##### 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 June 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)



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(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:

4,327,951 shares of Common Stock, par value $0.01 per share, outstanding
as of July 29, 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 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
June 30, 2003 (Unaudited) and December 31, 2002                                            |  |      | 2 | 
|                                                                                              | Condensed Consolidated Statements of Income for the Three
Months Ended June 30, 2003 and 2002 and Six Months
Ended June 30, 2003 and 2002 (Unaudited)     |  |      | 3 | 
|                                                                                              | Condensed Consolidated Statements of Shareholders Equity and Comprehensive
Income for the Six Months Ended June 30, 2003
and Year Ended 2002 (Unaudited) |  |      | 4 | 
|                                                                                              | Condensed Consolidated Statements of Cash Flows for the Six Months
Ended June 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 |                                                                                                                                                           |  | 10   |  
|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)

|                                                                                                                                            |                      |   |               |         |                   |   |         |         | 
|------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | - | ------------- | ------- | ----------------- | - | ------- | ------- | 
|                                                                                                                                            |                      |   | June 30, 2003 |         | December 31, 2002
|                                                                                                                                            |                      |   |               |         |                  
|                                                                                                                                            |                      |   | (unaudited)   |         |                   |   |        
|ASSETS                                                                                                                                      |                      |   |               |         |                   |   |         |        
|Cash and cash equivalents                                                                                                                   |                      | $ | 13,922        |         |                   | $ | 19,212  |        
|Trading account assets                                                                                                                      |                      |   | 2,127         |         |                   |   | 1,934   |        
|Securities available for sale                                                                                                               |                      |   | 318,479       |         |                   |   | 324,530 |        
|Securities held to maturity                                                                                                                 |                      |   | 2,312         |         |                   |   | 2,368   |        
|Loans receivable, (net of allowance for loan losses of $4,407
and $3,797 for June 30, 2003 and December 31, 2002, respectively)             |                      |   | 497,254       |         |                   |   | 448,050 |        
|Accrued interest receivable                                                                                                                 |                      |   | 2,975         |         |                   |   | 3,526   |        
|Premises and equipment, net                                                                                                                 |                      |   | 5,427         |         |                   |   | 4,469   |        
|Prepaid expenses and other assets                                                                                                           |                      |   | 1,582         |         |                   |   | 1,761   |        
|Investment in FHLB stock, at cost                                                                                                           |                      |   | 13,496        |         |                   |   | 11,750  |        
|Income taxes receivable                                                                                                                     |                      |   |              |         |                   |   | 252     |        
|Deferred tax asset                                                                                                                          |                      |   | 1,352         |         |                   |   | 1,187   |        
|Goodwill                                                                                                                                    |                      |   | 3,981         |         |                   |   | 3,981   |        
|Core deposit intangible, net                                                                                                                |                      |   | 1,214         |         |                   |   | 1,311   |        
|                                                                                                                                            |                      |   |               |         |                   |   |         |        
|TOTAL ASSETS                                                                                                                                |                      | $ | 864,121       |         |                   | $ | 824,331 |        
|                                                                                                                                            |                      |   |               |         |                   |   |         |        
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                        |                      |   |               |         |                   |   |         |        
|Deposits:                                                                                                                                   |                      |   |               |         |                   |   |         |        
|                                                                                                                                            | Interest bearing     |   | $             | 508,216 |                   |   | $       | 505,165 | 
|                                                                                                                                            | Non-interest bearing |   |               | 30,661  |                   |   |         | 20,106  | 
|                                                                                                                                            |                      |   |               |         |                   |   |         |        
|Total Deposits                                                                                                                              |                      |   | 538,877       |         |                   |   | 525,271 |        
|FHLB advances                                                                                                                               |                      |   | 224,000       |         |                   |   | 235,000 |        
|Securities sold under repurchase agreements                                                                                                 |                      |   | 16,076        |         |                   |   | 517     |        
|Note payable                                                                                                                                |                      |   | 12,000        |         |                   |   | 11,300  |        
|Due to broker                                                                                                                               |                      |   | 16,652        |         |                   |   | 446     |        
|Accounts payable and accrued expenses                                                                                                       |                      |   | 11,441        |         |                   |   | 9,325   |        
|Income taxes payable                                                                                                                        |                      |   | 183           |         |                   |   |        |        
|                                                                                                                                            |                      |   |               |         |                   |   |         |        
|TOTAL LIABILITIES                                                                                                                           |                      |   | 819,229       |         |                   |   | 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
4,327,951 shares issued and outstanding as of June 30, 2003
and December 31, 2002 |                      |   | 43            |         |                   |   | 43      |        
|Additional paid-in capital                                                                                                                  |                      |   | 30,641        |         |                   |   | 30,641  |        
|Retained earnings                                                                                                                           |                      |   | 16,863        |         |                   |   | 13,795  |        
|Accumulated other comprehensive income, net of tax of $(2,161)
and $(1,729) at June 30, 2003 and December 31, 2002, respectively            |                      |   | (2,655        | )       |                   |   | (2,007  | )      
|                                                                                                                                            |                      |   |               |         |                   |   |         |        
|Total Stockholders Equity                                                                                                                  |                      |   | 44,892        |         |                   |   | 42,472  |        
|                                                                                                                                            |                      |   |               |         |                   |   |         |        
|TOTAL LIABILITIES & STOCKHOLDERS EQUITY                                                                                                    |                      | $ | 864,121       |         |                   | $ | 824,331 |        
|                                                                                                                                            |                      |   |               |         |                   |   |         |        

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

- 2 -



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HARRINGTON WEST FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Dollars in thousands, except share and per share data

|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |        |        | 
|------------------------------------------- | ---------------------------------------------- | ------------------------- | --------- | ------------------ | ----- | ---------------- | --------- | ----- | ----- | ---- | --------- | ------ | ------ | - | --------- | ------ | ------ | 
|                                            |                                                |                           |           | Three months ended |       | Six months ended
|                                            |                                                |                           |           | June 30,           |       | June 30,        
|                                            |                                                |                           |           |                    |       |                 
|                                            |                                                |                           |           | 2003               |       | 2002             |           | 2003  |       | 2002
|                                            |                                                |                           |           |                    |       |                  |           |       |       |     
|INTEREST INCOME                             |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|                                            | Interest on loans                              |                           | $         | 8,177              |       |                  | $         | 7,919 |       |      | $         | 16,131 |        |   | $         | 16,138 |       
|                                            | Interest and dividends on securities           |                           |           | 3,129              |       |                  |           | 2,736 |       |      |           | 6,533  |        |   |           | 5,313  |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|Total interest income                       |                                                |                           | 11,306    |                    |       |                  | 10,655    |       |       |      | 22,664    |        |        |   | 21,451    |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|INTEREST EXPENSE                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|                                            | Interest on deposits                           |                           |           | 2,647              |       |                  |           | 3,559 |       |      |           | 5,312  |        |   |           | 7,772  |       
|                                            | Interest on FHLB advances and other borrowings |                           |           | 2,402              |       |                  |           | 1,742 |       |      |           | 4,858  |        |   |           | 3,398  |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|Total interest expense                      |                                                |                           | 5,049     |                    |       |                  | 5,301     |       |       |      | 10,170    |        |        |   | 11,170    |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|NET INTEREST INCOME BEFORE                  |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|                                            |                                                | PROVISION FOR LOAN LOSSES |           |                    | 6,257 |                  |           |       | 5,354 |      |           |        | 12,494 |   |           |        | 10,281 | 
|PROVISION FOR LOAN LOSSES                   |                                                |                           | 250       |                    |       |                  | 75        |       |       |      | 610       |        |        |   | 275       |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|NET INTEREST INCOME AFTER PROVISION         |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|                                            |                                                | FOR LOAN LOSSES           |           |                    | 6,007 |                  |           |       | 5,279 |      |           |        | 11,884 |   |           |        | 10,006 | 
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|OTHER INCOME (LOSS)                         |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|                                            | Income (loss) from trading assets              |                           |           | 1,294              |       |                  |           | (111  | )     |      |           | 1,870  |        |   |           | (95    | )     
|                                            | Loss on extinguishment of debt                 |                           |           | (892               | )     |                  |           |      |       |      |           | (1,423 | )      |   |           |       |       
|                                            | Other income gain (loss)                       |                           |           | (40                | )     |                  |           |      |       |      |           | 50     |        |   |           |       |       
|                                            | Banking fee income                             |                           |           | 1,200              |       |                  |           | 376   |       |      |           | 2,224  |        |   |           | 908    |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|Total other income                          |                                                |                           | 1,562     |                    |       |                  | 265       |       |       |      | 2,721     |        |        |   | 813       |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|OTHER EXPENSES                              |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|                                            | Salaries & employee benefits                   |                           |           | 2,555              |       |                  |           | 1,942 |       |      |           | 5,024  |        |   |           | 3,941  |       
|                                            | Premises & equipment                           |                           |           | 671                |       |                  |           | 528   |       |      |           | 1,324  |        |   |           | 1,022  |       
|                                            | Insurance premiums                             |                           |           | 82                 |       |                  |           | 63    |       |      |           | 151    |        |   |           | 122    |       
|                                            | Marketing                                      |                           |           | 113                |       |                  |           | 65    |       |      |           | 212    |        |   |           | 126    |       
|                                            | Computer services                              |                           |           | 166                |       |                  |           | 128   |       |      |           | 326    |        |   |           | 256    |       
|                                            | Consulting fees                                |                           |           | 236                |       |                  |           | 187   |       |      |           | 482    |        |   |           | 332    |       
|                                            | Office expenses & supplies                     |                           |           | 185                |       |                  |           | 135   |       |      |           | 361    |        |   |           | 279    |       
|                                            | Other                                          |                           |           | 464                |       |                  |           | 398   |       |      |           | 886    |        |   |           | 802    |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|Total other expenses                        |                                                |                           | 4,472     |                    |       |                  | 3,446     |       |       |      | 8,766     |        |        |   | 6,880     |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|INCOME BEFORE INCOME TAXES                  |                                                |                           | 3,097     |                    |       |                  | 2,098     |       |       |      | 5,839     |        |        |   | 3,939     |       
|INCOME TAXES                                |                                                |                           | 1,286     |                    |       |                  | 864       |       |       |      | 2,424     |        |        |   | 1,621     |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|NET INCOME                                  |                                                | $                         | 1,811     |                    |       | $                | 1,234     |       |       | $    | 3,415     |        |        | $ | 2,318     |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|BASIC EARNINGS PER SHARE                    |                                                | $                         | 0.42      |                    |       | $                | 0.37      |       |       | $    | 0.79      |        |        | $ | 0.69      |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|DILUTED EARNINGS PER SHARE                  |                                                | $                         | 0.40      |                    |       | $                | 0.36      |       |       | $    | 0.76      |        |        | $ | 0.67      |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|BASIC WEIGHTED AVERAGE SHARES
OUTSTANDING   |                                                |                           | 4,327,951 |                    |       |                  | 3,354,336 |       |       |      | 4,327,951 |        |        |   | 3,354,336 |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       
|DILUTED WEIGHTED AVERAGE SHARES
OUTSTANDING |                                                |                           | 4,509,560 |                    |       |                  | 3,474,786 |       |       |      | 4,499,026 |        |        |   | 3,484,518 |       
|                                            |                                                |                           |           |                    |       |                  |           |       |       |      |           |        |        |   |           |       

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 SHAREHOLDERS EQUITY
AND COMPREHENSIVE INCOME
(Dollars in thousands, except share data)

|                                       |                                                               |                            |           |       |              |     |         |         |          |          |               |            |               |        |               |        |  |  |   |        |       |                   |         |        |   |   |        |        |   | 
|-------------------------------------- | ------------------------------------------------------------- | -------------------------- | --------- | ----- | ------------ | --- | ------- | ------- | -------- | -------- | ------------- | ---------- | ------------- | ------ | ------------- | ------ |  |  | - | ------ | ----- | ----------------- | ------- | ------ | - | - | ------ | ------ | - | 
|                                       |                                                               |                            |           |       |              |     |         |         |          |          |               | Additional |               |        |               |        |  |  |   |        |       | Accumulated 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                                                    |                            |           |       |              |     |         |         |          |          |               |            |               |        |               | 3,415  |  |  | $ | 3,415  |       |                   |         |        |   |   |        | 3,415  |  
|Other comprehensive income,
net of tax |                                                               |                            |           |       |              |     |         |         |          |          |               |            |               |        |               |        |  |  |   |        |       |                   |         |        |   |   |        |       
|                                       | Unrealized gains on securities                                |                            |           |       |              |     |         |         |          |          |               |            |               |        |               |        |  |  |   | 762    |       |                   |         | 762    |   |   |        | 762    |  
|                                       | Effective portion in change in
fair value of cash flow hedges |                            |           |       |              |     |         |         |          |          |               |            |               |        |               |        |  |  |   | (1,410 | )     |                   |         | (1,410 | ) |   |        | (1,410 | )
|                                       |                                                               |                            |           |       |              |     |         |         |          |          |               |            |               |        |               |        |  |  |   |        |       |                   |         |        |   |   |        |       
|                                       |                                                               | Total comprehensive income |           |       |              |     |         |         |          |          |               |            |               |        |               |        |  |  |   | $      | 2,767 |                   |         |        |   |   |        |        |   | 
|                                       |                                                               |                            |           |       |              |     |         |         |          |          |               |            |               |        |               |        |  |  |   |        |       |                   |         |        |   |   |        |       
|Dividends on common stock              |                                                               |                            |           |       |              |     |         |         |          |          |               |            |               |        | (347          | )      |  |  |   |        |       |                   |         |        |   |   | (347   | )     
|                                       |                                                               |                            |           |       |              |     |         |         |          |          |               |            |               |        |               |        |  |  |   |        |       |                   |         |        |   |   |        |       
|BALANCE, JUNE 30, 2003                 |                                                               |                            | 4,327,951 |       |              | $   | 43      |         |          | $        | 30,641        |            |               | $      | 16,863        |        |  |  |   |        |       |                   | ($2,655 | )      |   | $ | 44,892 |       
|                                       |                                                               |                            |           |       |              |     |         |         |          |          |               |            |               |        |               |        |  |  |   |        |       |                   |         |        |   |   |        |       

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)

|                                       |                                                                                                                                                                  |  |   |                  |   |      |   |      |   | 
|-------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ---------------- | - | ---- | - | ---- | - | 
|                                       |                                                                                                                                                                  |  |   | Six months ended
|                                       |                                                                                                                                                                  |  |   | June 30,        
|                                       |                                                                                                                                                                  |  |   |                 
|                                       |                                                                                                                                                                  |  |   | 2003             |   | 2002
|                                       |                                                                                                                                                                  |  |   |                  |   |     
|DISCLOSURE OF RECLASSIFICATION AMOUNT: |                                                                                                                                                                  |  |   |                  |   |      |   |     
|                                       | Unrealized holding gains arising during period,
net of tax expense of $1,046 and $314 for June 30, 2003 and 2002, respectively                                   |  | $ | 1,473            |   |      | $ | 433  |  
|                                       | Less: Reclassification adjustment for gains included
in net income, net of tax expense of $505 and
$0 for June 30, 2003 and 2002, respectively                   |  |   | (711             | ) |      |   |     |  
|                                       |                                                                                                                                                                  |  |   |                  |   |      |   |     
|                                       | Net unrealized gain on securities, net of tax expense of
$541 and $314 for June 30, 2003 and 2002, respectively                                                  |  | $ | 762              |   |      | $ | 433  |  
|                                       |                                                                                                                                                                  |  |   |                  |   |      |   |     
|                                       | Unrealized net (loss) gain on cash flow hedges, net of tax
(benefit) expense of $(1,003) for June 30, 2003 and $(431) for
June 30, 2002                          |  | $ | (1,410           | ) |      | $ | (630 | )
|                                       | Less: Reclassification adjustment for net gains on cash
flow hedges included in net income, net of tax
expense of $0 for June 30, 2003 and $24 for
June 30, 2002 |  |   |                 |   |      |   | 34   |  
|                                       |                                                                                                                                                                  |  |   |                  |   |      |   |     
|                                       | Net unrealized loss on cash flow hedges                                                                                                                          |  | $ | (1,410           | ) |      | $ | (596 | )
|                                       |                                                                                                                                                                  |  |   |                  |   |      |   |     

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

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HARRINGTON WEST FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

|                                                     |                                                                                   |              |                                                                           |                                                     |       |                  |         |                  |       |       |         |  
|---------------------------------------------------- | --------------------------------------------------------------------------------- | ------------ | ------------------------------------------------------------------------- | --------------------------------------------------- | ----- | ---------------- | ------- | ---------------- | ----- | ----- | ------- | -
|                                                     |                                                                                   |              |                                                                           |                                                     |       | Six months ended |         | Six months ended
|                                                     |                                                                                   |              |                                                                           |                                                     |       | June 30,         |         | June 30,        
|                                                     |                                                                                   |              |                                                                           |                                                     |       | 2003             |         | 2002            
|                                                     |                                                                                   |              |                                                                           |                                                     |       |                  |         |                 
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                                   |              |                                                                           |                                                     |       |                  |         |                 
|                                                     | Net income                                                                        |              | $                                                                         | 3,415                                               |       |                  | $       | 2,318            |      
|                                                     | Adjustments to reconcile net income
to net cash provided by operating activities: |              |                                                                           |                                                     |       |                  |         |                  |      
|                                                     |                                                                                   |              | Accretion of deferred loan fees and costs                                 |                                                     |       | (1,054           | )       |                  |       | (445  | )      
|                                                     |                                                                                   |              | Depreciation and amortization                                             |                                                     |       | 532              |         |                  |       | 447   |        
|                                                     |                                                                                   |              | Amortization of premiums and discounts on loans
receivable and securities |                                                     |       | 2,616            |         |                  |       | 1,972 |        
|                                                     |                                                                                   |              | Provision for loan losses                                                 |                                                     |       | 610              |         |                  |       | 275   |        
|                                                     |                                                                                   |              | Activity in securities held for trading                                   |                                                     |       | (1,432           | )       |                  |       | 672   |        
|                                                     |                                                                                   |              | Loss of sale of real estate                                               |                                                     |       |                 |         |                  |       | 35    |        
|                                                     |                                                                                   |              | FHLB stock dividend                                                       |                                                     |       | (291             | )       |                  |       | (109  | )      
|                                                     |                                                                                   |              | Decrease in accrued interest receivable                                   |                                                     |       | 551              |         |                  |       | 100   |        
|                                                     |                                                                                   |              | Increase (decrease) in income taxes payable                               |                                                     |       | 436              |         |                  |       | (238  | )      
|                                                     |                                                                                   |              | Deferred income taxes                                                     |                                                     |       | (165             | )       |                  |       | (179  | )      
|                                                     |                                                                                   |              | Decrease in prepaid expenses                                              |                                                     |       | 177              |         |                  |       | 340   |        
|                                                     |                                                                                   |              | Increase in accounts payable                                              |                                                     |       | 706              |         |                  |       | 34    |        
|                                                     |                                                                                   |              |                                                                           |                                                     |       |                  |         |                  |      
|                                                     |                                                                                   |              |                                                                           | Net cash provided by operating activities           |       |                  | 6,101   |                  |       |       | 5,222   |  
|                                                     |                                                                                   |              |                                                                           |                                                     |       |                  |         |                  |      
|CASH FLOWS FROM INVESTING ACTIVITIES:                |                                                                                   |              |                                                                           |                                                     |       |                  |         |                 
|                                                     | Net (increase) decrease in loans receivable                                       |              |                                                                           | (49,014                                             | )     |                  |         | 18,022           |      
|                                                     | Proceeds from sales of securities available for sale                              |              |                                                                           | 26,385                                              |       |                  |         | 0                |      
|                                                     | Principal paydowns on securities available for sale                               |              |                                                                           | 89,862                                              |       |                  |         | 41,336           |      
|                                                     | Principal paydowns on securities held to maturity                                 |              |                                                                           | 49                                                  |       |                  |         | 116              |      
|                                                     | Purchases of securities available for sale                                        |              |                                                                           | (94,650                                             | )     |                  |         | (72,801          | )    
|                                                     | Purchase of premises and equipment                                                |              |                                                                           | (1,393                                              | )     |                  |         | (690             | )    
|                                                     | (Purchase) sale of FHLB Stock                                                     |              |                                                                           | (1,456                                              | )     |                  |         | 1,892            |      
|                                                     |                                                                                   |              |                                                                           |                                                     |       |                  |         |                  |      
|                                                     |                                                                                   |              |                                                                           | Net cash (used in) provided by investing activities |       |                  | (30,217 | )                |       |       | (12,125 | )
|                                                     |                                                                                   |              |                                                                           |                                                     |       |                  |         |                  |      
|CASH FLOWS FROM FINANCING ACTIVITIES:                |                                                                                   |              |                                                                           |                                                     |       |                  |         |                 
|                                                     | Net increase (decrease) in deposits                                               |              |                                                                           | 13,913                                              |       |                  |         | (14,955          | )    
|                                                     | Increase in securities sold under agreements to repurchase                        |              |                                                                           | 15,559                                              |       |                  |         | 957              |      
|                                                     | (Decrease) increase in FHLB advances                                              |              |                                                                           | (11,000                                             | )     |                  |         | 27,000           |      
|                                                     | Advances (payments) on note payable                                               |              |                                                                           | 700                                                 |       |                  |         | (1,400           | )    
|                                                     | Dividends paid on common stock                                                    |              |                                                                           | (346                                                | )     |                  |         | (179             | )    
|                                                     |                                                                                   |              |                                                                           |                                                     |       |                  |         |                  |      
|                                                     | Net cash provided by (used in) financing activities                               |              |                                                                           | 18,826                                              |       |                  |         | 11,423           |      
|                                                     |                                                                                   |              |                                                                           |                                                     |       |                  |         |                  |      
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |                                                                                   |              | (5,290                                                                    | )                                                   |       |                  | 4,520   |                 
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       |                                                                                   |              | 19,212                                                                    |                                                     |       |                  | 11,107  |                 
|                                                     |                                                                                   |              |                                                                           |                                                     |       |                  |         |                  |      
|CASH AND CASH EQUIVALENTS, END OF PERIOD             |                                                                                   | $            | 13,922                                                                    |                                                     |       | $                | 15,627  |                 
|                                                     |                                                                                   |              |                                                                           |                                                     |       |                  |         |                  |      
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMANTION - |                                                                                   |              |                                                                           |                                                     |       |                  |         |                 
|                                                     | Cash paid during the period for:                                                  |              |                                                                           |                                                     |       |                  |         |                  |      
|                                                     |                                                                                   | Interest     |                                                                           | $                                                   | 9,236 |                  |         | $                | 5,757 |      
|                                                     |                                                                                   | Income Taxes |                                                                           | $                                                   | 448   |                  |         | $                | 425   |      

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 branches 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 $118 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 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

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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.

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 June 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.

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|                                 |  |                                  |       |                                |  |           |           |             |  |               |      |           |  |   |       |  |  |  |           |  |  |   |      |  
|-------------------------------- |  | -------------------------------- | ----- | ------------------------------ |  | --------- | --------- | ----------- |  | ------------- | ---- | --------- |  | - | ----- |  |  |  | --------- |  |  | - | ---- | -
|                                 |  | Three months ended June 30, 2003 |       | Six months ended June 30, 2003
|                                 |  |                                  |       |                               
|                                 |  | Income                           |       | Shares                         |  | Per-Share |           | Income      |  | Shares        |      | Per-Share
|                                 |  | (Numerator)                      |       | (Denominator)                  |  | Amount    |           | (Numerator) |  | (Denominator) |      | Amount   
|                                 |  |                                  |       |                                |  |           |           |             |  |               |      |          
|Basic EPS                        |  | $                                | 1,811 |                                |  |           | 4,327,951 |             |  | $             | .42  |           |  | $ | 3,415 |  |  |  | 4,327,951 |  |  | $ | .79  |  
|Effect of dilutive
stock options |  |                                  |       |                                |  |           | 181,609   |             |  |               | (.02 | )         |  |   |       |  |  |  | 171,075   |  |  |   | (.03 | )
|                                 |  |                                  |       |                                |  |           |           |             |  |               |      |           |  |   |       |  |  |  |           |  |  |   |      |  
|Diluted EPS                      |  | $                                | 1,811 |                                |  |           | 4,509,560 |             |  | $             | .40  |           |  | $ | 3,415 |  |  |  | 4,499,026 |  |  | $ | .76  |  
|                                 |  |                                  |       |                                |  |           |           |             |  |               |      |           |  |   |       |  |  |  |           |  |  |   |      |  

|                                 |  |                                  |       |                                |  |           |           |             |  |               |      |           |  |   |       |  |  |  |           |  |  |   |      |  
|-------------------------------- |  | -------------------------------- | ----- | ------------------------------ |  | --------- | --------- | ----------- |  | ------------- | ---- | --------- |  | - | ----- |  |  |  | --------- |  |  | - | ---- | -
|                                 |  | Three
months ended June 30, 2002 |       | Six
months ended June 30, 2002
|                                 |  |                                  |       |                               
|                                 |  | Income                           |       | Shares                         |  | Per-Share |           | Income      |  | Shares        |      | Per-Share
|                                 |  | (Numerator)                      |       | (Denominator)                  |  | Amount    |           | (Numerator) |  | (Denominator) |      | Amount   
|                                 |  |                                  |       |                                |  |           |           |             |  |               |      |          
|Basic EPS                        |  | $                                | 1,234 |                                |  |           | 3,354,336 |             |  | $             | .37  |           |  | $ | 2,318 |  |  |  | 3,354,336 |  |  | $ | .69  |  
|Effect of dilutive
stock options |  |                                  |       |                                |  |           | 120,450   |             |  |               | (.01 | )         |  |   |       |  |  |  | 130,182   |  |  |   | (.02 | )
|                                 |  |                                  |       |                                |  |           |           |             |  |               |      |           |  |   |       |  |  |  |           |  |  |   |      |  
|Diluted EPS                      |  | $                                | 1,234 |                                |  |           | 3,474,786 |             |  | $             | .36  |           |  | $ | 2,318 |  |  |  | 3,484,518 |  |  | $ | .67  |  
|                                 |  |                                  |       |                                |  |           |           |             |  |               |      |           |  |   |       |  |  |  |           |  |  |   |      |  

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
June 30 would have been changed to the pro forma amounts indicated below:

|                  |                               |               |   |                    |      |                  |   |               |      |  |   |       |      |  |   |       |      | 
|----------------- | ----------------------------- | ------------- | - | ------------------ | ---- | ---------------- | - | ------------- | ---- |  | - | ----- | ---- |  | - | ----- | ---- | 
|                  |                               |               |   | Three months ended |      | Six Months Ended
|                  |                               |               |   |                    |      |                 
|Pro Forma Results |                               | June 30, 2003 |   | June 30, 2002      |      | June 30, 2003    |   | June 30, 2002
|                  |                               |               |   |                    |      |                  |   |              
|Net income:       |                               |               |   |                    |      |                  |   |               |      |  |   |       |      |  |   |      
|                  | As reported                   |               | $ | 1,811              |      |                  | $ | 1,234         |      |  | $ | 3,415 |      |  | $ | 2,318 |     
|                  | Pro forma                     |               | $ | 1,791              |      |                  | $ | 1,211         |      |  | $ | 3,376 |      |  | $ | 2,271 |     
|                  | Earnings per share - basic:   |               |   |                    |      |                  |   |               |      |  |   |       |      |  |   |       |     
|                  |                               | As reported   |   | $                  | 0.42 |                  |   | $             | 0.37 |  |   | $     | 0.79 |  |   | $     | 0.69 | 
|                  |                               | Pro forma     |   | $                  | 0.41 |                  |   | $             | 0.36 |  |   | $     | 0.78 |  |   | $     | 0.68 | 
|                  | Earnings per share - diluted: |               |   |                    |      |                  |   |               |      |  |   |       |      |  |   |       |     
|                  |                               | As reported   |   | $                  | 0.40 |                  |   | $             | 0.36 |  |   | $     | 0.76 |  |   | $     | 0.67 | 
|                  |                               | Pro forma     |   | $                  | 0.40 |                  |   | $             | 0.35 |  |   | $     | 0.75 |  |   | $     | 0.65 | 

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 six months ended June 30, 2003 and
2002, respectively; risk-free interest rates of 3.94% and 4.91% for the six
months ended June 30, 2003 and 2002, respectively; and expected lives of 9
years for the six months ended June 30, 2003 and 2002. The weighted average
fair values of the 63,950 and 59,025 options granted in the six months ended
June 30, 2003 and 2002 were $3.61 and $3.73, respectively.

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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 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.

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General

Harrington West Financial Group, Inc. (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 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) the
Phoenix/Scottsdale metropolitan area. The Company has nine offices on the
central coast of California, one office in Mission, Kansas, and a new 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 intends to open a second
Harrington Bank office in the Kansas City metropolitan area in the fourth
quarter 2003. In July 2003, Los Padres Bank announced that it had reached a
definitive agreement to finance and lease a full service banking facility in
Ventura, California. 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 $864.1 million at June 30, 2003,
as compared to $824.3 million at December 31, 2002, an increase of $39.8
million or 4.8%. The increase was primarily attributable to growth in net
loans to $497.3 million as of June 30, 2003, compared to $448.1 million at
December 31, 2002, an increase of $49.2 million or 11.0%. The Companys
primary focus with respect to its lending operations has historically been the
direct origination of single-family residential, 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, and commercial and
industrial loans. Accordingly, single-family residential loan balances
decreased to $93.7 million at June 30, 2003, compared to $116.7 million at
December 31, 2002, a decrease of $23.0 million or 19.7%, while multi-family
residential,

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##### Table of Contents



commercial real estate, and commercial and industrial loans as a group
increased to $353.1 million at June 30, 2003, compared to $282.8 million at
December 31, 2002, an increase of $70.3 million or 24.9%.

|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |         |  
|------------------------------- | -------------------------------- |  | ---------------------- | ------- | ----------------- |  | ------ | ----- | ------- |  | ------ | ------- | - |  | --- | ----- | - |  | ------ | ------- | -
|                                |                                  |  | June 30, 2003          |         | December 31, 2002 |  |        |       |        
|                                |                                  |  |                        |         |                   |  | Change
|                                |                                  |  | Amount                 |         | Percent           |  | Amount |       | Percent |  | Amount
|                                |                                  |  |                        |         |                   |  |        |       |         |  |       
|                                |                                  |  | (Dollars in thousands) |         |                   |  |       
|Real Estate Loans:              |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|                                | Single-family                    |  | $                      | 93,739  |                   |  |        | 18.6  | %       |  | $      | 116,714 |   |  |     | 25.8  | % |  | $      | (22,975 | )
|                                | Multi-family                     |  |                        | 78,593  |                   |  |        | 15.6  |         |  |        | 71,856  |   |  |     | 15.9  |   |  |        | 6,737   |  
|                                | Commercial                       |  |                        | 241,103 |                   |  |        | 48.1  |         |  |        | 183,264 |   |  |     | 40.6  |   |  |        | 57,839  |  
|                                | Construction (1)                 |  |                        | 30,552  |                   |  |        | 6.1   |         |  |        | 19,666  |   |  |     | 4.3   |   |  |        | 10,886  |  
|                                | Land acquisition and
development |  |                        | 6,616   |                   |  |        | 1.3   |         |  |        | 14,948  |   |  |     | 3.3   |   |  |        | (8,332  | )
|Commercial and industrial loans |                                  |  | 33,392                 |         |                   |  | 6.6    |       |         |  | 27,676 |         |   |  | 6.1 |       |   |  | 5,716  |        
|Consumer loans                  |                                  |  | 17,836                 |         |                   |  | 3.5    |       |         |  | 17,565 |         |   |  | 3.9 |       |   |  | 271    |        
|Other loans (2)                 |                                  |  | 878                    |         |                   |  | 0.2    |       |         |  | 503    |         |   |  | 0.1 |       |   |  | 375    |        
|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|                                | Total loans receivable           |  |                        | 502,709 |                   |  |        | 100.0 | %       |  |        | 452,192 |   |  |     | 100.0 | % |  |        | 50,517  |  
|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|Less:                           |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|                                | Allowance for loan loss          |  |                        | (4,407  | )                 |  |        |       |         |  |        | (3,797  | ) |  |     |       |   |  |        | (610    | )
|                                | Net deferred loan fees           |  |                        | (1,562  | )                 |  |        |       |         |  |        | (1,332  | ) |  |     |       |   |  |        | (230    | )
|                                | Net premiums                     |  |                        | 514     |                   |  |        |       |         |  |        | 987     |   |  |     |       |   |  |        | (473    | )
|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        
|                                |                                  |  | (5,455                 | )       |                   |  |        |       |         |  | (4,142 | )       |   |  |     |       |   |  | (1,313 | )      
|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |         |  
|                                | Loans receivable, net            |  | $                      | 497,254 |                   |  |        |       |         |  | $      | 448,050 |   |  |     |       |   |  | $      | 49,204  |  
|                                |                                  |  |                        |         |                   |  |        |       |         |  |        |         |   |  |     |       |   |  |        |        



|(1) |  | Includes loans secured by residential, land and commercial
properties. At June 30, 2003, the Company had $18.9 million of
construction loans secured by residential properties, $7.7 million of
construction loans secured by land and $4.0 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 decreased to $318.5 million at
June 30, 2003, as compared to $324.5 million at December 31, 2002, a decrease
of $6.1 million or 1.9%. 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 $538.9 million as of June 30, 2003, as
compared to $525.3 million as of December 31, 2002, an increase of $13.6
million. The increase in deposits was attributable to the new 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 new community banking office in
Scottsdale Arizona were $45.8 million at June 30, 2003, compared to $17.5
million at December 31, 2002, an increase of $28.3 million or 161.7%.

Advances from the Federal Home Loan Bank (FHLB) of San Francisco
decreased to $224.0 million at June 30, 2003, compared to $235.0 million at
December 31, 2002, a $11.0 million or 4.7% decrease. On May 7, 2003, the
Company replaced $15.0 million of floating rate FHLB advances with a five year,
3.153% fixed rate term repurchase agreement for interest rate risk management
purposes.

The due to broker account increased significantly to $16.7 million at June
30, 2003, as compared to $446,000 at December 31, 2002, an increase of $16.2
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.

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##### Table of Contents



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 $44.9 million at June 30, 2003, as
compared to $42.5 million at December 31, 2002, an increase of $2.4 million or
5.7%. The increase in stockholders equity was due primarily to net income
recognized during the six months ended June 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 $1.8 million for the three months ended
June 30, 2003, as compared to $1.2 million for the three months ended June 30,
2002, an increase of $577,000 or 46.8%. The Company reported net income of
$3.4 million for the six months ended June 30, 2003, as compared to $2.3
million for the six months ended June 30, 2002, an increase of $1.1 million or
47.3%. 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
$.40 per share for the three months ended June 30, 2003, compared to $.36 per
share for the three months ended June 30, 2002, and $.76 per share for the six
months ended June 30, 2003, compared to $.67 per share for the six months ended
June 30, 2002.

The Companys net interest income after provision for loan losses
increased by $728,000 or 13.8% to $6.0 million during the three months ended
June 30, 2003 over the prior comparable period in 2002. The Companys net
interest income after provision for loan losses increased by $1.9 million or
18.8% to $11.9 million during the six months ended June 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 to 3.04% or 27 basis
points during the three months ended June 30, 2003, when compared to the same
period in 2002 and the net interest margin decreased to 3.06% or 12 basis
points during the six months ended June 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.

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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##### Table of Contents





|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |      |      |      | 
|--------------------------------------------------------------------------------- | ------------------------------------------ | --------------------------------------------- | ----------------- | ------- | -------------------------- | ------- | -------- | ----- | ------ | ----- | ------- | ---- | -------- | ---- | ------ | ------- | ------- | ------- | ------- | ----- | ------ | ----- | ------ | ---- | ---- | ---- | 
|                                                                                  |                                            |                                               |                   |         | Three Months Ended June 30
|                                                                                  |                                            |                                               |                   |         |                           
|                                                                                  |                                            |                                               |                   |         | 2003                       |         | 2002    
|                                                                                  |                                            |                                               |                   |         |                            |         |         
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      | Average  |      |        |         |         |         | Average
|                                                                                  |                                            |                                               |                   |         | Average                    |         |          |       |        |       | Yield/  |      | Average  |      |        |         |         |         | Yield/ 
|                                                                                  |                                            |                                               |                   |         | Balance                    |         | Interest |       | Cost   |       | Balance |      | Interest |      | Cost  
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |       
|                                                                                  |                                            |                                               |                   |         | (Dollars in thousands)    
|Interest-earning assets:                                                          |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|                                                                                  | Loans receivable (1)                       |                                               | $                 | 482,347 |                            |         | $        | 8,177 |        |       |         | 6.78 | %        |      | $      | 430,470 |         |         | $       | 7,919 |        |       |        | 7.36 | %   
|                                                                                  | FHLB stock                                 |                                               |                   | 13,221  |                            |         |          | 158   |        |       |         | 4.80 |          |      |        | 5,698   |         |         |         | 82    |        |       |        | 5.74 |     
|                                                                                  | Securities and trading account assets (2)  |                                               |                   | 311,481 |                            |         |          | 2,913 |        |       |         | 3.74 |          |      |        | 195,233 |         |         |         | 2,597 |        |       |        | 5.32 |     
|                                                                                  | Cash and cash equivalents (3)              |                                               |                   | 18,129  |                            |         |          | 58    |        |       |         | 1.29 |          |      |        | 15,905  |         |         |         | 57    |        |       |        | 1.41 |     
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|                                                                                  |                                            | Total interest-earning assets                 |                   |         | 825,178                    |         |          |       | 11,306 |       |         |      | 5.48     |      |        |         | 647,306 |         |         |       | 10,655 |       |        |      | 6.58 |     
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|Noninterest-earning assets                                                        |                                            |                                               | 22,890            |         |                            |         |          |       |        |       |         |      |          |      | 19,087 |         |         |         |         |       |        |       |        |     
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|                                                                                  |                                            |                                               | Total assets      |         | $                          | 848,068 |          |       |        |       |         |      |          |      |        |         | $       | 666,393 |         |       |        |       |        |      |      |      | 
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|Interest-bearing liabilities:                                                     |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|                                                                                  | Deposits:                                  |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |      |     
|                                                                                  |                                            | NOW and money market accounts                 |                   |         | 126,828                    |         |          |       | 362    |       |         |      | 1.14     |      |        |         | 87,772  |         |         |       | 420    |       |        |      | 1.92 |     
|                                                                                  |                                            | Passbook accounts and certificates of deposit |                   |         | 380,646                    |         |          |       | 2,285  |       |         |      | 2.41     |      |        |         | 399,184 |         |         |       | 3,139  |       |        |      | 3.15 |     
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|                                                                                  |                                            |                                               | Total deposits    |         |                            | 507,474 |          |       |        | 2,647 |         |      |          | 2.09 |        |         |         | 486,956 |         |       |        | 3,559 |        |      |      | 2.93 | 
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|                                                                                  | FHLB advances (4)                          |                                               |                   | 242,120 |                            |         |          | 2,215 |        |       |         | 3.62 |          |      |        | 110,722 |         |         |         | 1,576 |        |       |        | 5.62 |     
|                                                                                  | Reverse Repurchase Agreements              |                                               |                   | 10,128  |                            |         |          | 73    |        |       |         | 2.86 |          |      |        | 1,326   |         |         |         | 4     |        |       |        | 1.26 |     
|                                                                                  | Other borrowings (5)                       |                                               |                   | 12,711  |                            |         |          | 114   |        |       |         | 3.55 |          |      |        | 16,241  |         |         |         | 162   |        |       |        | 3.96 |     
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|                                                                                  |                                            | Total interest-bearing liabilities            |                   |         | 772,433                    |         |          |       | 5,049  |       |         |      | 2.61     |      |        |         | 615,245 |         |         |       | 5,301  |       |        |      | 3.45 |     
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|Non-interest-bearing deposits                                                     |                                            |                                               | 20,388            |         |                            |         |          |       |        |       |         |      |          |      | 14,079 |         |         |         |         |       |        |       |        |     
|Non-interest-bearing liabilities                                                  |                                            |                                               | 10,834            |         |                            |         |          |       |        |       |         |      |          |      | 5,232  |         |         |         |         |       |        |       |        |     
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|                                                                                  |                                            |                                               | Total liabilities |         |                            | 803,655 |          |       |        |       |         |      |          |      |        |         |         | 634,556 |         |       |        |       |        |      |      |      | 
|Stockholders equity                                                              |                                            |                                               | 44,413            |         |                            |         |          |       |        |       |         |      |          |      | 31,837 |         |         |         |         |       |        |       |        |     
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|                                                                                  | Total liabilities and stockholders equity |                                               | $                 | 848,068 |                            |         |          |       |        |       |         |      |          |      | $      | 666,393 |         |         |         |       |        |       |        |      |     
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|Net interest-earning assets (liabilities)                                         |                                            | $                                             | 52,745            |         |                            |         |          |       |        |       |         |      |          | $    | 32,061 |         |         |         |         |       |        |       |        |     
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|Net interest income/interest rate spread                                          |                                            |                                               |                   |         |                            | $       | 6,257    |       |        |       | 2.87    | %    |          |      |        |         |         | $       | 5,354   |       |        |       | 3.14   | %   
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|Net interest margin                                                               |                                            |                                               |                   |         |                            |         |          |       |        |       | 3.04    | %    |          |      |        |         |         |         |         |       |        |       | 3.31   | %   
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     
|Ratio of average interest-earnings assets to
average interest-bearing liabilities |                                            |                                               |                   |         |                            |         |          |       |        |       | 106.83  | %    |          |      |        |         |         |         |         |       |        |       | 105.21 | %   
|                                                                                  |                                            |                                               |                   |         |                            |         |          |       |        |       |         |      |          |      |        |         |         |         |         |       |        |       |        |     

[Additional columns below]

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

|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |      |      |      | 
|--------------------------------------------------------------------------------- | ------------------------------------------ | --------------------------------------------- | ----------------- | ------- | ------------------------ | ------- | -------- | ------ | ------ | ----- | ------- | ---- | -------- | ---- | ------ | ------- | ------- | ------- | ------ | ------ | ------ | ----- | ------- | ---- | ---- | ---- | 
|                                                                                  |                                            |                                               |                   |         | Six Months Ended June 30
|                                                                                  |                                            |                                               |                   |         |                         
|                                                                                  |                                            |                                               |                   |         | 2003                     |         | 2002    
|                                                                                  |                                            |                                               |                   |         |                          |         |         
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      | Average  |      |        |         |         |         |        |        |        |       | Average
|                                                                                  |                                            |                                               |                   |         | Average                  |         |          |        |        |       | Yield/  |      | Average  |      |        |         |         |         | Yield/
|                                                                                  |                                            |                                               |                   |         | Balance                  |         | Interest |        | Cost   |       | Balance |      | Interest |      | Cost  
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |       
|                                                                                  |                                            |                                               |                   |         | (Dollars in thousands)  
|Interest-earning assets:                                                          |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|                                                                                  | Loans receivable (1)                       |                                               | $                 | 471,705 |                          |         | $        | 16,131 |        |       |         | 6.84 | %        |      | $      | 436,051 |         |         | $      | 16,138 |        |       |         | 7.40 | %   
|                                                                                  | FHLB stock                                 |                                               |                   | 12,795  |                          |         |          | 318    |        |       |         | 4.97 |          |      |        | 6,024   |         |         |        | 181    |        |       |         | 6.00 |     
|                                                                                  | Securities and trading account assets (2)  |                                               |                   | 316,016 |                          |         |          | 6,103  |        |       |         | 3.86 |          |      |        | 188,886 |         |         |        | 5,014  |        |       |         | 5.31 |     
|                                                                                  | Cash and cash equivalents (3)              |                                               |                   | 16,830  |                          |         |          | 112    |        |       |         | 1.33 |          |      |        | 15,801  |         |         |        | 118    |        |       |         | 1.49 |     
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|                                                                                  |                                            | Total interest-earning assets                 |                   |         | 817,346                  |         |          |        | 22,664 |       |         |      | 5.55     |      |        |         | 646,762 |         |        |        | 21,451 |       |         |      | 6.63 |     
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|Noninterest-earning assets                                                        |                                            |                                               | 23,166            |         |                          |         |          |        |        |       |         |      |          |      | 18,746 |         |         |         |        |        |        |       |         |     
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|                                                                                  |                                            |                                               | Total assets      |         | $                        | 840,512 |          |        |        |       |         |      |          |      |        |         | $       | 665,508 |        |        |        |       |         |      |      |      | 
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|Interest-bearing liabilities:                                                     |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|                                                                                  | Deposits:                                  |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |      |     
|                                                                                  |                                            | NOW and money market accounts                 |                   |         | 129,925                  |         |          |        | 741    |       |         |      | 1.14     |      |        |         | 78,243  |         |        |        | 659    |       |         |      | 1.68 |     
|                                                                                  |                                            | Passbook accounts and certificates of deposit |                   |         | 377,785                  |         |          |        | 4,571  |       |         |      | 2.42     |      |        |         | 415,339 |         |        |        | 7,113  |       |         |      | 3.42 |     
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|                                                                                  |                                            |                                               | Total deposits    |         |                          | 507,710 |          |        |        | 5,312 |         |      |          | 2.09 |        |         |         | 493,582 |        |        |        | 7,772 |         |      |      | 3.15 | 
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|                                                                                  | FHLB advances (4)                          |                                               |                   | 241,492 |                          |         |          | 4,564  |        |       |         | 3.78 |          |      |        | 103,955 |         |         |        | 3,047  |        |       |         | 5.87 |     
|                                                                                  | Reverse Repurchase Agreements              |                                               |                   | 5,518   |                          |         |          | 74     |        |       |         | 2.73 |          |      |        | 1,075   |         |         |        | 6      |        |       |         | 1.20 |     
|                                                                                  | Other borrowings (5)                       |                                               |                   | 12,044  |                          |         |          | 220    |        |       |         | 3.65 |          |      |        | 17,134  |         |         |        | 345    |        |       |         | 4.03 |     
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|                                                                                  |                                            | Total interest-bearing liabilities            |                   |         | 766,764                  |         |          |        | 10,170 |       |         |      | 2.65     |      |        |         | 615,746 |         |        |        | 11,170 |       |         |      | 3.63 |     
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|Non-interest-bearing deposits                                                     |                                            |                                               | 18,923            |         |                          |         |          |        |        |       |         |      |          |      | 13,076 |         |         |         |        |        |        |       |         |     
|Non-interest-bearing liabilities                                                  |                                            |                                               | 11,143            |         |                          |         |          |        |        |       |         |      |          |      | 5,603  |         |         |         |        |        |        |       |         |     
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|                                                                                  |                                            |                                               | Total liabilities |         |                          | 796,830 |          |        |        |       |         |      |          |      |        |         |         | 634,425 |        |        |        |       |         |      |      |      | 
|Stockholders equity                                                              |                                            |                                               | 43,682            |         |                          |         |          |        |        |       |         |      |          |      | 31,083 |         |         |         |        |        |        |       |         |     
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|                                                                                  | Total liabilities and stockholders equity |                                               | $                 | 840,512 |                          |         |          |        |        |       |         |      |          |      | $      | 665,508 |         |         |        |        |        |       |         |      |     
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|Net interest-earning assets (liabilities)                                         |                                            | $                                             | 50,582            |         |                          |         |          |        |        |       |         |      |          | $    | 31,016 |         |         |         |        |        |        |       |         |     
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|Net interest income/interest rate spread                                          |                                            |                                               |                   |         |                          | $       | 12,494   |        |        |       | 2.90    | %    |          |      |        |         |         | $       | 10,281 |        |        |       | 3.00    | %   
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|Net interest margin                                                               |                                            |                                               |                   |         |                          |         |          |        |        |       | 3.06    | %    |          |      |        |         |         |         |        |        |        |       | 3.18    | %   
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     
|Ratio of average interest-earnings assets to
average interest-bearing liabilities |                                            |                                               |                   |         |                          |         |          |        |        |       | 106.60  | %    |          |      |        |         |         |         |        |        |        |       | 105.04  | %   
|                                                                                  |                                            |                                               |                   |         |                          |         |          |        |        |       |         |      |          |      |        |         |         |         |        |        |        |       |         |     



|(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            
|                                                            |                                           |                                               |                |         | June 30, 2003 vs June 30, 2002
|                                                            |                                           |                                               |                |         |                               
|                                                            |                                           |                                               |                |         | Increase (decrease) due to     |        |          
|                                                            |                                           |                                               |                |         |                                |        | Total Net
|                                                            |                                           |                                               |                |         | Rate                           |        | Volume    |       | Rate/ Volume |     | Increase (Decrease)
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |     |                    
|                                                            |                                           |                                               |                |         | (In Thousands)                
|Interest-earning assets:                                    |                                           |                                               |                |         |                                |        |           |       |              |     |                     |         |       |       |      |    
|                                                            | Loans receivable                          |                                               |                | ($2,487 | )                              |        | $         | 3,817 |              |     |                     | ($1,072 | )     |       | $    | 258 |     
|                                                            | FHLB stock                                |                                               |                | (54     | )                              |        |           | 432   |              |     |                     | (302    | )     |       |      | 76  |     
|                                                            | Securities and trading account assets (1) |                                               |                | (3,085  | )                              |        |           | 6,186 |              |     |                     | (2,785  | )     |       |      | 316 |     
|                                                            | Cash and cash equivalents (2)             |                                               |                | (21     | )                              |        |           | 31    |              |     |                     | (9      | )     |       |      | 1   |     
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |     |                     |         |       |       |      |    
|Total net change in income on interest-earning assets       |                                           |                                               | (5,647         | )       |                                |        | 10,466    |       |              |     | (4,168              | )       |       |       | 651  |    
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |     |                     |         |       |       |      |    
|Interest-bearing liabilities:                               |                                           |                                               |                |         |                                |        |           |       |              |     |                     |         |       |       |      |    
|                                                            | Deposits                                  |                                               |                |         |                                |        |           |       |              |     |                     |         |       |       |      |     |     
|                                                            |                                           | NOW and money market accounts                 |                |         | (681                           | )      |           |       | 750          |     |                     |         | (127  | )     |      |     | (58  | )   
|                                                            |                                           | Passbook accounts and certificates
of deposit |                |         | (2,979                         | )      |           |       | (585         | )   |                     |         | 2,710 |       |      |     | (854 | )   
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |     |                     |         |       |       |      |    
|                                                            |                                           |                                               | Total deposits |         |                                | (3,660 | )         |       |              | 165 |                     |         |       | 2,583 |      |     |      | (912 | )
|                                                            | FHLB advances (3)                         |                                               |                | (2,221  | )                              |        |           | 7,389 |              |     |                     | (4,529  | )     |       |      | 639 |     
|                                                            | Reverse Repurchase Agreements             |                                               |                | 21      |                                |        |           | 111   |              |     |                     | (63     | )     |       |      | 69  |     
|                                                            | Other borrowings (4)                      |                                               |                | (65     | )                              |        |           | (140  | )            |     |                     | 157     |       |       |      | (48 | )   
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |     |                     |         |       |       |      |    
|Total net change in expense on interest-bearing liabilities |                                           |                                               | (5,925         | )       |                                |        | 7,525     |       |              |     | (1,852              | )       |       |       | (252 | )  
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |     |                     |         |       |       |      |    
|Change in net interest income                               |                                           | $                                             | 278            |         |                                | $      | 2,941     |       |              |     | ($2,316             | )       |       | $     | 903  |    
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |     |                     |         |       |       |      |    

[Additional columns below]

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

|                                                            |                                           |                                               |                |         |                                |        |           |       |              |      |                     |        |       |       |        |       |        |        |  
|----------------------------------------------------------- | ----------------------------------------- | --------------------------------------------- | -------------- | ------- | ------------------------------ | ------ | --------- | ----- | ------------ | ---- | ------------------- | ------ | ----- | ----- | ------ | ----- | ------ | ------ | -
|                                                            |                                           |                                               |                |         | Six Months Ended              
|                                                            |                                           |                                               |                |         | June 30, 2003 vs June 30, 2002
|                                                            |                                           |                                               |                |         |                               
|                                                            |                                           |                                               |                |         | Increase (decrease) due to     |        |          
|                                                            |                                           |                                               |                |         |                                |        | Total Net
|                                                            |                                           |                                               |                |         | Rate                           |        | Volume    |       | Rate/ Volume |      | Increase (Decrease)
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |      |                    
|                                                            |                                           |                                               |                |         | (In Thousands)                
|Interest-earning assets:                                    |                                           |                                               |                |         |                                |        |           |       |              |      |                     |        |       |       |        |      
|                                                            | Loans receivable                          |                                               |                | ($2,453 | )                              |        | $         | 2,639 |              |      |                     | ($194  | )     |       |        | ($8   | )     
|                                                            | FHLB stock                                |                                               |                | (62     | )                              |        |           | 407   |              |      |                     | (207   | )     |       |        | 138   |       
|                                                            | Securities and trading account assets (1) |                                               |                | (2,733  | )                              |        |           | 6,750 |              |      |                     | (2,928 | )     |       |        | 1,089 |       
|                                                            | Cash and cash equivalents (2)             |                                               |                | (25     | )                              |        |           | 15    |              |      |                     | 4      |       |       |        | (6    | )     
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |      |                     |        |       |       |        |      
|Total net change in income on interest-earning assets       |                                           |                                               | (5,273         | )       |                                |        | 9,811     |       |              |      | (3,325              | )      |       |       | 1,213  |      
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |      |                     |        |       |       |        |      
|Interest-bearing liabilities:                               |                                           |                                               |                |         |                                |        |           |       |              |      |                     |        |       |       |        |      
|                                                            | Deposits                                  |                                               |                |         |                                |        |           |       |              |      |                     |        |       |       |        |       |       
|                                                            |                                           | NOW and money market accounts                 |                |         | (425                           | )      |           |       | 870          |      |                     |        | (363  | )     |        |       | 82     |       
|                                                            |                                           | Passbook accounts and certificates
of deposit |                |         | (4,164                         | )      |           |       | (1,285       | )    |                     |        | 2,913 |       |        |       | (2,536 | )     
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |      |                     |        |       |       |        |      
|                                                            |                                           |                                               | Total deposits |         |                                | (4,589 | )         |       |              | (415 | )                   |        |       | 2,550 |        |       |        | (2,454 | )
|                                                            | FHLB advances (3)                         |                                               |                | (2,177  | )                              |        |           | 8,080 |              |      |                     | (4,392 | )     |       |        | 1,511 |       
|                                                            | Reverse Repurchase Agreements             |                                               |                | 16      |                                |        |           | 53    |              |      |                     | (1     | )     |       |        | 68    |       
|                                                            | Other borrowings (4)                      |                                               |                | (65     | )                              |        |           | (205  | )            |      |                     | 145    |       |       |        | (125  | )     
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |      |                     |        |       |       |        |      
|Total net change in expense on interest-bearing liabilities |                                           |                                               | (6,815         | )       |                                |        | 7,513     |       |              |      | (1,698              | )      |       |       | (1,000 | )    
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |      |                     |        |       |       |        |      
|Change in net interest income                               |                                           | $                                             | 1,542          |         |                                | $      | 2,298     |       |              |      | ($1,627             | )      |       | $     | 2,213  |      
|                                                            |                                           |                                               |                |         |                                |        |           |       |              |      |                     |        |       |       |        |      



|(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 $250,000 during the
three months ended and $610,000 for the six months ended June 30, 2003,
compared to $75,000 for the three months ended and $275,000 for the six months
ended June 30, 2002, an increase of $175,000 and $335,000, respectively. The
provision reflects the reserves required based upon, among other things, the
$49.2 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 June 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 $11.3 million for the three months
ended June 30, 2003, compared to $10.7 million for the three months ended June
30, 2002, an increase of $651,000 or 6.1%. The Company reported interest
income of $22.7 million for the six months ended June 30, 2003, compared to
$21.5 million for the six months ended June 30, 2002, an increase of $1.2
million or 5.7%. The primary reason for the increase during both periods was
the increase in the volume of interest-earning assets in the periods, which
more than compensated for the decrease in the average rate on interest-earning
assets.

The Company reported interest expense of $5.1 million for the three months
ended June 30, 2003, compared to $5.3 million for the three months ended June
30, 2002, a decrease of $252,000 or 4.8%. The Company reported interest
expense of $10.2 million for the six months ended June 30, 2003, compared to
$11.2 million for the six months ended June 30, 2002, a decrease of $1.0
million or 9.0%. 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 more than compensated for the increased volume of
interest-bearing liabilities.

The Companys total other income amounted to $1.6 million for the quarter
ending June 30, 2003 compared to $265,000 during the same quarter last year, an
increase of $1.3 million or 489.4%. The Companys total other income for the
six months ended June 30, 2003 amounted to $2.7 million compared to $813,000
for the same period last year, an increase of $1.9 million or 234.7%. The
increase in other income was attributable to banking fee income, consisting
primarily of fee income from wholesale banking, trust services, deposits and
loans.

Banking fee income amounted to $1.2 million for the quarter ending June
30, 2003 compared to $376,000 during the same quarter last year, an increase of
$824,000 or 219.1%. Banking fee income amounted to $2.2 million for the six
months ended June 30, 2003 compared to $908,000 for the same period last year,
an increase of $1.3 million or 144.9%. Banking fee income includes loan and
deposit fees, mortgage-banking fees, and investment management fees through
Harrington Wealth Management Company. All fee income sources showed growth in
the three months and six months ended June 30, 2003 over the same periods a
year ago.



| |  |  | Loan and deposit fees were $424,000 and $833,000 for
the three months and six months ended June 30, 2003,
respectively, as compared to $137,000 and $372,000 for the three
and six months ended June 30, 2002, respectively, an increase of
$287,000 and $461,000 or 209.5% and 123.9%, respectively.
Prepayment penalty fees remained strong with the lower interest
rate environment and high refinancing levels.                                                                                                                                                                                                                                                                                                                                                                     
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Mortgage banking fees were $664,000 and $1.2 million
for the three and six months ended June 30, 2003, respectively,
as compared to $146,000 and $358,000 for the three and six months
ended June 30, 2002, respectively, an increase of $518,000 and
$803,000 or 354.8% and 224.3%, respectively. These fees
continued to build with the favorable real estate market and low
interest rate environment contributing to heavy refinancings.
Los Padres Mortgage Company, LLC (LPMC), a joint venture with the
largest RE/MAX realty franchise in the Arizona market, continues
to increase originations and added $285,000 to banking fee income
for the three months ended June 30, 2003 and $494,000 for the six
months ended June 30, 2003. LPMC began operations in September
2002.

- 16 -



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| |  |  | Investment management and custody fees though
Harrington Wealth Management Company were $112,000 for the three
months ended June 30, 2003, compared to $93,000 for the three
months ended June 30, 2002, an increase of $19,000 or 20.4%. For
the six months ended June 30, 2003, fees were $230,000 compared
to $178,000 for the same period ending in 2002, an increase of
$52,000 or 29.2%.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gain on the sale of securities and income from trading assets was $1.3
million for the three months ended June 30, 2003, compared to a loss of
$111,000 for the three months ended June 30, 2002, an increase of $1.4 million.
Gain on sale of securities and income from trading assets was $1.9 million for
the six months ended June 30, 2003, as compared to $95,000 loss for the six
months ended June 30, 2002. In the current quarter, the $1.3 million of income
from trading assets includes a $828,000 gain on the sale of $10.0 million of
commercial mortgage-backed securities (CMBS) to capture the economic profit
associated with the spread tightening on this A-rated investment. The balance
of the income from trading assets in the current quarter 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 $30.0 million of fixed rate FHLB advances with a weighted average
coupon rate of 4.80% and a weighted average remaining maturity of 11 months and
incurred a $892,000 market-based prepayment loss on the extinguishment of the
debt for a net loss of $64,000 on both transactions.

The Companys total other expenses were $4.5 million during the three
months ended June 30, 2003, as compared to $3.4 million for the three months
ended June 30, 2002, an increase of $1.0 million or 29.8%. The Companys total
other expenses totaled $8.8 million during the six months ended June 30, 2003,
as compared to $6.9 million for the six months ended June 30, 2002, an increase
of $1.9 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 start-up and ongoing operations
of LPMC and the new Scottsdale banking operations, as well as some increases in
corporate expenses to support the Companys 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 32.1% at
June 30, 2003. At June 30, 2003, Los Padres Banks liquid assets totaled
approximately $143.8 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 June 30, 2003,
the Company had $224.0 million in FHLB advances and had $78.2 million of
additional borrowing capacity with the FHLB of San Francisco. During the June
2003 quarter, the Bank entered into a $15.0 million term repurchase agreement
that replaced the Companys FHLB debt for interest rate risk management
purposes. At June 30, 2003, the Companys note payable under its revolving
line of credit amounted to $12.0 million and with an additional borrowing
capacity under this loan facility of $13 million.

On September 17, 2002, the terms of the Companys line of credit under its
loan facility were renegotiated to expand the revolving line of credit
commitment from $20 million to $25 million and modify certain covenants.
Specifically, the covenant that restricts our ability to invest in mortgage
derivative securities has been revised to allow us to maintain a larger balance
as of the last day of the month. The covenant that restricts payment of cash
dividends has been revised to allow us to pay

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dividends in an aggregate amount not to exceed the greater of (a) $300,000
during any fiscal quarter, or (b) up to a maximum of 25% of consolidated net
income for the quarter. Additionally, the minimum core profitability
requirements have been slightly increased, and a new covenant requiring a ratio
of non-performing assets to stockholders equity plus loan loss reserves not to
exceed 0.3 to 1 has been added. On February 19, 2003, the Companys line of
credit under its loan facility was further amended (1) allowing the Company to
repurchase $2 million of its own capital stock during the term of the
agreement, and (2) increasing the minimum core profitability covenant from $5.0
to $6.0 million per quarter.

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 June
30, 2003, the total approved loan commitments outstanding amounted to $40.9
million. Certificates of deposit scheduled to mature in one year or less at
June 30, 2003 totaled $308.4 million and FHLB borrowings scheduled to mature
within the same period amounted to $194.0 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, pays its obligations and from which the Company can pay dividends 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,
that 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 June 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

- 18 -



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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 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
- 19 -Table of Contents

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 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 June
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

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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.

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 is the most far-reaching U.S. securities legislation enacted in
some time. 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). Given the extensive SEC role in implementing rules relating to
many of the SOAs new requirements, the final scope of these requirements
remains to be determined.

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.

This SOA addresses, among other matters: audit committees; certification
of financial statements by the chief executive officer and the chief financial
officer; the forfeiture of bonuses and profits made by directors and senior
officers in the twelve month period covered by restated financial statements; a
prohibition on insider trading during pension plan black out periods;
disclosure of off-balance sheet transactions; a prohibition on personal loans
to directors and officers; expedited filing requirements for Forms 4s;
disclosure of a code of ethics and filing a Form 8-K for a change or waiver of
such code; real time filing of periodic reports; the formation of a public
accounting oversight board; auditor independence; and various increased
criminal penalties for violations of securities laws.




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 June 30, 2003, these prepayment assumptions varied from
8% to 56% for fixed-rate

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##### Table of Contents



mortgages and mortgage-backed securities and varied from 1% to 41% for
adjustable-rate mortgages and mortgage-backed securities.

The following table sets forth at June 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.

|                                                                      |                                 |   |                                               |       |      |   |         |       |   |   |         |       |      |  |      |  |  |  |          |       |   |  |          |       |   |  |          |        |  
|--------------------------------------------------------------------- | ------------------------------- | - | --------------------------------------------- | ----- | ---- | - | ------- | ----- | - | - | ------- | ----- | ---- |  | ---- |  |  |  | -------- | ----- | - |  | -------- | ----- | - |  | -------- | ------ | -
|                                                                      |                                 |   | Change In Interest Rates (In Basis Points)(1)
|                                                                      |                                 |   |                                              
|                                                                      |                                 |   | -300                                          |       | -200 |   | -100    |       | - |   | +100    |       | +200 |  | +300
|                                                                      |                                 |   |                                               |       |      |   |         |       |   |   |         |       |      |  |     
|                                                                      |                                 |   | (Dollars in Thousands)                       
|Market value gain (loss) in assets                                    |                                 | $ | 19,796                                        |       |      | $ | 15,832  |       |   | $ | 9,727   |       |      |  |      |  |  |  | ($12,459 | )     |   |  | ($28,151 | )     |   |  | ($46,546 | )     
|Market value gain (loss) of liabilities                               |                                 |   | (13,062                                       | )     |      |   | (10,257 | )     |   |   | (6,171  | )     |      |  |      |  |  |  | 6,389    |       |   |  | 13,047   |       |   |  | 20,002   |       
|                                                                      |                                 |   |                                               |       |      |   |         |       |   |   |         |       |      |  |      |  |  |  |          |       |   |  |          |       |   |  |          |        |  
|Market value gain (loss) of net assets
before interest rate contracts |                                 |   | 6,734                                         |       |      |   | 5,575   |       |   |   | 3,556   |       |      |  |      |  |  |  | (6,070   | )     |   |  | (15,104  | )     |   |  | (26,544  | )     
|Market value gain (loss) of interest
rate contracts                   |                                 |   | (13,529                                       | )     |      |   | (10,281 | )     |   |   | (4,980  | )     |      |  |      |  |  |  | 4,726    |       |   |  | 9,208    |       |   |  | 13,458   |       
|                                                                      |                                 |   |                                               |       |      |   |         |       |   |   |         |       |      |  |      |  |  |  |          |       |   |  |          |       |   |  |          |        |  
|Total change in MVPE (2)                                              |                                 |   | ($6,795                                       | )     |      |   | ($4,706 | )     |   |   | ($1,424 | )     |      |  |      |  |  |  | ($1,344  | )     |   |  | ($5,896  | )     |   |  | ($13,086 | )     
|                                                                      |                                 |   |                                               |       |      |   |         |       |   |   |         |       |      |  |      |  |  |  |          |       |   |  |          |       |   |  |          |        |  
|Change in MVPE as a percent of:                                       |                                 |   |                                               |       |      |   |         |       |   |   |         |       |      |  |      |  |  |  |          |       |   |  |          |       |   |  |          |       
|                                                                      | MVPE(2)                         |   |                                               | -9.62 | %    |   |         | -6.66 | % |   |         | -2.02 | %    |  |      |  |  |  |          | -1.90 | % |  |          | -8.35 | % |  |          | -18.53 | %
|                                                                      | Total assets of Los Padres Bank |   |                                               | -.79  | %    |   |         | -.54  | % |   |         | -.16  | %    |  |      |  |  |  |          | -.16  | % |  |          | -.68  | % |  |          | -1.52  | %



---

|(1) |  | Assumes an instantaneous parallel change in interest rates at all maturities.
|--- |  | -----------------------------------------------------------------------------
|   
|(2) |  | Based on the Companys pre-tax MVPE of $70.6 million at June 30, 2003.       

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

Within the 90 days prior to the date of 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-14 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 or in other factors which could significantly
affect these controls subsequent to the date the Company carried out its
evaluation.

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 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.

- 22 -



---



##### 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



| |  |  | The Company held its Annual Meeting of Shareholders on May 28,
2003.
| |  |  | --------------------------------------------------------------------
|

| | 1. |  | At the Annual Meeting, the following individuals
were elected to serve as directors of the Company for a three
year term or until their successors are elected and qualified.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                         |  |           |           |                    |  |  |        | 
|------------------------ |  | --------- | --------- | ------------------ |  |  | ------ | 
|                         |  | VOTES FOR |           | WITHHELD AUTHORITY
|                         |  |           |           |                   
|William W. Phillips, Jr. |  |           | 2,813,149 |                    |  |  | 41,436 | 
|William D. Ross          |  |           | 2,813,149 |                    |  |  | 44,936 | 



| |  |  | Other directors currently serving whose terms expire in the year listed:
| |  |  | ------------------------------------------------------------------------

|                  |  |  |      | 
|----------------- |  |  | ---- | 
|Paul O. Halme     |  |  | 2004 | 
|Stanley J. Kon    |  |  | 2004 | 
|Craig J. Cerny    |  |  | 2005 | 
|John J. McConnell |  |  | 2005 | 



| |  |  | 2.  The appointment of Deloitte & Touche, LLP as independent
auditors of the Company for the year ended December 31, 2003 was
ratified at the 2003 Annual Meeting of Shareholders by the
following:
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | FOR:      2,843,385      AGAINST:      10,600      ABSTAIN:      600                                                                                                                               




Item 5:Other Information



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

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##### Table of Contents






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)                                                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                  
|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. (1)                                                                                                                                                                                   
|            |  |                                                                                                                                                                                                                                                  
|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 April
15, 2003 announcing a press release of its earnings for the quarter ended March
31, 2003.

The Registrant filed a Current Report on Form 8-K with the SEC on May 14,
2003 furnishing the transcripts of two interviews conducted with Craig J.
Cerny, the Chairman and Chief Executive Officer of the Company, by each of The
Wall Street Transcript and CEOCFOinterviews.com. Also included was an updated
investor presentation including, among other things, a review of certain
financial results and trends through the period ended March 31, 2003.

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##### Table of Contents






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: August 4, 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)

- 25 -