##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q

(Mark One)

|  |  |                                                                                        
|- |  | ---------------------------------------------------------------------------------------
|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|  |  | For the quarterly period ended September 30, 2003                                      

OR


|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|  |  | For the transition period
from  to                                                      

Commission File Number: 000-50066

HARRINGTON WEST FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)


|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or other jurisdiction of incorporation or organization) |  | 48-1175170
(I.R.S. Employer Identification No.)

610 Alamo Pintado Road
Solvang, California
(Address of principal executive offices)

93463
(Zip Code)

(805) 688-6644
(Registrants telephone number, including area code)



---

(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  x  Yes                    o No

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934).   o  Yes                                 x
No

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practicable date:

4,338,451 shares of Common Stock, par value $0.01 per share, outstanding
as of November 6, 2003.





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TABLE OF CONTENTS



|                             |                                                                    |                                                                                    |  |  |  |  |  | 
|---------------------------- | ------------------------------------------------------------------ | ---------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART 1-FINANCIAL INFORMATION
|                             | Item 1: Condensed Consolidated Financial Statements               
|                             |                                                                    | CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION                          
|                             |                                                                    | CONDENSED CONSOLIDATED STATEMENTS OF INCOME                                       
|                             |                                                                    | CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
|                             |                                                                    | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                   
|                             |                                                                    | NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                    
|                             | Item 2: Managements Discussion and Analysis                      
|                             | Item 3: Quantitative and Qualitative Disclosures about Market Risk
|                             | Item 4: Controls and Procedures                                   
|PART II - OTHER INFORMATION 
|                             | Item 1: Legal Proceedings                                         
|                             | Item 2: Changes in Securities and Use of Proceeds                 
|                             | Item 3: Defaults Upon Senior Securities                           
|                             | Item 4: Submission of Matters to a Vote of Security Holders       
|                             | Item 5: Other Information                                         
|                             | Item 6: Exhibits and Reports on Form 8-K                          
|SIGNATURES                  
|EXHIBIT 4.1                 
|EXHBIIT 4.2                 
|EXHIBIT 4.3                 
|EXHIBIT 10.2.2              
|EXHIBIT 10.2.3              
|EXHIBIT 31.1                
|EXHIBIT 31.2                
|EXHIBIT 32                  



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##### Table of Contents



HARRINGTON WEST FINANCIAL GROUP, INC.

INDEX

|                                                                                             |            |                                                                                                                                                                  |    |      |   | 
|-------------------------------------------------------------------------------------------- | ---------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ---- | - | 
|                                                                                             |            |                                                                                                                                                                  |    | Page
|Part I - Financial Information                                                               |            |                                                                                                                                                                  |    |     
|Item 1.Condensed Consolidated Financial Statements                                           |            |                                                                                                                                                                  | 2  |     
|                                                                                             |            | Condensed Consolidated Statements of Financial Condition as of
September 30, 2003 (Unaudited) and December 31, 2002                                              |    |      | 2 | 
|                                                                                             |            | Condensed Consolidated Statements of Income for the Three
Months Ended September 30, 2003 and 2002 and Nine months
Ended September 30, 2003 and 2002 (Unaudited) |    |      | 3 | 
|                                                                                             |            | Condensed Consolidated Statements of Shareholders Equity and Comprehensive
Income for the nine months ended September 30, 2003
and Year Ended 2002 (Unaudited)  |    |      | 4 | 
|                                                                                             |            | Condensed Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 2003 and 2002 (Unaudited)                                                |    |      | 6 | 
|                                                                                             |            | Notes to Unaudited Condensed Consolidated Financial Statements                                                                                                   |    |      | 7 | 
|Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations |            |                                                                                                                                                                  | 9  |     
|Item 3.Quantitative and Qualitative Disclosures about Market Risk                            |            |                                                                                                                                                                  | 21 |     
|Item 4.Controls and Procedures                                                               |            |                                                                                                                                                                  | 22 |     
|Part II  - Other Information                                                                 |            |                                                                                                                                                                  |    |     
|Item 1.Legal Proceedings                                                                     |            |                                                                                                                                                                  | 23 |     
|Item 2.Changes in Securities and Use of Proceeds                                             |            |                                                                                                                                                                  | 23 |     
|Item 3.Defaults upon Senior Securities                                                       |            |                                                                                                                                                                  | 23 |     
|Item 4.Submission of Matters to a Vote of Security Holders                                   |            |                                                                                                                                                                  | 23 |     
|Item 5.Other Information                                                                     |            |                                                                                                                                                                  | 23 |     
|Item 6.Exhibits and Reports on Form 8-K                                                      |            |                                                                                                                                                                  | 24 |     
|                                                                                             | Signatures |                                                                                                                                                                  |    | 25   |  

- 1 -



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##### Table of Contents






PART 1-FINANCIAL INFORMATION




Item 1: Condensed Consolidated Financial Statements

HARRINGTON WEST FINANCIAL GROUP, INC.




CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


(Dollars in thousands, except share data)

|                                                                                                                                      |                             |                                                                                       |         |                    |         |                   |         |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------------------------------------------------------------------------------------- | ------- | ------------------ | ------- | ----------------- | ------- | - | ------- | 
|                                                                                                                                      |                             |                                                                                       |         | September 30, 2003 |         | December 31, 2002
|                                                                                                                                      |                             |                                                                                       |         |                    |         |                  
|                                                                                                                                      |                             |                                                                                       |         | (unaudited)        |         |                   |         |  
|ASSETS                                                                                                                                |                             |                                                                                       |         |                    |         |                   |         |  
|Cash and cash equivalents                                                                                                             |                             | $                                                                                     | 16,444  |                    |         | $                 | 19,212  |  
|Trading account assets                                                                                                                |                             |                                                                                       | 1,945   |                    |         |                   | 1,934   |  
|Securities available for sale                                                                                                         |                             |                                                                                       | 344,085 |                    |         |                   | 324,530 |  
|Securities held to maturity                                                                                                           |                             |                                                                                       | 2,303   |                    |         |                   | 2,368   |  
|Loans receivable, (net of allowance for loan losses of $4,507
and $3,797 for September 30, 2003 and December 31,
2002, respectively)  |                             |                                                                                       | 504,336 |                    |         |                   | 448,050 |  
|Accrued interest receivable                                                                                                           |                             |                                                                                       | 2,957   |                    |         |                   | 3,526   |  
|Premises and equipment, net                                                                                                           |                             |                                                                                       | 5,883   |                    |         |                   | 4,469   |  
|Prepaid expenses and other assets                                                                                                     |                             |                                                                                       | 2,159   |                    |         |                   | 1,761   |  
|Investment in FHLB stock, at cost                                                                                                     |                             |                                                                                       | 13,169  |                    |         |                   | 11,750  |  
|Income taxes receivable                                                                                                               |                             |                                                                                       |        |                    |         |                   | 252     |  
|Deferred tax asset                                                                                                                    |                             |                                                                                       | 1,917   |                    |         |                   | 1,187   |  
|Goodwill                                                                                                                              |                             |                                                                                       | 3,981   |                    |         |                   | 3,981   |  
|Core deposit intangible, net                                                                                                          |                             |                                                                                       | 1,166   |                    |         |                   | 1,311   |  
|                                                                                                                                      |                             |                                                                                       |         |                    |         |                   |         |  
|TOTAL ASSETS                                                                                                                          |                             | $                                                                                     | 900,345 |                    |         | $                 | 824,331 |  
|                                                                                                                                      |                             |                                                                                       |         |                    |         |                   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                  |                             |                                                                                       |         |                    |         |                   |         |  
|Deposits:                                                                                                                             |                             |                                                                                       |         |                    |         |                   |         |  
|                                                                                                                                      |                             | Interest bearing                                                                      |         | $                  | 514,484 |                   |         | $ | 505,165 | 
|                                                                                                                                      |                             | Non-interest bearing                                                                  |         |                    | 25,385  |                   |         |   | 20,106  | 
|                                                                                                                                      |                             |                                                                                       |         |                    |         |                   |         |  
|Total Deposits                                                                                                                        |                             |                                                                                       | 539,869 |                    |         |                   | 525,271 |  
|FHLB advances                                                                                                                         |                             |                                                                                       | 217,500 |                    |         |                   | 235,000 |  
|Securities sold under repurchase agreements                                                                                           |                             |                                                                                       | 65,893  |                    |         |                   | 517     |  
|Trust preferred securities                                                                                                            |                             |                                                                                       | 15,000  |                    |         |                   |        |  
|Note payable                                                                                                                          |                             |                                                                                       |        |                    |         |                   | 11,300  |  
|Due to broker                                                                                                                         |                             |                                                                                       | 5,000   |                    |         |                   | 446     |  
|Accounts payable and accrued expenses                                                                                                 |                             |                                                                                       | 10,401  |                    |         |                   | 9,325   |  
|Income taxes payable                                                                                                                  |                             |                                                                                       | 374     |                    |         |                   |        |  
|                                                                                                                                      |                             |                                                                                       |         |                    |         |                   |         |  
|TOTAL LIABILITIES                                                                                                                     |                             |                                                                                       | 854,037 |                    |         |                   | 781,859 |  
|                                                                                                                                      |                             |                                                                                       |         |                    |         |                   |         |  
|STOCKHOLDERS EQUITY                                                                                                                  |                             |                                                                                       |         |                    |         |                   |         |  
|Preferred stock, $.01 par value: 1,000,000 shares authorized:                                                                         |                             |                                                                                       |         |                    |         |                   |         |  
|                                                                                                                                      | none issued and outstanding |                                                                                       |         |                    |         |                   |         |   |        
|Common stock, $.01 par value; 9,000,000 shares authorized:                                                                            |                             |                                                                                       |         |                    |         |                   |         |  
|                                                                                                                                      |                             | 4,338451 shares issued and outstanding as of September 30, 2003
and December 31, 2002 |         |                    | 43      |                   |         |   | 43      | 
|Additional paid-in capital                                                                                                            |                             |                                                                                       | 30,710  |                    |         |                   | 30,641  |  
|Retained earnings                                                                                                                     |                             |                                                                                       | 18,516  |                    |         |                   | 13,795  |  
|Accumulated other comprehensive income, net of tax of $(1,430)
and $(1,756) at September 30, 2003 and December 31, 2002, respectively |                             |                                                                                       | (2,961  | )                  |         |                   | (2,007  | )
|                                                                                                                                      |                             |                                                                                       |         |                    |         |                   |         |  
|Total Stockholders Equity                                                                                                            |                             |                                                                                       | 46,308  |                    |         |                   | 42,472  |  
|                                                                                                                                      |                             |                                                                                       |         |                    |         |                   |         |  
|TOTAL LIABILITIES & STOCKHOLDERS EQUITY                                                                                              |                             | $                                                                                     | 900,345 |                    |         | $                 | 824,331 |  
|                                                                                                                                      |                             |                                                                                       |         |                    |         |                   |         |  

The accompanying notes are an integral part of these condensed statements.

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##### Table of Contents






HARRINGTON WEST FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS
OF INCOME


Dollars in thousands, except share and per share data

|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |        |  
|---------------------------------------------------- | ---------------------------------------------- | - | ------------------ | ----- | ----------------- | - | --------- | ----- | ---- | - | --------- | ------ | - | - | --------- | ------ | -
|                                                     |                                                |   | Three months ended |       | Nine months ended
|                                                     |                                                |   | September 30,      |       | September 30,    
|                                                     |                                                |   |                    |       |                  
|                                                     |                                                |   | 2003               |       | 2002              |   | 2003      |       | 2002
|                                                     |                                                |   |                    |       |                   |   |           |       |     
|INTEREST INCOME                                      |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|                                                     | Interest on loans                              |   | $                  | 8,458 |                   |   | $         | 7,756 |      |   | $         | 24,589 |   |   | $         | 23,894 |  
|                                                     | Interest and dividends on securities           |   |                    | 3,393 |                   |   |           | 3,345 |      |   |           | 9,926  |   |   |           | 8,658  |  
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|Total interest income                                |                                                |   | 11,851             |       |                   |   | 11,101    |       |      |   | 34,515    |        |   |   | 32,552    |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|INTEREST EXPENSE                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|                                                     | Interest on deposits                           |   |                    | 2,555 |                   |   |           | 3,283 |      |   |           | 7,866  |   |   |           | 11,048 |  
|                                                     | Interest on FHLB advances and other borrowings |   |                    | 2,410 |                   |   |           | 2,127 |      |   |           | 7,269  |   |   |           | 5,532  |  
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|Total interest expense                               |                                                |   | 4,965              |       |                   |   | 5,410     |       |      |   | 15,135    |        |   |   | 16,580    |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES |                                                |   | 6,886              |       |                   |   | 5,691     |       |      |   | 19,380    |        |   |   | 15,972    |       
|PROVISION FOR LOAN LOSSES                            |                                                |   | 100                |       |                   |   | 50        |       |      |   | 710       |        |   |   | 325       |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES  |                                                |   | 6,786              |       |                   |   | 5,641     |       |      |   | 18,670    |        |   |   | 15,647    |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|OTHER INCOME (LOSS)                                  |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|                                                     | Income (loss) from trading assets              |   |                    | 380   |                   |   |           | (69   | )    |   |           | 2,249  |   |   |           | (165   | )
|                                                     | Loss on extinguishment of debt                 |   |                    | (187  | )                 |   |           |      |      |   |           | (1,610 | ) |   |           |       |  
|                                                     | Other income gain (loss)                       |   |                    | (2    | )                 |   |           | (275  | )    |   |           | 47     |   |   |           | (310   | )
|                                                     | Banking fee income                             |   |                    | 1,036 |                   |   |           | 561   |      |   |           | 3,260  |   |   |           | 1,505  |  
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|Total other income                                   |                                                |   | 1,227              |       |                   |   | 217       |       |      |   | 3,946     |        |   |   | 1,030     |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|OTHER EXPENSES                                       |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|                                                     | Salaries & employee benefits                   |   |                    | 2,521 |                   |   |           | 1,997 |      |   |           | 7,545  |   |   |           | 5,937  |  
|                                                     | Premises & equipment                           |   |                    | 679   |                   |   |           | 556   |      |   |           | 2,003  |   |   |           | 1,579  |  
|                                                     | Insurance premiums                             |   |                    | 209   |                   |   |           | 64    |      |   |           | 359    |   |   |           | 186    |  
|                                                     | Marketing                                      |   |                    | 103   |                   |   |           | 65    |      |   |           | 315    |   |   |           | 190    |  
|                                                     | Computer services                              |   |                    | 162   |                   |   |           | 132   |      |   |           | 488    |   |   |           | 388    |  
|                                                     | Consulting fees                                |   |                    | 234   |                   |   |           | 188   |      |   |           | 716    |   |   |           | 520    |  
|                                                     | Office expenses & supplies                     |   |                    | 172   |                   |   |           | 160   |      |   |           | 533    |   |   |           | 438    |  
|                                                     | Other                                          |   |                    | 499   |                   |   |           | 429   |      |   |           | 1,385  |   |   |           | 1,233  |  
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|Total other expenses                                 |                                                |   | 4,579              |       |                   |   | 3,591     |       |      |   | 13,344    |        |   |   | 10,471    |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|INCOME BEFORE INCOME TAXES                           |                                                |   | 3,434              |       |                   |   | 2,267     |       |      |   | 9,272     |        |   |   | 6,206     |       
|INCOME TAXES                                         |                                                |   | 1,436              |       |                   |   | 929       |       |      |   | 3,859     |        |   |   | 2,550     |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|NET INCOME                                           |                                                | $ | 1,998              |       |                   | $ | 1,338     |       |      | $ | 5,413     |        |   | $ | 3,656     |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|BASIC EARNINGS PER SHARE                             |                                                | $ | 0.46               |       |                   | $ | 0.40      |       |      | $ | 1.25      |        |   | $ | 1.09      |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|DILUTED EARNINGS PER SHARE                           |                                                | $ | 0.44               |       |                   | $ | 0.38      |       |      | $ | 1.20      |        |   | $ | 1.05      |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|BASIC WEIGHTED AVERAGE SHARES OUTSTANDING            |                                                |   | 4,328,676          |       |                   |   | 3,354,336 |       |      |   | 4,328,275 |        |   |   | 3,354,336 |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       
|DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING          |                                                |   | 4,560,449          |       |                   |   | 3,485,884 |       |      |   | 4,520,105 |        |   |   | 3,484,535 |       
|                                                     |                                                |   |                    |       |                   |   |           |       |      |   |           |        |   |   |           |       

The accompanying notes are an integral part of these condensed statements.

- 3 -



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##### Table of Contents






HARRINGTON WEST FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
AND COMPREHENSIVE INCOME
(Dollars in thousands, except share data)


|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |        |   | 
|-------------------------------------- | ------------------------------------------------------------- | -------------------------- | --------- | ------------ |  | ------- | -- | -------- |  | ------------- | ------ | ------------- |  | ------------- | ------ | ------ |  |  | - | ------ | ----- | ----- | ------ | ----------- | - | - | ------ | ------ | - | 
|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        | Accumulated |   |   |        |       
|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        | Additional    |  |               |        |        |  |  |   |        |       | Other |        | Total      
|                                       |                                                               |                            |           | Common Stock |  | Paid-in |    | Retained |  | Comprehensive |        | Comprehensive |  | Stockholders
|                                       |                                                               |                            |           | Stock        |  | Amt     |    | Capital  |  | Earnings      |        | Income        |  | Income        |        | Equity
|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |       
|Balance, December 31, 2001             |                                                               |                            | 3,354,336 |              |  | $       | 34 |          |  | $             | 20,305 |               |  | $             | 9,175  |        |  |  |   |        |       | $     | 630    |             |   | $ | 30,144 |       
|Comprehensive income:                  |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       
|                                       | Net income                                                    |                            |           |              |  |         |    |          |  |               |        |               |  |               |        | 5,045  |  |  | $ | 5,045  |       |       |        |             |   |   |        | 5,045  |  
|Other comprehensive income,
net of tax |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       
|                                       | Unrealized gains on securities                                |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   | 671    |       |       |        | 671         |   |   |        | 671    |  
|                                       | Effective portion in change in
fair value of cash flow
hedges |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   | (3,308 | )     |       |        | (3,308      | ) |   |        | (3,308 | )
|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       
|                                       |                                                               | Total comprehensive income |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   | $      | 2,408 |       |        |             |   |   |        |        |   | 
|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       
|Initial public offering                |                                                               |                            | 973,615   |              |  |         | 9  |          |  |               | 10,212 |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   | 10,221 |       
|Stock options                          |                                                               |                            |           |              |  |         |    |          |  |               | 124    |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   | 124    |       
|Dividends on common stock              |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               | (425   | )      |  |  |   |        |       |       |        |             |   |   | (425   | )     
|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       
|Balance, December 31, 2002             |                                                               |                            | 4,327,951 |              |  |         | 43 |          |  |               | 30,641 |               |  |               | 13,795 |        |  |  |   |        |       |       | (2,007 | )           |   |   | 42,472 |       
|Comprehensive income:                  |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       
|                                       | Net income                                                    |                            |           |              |  |         |    |          |  |               |        |               |  |               |        | 5,413  |  |  | $ | 5,413  |       |       |        |             |   |   |        | 5,413  |  
|Other comprehensive income,
net of tax |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       
|                                       | Unrealized gains on securities                                |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   | (494   | )     |       |        | (494        | ) |   |        | (494   | )
|                                       | Effective portion in change in
fair value of cash flow
hedges |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   | (460   | )     |       |        | (460        | ) |   |        | (460   | )
|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       
|                                       |                                                               | Total comprehensive income |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   | $      | 4,459 |       |        |             |   |   |        |        |   | 
|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       
|Stock options exercised                |                                                               |                            | 10,500    |              |  |         |    |          |  |               | 69     |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   | 69     |       
|Dividends on common stock              |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               | (692   | )      |  |  |   |        |       |       |        |             |   |   | (692   | )     
|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       
|Balance, September 30, 2003            |                                                               |                            | 4,338,451 |              |  | $       | 43 |          |  | $             | 30,710 |               |  | $             | 18,516 |        |  |  |   |        |       | ($    | 2,961  | )           |   | $ | 46,308 |       
|                                       |                                                               |                            |           |              |  |         |    |          |  |               |        |               |  |               |        |        |  |  |   |        |       |       |        |             |   |   |        |       

The accompanying notes are an integral part of these condensed statements.

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HARRINGTON WEST FINANCIAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE
INCOME
(Dollars in thousands)


|                                       |                                                                                                                                                                                       |  |                   |        |      |  |   |        |  
|-------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------ | ---- |  | - | ------ | -
|                                       |                                                                                                                                                                                       |  | Nine months ended
|                                       |                                                                                                                                                                                       |  | September,       
|                                       |                                                                                                                                                                                       |  |                  
|                                       |                                                                                                                                                                                       |  | 2003              |        | 2002
|                                       |                                                                                                                                                                                       |  |                   |        |     
|DISCLOSURE OF RECLASSIFICATION AMOUNT: |                                                                                                                                                                                       |  |                   |        |      |  |   |       
|                                       | Unrealized holding gains arising during period,
net of tax (benefit) expense of $(835) and $424 for
September 30, 2003 and 2002, respectively                                         |  | $                 | (1,333 | )    |  | $ | 585    |  
|                                       | Less: Reclassification adjustment for gains included
in net income, net of tax expense of $595 and
$0 for September 30, 2003 and 2002, respectively                                   |  |                   | (839   | )    |  |   |       |  
|                                       |                                                                                                                                                                                       |  |                   |        |      |  |   |       
|                                       | Net unrealized gain on securities, net of tax (benefit)
expense of $(1,430) and $424 for September 30,
2003 and 2002, respectively                                                    |  | $                 | (494   | )    |  | $ | 585    |  
|                                       |                                                                                                                                                                                       |  |                   |        |      |  |   |       
|                                       | Unrealized net (loss) gain on cash flow hedges, net of tax
(benefit) expense of $(320) for September 30, 2003 and
$(2,184)for September 30, 2002                                      |  | $                 | (448   | )    |  | $ | (4,929 | )
|                                       | Less: Reclassification adjustment for net gains on cash
flow hedges included in net income, net of tax
expense (benefit) of $8 for September 30, 2003 and
$(4) for September 30, 2002 |  |                   | (12    | )    |  |   | 5      |  
|                                       |                                                                                                                                                                                       |  |                   |        |      |  |   |       
|                                       | Net unrealized loss on cash flow hedges, net of tax (benefit)
expense of $(312) and $(2,180) for September 30, 2003
and 2002, respectively                                            |  | $                 | (460   | )    |  | $ | (4,924 | )
|                                       |                                                                                                                                                                                       |  |                   |        |      |  |   |       

The accompanying notes are an integral part of these condensed statements.

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##### Table of Contents






HARRINGTON WEST FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

|                                                     |                                                                                   |              |                                                                           |                                           |        |                   |         |                   |        |        |          |  
|---------------------------------------------------- | --------------------------------------------------------------------------------- | ------------ | ------------------------------------------------------------------------- | ----------------------------------------- | ------ | ----------------- | ------- | ----------------- | ------ | ------ | -------- | -
|                                                     |                                                                                   |              |                                                                           |                                           |        | Nine months ended |         | Nine months ended
|                                                     |                                                                                   |              |                                                                           |                                           |        | September 30,     |         | September 30,    
|                                                     |                                                                                   |              |                                                                           |                                           |        | 2003              |         | 2002             
|                                                     |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|                                                     | Net income                                                                        |              | $                                                                         | 5,413                                     |        |                   | $       | 3,656             |       
|                                                     | Adjustments to reconcile net income
to net cash provided by operating activities: |              |                                                                           |                                           |        |                   |         |                   |       
|                                                     |                                                                                   |              | Accretion of deferred loan fees and costs                                 |                                           |        | (1,493            | )       |                   |        | (733   | )       
|                                                     |                                                                                   |              | Depreciation and amortization                                             |                                           |        | 802               |         |                   |        | 672    |         
|                                                     |                                                                                   |              | Amortization of premiums and discounts on loans
receivable and securities |                                           |        | 3,352             |         |                   |        | 2,992  |         
|                                                     |                                                                                   |              | Provision for loan losses                                                 |                                           |        | 710               |         |                   |        | 325    |         
|                                                     |                                                                                   |              | Gain on sale of investment securities                                     |                                           |        | (1,455            | )       |                   |        | (5     | )       
|                                                     |                                                                                   |              | Activity in securities held for trading                                   |                                           |        | (14               | )       |                   |        | 752    |         
|                                                     |                                                                                   |              | FHLB stock dividend                                                       |                                           |        | (434              | )       |                   |        | (205   | )       
|                                                     |                                                                                   |              | Decrease (increase)in accrued interest receivable                         |                                           |        | 569               |         |                   |        | (112   | )       
|                                                     |                                                                                   |              | Increase (decrease) in income taxes payable                               |                                           |        | 626               |         |                   |        | (107   | )       
|                                                     |                                                                                   |              | Deferred income taxes                                                     |                                           |        | (730              | )       |                   |        | (1,992 | )       
|                                                     |                                                                                   |              | (Increase) decrease in prepaid expenses and other assets                  |                                           |        | (401              | )       |                   |        | 129    |         
|                                                     |                                                                                   |              | Increase in accounts payable                                              |                                           |        | 5,616             |         |                   |        | 2,007  |         
|                                                     |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|                                                     |                                                                                   |              |                                                                           | Net cash provided by operating activities |        |                   | 12,561  |                   |        |        | 7,379    |  
|                                                     |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|CASH FLOWS FROM INVESTING ACTIVITIES:                |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|                                                     | Net (increase) decrease in loans receivable                                       |              |                                                                           | (55,850                                   | )      |                   |         | 28,183            |       
|                                                     | Proceeds from sales of securities available for sale                              |              |                                                                           | 30,757                                    |        |                   |         |                  |       
|                                                     | Principal paydowns on securities available for sale                               |              |                                                                           | 119,494                                   |        |                   |         | 66,133            |       
|                                                     | Principal paydowns on securities held to maturity                                 |              |                                                                           | 55                                        |        |                   |         | 138               |       
|                                                     | Purchases of securities available for sale                                        |              |                                                                           | (172,588                                  | )      |                   |         | (201,360          | )     
|                                                     | Purchase of premises and equipment                                                |              |                                                                           | (2,070                                    | )      |                   |         | (974              | )     
|                                                     | Purchase of FHLB Stock                                                            |              |                                                                           | (986                                      | )      |                   |         | (2,410            | )     
|                                                     |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|                                                     |                                                                                   |              |                                                                           | Net cash used in investing activities     |        |                   | (81,188 | )                 |        |        | (110,290 | )
|                                                     |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|CASH FLOWS FROM FINANCING ACTIVITIES:                |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|                                                     | Net increase (decrease) in deposits                                               |              |                                                                           | 14,906                                    |        |                   |         | (9,564            | )     
|                                                     | Increase in securities sold under agreements to repurchase                        |              |                                                                           | 65,376                                    |        |                   |         | 210               |       
|                                                     | (Decrease) increase in FHLB advances                                              |              |                                                                           | (17,500                                   | )      |                   |         | 112,597           |       
|                                                     | Advances (payments) on note payable                                               |              |                                                                           | (11,300                                   | )      |                   |         | 2,800             |       
|                                                     | Increase trust preferred securities                                               |              |                                                                           | 15,000                                    |        |                   |         |                  |       
|                                                     | Exercise of stock options on common stock                                         |              |                                                                           | 69                                        |        |                   |         |                  |       
|                                                     | Dividends paid on common stock                                                    |              |                                                                           | (692                                      | )      |                   |         | (291              | )     
|                                                     |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|                                                     | Net cash provided by financing activities                                         |              |                                                                           | 65,859                                    |        |                   |         | 105,752           |       
|                                                     |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |                                                                                   |              | (2,768                                                                    | )                                         |        |                   | 2,841   |                  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       |                                                                                   |              | 19,212                                                                    |                                           |        |                   | 11,107  |                  
|                                                     |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|CASH AND CASH EQUIVALENTS, END OF PERIOD             |                                                                                   | $            | 16,444                                                                    |                                           |        | $                 | 13,948  |                  
|                                                     |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION -  |                                                                                   |              |                                                                           |                                           |        |                   |         |                  
|                                                     | Cash paid during the period for:                                                  |              |                                                                           |                                           |        |                   |         |                   |       
|                                                     |                                                                                   | Interest     |                                                                           | $                                         | 12,422 |                   |         | $                 | 16,113 |       
|                                                     |                                                                                   | Income Taxes |                                                                           | $                                         | 3,301  |                   |         | $                 | 3,100  |       

The accompanying notes are an integral part of these condensed statements.

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HARRINGTON WEST FINANCIAL GROUP, INC.




NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS


1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business of the CompanyHarrington West Financial Group, Inc. (the Company)
is a diversified, community-based financial institution holding company
incorporated on August 29, 1995 to acquire and hold all of the outstanding
common stock of Los Padres Bank, FSB (the Bank), a federally chartered
savings bank which operates 11 banking facilities serving individuals and small
to medium-sized businesses. Nine banking facilities are operated on the
California Central Coast, one banking facility is located in Scottsdale
Arizona, and one banking facility is located in Shawnee Mission, Kansas, which
is operated as a division under the Harrington Bank brand. The Company also
owns Harrington Wealth Management Company, a trust and investment management
company with $117.6 million in assets under management or custody, and 51% of
Los Padres Mortgage Company, LLC.

In August 2002, the Bank entered into a joint venture agreement with Market
Resources, Inc., the owner of numerous RE/MAX brokerage agencies in the Phoenix
and Scottsdale, Arizona, metropolitan areas. Under the agreement, the Bank
established Los Padres Mortgage, LLC as a 51%-owned mortgage-banking
subsidiary. Los Padres Mortgage, LLC brokers single-family residential and
commercial real estate loans primarily to third party investors. The Bank also
has the opportunity to purchase select single-family and commercial real estate
loans from Los Padres Mortgage, LLC for its portfolio. Los Padres Mortgage,
LLC began operations in September 2002.

Basis of PresentationThe unaudited consolidated financial statements are
condensed and do not contain all information required by accounting principles
generally accepted in the United States of America (generally accepted
accounting principles) to be included in a full set of financial statements.
The condensed consolidated financial statements include the Company and the
accounts of its wholly owned subsidiaries.

All intercompany balances and transactions have been eliminated. Certain
reclassifications have been made to make information comparable between years.
The information furnished reflects all adjustments, which in the opinion of
management are necessary for a fair statement of the financial position and the
results of the operations of the Company. All such adjustments are of a normal
and recurring nature.

The preparation of financial statements are in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

The unaudited consolidated interim financial statements of the Company and
subsidiaries presented herein should be read in conjunction with the
consolidated financial statements of the Company for the year ended December
31, 2002, included in the Annual Report on Form 10-K.

Allowance for Loan Losses- Allowance for loan losses is increased by charges
to income and decreased by charge-offs (net of recoveries).

The allowance is maintained at a level believed by management to be sufficient
to absorb estimated probable credit losses. Managements determination of the
adequacy of the allowance is based on periodic evaluations of the credit
portfolio and other relevant factors. This evaluation is inherently
subjective, as it requires material estimates, including, among others, the
amounts and timing of expected future cash flows on impaired loans, estimated
losses on consumer loans and residential mortgages, and general amounts for
historical loss experience, economic conditions, uncertainties in estimating
losses and inherent risks in the various credit portfolios, all of which may be
susceptible to significant change.

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In determining the adequacy of the allowance for loan losses, the Company makes
specific allocations to impaired loans in accordance with Statement of
Financial Accounting Standards (SFAS) No. 114, Accounting by Creditors for
Impairment of a Loan. Loans are identified as impaired when it is deemed
probable that the borrower will be unable to meet the scheduled principal and
interest payments under the terms of the loan agreement. Impairment is based
on the present value of expected future cash flows discounted at the loans
effective interest rate, except that as a practical expedient, a creditor may
measure impairment based on a loans observable market price or the fair value
of the collateral if the loan is collateral dependent.

Allocations to non-homogenous loan pools are developed by loan type and risk
factor and are based on historical loss trends and managements judgment
concerning those trends and other relevant factors. These factors may include,
among others, trends in criticized assets, regional and national economic
conditions, changes in lending policies and procedures, trends in local real
estate values and changes in volumes and terms of the loan portfolio.

Homogenous (consumer and residential mortgage) loan allocations are made at a
total portfolio level based on historical loss experience adjusted for
portfolio activity and economic conditions.
Management believes the level of the allowance as of September 30, 2003 is
adequate to absorb losses inherent in the loan portfolio.

2.     EARNINGS PER SHARE

The following tables represent the calculation of earnings per share (EPS)
for the periods presented.

|                                 |  |   |                                       |  |               |  |           |  |                                      |   |      |   |             |                                  |               |   |           |  |  |  |           |  |  |   |      |   |  |  | 
|-------------------------------- |  | - | ------------------------------------- |  | ------------- |  | --------- |  | ------------------------------------ | - | ---- | - | ----------- | -------------------------------- | ------------- | - | --------- |  |  |  | --------- |  |  | - | ---- | - |  |  | 
|                                 |  |   | Three months ended September 30, 2003 |  |               |  |           |  | Nine months ended September 30, 2003
|                                 |  |   |                                       |  |               |  |           |  |                                     
|                                 |  |   | Income                                |  | Shares        |  | Per-Share |  |                                      |   |      |   | Income      |                                  | Shares        |   | Per-Share
|                                 |  |   | (Numerator)                           |  | (Denominator) |  | Amount    |  |                                      |   |      |   | (Numerator) |                                  | (Denominator) |   | Amount   
|                                 |  |   |                                       |  |               |  |           |  |                                      |   |      |   |             |                                  |               |   |          
|Basic EPS                        |  | $ | 1,988                                 |  |               |  | 4,328,676 |  |                                      | $ | .46  |   |             | Basic EPS                        |               | $ | 5,413     |  |  |  | 4,328,275 |  |  | $ | 1.25 |  
|Effect
of dilutive stock options |  |   |                                       |  |               |  | 231,773   |  |                                      |   | (.02 | ) |             | Effect
of dilutive stock options |               |   |           |  |  |  | 191,830   |  |  |   | (.05 | )
|                                 |  |   |                                       |  |               |  |           |  |                                      |   |      |   |             |                                  |               |   |           |  |  |  |           |  |  |   |      |   |  | 
|Diluted EPS                      |  | $ | 1,988                                 |  |               |  | 4,560,449 |  |                                      | $ | .44  |   |             | Diluted EPS                      |               | $ | 5,413     |  |  |  | 4,520,105 |  |  | $ | 1.20 |  
|                                 |  |   |                                       |  |               |  |           |  |                                      |   |      |   |             |                                  |               |   |           |  |  |  |           |  |  |   |      |   |  | 

|                                  |  |   |                                       |  |               |  |           |  |                                      |   |      |   |             |                                   |               |   |           |  |  |  |           |  |  |   |      |   |  |  | 
|--------------------------------- |  | - | ------------------------------------- |  | ------------- |  | --------- |  | ------------------------------------ | - | ---- | - | ----------- | --------------------------------- | ------------- | - | --------- |  |  |  | --------- |  |  | - | ---- | - |  |  | 
|                                  |  |   | Three months ended September 30, 2002 |  |               |  |           |  | Nine months ended September 30, 2002
|                                  |  |   |                                       |  |               |  |           |  |                                     
|                                  |  |   | Income                                |  | Shares        |  | Per-Share |  |                                      |   |      |   | Income      |                                   | Shares        |   | Per-Share
|                                  |  |   | (Numerator)                           |  | (Denominator) |  | Amount    |  |                                      |   |      |   | (Numerator) |                                   | (Denominator) |   | Amount   
|                                  |  |   |                                       |  |               |  |           |  |                                      |   |      |   |             |                                   |               |   |          
|Basic EPS                         |  | $ | 1,338                                 |  |               |  | 3,354,336 |  |                                      | $ | .40  |   |             | Basic EPS                         |               | $ | 3,656     |  |  |  | 3,354,336 |  |  | $ | 1.09 |  
|Effect
of dilutive 
stock options |  |   |                                       |  |               |  | 131,548   |  |                                      |   | (.02 | ) |             | Effect
of dilutive
 stock options |               |   |           |  |  |  | 130,199   |  |  |   | (.04 | )
|                                  |  |   |                                       |  |               |  |           |  |                                      |   |      |   |             |                                   |               |   |           |  |  |  |           |  |  |   |      |   |  | 
|Diluted EPS                       |  | $ | 1,338                                 |  |               |  | 3,485,884 |  |                                      | $ | .38  |   |             | Diluted EPS                       |               | $ | 3,656     |  |  |  | 3,484,535 |  |  | $ | 1.05 |  
|                                  |  |   |                                       |  |               |  |           |  |                                      |   |      |   |             |                                   |               |   |           |  |  |  |           |  |  |   |      |   |  | 

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3.     FAIR VALUE OF OPTIONS

The Company applies APB Opinion No. 25 and related interpretations in
accounting for its stock option plan. Accordingly, no compensation cost has
been recognized for its stock option plan.

Had compensation cost for the Companys stock option plan been determined based
on the fair value at the grant dates for awards under the plan consistent with
the method of SFAS No. 123, Accounting for Stock-Based
Compensation, the
Companys net income and earnings per share for the quarter and years ended
September 30 would have been changed to the pro forma amounts indicated below:

|                  |                               |               |   |                    |      |                   |   |               |      |  |   |       |      |  |   |       |      | 
|----------------- | ----------------------------- | ------------- | - | ------------------ | ---- | ----------------- | - | ------------- | ---- |  | - | ----- | ---- |  | - | ----- | ---- | 
|                  |                               |               |   | Three months ended |      | Nine months ended
|                  |                               |               |   |                    |      |                  
|                  |                               | September 30, |   | September 30,      |      | September 30,     |   | September 30,
|Pro Forma Results |                               | 2003          |   | 2002               |      | 2003              |   | 2002         
|                  |                               |               |   |                    |      |                   |   |               |      | 
|Net income:       |                               |               |   |                    |      |                   |   |               |      |  |   |       |      |  |   |      
|                  | As reported                   |               | $ | 1,998              |      |                   | $ | 1,338         |      |  | $ | 5,413 |      |  | $ | 3,656 |     
|                  | Pro forma                     |               | $ | 1,979              |      |                   | $ | 1,314         |      |  | $ | 5,357 |      |  | $ | 3,601 |     
|                  | Earnings per share - basic:   |               |   |                    |      |                   |   |               |      |  |   |       |      |  |   |       |     
|                  |                               | As reported   |   | $                  | 0.46 |                   |   | $             | 0.40 |  |   | $     | 1.25 |  |   | $     | 1.09 | 
|                  |                               | Pro forma     |   | $                  | 0.46 |                   |   | $             | 0.39 |  |   | $     | 1.24 |  |   | $     | 1.07 | 
|                  | Earnings per share - diluted: |               |   |                    |      |                   |   |               |      |  |   |       |      |  |   |       |     
|                  |                               | As reported   |   | $                  | 0.44 |                   |   | $             | 0.38 |  |   | $     | 1.20 |  |   | $     | 1.05 | 
|                  |                               | Pro forma     |   | $                  | 0.43 |                   |   | $             | 0.38 |  |   | $     | 1.19 |  |   | $     | 1.03 | 

The fair values of options granted under the Companys fixed stock option plan
were estimated on the date of grant using the Black-Scholes option-pricing
model, with the following weighted-average assumptions used: expected
volatility of 29.03% and 27.58% for the nine months ended September 30, 2003
and 2002, respectively; risk-free interest rates of 3.94% and 4.89% for the
nine months ended September 30, 2003 and 2002, respectively; and expected lives
of 9 years for the nine months ended September 30, 2003 and 2002. The weighted
average fair values of the 63,950 and 60,525 options granted in the nine months
ended September 30, 2003 and 2002 were $3.61 and $3.74, respectively. No
options were issued during the three months ended September 30, 2003.

4.     COMMITMENTS AND CONTINGENCIES

In September 2003, the Company issued, through Harrington West Capital Trust I,
$15.0 million of trust-preferred securities in a private placement. In
connection with the issuance of the preferred securities, the Company has
committed to irrevocably and unconditionally guarantee the following payments
or distributions with respect to the preferred securities to the holders
thereof to the extent that Harrington West Trust I has not made such payments
or distributions and has the funds therefore: (i) accrued and unpaid
distributions, (ii) the redemption price, and (iii) upon a dissolution or
termination of the trust, the lesser of the liquidation amount and all accrued
and unpaid distributions and the amount of assets of the trust remaining
available for distribution.




Item 2: Managements Discussion and Analysis

Cautionary Statement Regarding Forward-Looking Statements

A number of the presentations and disclosures in this Form 10-Q, including,
without limitation, statements regarding the level of allowance for loan
losses, the rate of delinquencies and amounts of charge-offs, and the rates of
loan growth, and any statements preceded by, followed by or which include

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the words may, could, should, will, would, hope, might,
believe, expect, anticipate, estimate, intend, plan, assume or
similar expressions constitute forward-looking statements. These
forward-looking statements, implicitly and explicitly, include the assumptions
underlying the statements and other information with respect to our beliefs,
plans, objectives, goals, expectations, anticipations, estimates, intentions,
financial condition, results of operations, future performance and business,
including our expectations and estimates with respect to our revenues,
expenses, earnings, return on equity, return on assets, efficiency ratio, asset
quality and other financial data and capital and performance ratios.

Although we believe that the expectations reflected in our forward-looking
statements are reasonable, these statements involve risks and uncertainties
that are subject to change based on various important factors (some of which
are beyond our control). The following factors, among others, could cause our
financial performance to differ materially from our goals, plans, objectives,
intentions, expectations and other forward-looking statements:



| |  |  | the strength of the United States economy in general
and the strength of the regional and local economies within our
markets in California, Kansas and Arizona;                                                            
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | adverse changes in the local real estate market, as
most of the Companys loans are concentrated in the central coast
of California and a substantial portion of these loans have real
estate as collateral;               
|
| |  |  | the effects of, and changes in, trade, monetary and
fiscal policies and laws, including interest rate policies of the
Board of Governors of the Federal Reserve System;                                                    
|
| |  |  | inflation, interest rate, market and monetary
fluctuations;                                                                                                                                                                
|
| |  |  | adverse changes in asset quality and the resulting
credit risk-related losses and expenses;                                                                                                                                
|
| |  |  | our timely development of new products and services in
a changing environment, including the features, pricing and
quality of our products and services compared to the products and
services of our competitors;          
|
| |  |  | the willingness of users to substitute competitors
products and services for our products and services;                                                                                                                   
|
| |  |  | the impact of changes in financial services policies,
laws and regulations, including laws, regulations and policies
concerning taxes, banking, securities and insurance, and the
application thereof by regulatory bodies;
|
| |  |  | technological changes;                                                                                                                                                                                                     
|
| |  |  | changes in consumer spending and savings habits; and                                                                                                                                                                       
|
| |  |  | regulatory or judicial proceedings.                                                                                                                                                                                        

If one or more of the factors affecting our forward-looking information
and statements proves incorrect, then our actual results, performance or
achievements could differ materially from those expressed in, or implied by,
forward-looking information and statements contained in this Form 10-Q.
Therefore, we caution you not to place undue reliance on our forward-looking
information and statements.

We do not intend to update our forward-looking information and statements,
whether written or oral, to reflect change. All forward-looking statements
attributable to us are expressly qualified by these cautionary statements.

General

The Company is a diversified, community-based, financial institution
holding company headquartered in Solvang, California with its executive offices
in Overland Park, Kansas. The Company conducts operations primarily through
Los Padres Bank, FSB, a federally chartered savings bank, and its division
located in the Kansas City metropolitan area, Harrington Bank.

The Company is focused on providing its diversified products and
personalized service approach in three distinct markets: (i) the central coast
of California, (ii) the Kansas City metropolitan area and (iii)

- 10 -



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the Phoenix/Scottsdale metropolitan area. The Company has nine offices on
the central coast of California, one office in Mission, Kansas, and a community
banking office in the Phoenix/Scottsdale, Arizona metropolitan area which
opened in November 2002. In addition, in the third quarter of 2002, the
Company established Los Padres Mortgage, LLC, a mortgage banking company
engaged in a joint venture with the largest RE/MAX franchise in Arizona to
broker single-family residential and commercial real estate loans in the
Phoenix/Scottsdale metropolitan area. The Company currently intends to open
two new banking facilities: a second Harrington Bank office in the Kansas City
metropolitan area in the fourth quarter 2003 and its tenth Los Padres Bank
office on the central coast of California in Ventura by the second quarter of
2004.Each of the Companys markets has its own local independent management
team operating under the Los Padres Bank or Harrington Bank names. The
Companys loan underwriting, corporate administration, and treasury functions
are centralized to create operating efficiencies.

Los Padres Bank and Harrington Bank provide an array of financial products
and services for businesses and retail customers by attracting deposits from
individuals and businesses and using these deposits, together with borrowed
funds, to originate single-family and multi-family residential, commercial real
estate, commercial business, and consumer loans.

The Company also maintains a portfolio of highly liquid mortgage-backed
and related securities as a means of managing its excess liquidity and
enhancing its profitability. The Company utilizes various interest rate
contracts as a means of managing its interest rate risk. The Company also
operates Harrington Wealth Management Company, which provides trust and
investment management services to individuals and small institutional clients
by employing a customized asset allocation approach and investing predominantly
in low fee, indexed mutual funds.

On November 12, 2002, the Company completed its initial public offering.
An aggregate of 1,120,000 shares were sold to the public at $12.00 per share,
comprised of 973,615 shares sold by the Company and 146,385 shares sold by
certain stockholders of the Company.

Financial Condition

The Companys total assets increased to $900.3 million at September 30,
2003, as compared to $824.3 million at December 31, 2002, an increase of $76.0
million or 9.2%. The increase was primarily attributable to growth in net
loans to $504.3 million as of September 30, 2003, compared to $448.1 million at
December 31, 2002, an increase of $56.3 million or 12.6%. The Companys
primary focus with respect to its lending operations has historically been the
direct origination of single-family and multi-family residential, commercial
real estate, and consumer loans. Although the Company continues to emphasize
single-family residential loan products that meet its customers needs, the
Company now generally brokers such loans on behalf of third party investors in
order to generate fee income. As part of its strategic plan to diversify its
loan portfolio, the Company has been increasing its emphasis on loans secured
by commercial real estate, multi-family residential, and commercial and
industrial loans. Accordingly, single-family residential loan balances
decreased to $92.4 million at September 30, 2003, compared to $116.7 million at
December 31, 2002, a decrease of $24.3 million or 20.8%, while multi-family
residential, commercial real estate, and commercial and industrial loans as a
group increased to $364.6 million at September 30, 2003, compared to $282.8
million at December 31, 2002, an increase of $81.8 million or 28.9%.

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|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |         |  
|------------------------------- | -------------------------------- |  | ---------------------- | ------- | ----------------- |  | ------ | ----- | ------- |  | ------ | ------- | - |  | --- | ----- | - |  | ------ | ------- | -
|                                |                                  |  | September 30, 2003     |         | December 31, 2002 |  |        |       |        
|                                |                                  |  |                        |         |                   |  | Change
|                                |                                  |  | Amount                 |         | Percent           |  | Amount |       | Percent |  | Amount
|                                |                                  |  |                        |         |                   |  |        |       |         |  |       
|                                |                                  |  | (Dollars in thousands)
|Real Estate Loans:              |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|                                | Single-family                    |  | $                      | 92,436  |                   |  |        | 18.1  | %       |  | $      | 116,714 |   |  |     | 25.8  | % |  | $      | (24,278 | )
|                                | Multi-family                     |  |                        | 78,089  |                   |  |        | 15.3  |         |  |        | 71,856  |   |  |     | 15.9  |   |  |        | 6,233   |  
|                                | Commercial                       |  |                        | 234,110 |                   |  |        | 45.9  |         |  |        | 183,264 |   |  |     | 40.6  |   |  |        | 50,846  |  
|                                | Construction (1)                 |  |                        | 27,831  |                   |  |        | 5.5   |         |  |        | 19,666  |   |  |     | 4.3   |   |  |        | 8,165   |  
|                                | Land acquisition and
development |  |                        | 9,244   |                   |  |        | 1.8   |         |  |        | 14,948  |   |  |     | 3.3   |   |  |        | (5,704  | )
|Commercial and industrial loans |                                  |  | 52,428                 |         |                   |  | 10.3   |       |         |  | 27,676 |         |   |  | 6.1 |       |   |  | 24,752 |        
|Consumer loans                  |                                  |  | 14,976                 |         |                   |  | 2.9    |       |         |  | 17,565 |         |   |  | 3.9 |       |   |  | (2,589 | )      
|Other loans (2)                 |                                  |  | 835                    |         |                   |  | 0.2    |       |         |  | 503    |         |   |  | 0.1 |       |   |  | 332    |        
|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|                                | Total loans receivable           |  |                        | 509,949 |                   |  |        | 100.0 | %       |  |        | 452,192 |   |  |     | 100.0 | % |  |        | 57,757  |  
|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|Less:                           |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|                                | Allowance for loan loss          |  |                        | (4,507  | )                 |  |        |       |         |  |        | (3,797  | ) |  |     |       |   |  |        | (710    | )
|                                | Net deferred loan fees           |  |                        | (1,533  | )                 |  |        |       |         |  |        | (1,332  | ) |  |     |       |   |  |        | (201    | )
|                                | Net premiums                     |  |                        | 427     |                   |  |        |       |         |  |        | 987     |   |  |     |       |   |  |        | (560    | )
|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|                                |                                  |  | (5,613                 | )       |                   |  |        |       |         |  | (4,142 | )       |   |  |     |       |   |  | (1,471 | )      
|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|                                | Loans receivable, net            |  | $                      | 504,336 |                   |  |        |       |         |  | $      | 448,050 |   |  |     |       |   |  | $      | 56,286  |  
|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        



|(1) |  | Includes loans secured by residential, land and commercial
properties. At September 30, 2003, the Company had $14.1 million of
construction loans secured by residential properties, $6.6 million of
construction loans secured by land and $7.3 million of construction
loans secured by commercial properties.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes loans collateralized by deposits and consumer line of
credit loans.                                                                                                                                                                                                                                    

Securities classified as available for sale increased to $344.1 million at
September 30, 2003, as compared to $324.5 million at December 31, 2002, an
increase of $19.6 million or 6.0%. The Company manages the securities
portfolio in order to enhance net interest income and net market value, as
opportunities dictate, and deploys excess capital in investment assets until
such time as the Company can reinvest into loans or other community banking
assets that generate higher risk-adjusted returns.

Total deposits increased to $539.9 million as of September 30, 2003, as
compared to $525.3 million as of December 31, 2002, an increase of $14.6
million or 2.8%. The increase in deposits was attributable to the community
banking office in Scottsdale, Arizona, while deposits in other markets declined
somewhat due to the Companys emphasis on reducing the cost of highly rate
sensitive deposits. The deposits of the community banking office in
Scottsdale, Arizona were $46.7 million at September 30, 2003, compared to $17.5
million at December 31, 2002, an increase of $29.4 million or 167.6%.

Advances from the Federal Home Loan Bank (FHLB) of San Francisco
decreased to $217.5 million at September 30, 2003, compared to $235.0 million
at December 31, 2002, a $17.5 million or 7.4% decrease. On July 3, 2003, the
Company replaced $35.0 million of floating rate FHLB advances with a two year,
1.50% fixed rate term $20.0 million repurchase agreement and a five-year,
2.720% fixed rate $15.0 million term repurchase agreement. Also, on July 8,
2003 the Company replaced FHLB debt with a $15.0 million, seven year, 3.450%
fixed term repurchase agreement. Replacing the FHLB floating rate advances
with fixed rate term, repurchase agreements was conducted for interest rate
risk management purposes.

On September 25, 2003, the Company announced that it completed a $15.0
million, thirty year, 3.99% floating rate capital trust offering. The capital
securities were issued through a newly formed subsidiary, Harrington West
Capital Trust I, in a private transaction. The capital trust securities bear
an interest rate of three-month LIBOR plus 2.85% and will mature on October 8,
2033. A portion of the proceeds from this offering were used to payoff the
Companys secured line of credit with Harris Bank

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which had a balance of $12.5 million. The remainder of the proceeds will
be used for expansion of Los Padres Banks operations. On October 30, 2003,
the Company renegotiated its line of credit with Harris Bank on more favorable
terms to provide further capital for expansion. There were no commission or
expense charges to the Company for the capital trust offering . Interest is to
be paid quarterly on December 31, March 31, June 30, and September 30.

The due to broker account increased to $5.0 million at September 30, 2003,
as compared to $446,000 at December 31, 2002, an increase of $4.6 million as a
result of the purchase of securities classified as available for sale which
were purchased in the quarter but not settled until after quarter-end. In
accordance with trade date accounting, the securities were included in
available for sale assets with a corresponding liability in the due to broker
account.

Stockholders equity increased to $46.3 million at September 30, 2003, as
compared to $42.5 million at December 31, 2002, an increase of $3.8 million or
9.0%. The increase in stockholders equity was due primarily to net income
recognized during the nine months ended September 30, 2003. The Companys
stockholders equity was also affected by unrealized gains and losses on
securities and interest rate contracts and dividends paid on the Companys
common stock.

Results of Operations

The Company reported net income of $2.0 million for the three months ended
September 30, 2003, as compared to $1.3 million for the three months ended
September 30, 2002, an increase of $660,000 or 49.3%. The Company reported net
income of $5.4 million for the nine months ended September 30, 2003, as
compared to $3.7 million for the nine months ended September 30, 2002, an
increase of $1.8 million or 48.1%. The increase in net income during the
three-month and six-month periods primarily reflected significant increases in
net interest income and banking fee income, which were partially offset by
increases in total other expenses during such periods. On a diluted earnings
per share basis, the Company earned $.44 per share for the three months ended
September 30, 2003, compared to $.38 per share for the three months ended
September 30, 2002, and $1.20 per share for the nine months ended September 30,
2003, compared to $1.05 per share for the nine months ended September 30, 2002.

The Companys net interest income after provision for loan losses
increased by $1.1 million or 20.3% to $6.8 million during the three months
ended September 30, 2003 over the prior comparable period in 2002. The
Companys net interest income after provision for loan losses increased by $3.0
million or 19.3% to $18.7 million during the nine months ended September 30,
2003 over the prior comparable period in 2002. The increase in the Companys
net interest income during both periods reflected the continued growth in its
interest-earning assets and its increased focus on higher spread-earning loans,
primarily commercial and industrial, commercial real estate, and multi-family
residential real estate loans. The net interest margin decreased by six basis
points to 3.2% during the three months ended September 30, 2003, when compared
to the same period in 2002 and the net interest margin decreased by ten basis
points to 3.1% during the nine months ended September 30, 2003, when compared
to the same period in 2002. The net interest margin declined slightly due to
the growth in lower margin investment securities that were purchased in
anticipation of the Companys IPO. This decline was counterbalanced by the
addition of higher margin loans and the decline in interest expense for the
interest-bearing liabilities.

The following table sets forth, for the periods presented, information
regarding (i) the total dollar amount of interest income from interest-earning
assets and the resultant average yields; (ii) the total dollar amount of
interest expense on interest-bearing liabilities and the resultant average
rate; (iii) net interest income before provision for loan losses; (iv) interest
rate spread; and (v) net interest margin. No tax equivalent adjustments were
made during the periods presented. Information is based on average daily
balances during the presented periods.

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|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |      |      |      | 
|--------------------------------------------------------------------------------- | ------------------------------------------ | --------------------------------------------- | ----------------- | ------- | -------------------------------- | ------- | -------- | ----- | ------ | ----- | ------- | ---- | -------- | ---- | ------ | ------- | ------- | ------- | ------ | ----- | ------ | ----- | ------- | ---- | ---- | ---- | 
|                                                                                  |                                            |                                               |                   |         | Three months ended September 30,
|                                                                                  |                                            |                                               |                   |         |                                 
|                                                                                  |                                            |                                               |                   |         | 2003                             |         | 2002    
|                                                                                  |                                            |                                               |                   |         |                                  |         |         
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      | Average  |      |        |         |         |         |        |       |        |       | Average
|                                                                                  |                                            |                                               |                   |         | Average                          |         |          |       |        |       | Yield/  |      | Average  |      |        |         |         |         | Yield/
|                                                                                  |                                            |                                               |                   |         | Balance                          |         | Interest |       | Cost   |       | Balance |      | Interest |      | Cost  
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |       
|                                                                                  |                                            |                                               |                   |         | (Dollars in thousands)          
|Interest-earning assets:                                                          |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|                                                                                  | Loans receivable (1)                       |                                               | $                 | 503,728 |                                  |         | $        | 8,458 |        |       |         | 6.72 | %        |      | $      | 421,242 |         |         | $      | 7,756 |        |       |         | 7.37 | %   
|                                                                                  | FHLB stock                                 |                                               |                   | 13,245  |                                  |         |          | 134   |        |       |         | 4.02 |          |      |        | 7,598   |         |         |        | 103   |        |       |         | 5.38 |     
|                                                                                  | Securities and trading account assets (2)  |                                               |                   | 325,143 |                                  |         |          | 3,209 |        |       |         | 3.95 |          |      |        | 252,284 |         |         |        | 3,181 |        |       |         | 5.04 |     
|                                                                                  | Cash and cash equivalents (3)              |                                               |                   | 16,980  |                                  |         |          | 50    |        |       |         | 1.17 |          |      |        | 15,687  |         |         |        | 61    |        |       |         | 1.57 |     
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|                                                                                  |                                            | Total interest-earning assets                 |                   |         | 859,096                          |         |          |       | 11,851 |       |         |      | 5.52     |      |        |         | 696,811 |         |        |       | 11,101 |       |         |      | 6.37 |     
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|Noninterest-earning assets                                                        |                                            |                                               | 20,645            |         |                                  |         |          |       |        |       |         |      |          |      | 19,859 |         |         |         |        |       |        |       |         |     
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|                                                                                  |                                            |                                               | Total assets      |         | $                                | 879,741 |          |       |        |       |         |      |          |      |        |         | $       | 716,670 |        |       |        |       |         |      |      |      | 
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|Interest-bearing liabilities:                                                     |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|                                                                                  | Deposits:                                  |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |      |     
|                                                                                  |                                            | NOW and money market accounts                 |                   |         | 125,587                          |         |          |       | 328    |       |         |      | 1.03     |      |        |         | 127,420 |         |        |       | 679    |       |         |      | 2.11 |     
|                                                                                  |                                            | Passbook accounts and certificates of deposit |                   |         | 386,148                          |         |          |       | 2,227  |       |         |      | 2.29     |      |        |         | 366,312 |         |        |       | 2,604  |       |         |      | 2.82 |     
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|                                                                                  |                                            |                                               | Total deposits    |         |                                  | 511,735 |          |       |        | 2,555 |         |      |          | 1.98 |        |         |         | 493,732 |        |       |        | 3,283 |         |      |      | 2.64 | 
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|                                                                                  | FHLB advances (4)                          |                                               |                   | 211,929 |                                  |         |          | 1,876 |        |       |         | 3.46 |          |      |        | 150,182 |         |         |        | 1,946 |        |       |         | 5.07 |     
|                                                                                  | Reverse Repurchase Agreements              |                                               |                   | 64,060  |                                  |         |          | 421   |        |       |         | 2.57 |          |      |        | 1,134   |         |         |        | 4     |        |       |         | 1.22 |     
|                                                                                  | Other borrowings (5)                       |                                               |                   | 12,310  |                                  |         |          | 113   |        |       |         | 3.60 |          |      |        | 17,772  |         |         |        | 177   |        |       |         | 3.90 |     
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|                                                                                  |                                            | Total interest-bearing liabilities            |                   |         | 800,034                          |         |          |       | 4,965  |       |         |      | 2.45     |      |        |         | 662,820 |         |        |       | 5,410  |       |         |      | 3.23 |     
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|Non-interest-bearing deposits                                                     |                                            |                                               | 23,578            |         |                                  |         |          |       |        |       |         |      |          |      | 14,614 |         |         |         |        |       |        |       |         |     
|Non-interest-bearing liabilities                                                  |                                            |                                               | 10,529            |         |                                  |         |          |       |        |       |         |      |          |      | 7,512  |         |         |         |        |       |        |       |         |     
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|                                                                                  |                                            |                                               | Total liabilities |         |                                  | 834,141 |          |       |        |       |         |      |          |      |        |         |         | 684,946 |        |       |        |       |         |      |      |      | 
|Stockholders equity                                                              |                                            |                                               | 45,600            |         |                                  |         |          |       |        |       |         |      |          |      | 31,724 |         |         |         |        |       |        |       |         |     
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|                                                                                  | Total liabilities and stockholders equity |                                               | $                 | 879,741 |                                  |         |          |       |        |       |         |      |          |      | $      | 716,670 |         |         |        |       |        |       |         |      |     
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|Net interest-earning assets (liabilities)                                         |                                            | $                                             | 59,062            |         |                                  |         |          |       |        |       |         |      |          | $    | 33,991 |         |         |         |        |       |        |       |         |     
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|Net interest income/interest rate spread                                          |                                            |                                               |                   |         |                                  | $       | 6,886    |       |        |       | 3.07    | %    |          |      |        |         |         | $       | 5,691  |       |        |       | 3.14    | %   
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|Net interest margin                                                               |                                            |                                               |                   |         |                                  |         |          |       |        |       | 3.24    | %    |          |      |        |         |         |         |        |       |        |       | 3.30    | %   
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     
|Ratio of average interest-earnings assets to
average interest-bearing liabilities |                                            |                                               |                   |         |                                  |         |          |       |        |       | 107.38  | %    |          |      |        |         |         |         |        |       |        |       | 105.13  | %   
|                                                                                  |                                            |                                               |                   |         |                                  |         |          |       |        |       |         |      |          |      |        |         |         |         |        |       |        |       |         |     

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |      |      |      | 
|--------------------------------------------------------------------------------- | ------------------------------------------ | --------------------------------------------- | ----------------- | ------- | ------------------------------- | ------- | -------- | ------ | ------ | ----- | ------- | ---- | -------- | ---- | ------ | ------- | ------- | ------- | ------ | ------ | ------ | ------ | ------- | ---- | ---- | ---- | 
|                                                                                  |                                            |                                               |                   |         | Nine months ended September 30,
|                                                                                  |                                            |                                               |                   |         |                                
|                                                                                  |                                            |                                               |                   |         | 2003                            |         | 2002    
|                                                                                  |                                            |                                               |                   |         |                                 |         |         
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      | Average  |      |        |         |         |         |        |        |        |        | Average
|                                                                                  |                                            |                                               |                   |         | Average                         |         |          |        |        |       | Yield/  |      | Average  |      |        |         |         |         | Yield/
|                                                                                  |                                            |                                               |                   |         | Balance                         |         | Interest |        | Cost   |       | Balance |      | Interest |      | Cost  
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |       
|                                                                                  |                                            |                                               |                   |         | (Dollars in thousands)         
|Interest-earning assets:                                                          |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|                                                                                  | Loans receivable (1)                       |                                               | $                 | 482,497 |                                 |         | $        | 24,589 |        |       |         | 6.79 | %        |      | $      | 431,060 |         |         | $      | 23,894 |        |        |         | 7.39 | %   
|                                                                                  | FHLB stock                                 |                                               |                   | 12,946  |                                 |         |          | 452    |        |       |         | 4.66 |          |      |        | 6,554   |         |         |        | 283    |        |        |         | 5.77 |     
|                                                                                  | Securities and trading account assets (2)  |                                               |                   | 319,092 |                                 |         |          | 9,312  |        |       |         | 3.89 |          |      |        | 210,251 |         |         |        | 8,196  |        |        |         | 5.20 |     
|                                                                                  | Cash and cash equivalents (3)              |                                               |                   | 16,881  |                                 |         |          | 162    |        |       |         | 1.28 |          |      |        | 15,763  |         |         |        | 179    |        |        |         | 1.52 |     
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|                                                                                  |                                            | Total interest-earning assets                 |                   |         | 831,416                         |         |          |        | 34,515 |       |         |      | 5.54     |      |        |         | 663,628 |         |        |        | 32,552 |        |         |      | 6.54 |     
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|Noninterest-earning assets                                                        |                                            |                                               | 22,173            |         |                                 |         |          |        |        |       |         |      |          |      | 18,934 |         |         |         |        |        |        |        |         |     
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|                                                                                  |                                            |                                               | Total assets      |         | $                               | 853,589 |          |        |        |       |         |      |          |      |        |         | $       | 682,562 |        |        |        |        |         |      |      |      | 
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|Interest-bearing liabilities:                                                     |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|                                                                                  | Deposits:                                  |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |      |     
|                                                                                  |                                            | NOW and money market accounts                 |                   |         | 128,464                         |         |          |        | 1,068  |       |         |      | 1.11     |      |        |         | 94,816  |         |        |        | 1,336  |        |         |      | 1.88 |     
|                                                                                  |                                            | Passbook accounts and certificates of deposit |                   |         | 380,603                         |         |          |        | 6,798  |       |         |      | 2.38     |      |        |         | 398,817 |         |        |        | 9,712  |        |         |      | 3.25 |     
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|                                                                                  |                                            |                                               | Total deposits    |         |                                 | 509,067 |          |        |        | 7,866 |         |      |          | 2.06 |        |         |         | 493,633 |        |        |        | 11,048 |         |      |      | 2.98 | 
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|                                                                                  | FHLB advances (4)                          |                                               |                   | 231,529 |                                 |         |          | 6,439  |        |       |         | 3.71 |          |      |        | 119,533 |         |         |        | 5,000  |        |        |         | 5.58 |     
|                                                                                  | Reverse Repurchase Agreements              |                                               |                   | 25,246  |                                 |         |          | 497    |        |       |         | 2.62 |          |      |        | 1,095   |         |         |        | 10     |        |        |         | 1.22 |     
|                                                                                  | Other borrowings (5)                       |                                               |                   | 12,134  |                                 |         |          | 333    |        |       |         | 3.66 |          |      |        | 17,349  |         |         |        | 522    |        |        |         | 4.01 |     
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|                                                                                  |                                            | Total interest-bearing liabilities            |                   |         | 777,976                         |         |          |        | 15,135 |       |         |      | 2.59     |      |        |         | 631,610 |         |        |        | 16,580 |        |         |      | 3.50 |     
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|Non-interest-bearing deposits                                                     |                                            |                                               | 20,492            |         |                                 |         |          |        |        |       |         |      |          |      | 13,595 |         |         |         |        |        |        |        |         |     
|Non-interest-bearing liabilities                                                  |                                            |                                               | 10,731            |         |                                 |         |          |        |        |       |         |      |          |      | 6,563  |         |         |         |        |        |        |        |         |     
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|                                                                                  |                                            |                                               | Total liabilities |         |                                 | 809,199 |          |        |        |       |         |      |          |      |        |         |         | 651,768 |        |        |        |        |         |      |      |      | 
|Stockholders equity                                                              |                                            |                                               | 44,390            |         |                                 |         |          |        |        |       |         |      |          |      | 30,794 |         |         |         |        |        |        |        |         |     
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|                                                                                  | Total liabilities and stockholders equity |                                               | $                 | 853,589 |                                 |         |          |        |        |       |         |      |          |      | $      | 682,562 |         |         |        |        |        |        |         |      |     
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|Net interest-earning assets (liabilities)                                         |                                            | $                                             | 53,440            |         |                                 |         |          |        |        |       |         |      |          | $    | 32,018 |         |         |         |        |        |        |        |         |     
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|Net interest income/interest rate spread                                          |                                            |                                               |                   |         |                                 | $       | 19,380   |        |        |       | 2.95    | %    |          |      |        |         |         | $       | 15,972 |        |        |        | 3.04    | %   
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|Net interest margin                                                               |                                            |                                               |                   |         |                                 |         |          |        |        |       | 3.11    | %    |          |      |        |         |         |         |        |        |        |        | 3.21    | %   
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     
|Ratio of average interest-earnings assets to
average interest-bearing liabilities |                                            |                                               |                   |         |                                 |         |          |        |        |       | 106.87  | %    |          |      |        |         |         |         |        |        |        |        | 105.07  | %   
|                                                                                  |                                            |                                               |                   |         |                                 |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |        |         |     



|(1) |  | Includes non-accrual loans. Interest income includes fees earned on
loans originated.                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Consists of securities classified as available for sale and held to
maturity and trading account assets.                                                             
|   
|(3) |  | Consists of cash and due from banks and federal funds sold.                                                                                                          
|   
|(4) |  | Interest on FHLB advances is net of hedging costs. Interest rate
swaps are used to hedge the short-term repricing characteristics of the
floating-rate FHLB advances.
|   
|(5) |  | Consists of a note payable under a revolving line of credit.                                                                                                         

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The following table sets forth the effects of changing rates and volumes
on net interest income. Information is provided with respect to (i) effects on
interest income attributable to changes in rates (changes in rate multiplied by
prior volume); (ii) effects on interest income attributable to changes in
volume (changes in volume multiplied by prior rate); (iii) changes in
rate/volume (change in rate multiplied by change in volume).

|                                                            |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |                |        |        |        |       |       |       |    |          |        |       |     |        |       |        |        |  
|----------------------------------------------------------- | ----------------------------------------- | --------------------------------------------- | -------------- | ------ | ---------------------------------------- | ------ | ---------------------------------------- | ----- | -------------- | --- | -------------------------- | ----- | ----- | ----- | -------- | --- | ------ | ---- | -------------- | ------ | ------ | ------ | ----- | ----- | ----- | -- | -------- | ------ | ----- | --- | ------ | ----- | ------ | ------ | -
|                                                            |                                           |                                               |                |        | Three Months Ended                       |        | Nine months ended                       
|                                                            |                                           |                                               |                |        | September 30, 2003 vs September 30, 2002 |        | September 30, 2003 vs September 30, 2002
|                                                            |                                           |                                               |                |        |                                          |        |                                         
|                                                            |                                           |                                               |                |        | Increase (decrease) due to               |        |                                          |       |                |     | Increase (decrease) due to |       |       |       |         
|                                                            |                                           |                                               |                |        |                                          |        | Total Net                                |       |                |     | Total Net                 
|                                                            |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       | Rate/ |       | Increase |     |        |      |                |        |        |        |       |       | Rate/ |    | Increase
|                                                            |                                           |                                               |                |        | Rate                                     |        | Volume                                   |       | Volume         |     | (Decrease)                 |       | Rate  |       | Volume   |     | Volume |      | (Decrease)    
|                                                            |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |               
|                                                            |                                           |                                               |                |        |                                          |        |                                          |       | (In Thousands) |     |                            |       |       |       |          |     |        |      | (In Thousands) |        |        |        |      
|Interest-earning assets:                                    |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |                |        |        |        |       |       |       |    |          |        |       |     |        |      
|                                                            | Loans receivable                          |                                               | ($             | 2,733  | )                                        |        | $                                        | 6,076 |                |     | ($                         | 2,641 | )     |       | $        | 702 |        |      | ($             | 2,569  | )      |        | $     | 3,803 |       |    | ($       | 539    | )     |     | $      | 695   |       
|                                                            | FHLB stock                                |                                               |                | (105   | )                                        |        |                                          | 304   |                |     |                            | (168  | )     |       |          | 31  |        |      |                | (73    | )      |        |       | 369   |       |    |          | (127   | )     |     |        | 169   |       
|                                                            | Securities and trading account assets (1) |                                               |                | (2,762 | )                                        |        |                                          | 3,674 |                |     |                            | (884  | )     |       |          | 28  |        |      |                | (2,746 | )      |        |       | 5,656 |       |    |          | (1,794 | )     |     |        | 1,116 |       
|                                                            | Cash and cash equivalents (2)             |                                               |                | (62    | )                                        |        |                                          | 20    |                |     |                            | 31    |       |       |          | (11 | )      |      |                | (37    | )      |        |       | 17    |       |    |          | 3      |       |     |        | (17   | )     
|                                                            |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |                |        |        |        |       |       |       |    |          |        |       |     |        |      
|Total net change in income on interest-earning assets       |                                           |                                               | (5,662         | )      |                                          |        | 10,074                                   |       |                |     | (3,662                     | )     |       |       | 750      |     |        |      | (5,425         | )      |        |        | 9,845 |       |       |    | (2,457   | )      |       |     | 1,963  |      
|                                                            |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |                |        |        |        |       |       |       |    |          |        |       |     |        |      
|Interest-bearing liabilities:                               |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |                |        |        |        |       |       |       |    |          |        |       |     |        |      
|                                                            | Deposits                                  |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |                |        |        |        |       |       |       |    |          |        |       |     |        |       |       
|                                                            |                                           | NOW and money market accounts                 |                |        | (1,374                                   | )      |                                          |       | (39            | )   |                            |       | 1,062 |       |          |     | (351   | )    |                |        | (730   | )      |       |       | 632   |    |          |        | (170  | )   |        |       | (268   | )     
|                                                            |                                           | Passbook accounts and certificates
of deposit |                |        | (1,949                                   | )      |                                          |       | 559            |     |                            |       | 1,013 |       |          |     | (377   | )    |                |        | (3,451 | )      |       |       | (591  | )  |          |        | 1,128 |     |        |       | (2,914 | )     
|                                                            |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |                |        |        |        |       |       |       |    |          |        |       |     |        |      
|                                                            |                                           |                                               | Total deposits |        |                                          | (3,323 | )                                        |       |                | 520 |                            |       |       | 2,075 |          |     |        | (728 | )              |        |        | (4,181 | )     |       |       | 41 |          |        |       | 958 |        |       |        | (3,182 | )
|                                                            | FHLB advances (3)                         |                                               |                | (2,417 | )                                        |        |                                          | 3,133 |                |     |                            | (786  | )     |       |          | (70 | )      |      |                | (2,235 | )      |        |       | 6,248 |       |    |          | (2,574 | )     |     |        | 1,439 |       
|                                                            | Reverse Repurchase Agreements             |                                               |                | 14     |                                          |        |                                          | 769   |                |     |                            | (366  | )     |       |          | 417 |        |      |                | 15     |        |        |       | 294   |       |    |          | 178    |       |     |        | 487   |       
|                                                            | Other borrowings (4)                      |                                               |                | (55    | )                                        |        |                                          | (213  | )              |     |                            | 204   |       |       |          | (64 | )      |      |                | (61    | )      |        |       | (209  | )     |    |          | 81     |       |     |        | (189  | )     
|                                                            |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |                |        |        |        |       |       |       |    |          |        |       |     |        |      
|Total net change in expense on interest-bearing liabilities |                                           |                                               | (5,781         | )      |                                          |        | 4,209                                    |       |                |     | 1,127                      |       |       |       | (445     | )   |        |      | (6,462         | )      |        |        | 6,374 |       |       |    | (1,357   | )      |       |     | (1,445 | )    
|                                                            |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |                |        |        |        |       |       |       |    |          |        |       |     |        |      
|Change in net interest income                               |                                           | $                                             | 119            |        |                                          | $      | 5,865                                    |       |                | ($  | 4,789                      | )     |       | $     | 1,195    |     |        | $    | 1,037          |        |        | $      | 3,471 |       |       | ($ | 1,100    | )      |       | $   | 3,408  |      
|                                                            |                                           |                                               |                |        |                                          |        |                                          |       |                |     |                            |       |       |       |          |     |        |      |                |        |        |        |       |       |       |    |          |        |       |     |        |      



|(1) |  | Consists of securities classified as available for sale and held for
maturity and trading account assets.                                                                 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Consists of cash and due from banks and federal funds sold.                                                                                                               
|   
|(3) |  | Interest on FHLB advances is net of cash flow hedging costs. Interest
rate swaps are used to hedge the short-term repricing characteristics of
the floating-rate advances.
|   
|(4) |  | Consists of a note payable under a revolving line of credit.                                                                                                              

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The Company increased its provision for loan losses by $100,000 during the
three months ended and $710,000 for the nine months ended September 30, 2003,
compared to $50,000 for the three months ended and $325,000 for the nine months
ended September 30, 2002, an increase of $50,000 and $385,000, respectively.
The provision reflects the reserves required based upon, among other things,
the $56.3 million in loan growth since December 31, 2002 and the Companys
analysis of the composition, credit quality and growth of its commercial real
estate and commercial and industrial loan portfolios. At September 30, 2003,
the Company had no non-performing assets, as compared to $218,000 or 0.05% of
total loans as of December 31, 2002.

The Company reported interest income of $11.9 million for the three months
ended September 30, 2003, compared to $11.1 million for the three months ended
September 30, 2002, an increase of $750,000 or 6.8%. The Company reported
interest income of $34.5 million for the nine months ended September 30, 2003,
compared to $32.6 million for the nine months ended September 30, 2002, an
increase of $2.0 million or 6.0%. The primary reason for the increase during
both periods was the increase in the volume of interest-earning assets in the
periods, which was partially offset by a decrease in the average rate on
interest-earning assets.

The Company reported interest expense of $5.0 million for the three months
ended September 30, 2003, compared to $5.4 million for the three months ended
September 30, 2002, a decrease of $445,000 or 8.2%. The Company reported
interest expense of $15.1 million for the nine months ended September 30, 2003,
compared to $16.8 million for the nine months ended September 30, 2002, a
decrease of $1.4 million or 8.7%. The decrease in interest expense during both
periods was attributable to a decrease in the average rate on interest-bearing
liabilities as a result of the downward repricing of interest
bearing-liabilities during the respective periods, which was partially offset
by an increase in the volume of interest-bearing liabilities.

The Companys total other income, which includes gain and losses on
securities, loans, deposits, borrowings, and trading assets plus banking fee
income amounted to $1.2 million for the quarter ending September 30, 2003
compared to $217,000 during the same quarter last year, an increase of $1.0
million or 465.4%. The Companys total other income for the nine months ended
September 30, 2003 amounted to $3.9 million compared to $1.0 million for the
same period last year, an increase of $2.9 million or 283.1%. The increase in
other income was primarily attributable to an increase in banking fee income,
consisting primarily of fee income from wholesale banking, trust services,
deposits and loans and gains on commercial mortgage-backed securities (CMBS)
swaps.

Banking fee income amounted to $1.0 million for the quarter ending
September 30, 2003 compared to $561,000 during the same quarter last year, an
increase of $475,000 or 84.7%. Banking fee income amounted to $3.3 million for
the nine months ended September 30, 2003 compared to $1.5 million for the same
period last year, an increase of $1.8 million or 116.6%. Mortgage banking fees
were the main source for the growth in banking fee income contributing $490,000
for the three months ending September 2003, an increase of $267,000 or 119.7%
compared to the same quarter last year. Mortgage banking fees for the nine
months ending September 2003 contributed $1.7 million of banking fee income
compared to $581,000 year-to-date in September 2002, an increase of $1.1
million or 184.2%.

Gain on the sale of securities and income from trading assets was $380,000
for the three months ended September 30, 2003, compared to a loss of $69,000
for the three months ended September 30, 2002, an increase of $449,000. Gain
on sale of securities and income from trading assets was $2.2 million for the
nine months ended September 30, 2003, as compared to $165,000 loss for the nine
months ended September 30, 2002, an increase of $2.4 million or 146.3%. In the
quarter ending September 30, 2003, the $380,000 of income from trading assets
includes a $218,000 gain on the sale of $4.2 million of Ginnie Mae
mortgage-backed securities to capture the economic profit associated with the
spread tightening. The balance of the income from trading assets in the
quarter ending September 30, 2003 was a result of favorable changes in market
spreads associated with the hedged total return CMBS swaps. Related to the
gain on the sale of the securities, the Company paid-off $5.5 million of fixed
rate FHLB

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advances with a coupon rate of 3.8% and a remaining maturity of 15 months
and incurred a $187,000 market-based prepayment loss on the extinguishment of
the debt for a net gain of $31,000 on both transactions.

The Companys total other expenses were $4.6 million during the three
months ended September 30, 2003, as compared to $3.6 million for the three
months ended September 30, 2002, an increase of $988,000 or 27.5%. The
Companys total other expenses totaled $13.3 million during the nine months
ended September 30, 2003, as compared to $10.5 million for the nine months
ended September 30, 2002, an increase of $2.9 million or 27.4%. The general
increase in expenses was largely due to commission related compensation
relative to increased mortgage banking originations, the expenses associated
with the initial start-up expenses for the Companys new banking operations in
Overland Park, Kansas and Ventura, California and higher workers compensation
insurance for the California operations, other insurance and an increase in
corporate expenses associated with the Company being a public company and its
growth.

Liquidity and Capital Resources

Liquidity.The liquidity of Los Padres Bank, as measured by the ratio of
cash, cash equivalents (not committed, pledged or required to liquidate
specific liabilities), investments and qualifying mortgage-backed securities to
the sum of total deposits plus borrowings payable within one year, was 30.8% at
September 30, 2003. At September 30, 2003, Los Padres Banks liquid assets
totaled approximately $148.6 million.

The Companys liquidity, represented by cash and cash equivalents, is a
product of its operating, investing and financing activities. The Companys
primary sources of internal liquidity consist of deposits, prepayments and
maturities of outstanding loans and mortgage-backed and related securities,
maturities of short-term investments, sales of mortgage-backed and related
securities and funds provided from operations. The Companys external sources
of liquidity consist of borrowings, primarily advances from the FHLB of San
Francisco, securities sold under agreements to repurchase and a revolving line
of credit loan facility which it maintains with two banks. At September 30,
2003, the Company had $217.5 million in FHLB advances and had $97.4 million of
additional borrowing capacity with the FHLB of San Francisco based on a 35% of
total Bank asset limitation which is further limited to $33.8 of additional
capacity based on excess collateral held at FHLB. During the September 2003
quarter, the Bank entered into three term repurchase agreements for a total of
$50.0 million that replaced the Companys FHLB debt for interest rate risk
management purposes. On September 25, 2003, the Company paid off its note
payable under its revolving line of credit with funds received from a capital
trust offering.

On September 25, 2003, the Company completed a $15.0 million dollar
capital trust offering where capital securities were issued through a newly
formed subsidiary, Harrington West Capital Trust I, in a private transaction.
A portion of the funds received from the capital trust offering were used to
pay-off the $12.5 million drawn on the Companys line of credit. The remainder
of the proceeds received from the capital trust offering will be used to
further the Companys expansion.

On October 30, 2003, the Company renegotiated the terms of the line of
credit under its loan facility and decreased the revolving line of credit from
$25.0 million to $15.0 million and modified two covenants. The covenant that
restricts payment of cash dividends has been revised to allow the Company to
pay larger dividends in an aggregate amount not to exceed the greater of (a)
$450,000 during any fiscal quarter, or (b) up to a maximum of 40% of
consolidated net income for the quarter. The other covenant amendment released
the collateral held pursuant to the Pledge and Security Agreement for the
credit facility.

Liquidity management is both a daily and long-term function of business
management. Excess liquidity is generally used to pay down short-term
borrowings. On a longer-term basis, the Company maintains a strategy of
investing in various mortgage-backed and related securities and loans. At
September 30, 2003, the total approved loan commitments outstanding amounted to
$26.1 million.

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Certificates of deposit scheduled to mature in one year or less at
September 30, 2003 totaled $313.1 million and FHLB borrowings scheduled to
mature within the same period amounted to $193.0 million. Management believes
that the Company has adequate resources to fund all of its commitments and that
the Company could either adjust the rate of certificates of deposit in order to
retain deposits in changing interest rate environments or replace such deposits
with advances from the FHLB of San Francisco if it proved to be cost-effective
to do so.

A substantial source of the Companys income from which it services its
debt and capital trust securities, pays its obligations and pays dividends to
its shareholders is the receipt of dividends from Los Padres Bank. The
availability of dividends from Los Padres Bank is limited by various statutes
and regulations. In order to make such dividend payment, Los Padres Bank is
required to provide 30 days advance notice to the Office of Thrift Supervision
(OTS), during which time the OTS may object to such dividend payment. On
April 23, 2003, Los Padres Bank received approval from the OTS to pay up to
$3.0 million in cash dividends during the twelve-month period ending March 31,
2004. It is possible, depending upon the financial condition of Los Padres
Bank and other factors, the OTS could object to the payment of dividends by Los
Padres Bank on the basis that the payment of such dividends is an unsafe or
unsound practice.

Capital Resources.Federally insured savings institutions such as Los
Padres Bank are required to maintain minimum levels of regulatory capital.
Under applicable regulations, an institution is well capitalized if it has a
total risk-based capital ratio of at least 10.0%, a Tier 1 risk-based capital
ratio of at least 6.0% and a leverage ratio of at least 5.0%, with no written
agreement, order, capital directive, prompt corrective action directive or
other individual requirement by the OTS to maintain a specific capital measure.
An institution is adequately capitalized if it has a total risk-based capital
ratio of at least 8.0% and a Tier 1 risk-based capital ratio of at least 4.0%
and a leverage ratio of at least 4.0% (or 3.0% if it has a composite rating of
1). The regulation also establishes three categories for institutions with
lower ratios: undercapitalized, significantly undercapitalized and critically
undercapitalized. At September 30, 2003, Los Padres Bank met the capital
requirements of a well capitalized institution under applicable OTS
regulations.

Due to the Companys business strategy which has concentrated on growth of
lending operations, a shift in the Companys lending focus to more commercial
lending, and the size of the Companys securities portfolio, the Company in
April, 2000 had informally agreed with the OTS that Los Padres Bank would
maintain a total risk-based capital ratio and a leverage ratio of at least 11%
and 6%, respectively, which is in excess of the OTS minimum capital
requirements. By letter dated June 16, 2003, the OTS eliminated the informal
agreement.

Asset and Liability Management

In general, financial institutions are negatively affected by an increase
in interest rates to the extent that interest-bearing liabilities mature or
reprice more rapidly than interest-earning assets. The lending activities of
savings institutions have historically emphasized the origination of long-term,
fixed-rate loans secured by single-family residences, and the primary source of
funds of such institutions has been deposits, which largely mature or are
subject to repricing within a shorter period of time. This factor has
historically caused the income and market value of portfolio equity (MVPE) of
savings institutions to be more volatile than other financial institutions.

MVPE is defined as the net present value of the cash flows from an
institutions existing assets, liabilities and off-balance sheet instruments.
The MVPE is estimated by valuing our assets, liabilities and off-balance sheet
instruments under various interest rate scenarios. The extent to which assets
gain or lose value in relation to the gains or losses of liabilities determines
the appreciation or depreciation in equity on a market value basis. MVPE
analysis is intended to evaluate the impact of immediate and sustained interest
rate shifts of the current yield curve upon the market value of the current
balance sheet. While having liabilities that reprice more frequently than
assets is generally beneficial to net interest

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income and MVPE in times of declining interest rates, such an
asset/liability mismatch is generally detrimental during periods of rising
interest rates.

The Companys management believes that its asset and liability management
strategy, as discussed below, provides it with a competitive advantage over
other financial institutions. The Company believes that its ability to hedge
its interest rate exposure through the use of various interest rate contracts
provides it with the flexibility to acquire loans structured to meet its
customers preferences and investments that provide attractive net
risk-adjusted spreads, regardless of whether the customers loan or our
investment is fixed-rate or adjustable-rate or short-term or long-term.
Similarly, the Company can choose a cost-effective source of funds and
subsequently engage in an interest rate swap or other hedging transaction so
that the interest rate sensitivities of its interest-earning assets and
interest-bearing liabilities are more closely matched.

The Companys asset and liability management strategy is formulated and
monitored by the board of directors of Los Padres Bank. The Boards written
policies and procedures are implemented by the Asset and Liability Committee of
Los Padres Bank (ALCO), which is comprised of Los Padres Banks chief
executive officer, president, chief financial officer, director of financial
reporting and four non-employee directors of Los Padres Bank. The ALCO meets
at least eight times a year to review the sensitivity of Los Padres Banks
assets and liabilities to interest rate changes, investment opportunities, the
performance of the investment portfolios, and prior purchase and sale activity
of securities. The ALCO also provides guidance to management on reducing
interest rate risk and on investment strategy and retail pricing and funding
decisions with respect to Los Padres Banks overall asset and liability
composition. The ALCO reviews Los Padres Banks liquidity, cash flow needs,
interest rate sensitivity of investments, deposits and borrowings, core deposit
activity, current market conditions and interest rates on both a local and
national level in connection with fulfilling its responsibilities.

The ALCO regularly reviews interest rate risk with respect to the impact
of alternative interest rate scenarios on net interest income and on Los Padres
Banks MVPE. The Asset and Liability Committee also reviews analyses
concerning the impact of changing market volatility, prepayment forecast error,
and changes in option-adjusted spreads and non-parallel yield curve shifts.

In the absence of hedging activities, the Companys MVPE would decline as
a result of a general increase in market rates of interest. This decline would
be due to the market values of the Companys assets being more sensitive to
interest rate fluctuations than are the market values of its liabilities due to
its investment in and origination of generally longer-term assets which are
funded with shorter-term liabilities. Consequently, the elasticity (i.e.,the
change in the market value of an asset or liability as a result of a change in
interest rates) of the Companys assets is greater than the elasticity of its
liabilities.

Accordingly, the primary goal of the Companys asset and liability
management policy is to effectively increase the elasticity of its liabilities
and/or effectively contract the elasticity of its assets so that the respective
elasticities are matched as closely as possible. This elasticity adjustment
can be accomplished internally by restructuring the balance sheet or externally
by adjusting the elasticities of assets and/or liabilities through the use of
interest rate contracts. The Companys strategy is to hedge either internally
through the use of longer-term certificates of deposit or less sensitive
transaction deposits and FHLB advances or externally through the use of various
interest rate contracts.

External hedging generally involves the use of interest rate swaps, caps,
floors, options and futures. The notional amount of interest rate contracts
represents the underlying amount on which periodic cash flows are calculated
and exchanged between counterparties. However, this notional amount does not
necessarily represent the principal amount of securities that would effectively
be hedged by that interest rate contract.

In selecting the type and amount of interest rate contract to utilize, the
Company compares the elasticity of a particular contract to that of the
securities to be hedged. An interest rate contract with the

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appropriate offsetting elasticity could have a notional amount much
greater than the face amount of the securities being hedged.

The Company adopted SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities,on January 1, 2001. SFAS No. 133 requires that an
entity recognize all interest rate contracts as either assets or liabilities in
the statement of financial condition and measure those instruments at fair
value. If certain conditions are met, an interest rate contract may be
specifically designated as a fair value hedge, a cash flow hedge, or a hedge of
foreign currency exposure. The accounting for changes in the fair value of an
interest rate contract (that is, gains and losses) depends on the intended use
of the interest rate contract and the resulting designation. To qualify for
hedge accounting, the Company must show that, at the inception of the interest
rate contracts and on an ongoing basis, the changes in the fair value of the
interest rate contracts are expected to be highly effective in offsetting
related changes in the cash flows of the hedged liabilities. The Company has
entered into various interest rate swaps for the purpose of hedging certain of
its short-term liabilities. These interest rate swaps qualify for hedge
accounting. Accordingly, the effective portion of the accumulated change in
the fair value of the cash flow hedges is recorded in a separate component of
stockholders equity, net of tax, while the ineffective portion is recognized
in earnings immediately. The Company has also entered into various interest
rate swaps which hedge a portion of its securities portfolio. These swaps do
not qualify for hedge accounting treatment and are included in the trading
account assets and are reported at fair value with realized and unrealized
gains and losses on these instruments recognized in income (loss) from trading
account assets.

Critical Accounting Policies

General.The financial information contained in the Companys
consolidated financial statements is, to a significant extent, based on
approximate measures of the financial effects of transactions and events that
have already occurred. A variety of factors could affect the ultimate value
that is obtained either when recognizing income or expense, recovering an asset
or relieving a liability. The Company uses historical loss factors to
determine the inherent loss that may be present in its loan portfolio. Actual
losses could differ significantly from these historical factors. As of
September 30, 2003, the Company has not created any special purpose entities to
securitize assets or to obtain off-balance sheet funding. Although the Company
has sold loans in the past two years, those loans have been sold to third
parties without recourse, subject to customary representations and warranties.

Allowance for loan losses.The allowance for loan losses is an estimate
of the losses that may be sustained in the Companys loan portfolio. The
allowance is based on two principles of accounting: (i) Statement of Financial
Accounting Standards, or SFAS, No. 5, Accounting for Contingencies, which
requires that losses be accrued when they are probable of occurring and
estimable; and (ii) SFAS No. 114, Accounting by Creditors for Impairment of a
Loan and SFAS No. 118, Accounting by Creditors for Impairment of a
Loan-Income Recognition and Disclosures, which requires that losses be accrued
based on the differences between the value of collateral, present value of
future cash flows or values that are observable in the secondary market and the
loan balance. The Companys allowance for loan losses has four components: (i)
an allocated allowance for specifically identified problem loans, (ii) a
formula allowance for non-homogenous loans, (iii) an allocated allowance for
large groups of smaller balance homogenous loans and (iv) an unallocated
allowance. Each of these components is determined based upon estimates that
can and do change when the actual events occur. The formula allowance uses a
model based on historical losses as an indicator of future losses and as a
result could differ from the losses incurred in the future; however, since this
history is updated with the most recent loss information, the differences that
might otherwise occur may be mitigated. The specific allowance uses various
techniques to arrive at an estimate of loss. Historical loss information,
discounted cash flows, fair market value of collateral and secondary market
information are all used to estimate those losses. The use of these values is
inherently subjective and actual losses could be greater or less than the
estimates. The unallocated allowance captures losses that are attributable to
various economic events, industry or geographic sectors whose impact on the
portfolio have occurred but have yet to be recognized in either the formula or
specific allowances.

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Recent Legislation

On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of
2002 (SOA). The stated goals of the SOA are to increase corporate
responsibility, to provide for enhanced penalties for accounting and auditing
improprieties at publicly traded companies and to protect investors by
improving the accuracy and reliability of corporate disclosures pursuant to the
securities laws. The SOA generally applies to all companies, both U.S. and
non-U.S., that file or are required to file periodic reports with the
Securities and Exchange Commission (SEC), under the Securities Exchange Act
of 1934 (the Exchange Act).

The SOA includes very specific additional disclosure requirements and new
corporate governance rules, requires the SEC and securities exchanges to adopt
extensive additional disclosure, corporate governance and other related rules
and mandates further studies of certain issues by the SEC and the Comptroller
General. The SOA represents significant federal involvement in matters
traditionally left to state regulatory systems, such as the regulation of the
accounting profession, and to state corporate law, such as the relationship
between a board of directors and management and between a board of directors
and its committees.




Item 3: Quantitative and Qualitative Disclosures about Market Risk

The OTS requires each thrift institution to calculate the estimated change
in the institutions MVPE assuming an instantaneous, parallel shift in the
Treasury yield curve of 100 to 300 basis points either up or down in 100 basis
point increments. The OTS permits institutions to perform this MVPE analysis
using their own internal model based upon reasonable assumptions.

In estimating the market value of mortgage loans and mortgage-backed
securities, the Company utilizes various prepayment assumptions which vary, in
accordance with historical experience, based upon the term, interest rate,
prepayment penalties, if applicable, and other factors with respect to the
underlying loans. At September 30, 2003, these prepayment assumptions varied
from 7% to 42% for fixed-rate mortgages and mortgage-backed securities and
varied from 7% to 37% for adjustable-rate mortgages and mortgage-backed
securities.

The following table sets forth at September 30, 2003 the estimated
sensitivity of Los Padres Banks MVPE to parallel yield curve shifts using the
Companys internal market value calculation. The table demonstrates the
sensitivity of the Companys assets and liabilities both before and after the
inclusion of its interest rate contracts.

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|                                                                      |         |   |                                               |      |      |   |         |      |   |   |        |      |      |  |      |  |  |  |          |       |   |  |          |        |   |  |          |        |  
|--------------------------------------------------------------------- | ------- | - | --------------------------------------------- | ---- | ---- | - | ------- | ---- | - | - | ------ | ---- | ---- |  | ---- |  |  |  | -------- | ----- | - |  | -------- | ------ | - |  | -------- | ------ | -
|                                                                      |         |   | Change In Interest Rates (In Basis Points)(1)
|                                                                      |         |   |                                              
|                                                                      |         |   | -300                                          |      | -200 |   | -100    |      | - |   | +100   |      | +200 |  | +300
|                                                                      |         |   |                                               |      |      |   |         |      |   |   |        |      |      |  |     
|                                                                      |         |   | (Dollars in Thousands)                       
|Market value gain (loss) in assets                                    |         | $ | 36,803                                        |      |      | $ | 27,065  |      |   | $ | 14,819 |      |      |  |      |  |  |  | ($16,659 | )     |   |  | ($35,287 | )      |   |  | ($55,330 | )     
|Market value gain (loss) of liabilities                               |         |   | (19,320                                       | )    |      |   | (14,258 | )    |   |   | (7,976 | )    |      |  |      |  |  |  | 8,134    |       |   |  | 16,465   |        |   |  | 24,996   |       
|                                                                      |         |   |                                               |      |      |   |         |      |   |   |        |      |      |  |      |  |  |  |          |       |   |  |          |        |   |  |          |       
|Market value gain (loss) of net assets
before interest rate contracts |         |   | 17,483                                        |      |      |   | 12,807  |      |   |   | 6,843  |      |      |  |      |  |  |  | (8,525   | )     |   |  | (18,822  | )      |   |  | (30,334  | )     
|Market value gain (loss) of interest
rate contracts                   |         |   | (17,455                                       | )    |      |   | (11,916 | )    |   |   | (5,714 | )    |      |  |      |  |  |  | 5,376    |       |   |  | 10,436   |        |   |  | 15,208   |       
|                                                                      |         |   |                                               |      |      |   |         |      |   |   |        |      |      |  |      |  |  |  |          |       |   |  |          |        |   |  |          |       
|Total change in MVPE (2)                                              |         | $ | 28                                            |      |      | $ | 891     |      |   | $ | 1,129  |      |      |  |      |  |  |  | ($3,149  | )     |   |  | ($8,386  | )      |   |  | ($15,126 | )     
|                                                                      |         |   |                                               |      |      |   |         |      |   |   |        |      |      |  |      |  |  |  |          |       |   |  |          |        |   |  |          |       
|Change in MVPE as a percent of:                                       |         |   |                                               |      |      |   |         |      |   |   |        |      |      |  |      |  |  |  |          |       |   |  |          |        |   |  |          |       
|                                                                      | MVPE(2) |   |                                               | 0.04 | %    |   |         | 1.16 | % |   |        | 1.47 | %    |  |      |  |  |  |          | -4.09 | % |  |          | -10.89 | % |  |          | -19.64 | %
|MVPE post shock ratio (3)                                             |         |   | 7.71                                          | %    |      |   | 7.88    | %    |   |   | 8.01   | %    |      |  |      |  |  |  | 7.80     | %     |   |  | 7.36     | %      |   |  | 6.73     | %     



---

|(1) |  | Assumes an instantaneous parallel change in interest rates at all
maturities.
|--- |  | -----------------------------------------------------------------------------
|   
|(2) |  | Based on the Companys pre-tax MVPE of $77.0 million at September 30, 2003.  
|   
|(3) |  | Pre-tax MVPE as a percentage of tangible assets.                             

The table set forth above does not purport to show the impact of interest
rate changes on the Companys equity under generally accepted accounting
principles. Market value changes only impact the Companys income statement or
the balance sheet to the extent the affected instruments are marked to market,
and over the life of the instruments as an impact on recorded yields.




Item 4: Controls and Procedures

As of the end of the period covered by this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Companys management, including the Companys Chief Executive Officer along
with the Companys Chief Financial Officer, of the effectiveness of the design
and operation of the Companys disclosure controls and procedures pursuant to
Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, the
Companys Chief Executive Officer along with the Companys Chief Financial
Officer concluded that the Companys disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Company (including its consolidated subsidiaries) required to be included in
the Companys periodic SEC filings. There have been no significant changes in
the Companys internal controls over financial reporting that have materially
affected, or are reasonably likely to materially affect, the Companys internal
control over financial reporting.

Disclosure controls and procedures are Company controls and other
procedures that are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the Companys management, including its Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.

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##### Table of Contents






PART II - OTHER INFORMATION




Item 1:Legal Proceedings



| |  |  | The Registrant is involved in routine legal proceedings occurring
in the ordinary course of business which, in the aggregate, are
believed by management to be immaterial to the financial condition
and results of operations of the Registrant.
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Item 2: Changes in Securities and Use of Proceeds



| |  |  | None.
| |  |  | -----




Item 3: Defaults Upon Senior Securities



| |  |  | Not applicable.
| |  |  | ---------------




Item 4:Submission of Matters to a Vote of Security Holders



| |  |  | Not applicable.
| |  |  | ---------------




Item 5: Other Information



| |  |  | Not applicable.
| |  |  | ---------------

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Item 6: Exhibits and Reports on Form 8-K



| | a) |  | Exhibits
| | -- |  | --------

|            |  |                                                                                                                                                                                                                                                  
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                                                                                                                                                      
|3.1         |  | Certificate of Incorporation of Harrington West Financial Group, Inc. (1)                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                  
|3.1.1       |  | Certificate of Amendment to Certificate of Incorporation. (1)                                                                                                                                                                                    
|            |  |                                                                                                                                                                                                                                                  
|3.1.2       |  | Second Certificate of Amendment to Certificate of Incorporation. (1)                                                                                                                                                                             
|            |  |                                                                                                                                                                                                                                                  
|3.2         |  | Bylaws of Harrington West Financial Group, Inc. (1)                                                                                                                                                                                              
|            |  |                                                                                                                                                                                                                                                  
|3.2.1       |  | Amendment to Bylaws. (1)                                                                                                                                                                                                                         
|            |  |                                                                                                                                                                                                                                                  
|4.0         |  | Specimen stock certificate of Harrington West Financial Group, Inc. (1)                                                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                  
|4.1         |  | Indenture Agreement dated September 25, 2003.                                                                                                                                                                                                    
|            |  |                                                                                                                                                                                                                                                  
|4.2         |  | Amended and Restated Declaration of Trust of Harrington West
Capital Trust I dated September 25, 2003                                                                                                                                            
|            |  |                                                                                                                                                                                                                                                  
|4.3         |  | Preferred Securities Guarantee Agreement dated September 25,
2003                                                                                                                                                                                
|            |  |                                                                                                                                                                                                                                                  
|10.1        |  | Harrington West Financial Group 1996 Stock Option Plan, as
amended. (1)                                                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                  
|10.2        |  | Amended and Restated Credit Agreement dated as of October 30,
1997 among Harrington West Financial Group, Inc., the lenders party
thereto and Harris Trust and Savings Bank, as amended on October 1,
1999, May 2, 2000 and November 1, 2001. (1)
|            |  |                                                                                                                                                                                                                                                  
|10.2.1      |  | Fourth Amendment to Amended and Restated Credit Agreement dated
September 17, 2002. (1)                                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                  
|10.2.2      |  | Fifth Amendment to Amended and Restated Credit Agreement dated
February 24, 2003.                                                                                                                                                                
|            |  |                                                                                                                                                                                                                                                  
|10.2.3      |  | Sixth Amendment to Amended and Restated Credit Agreement dated
October 30, 2003.                                                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                  
|10.3        |  | Investment and Interest Rate Advisory Agreement between Los
Padres Savings Bank, FSB and Smith Breeden Associates, Inc., dated
February 3, 1997. (1)                                                                                             
|            |  |                                                                                                                                                                                                                                                  
|10.4        |  | Purchase and Assumption Agreement by and between Los Padres
Bank, FSB and Harrington Bank, FSB dated as of May 30, 2001. (1)                                                                                                                     
|            | 
|10.5        |  | Los Padres Mortgage Company, LLC Operating Agreement by and
between Resource Marketing Group, Inc. and Los Padres Bank FSB dated
June 13, 2002. (1)                                                                                              
|            |  |                                                                                                                                                                                                                                                  
|10.6        |  | Option Agreement, dated as of April 4, 1996 by and between
Smith Breeden Associates, Inc. and Harrington West Financial Group,
Inc. Assignment of Option, dated as of January 19, 2001, by and
between Craig Cerny. (1)                          
|            |  |                                                                                                                                                                                                                                                  
|10.7        |  | Stock Purchase Agreement by and between Harrington Bank, FSB
and Los Padres Bank, FSB dated as of May 30, 2001. (1)                                                                                                                              
|            |  |                                                                                                                                                                                                                                                  
|31.1        |  | Section 302 Certification by Chief Executive Officer filed
herewith.                                                                                                                                                                             
|            |  |                                                                                                                                                                                                                                                  
|31.2        |  | Section 302 Certification by Chief Financial Officer filed
herewith.                                                                                                                                                                             
|            |  |                                                                                                                                                                                                                                                  
|32          |  | Section 906 Certification by Chief Executive Officer and
Chief Financial Officer furnished herewith.                                                                                                                                             



| | (1) |    | Incorporated by reference to the Registrants Form S-1 (File
No. 333-99031) filed with the Securities and Exchange Commission
(the SEC) on August 30, 2002, as amended.
| | --- | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     | b) | Reports on Form 8-K                                                                                                                                                      

The Registrant filed a Current Report on Form 8-K with the SEC on July 16,
2003 announcing a press release of its earnings for the quarter ended June 30,
2003.

The Registrant filed a Current Report on Form 8-K with the SEC on
September 25, 2003 announcing a press release of its completion of a $15.0
million capital trust offering.

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SIGNATURES

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

|                        |  |     |  |                                         |  |                
|----------------------- |  | --- |  | --------------------------------------- |  | ---------------
|                        |  |     |  | HARRINGTON WEST FINANCIAL GROUP, INC   
|                        |  |     |  |                                         |  |                
|Date: November 12, 2003 |  | By: |  | /S/ CRAIG J. CERNY                     
|                        |  |     |  |                                         |  |                
|                        |  |     |  | Craig J. Cerny, Chief Executive Officer
|                        |  |     |  | (Principal Executive Officer)          
|                        |  |     |  |                                         |  |                
|                        |  |     |  | By:                                     |  | /S/ SEAN CALLOW
|                        |  |     |  |                                         |  |                
|                        |  |     |  | Sean Callow,                           
|                        |  |     |  | Senior Vice President and              
|                        |  |     |  | Chief Financial Officer                
|                        |  |     |  | (Principal Financial and               
|                        |  |     |  | Accounting Officer)                    

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