitiesand Exchange Act of 1934, the registrant has duly caused this Amendment No. 1to be signed in its behalf by the undersigned, thereunto duly authorized.
| Date:  April 25, 2007 | **1****st PACIFIC BANCORP** |
|----------------------------|----------------------------------|
|                       | ** **                       | ** ** |
|                       | By:                              | /s/ A. Vincent  Siciliano |
|                       |                             | A. Vincent  Siciliano |
|                       |                             | President &  Chief Executive Officer |
|                       |                             |   |
|                       | By:                              | /s/  James H. Burgess |
|                       |                             | James H. Burgess |
|                       |                             | Executive Vice  President & Chief Financial Officer |

 

In accordance withthe Exchange Act, this report has been signed by the following persons onbehalf of the registrant and in the capacities on the dates indicated:
| Signature                 | ** ** | **Title**                                    | ** ** | **Date**       |
|---------------------------|------------|----------------------------------------------|------------|----------------|
|                      |       |                                         |       |           |
| /s/ A. Vincent  Siciliano |       | President, Chief Executive Officer,          |       | April 25, 2007 |
| A. Vincent  Siciliano     |       | Director (principal executive officer)       |       |           |
|                      |       |                                         |       |           |
|                      |       | Executive Vice President,               |       |           |
| /s/ James H.  Burgess     |       | Chief Financial Officer (principal financial |       | April 25, 2007 |
| James H. Burgess          |       | officer and principal accounting officer)    |       |           |
|                      |       |                                         |       |           |
| /s/ Robert P.  Cange*     |       | Director                                     |       | April 25, 2007 |
| Robert P. Cange           |       |                                         |       |           |
|                      |       |                                         |       |           |
| /s/ Albert  Colucci*      |       | Director                                     |       | April 25, 2007 |
| Albert Colucci            |       |                                         |       |           |
|                      |       |                                         |       |           |
| /s/ Veronica Z.  Froman*  |       | Director                                     |       | April 25, 2007 |
| Veronica Z.  Froman       |       |                                         |       |           |
|                      |       |                                         |       |           |
| /s/ James G.  Knight*     |       | Director                                     |       | April 25, 2007 |
| James G. Knight           |       |                                         |       |           |
|                      |       |                                         |       |           |
| /s/ Susan Lew*            |       | Director                                     |       | April 25, 2007 |
| Susan Lew                 |       |                                         |       |           |
|                      |       |                                         |       |           |
| /s/ Albert  Logan*        |       | Director                                     |       | April 25, 2007 |
| Albert Logan              |       |                                         |       |           |
|                      |       |                                         |       |           |

 
| *By:   | /s/  James H.  Burgess                                                                                 |   |
|--------|-------------------------------------------------------------------------------------------------------------|--------|
|   | James H. Burgess pursuant to the Power of Attorney  contained on the signature page of the Original Filing. |   |

 

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