**Exhibit 10.3**

**ASSUMPTION, AFFIRMATION AND AMENDMENT TO LEASE**

THIS ASSUMPTION, AFFIRMATION AND AMENDMENT TO LEASE(the “Agreement”) is entered into as of the 26th day of March,**2001 by and between La Jolla Investors, a general partnership, as toan undivided 50% interest and Larry Tucker as Trustee of Larry Tucker SeparateProperty Trust dated September 17, 1987 as to an undivided 50% interest(together, “Landlord”) and 1st Pacific Bank of California, a CaliforniaCorporation (the “Bank”).

**RECITALS**

A. Landlord is the owner of certain real propertylocated in the City of San Diego commonly known as 7728 Regents Road in the LaJolla Colony Plaza shopping center located at the northwest corner of RegentsRoad and Arriba Street and more particularly described as Parcel 5 of ParcelMap 13620 recorded December 27, 1984 as file # 84-480860 in the officialrecords of San Diego County, California (the “Property”).

B. The Property has been improved with a retail shopbuilding which among other things includes 3,000 square feet of space presentlyoccupied by the Bank (the “Original Premises”), as well as an adjoining 920square feet space to the west of the Original Premises (the “Adjoining Space”).

C. Landlord’s predecessor and the predecessor ofWashington Mutual Bank FA (“Tenant”) entered into a Lease Agreement dated as ofFebruary 10, 1987 for the Original Premises which lease was amended byAmendment No. 1 dated December 18, 1995

1

----

(collectively, the “Lease”).

D. The Bank occupies the Original Premises pursuant toa sublease dated as of December 30, 1999 between Tenant and the Bank (which atthat time was a proposed organization) and La Jolla Association (the “Sublease”).

E. The Sublease expires on December 31, 2002 and theBank desires to have all the rights and obligations of the Tenant under theLease remain in effect through and including December 31, 2007, with theadditional right to extend such rights and obligations for an additional five(5) years through and including December 31, 2012, as if the Bank were the Tenantunder the Lease.

F. Landlord has informed the Bank that Landlord doesnot intend to extend the lease of the existing lessee of the Adjoining Spaceand the Bank has expressed a desire to lease the Adjoining Space as well.Landlord is willing to lease the Adjoining Space to the Bank provided that theBank (i) leases both the Original Premises and the Adjoining Space pursuant tothe terms of the Lease from January 1, 2003 through December 31, 2007 and (ii)enters into a lease for the Adjoining Space for the period of time commencingAugust 1, 2001 through December 31, 2002, in form attached hereto as Exhibit Aand by this reference incorporated herein, concurrently with the executionhereof.

G. The duties of Landlord hereunder are expresslyconditioned upon the Bank obtaining the written agreement from Tenant not toexercise its options under the Lease, since Landlord

2

----

does not want to be in the position of leasing the Original Premises totwo tenants for the same period of time.

Now therefore in consideration of these Recitals and the conditions andcovenants hereinafter contained it is agreed as follows:

1. Effective with and from and after January 1, 2003,the Bank assumes the Lease and agrees to act as tenant thereunder, affirms allthe terms and conditions of the Lease and hereby exercises the option to extendthe term of Lease through and including December 31, 2007.

2. The Bank agrees that effective January 1, 2003, theterm “Premises” as defined in the Lease shall be expanded to include theAdjoining Space and that the rent rate per square foot of the Original Premisesunder the Lease as of December 31, 2002 shall be used as the rent rate for thePremises including the Adjoining Space on January 1, 2003. That rent rate shallbe adjusted on July 1, 2003 and each July 1 thereafter during the remainder ofthe term of the Lease as provided in the Lease.

3. A lease between Landlord and the Bank for theAdjoining Space shall be entered into concurrently with this Agreement in theform of Exhibit A attached hereto.

4. Nothing herein shall be construed to amend oraffect the Sublease or the rights and duties of the Bank under the Subleasethrough and including December 31, 2002.

3

----

5. Each party hereto warrants to the other that it hasused no real estate broker in connection with the transaction set forth herein.

 

THE PARTIES HAVE EXECUTED THIS AGREEMENT at San Diego, California.

 
|        | LANDLORD:                                                                                       |
|--------|-------------------------------------------------------------------------------------------------|
|   |                                                                                            |   |
|   | LA JOLLA INVESTORS,  a California General Partnership                                           |
|   |                                                                                            |   |
|   |                                                                                            |   |
|   | By:                                                                                             | /s/ Steven Park Grant |
|   |                                                                                            | Steven Park Grant, as Trustee of the Grant  Family Trust of 1991, General Partner |
|   |                                                                                            |   |
|   |                                                                                            |   |
|   |                                                                                            | /s/ Larry Tucker |
|   | Larry Tucker, as Trustee of the Larry Tucker  Separate Property Trust dated September 17, 1987, |
|   |                                                                                            |   |
|   |                                                                                            |   |
|   | The Bank:                                                                                       |
|   |                                                                                            |   |
|   | 1st Pacific Bank of California,  a California Corporation                                       |
|   |                                                                                            |   |
|   |                                                                                            |   |
|   | By:                                                                                             | /s/ Robert B. Hildt |
|   |                                                                                            | Robert B. Hildt |
|   |                                                                                            |   |
|   | Its President                                                                                   |

 

4

----