UNITED STATES
                        SECURITIES & EXCHANGE COMMISSION
                             Washington, D.C. 20549
                           --------------------------

                                    FORM 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     Of the Securities Exchange Act of 1934


                         For Quarter Ended June 30, 2003
                         Commission file number: 0-49892
                         -------------------------------



                              PACIFIC STATE BANCORP
             (Exact Name of Registrant as Specified in its Charter)


          California                                             61-1407606
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

                     1889 W. March Lane, Stockton, CA 95207
               (Address of Principal Executive Offices) (Zip Code)

        Registrant's Telephone Number, including Area Code (209) 943-7400

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.

                 Yes [ ]                  No [X]


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

        Title of Class                  Shares outstanding as of August 11, 2003

        Common Stock
        No Par Value                                     841,820

                                     PART I
<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                              PACIFIC STATE BANCORP
                           Consolidated Balance Sheet


<TABLE>
<CAPTION>
                                                                   June 30,     December 31,
Assets                                                               2003          2002
------                                                           ------------   ------------
                                                                  (Unaudited)

<S>                                                              <C>            <C>
Cash and due from banks                                          $  8,483,793   $ 18,465,668
Federal funds sold                                                    717,000      5,000,000
Investment securities (market value of $13,323,342 in 2003
  and $12,764,300 in 2002)                                         13,325,284     12,767,400
Loans, less allowance for loan losses of $1,465,952 in 2003
  and $1,306,309 in 2002                                          151,976,795    133,965,914
Other real estate                                                     129,866         48,704
Bank premises and equipment, net                                    7,449,370      6,429,899
Accrued interest receivable and other assets                        3,463,277      3,462,899
                                                                 ------------   ------------

         Total assets                                            $185,545,385   $180,140,484
                                                                 ============   ============

Liabilities and Shareholders' Equity
------------------------------------

Deposits:
  Non-interest bearing                                           $ 36,453,277   $ 30,697,547
  Interest bearing                                                125,638,519    127,442,460
                                                                 ------------   ------------
         Total deposits                                           162,091,796    158,140,007
Borrowed funds                                                      5,000,000      5,000,000
Accrued interest payable and other liabilities                      1,147,933        680,615
Mandatorily  redeemable cumulative trust preferred securities
  of subsidiary grantor trust                                       5,000,000      5,000,000
                                                                 ------------   ------------
             Total liabilities                                    173,239,729    168,820,622

Shareholders' equity
--------------------

  Preferred stock - no par value; 2,000,000 shares authorized;
    none issued and outstanding                                            --             --

  Common stock - no par value; 12,000,000 shares authorized;
    shares issued and outstanding 837,820 in 2003 and 806,437
    in 2002                                                         6,917,686      6,915,534

Retained earnings                                                   5,286,056      4,404,078

Accumulated other comprehensive income                                101,914            250
                                                                 ------------   ------------
         Total shareholders' equity                                12,305,656     11,319,862
                                                                 ============   ============
         Total liabilities and shareholders' equity              $185,545,385   $180,140,484
                                                                 ============   ============
</TABLE>


            See notes to unaudited consolidated financial statements

                                       2
<PAGE>

                              Pacific State Bancorp
                               Statement of Income
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                             For the Three Months       For the Six Months
                                                                 Ended June 30,            Ended June 30,
                                                            -----------------------   -----------------------
                                                               2003         2002         2003         2002
                                                            ----------   ----------   ----------   ----------

<S>                                                         <C>          <C>          <C>          <C>
Interest income:

  Interest and fees on loans                                $2,576,354   $2,092,674   $4,963,138   $3,938,082
  Interest on federal funds sold                                25,346       10,430       68,261       25,160
  Interest on investment securities
    Taxable                                                     58,887      124,935      129,174      216,222
    Exempt from Federal income taxes                            52,657       55,755      100,642      127,719
                                                            ----------   ----------   ----------   ----------
         Total interest income                               2,713,244    2,283,794    5,261,215    4,307,183

Interest expense:
  Interest on deposits                                         609,841      707,542    1,273,948    1,415,283
  Interest  on mandatorily redeemable
  Redeemable trust preferred securities                         60,566           --      118,200           --

  Interest on short-term borrowings                             31,688           --       63,028          338
                                                            ----------   ----------   ----------   ----------
         Total interest expense                                702,095      707,542    1,455,176    1,415,621
                                                            ----------   ----------   ----------   ----------
         Net interest income                                 2,011,149    1,576,252    3,806,039    2,891,562

Provision for loan losses                                      138,000       81,500      260,000      158,000
                                                            ----------   ----------   ----------   ----------
         Net interest income after
         provision for loan losses                           1,873,149    1,494,752    3,546,039    2,733,562
                                                            ----------   ----------   ----------   ----------

Non-interest income:
  Service charges                                              156,591      131,200      308,149      237,806
  Other fee income                                             158,310      104,517      304,380      246,983
  Rental income from other real estate                           4,860        4,860        9,720        9,720
  Gain from sale of securities                                      --       26,334           --       26,334
  Gain from sale of loans                                       74,710      166,687      308,549      309,759
                                                            ----------   ----------   ----------   ----------
         Total non-interest income                             394,471      433,598      930,798      830,602

Other expenses:
  Salaries and employee benefits                               709,916      580,782    1,478,077    1,166,590
  Occupancy                                                    174,760      130,927      329,157      262,865
  Furniture and equipment                                      115,795      151,640      239,087      296,218
  Professional fees                                            125,866       98,255      225,831      193,667
  Postage, stationary and supplies                              40,869       48,459       99,191       89,167
  Other                                                        359,810      380,279      735,116      713,417
                                                            ----------   ----------   ----------   ----------
         Total other expenses                                1,527,016    1,390,342    3,106,459    2,721,924
                                                            ----------   ----------   ----------   ----------
         Income before income taxes                            740,604      538,008    1,370,378      842,240

Income tax expense                                             264,600      186,500      488,400      290,500
                                                            ----------   ----------   ----------   ----------
         Net income                                         $  476,004   $  351,508   $  881,978   $  551,740
                                                            ==========   ==========   ==========   ==========
Basic earnings per share                                    $     0.57   $     0.43   $     1.06   $     0.70
                                                            ==========   ==========   ==========   ==========
Diluted earnings per share                                  $     0.55   $     0.41   $     1.03   $     0.66
                                                            ==========   ==========   ==========   ==========

Weighted average common shares outstanding                     840,996      810,115      829,180      791,012

Weighted average common and common equivalent
shares outstanding                                             867,114      855,009      853,282      834,742
</TABLE>


            See notes to unaudited consolidated financial statements

                                       3
<PAGE>

                     Pacific State Bancorp and Subsidiaries
                             Statement of Cash Flows
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                  For the Six Months Ended
                                                                           June 30,
                                                                 ---------------------------
                                                                     2003           2002
                                                                 ------------   ------------

<S>                                                              <C>            <C>
Cash flows from operating activities:
  Net income                                                     $    881,978   $    551,740
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Provision for loan losses                                       260,000        158,000
      Deferred loan origination fees and costs, net                   (20,210)       (65,590)
      Depreciation and amortization                                   243,720         60,213
      OREO write-downs charged to expense                                  --         20,000
      Increase in accrued interest receivable and
        other assets                                                 (139,820)      (752,860)
      Increase in accrued interest payable and
        other liabilities                                             467,318        386,034
                                                                 ------------   ------------
         Net cash provided by operating activities                  1,692,986        357,537
                                                                 ------------   ------------

Cash flows from investing activities:
  Proceeds from matured and called available-for-sale
    investment securities                                             150,000      3,115,000
  Purchase of available-for-sale investment securities             (1,000,000)   (12,006,599)
  Proceeds from principal repayments from available-for-sale
    mortgage-backed securities                                        336,953         79,929
  Proceeds from principal repayments from held-to-maturity
    mortgage-backed securities                                         88,897         35,036
  Net increase in loans                                           (18,316,309)    (9,039,622)
  Proceeds from sale of other real estate                             (81,285)            --
  Purchases of bank premises and equipment                         (1,100,058)      (513,421)
  Net liabilities assumed in the acquisition of
    CB&T branch                                                            --     13,805,923
                                                                 ------------   ------------
         Net cash used in investing activities                    (19,921,802)    (4,523,754)
                                                                 ------------   ------------

Cash flows from financing activities:
  Net increase in demand, interest-bearing
    and savings deposits                                            2,669,743     10,946,108
  Net change in time deposits                                       1,282,046     (2,838,268)
  Issuance of mandatorily  redeemable cumulative trust
    preferred securities of subsidiary grantor trust                       --      5,000,000
  Repurchase of common stock                                         (170,546)            --
  Proceeds from stock options exercised                               172,698        119,486
                                                                 ------------   ------------
  Net cash provided by financing activities                         3,953,941     13,227,326
                                                                 ------------   ------------
 (Decrease) Increase in cash and cash equivalents                 (14,274,875)     9,061,109
Cash and cash equivalents at beginning of year                     23,465,668      6,825,720
                                                                 ------------   ------------
Cash and cash equivalents at end of period                       $  9,190,793   $ 15,886,829
                                                                 ============   ============
</TABLE>


            See notes to unaudited consolidated financial statements

                                       4
<PAGE>

                              Pacific State Bancorp
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2003


1.   CONSOLIDATED FINANCIAL STATEMENTS


In the opinion of management, the unaudited consolidated financial statements
contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the consolidated financial position of Pacific State
Bancorp (the "Company") at June 30, 2003 and December 31, 2002, and the results
of its operations and its cash flows for the month periods ended June 30, 2003
and 2002.

Certain disclosures normally presented in the notes to the financial statements
prepared in accordance with generally accepted accounting principles have been
omitted. These interim consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's 2002 Annual Report to Shareholders. The results of
operations for the three month and six month periods ended June 30, 2003 may not
necessarily be indicative of the operating results for the full year.

In preparing such financial statements, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities as of
the date of the balance sheet and revenues and expenses for the period. Actual
results could differ significantly from those estimates. Material estimates that
are particularly susceptible to significant changes in the near term relate to
the determination of the allowance for loan and lease losses, the provision for
taxes and the estimated fair value of investment securities.


2.   STOCK-BASED COMPENSATION

A June 30, 2003, the Company had* two stock-based employee compensation plans,
the Pacific State Bancorp 1997 Stock Option Plan and the Pacific State Bancorp
1987 Stock Option Plan (the "Plans"). The Company accounts for these plans under
the recognition and measurement principles of APB Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations. No stock-based employee
compensation cost is reflected in net income, as all options granted under these
plans had an exercise price equal to the market value of the underlying common
stock on the date of grant.

Pro forma adjustments to the Company's consolidated net earnings and earnings
per share are disclosed during the years in which the options become vested. The
following table illustrates the effect on net income and earnings per share if
the Company had applied the fair value recognition provisions of FASB Statement
No. 123, Accounting for Stock-Based Compensation, to stock-based employee
compensation.

<TABLE>
<CAPTION>
                                             For the Three Months Ended     For the Six Months Ended
                                             --------------------------    --------------------------
                                                 2003           2002           2003           2002
                                             -----------    -----------    -----------    -----------

<S>                                          <C>            <C>            <C>            <C>
Net income, as reported                      $   476,004    $   351,508    $   881,978    $   551,740
Deduct:  Total stock-based employee
compensation expense determined
under the fair value method
for all awards, net of related tax effects         9,552          7,477         19,104         14,954
                                             -----------    -----------    -----------    -----------
                                             $   466,452    $   344,031    $   862,874    $   536,786
                                             ===========    ===========    ===========    ===========

Basic earning per share - as reported        $      0.56    $      0.43    $      1.06    $      0.70
Basic earning per share - pro forma          $      0.57    $      0.42    $      1.04
Diluted earnings per share - as reported     $      0.55    $      0.41    $      1.03    $      0.66
Diluted earnings per share - pro forma       $      0.54    $      0.41    $      1.01
</TABLE>

                                       5
<PAGE>

3.   EARNINGS PER SHARE COMPUTATION

Basic earnings per share is computed by dividing net income by the weighted
average common shares outstanding for the period. Diluted earnings per share
reflect the potential dilution that could occur if outstanding stock options
were exercised. Diluted earnings per share is computed by dividing net income by
the weighted average common shares outstanding for the period plus the dilutive
effect of options


4.   COMPREHENSIVE INCOME

Comprehensive income is reported in addition to net income for all periods
presented. Comprehensive income is made up of net income plus other
comprehensive income (loss). Other comprehensive income (loss), net of taxes,
was comprised of the unrealized gains (losses) on available-for-sale investment
securities of $(102,000) for the six month period ended June 30, 2003 and $3,400
for the six month period ended June 30, 2002. Comprehensive income was $476,000
for the three month period ended June 30, 2003 and $352,000 for the three month
period ended June 30, 2002. Comprehensive income was $882,000 for the six month
period ended June30, 2003 and $552,000 for the six month period ended June 30,
2002.


5.   COMMITMENTS AND CONTINGENCIES

In the normal course of business there are outstanding various commitments to
extend credit which are not reflected in the financial statements, including
loan commitments of approximately $35,998,000 and letters of credit of $459,000
at June 30, 2003. However, all such commitments will not necessarily culminate
in actual extensions of credit by the Company during 2003.

Approximately $11,315,000 of the loan commitments outstanding at June 30, 2003
are for real estate loans and are expected to fund within the next twelve
months. The remaining commitments primarily relate to revolving lines of credit
or other commercial loans, and many of these are expected to expire without
being drawn upon. Therefore, the total commitments do not necessarily represent
future cash requirements. Each potential borrower and the necessary collateral
are evaluated on an individual basis. Collateral varies, but may include real
property, bank deposits, debt or equity securities or business assets.

Stand-by letters of credit are commitments written to guarantee the performance
of a customer to a third party. These guarantees are issued primarily relating
to purchases of inventory by commercial customers and are typically short term
in nature. Credit risk is similar to that involved in extending loan commitments
to customers and accordingly, evaluation and collateral requirements similar to
those for loan commitments are used. Virtually all such commitments are
collateralized.


6.   ACCOUNTING PRONOUNCEMENTS

In December 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 148, Accounting for
Stock-Based Compensation--Transition and Disclosure--an amendment of SFAS
Statement No. 123. This Statement amends SFAS No. 123, Accounting for
Stock-Based Compensation, to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and
interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. The
transition guidance and annual disclosure provisions of SFAS No. 148 are
effective for fiscal years ending after December 15, 2002. The interim
disclosure provisions are effective for financial reporting containing financial
statements for interim periods beginning after December 15, 2002. Because the
Company accounts for the compensation cost associated with its stock option plan
under the intrinsic value method, the alternative methods of transition will not
apply to the Company. The additional disclosure requirements of the Statement
are included in these consolidated financial statements. In management's
opinion, the adoption of this Statement did not have a material impact on the
Company's consolidated financial position or results of operations.

On April 30, 2003, the FASB issued Statement SFAS No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities. This Statement
amends and clarifies the accounting for derivative instruments by providing

                                       6
<PAGE>

guidance related to circumstances under which a contract with a net investment
meets the characteristics of a derivative as discussed in Statement 133. The
Statement also clarifies when a derivative contains a financing component. The
Statement is intended to result in more consistent reporting for derivative
contracts and must be applied prospectively for contracts entered into or
modified after June 30, 2003, except for hedging relationships designated after
June 30, 2003. In management's opinion, adoption of this statement is not
expected to have a material effect on the Company's consolidated financial
position or results of operations.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). This Statement is effective
for financial instruments entered into or modified by the Company after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. The Company has previously accounted for its
mandatorily redeemable cumulative trust preferred securities in a manner
consistent with the Statement and, in management's opinion, adoption of this
Statement did not have a material effect on the Company's consolidated financial
position or results of operations.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS OF PACIFIC STATE BANCORP

The following is management's discussion and analysis of the significant changes
in Pacific State Bancorp (the "Company") balance sheet accounts between June
30,2003 and December 31, 2002 and its income and expense accounts for the three
and six-month periods ended June 30, 2003 and 2002. The discussion is designed
to provide a better understanding of significant trends related to the Company's
financial condition, results of operations, liquidity, capital resources and
interest rate sensitivity.

In addition to the historical information contained herein, this report on Form
10-Q contains certain forward-looking statements. The reader of this report
should understand that all such forward-looking statements are subject to
various uncertainties and risks that could affect their outcome. The Company's
actual results could differ materially from those suggested by such
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, variances in the actual versus
projected growth in assets, return on assets, loan losses, expenses, changes in
the interest rate environment including interest rates charged on loans, earned
on securities investments and paid on deposits, competition effects, fee and
other noninterest income earned, general economic conditions, nationally,
regionally and in the operating market areas of the Company and its
subsidiaries, changes in the regulatory environment, changes in business
conditions and inflation, changes in securities markets, data processing
problems, a decline in real estate values in the Company's market area, the
effects of terrorism, the threat of terrorism or the impact of potential
military conflicts and the conduct of the war on terrorism by the United States
and its allies, as well as other factors. This entire report should be read to
put such forward-looking statements in context. To gain a more complete
understanding of the uncertainties and risks involved in the Company's business,
this report should be read in conjunction with the Company's annual report on
Form 10-K for the year ended December 31, 2002.

         Interest income and net interest income are presented on a fully
taxable equivalent basis (FTE) within management's discussion and analysis.

Nature of Operations

On June 24, 2002, Pacific State Bancorp ("Bancorp") commenced operations as a
bank holding company by acquiring all of the outstanding shares of Pacific State
Bank (the "Bank") in a one bank holding company reorganization. The new
corporate structure gives Bancorp and the Bank greater flexibility in terms of
operation, expansion, and diversification. The reorganization was approved by
the Bank's shareholders on May 9, 2002, and all required regulatory approvals or
non-disapprovals with respect to the reorganization were obtained.

Pacific State Bancorp's subsidiaries include the Bank and Pacific State
Statutory Trust I, a Delaware statutory business trust which was formed in June
2002 for the exclusive purpose of issuing and selling trust preferred
securities.

                                       7
<PAGE>

The Bank commenced operations in 1987 and is a California state-chartered member
bank of the Federal Reserve System. The Bank operates seven branches in
California, including two branches in Stockton and branches in Modesto,
Groveland, Arnold, Angels Camp and Tracy. The Bank's primary source of revenue
is providing interest paid on loans to customers who are predominately small and
middle-market businesses and individuals.

Earnings Summary
----------------

The Company reported net income for the second quarter of 2003 of $476,004 or
$0.57 basic earnings per common share or $0.55 diluted earnings per common
equivalent share, compared to net income of $351,508 or $0.43 basic earnings per
common and $0.41 diluted earnings per common equivalent share, reported for the
same period in 2002. Return on average assets annualized for the six months
ended June 30, 2003 and 2002 were .97 % and .81%, respectively. Net earnings
increased by 35.2% for the three months ended June 30, 2003 compared to the same
period in 2002 due mostly to an increase in net interest income of 27.5%. Net
earnings increased by 60.0% for the six months ended June 30, 2003 compared to
the six months ended June 30, 2002. Return on average common equity annualized
was 15.73% for the second quarter of 2003, compared with 13.58% for the second
quarter of 2001.

Interest income for the six months ended June 30, 2003 was $5.3 million compared
to $4.3 million for the same period in 2002, an increase of 22%. The increase
was due to an increase in loan interest income of $900,000 as well as an
increase in loan fees of $99,000. The increase in loan interest income is due to
growth within the loan portfolio. Interest expense increase slightly by 3% for
the six months ended June 30, 2003 compared to June 30, 2002 due to growth in
deposits.

Non-interest income increased slightly from $831,000 to $931,000 for the six
months ended June 30, 2003. The increase was primarily due to increase of
$70,000 in service charge income as a result of the growth in deposits and an
increase of $57,000 in other fee income. Gain on sale of loans decreased
slightly from $310,000 to $309,000 for the six months ended June 30, 2002 and
2003, respectively. The gain on sale of loans was projected and anticipated in
the normal course of the Bank's operations.

Non-interest expense increased from $2.7 million in 2002 to $3.1 million in 2003
or 14%. Salaries and benefits increased 27% from $1.2 million for the first two
quarters in 2002 to $1.5 million in the first two quarters of 2003. Occupancy
and equipment also increased $66,000 from second quarter end 2002 to second
quarter end 2003 during the same periods. The 14% increase in non-interest
expense is consistent with the 17% increase in total assets from the second
quarter end 2002 to second quarter end 2003 and the related growth in the Bank's
loan portfolio.

Balance Sheet Analysis
----------------------

Total assets increased by 3% from December 31, 2002 to June 30, 2003. The
increase in total assets was a result of an increase in deposits from $158.1
million to $162.0 million. Net loans during this period increased from $134.0
million to $151.9 million and investments increased from $12.8 million to $13.3
million.

Non-performing assets (including nonaccrual loans, loans 90 days past due and
other real estate owned) totaled $260,000 at June 30, 2003, compared to $248,000
on December 31, 2002 and $537,000 on June 30, 2002. The ratio of non-performing
assets to total loans was .17% at June 30, 2003, .14% at December 31, 2002 and
..47% at June 30, 2002.

The allowance for loan losses was $1.5 million at June 30, 2003, compared to
$1.3 million at December 31, 2002 and $1.2 million at June 30, 2002. The
provision for loan losses was $260,000 for the six months ended June 30, 2003
versus $158,000 for the same period in 2002. Net charge-offs were $100,000 for
the first six months of 2003, compared to $110,000 for the first six months of
2001. The ratio of the allowance for loan losses to non-performing assets was
568.8% at June 30, 2003, compared to 242.09% at December 31, 2002 and 223.5% at
June 30, 2002.

Income Taxes
------------

The Bank accrued $488,400 in income taxes for the six months ending June 30,
2003 compared to $290,500 for the same period in 2002. The Bank accrued $264,000
in income taxes for the quarter ended June 30, 2003 compared to $186,500 for the
same period in 2002. These increases are consistent with the increase in income
before taxes.

                                       8
<PAGE>

Liquidity
---------

Liquidity represents the Bank's ability to meet the requirements of customers'
borrowing needs as well as fluctuations in core deposits, which include demand,
savings and interest bearing demand accounts, money market accounts and time
deposits. Total deposits averaged $160.8 million during the six months ended
June 30, 2003 compared to $136.4 million in 2002. Principal sources of liquidity
are cash and due from banks, Federal funds sold and investment securities. At
quarter end June 30, 2003 these items represented $22.3 million or 13.8% of
total deposits compared to $35.6 million or 25.2% at December 31, 2002. Other
sources of liquidity are maturing loans, a borrowing line from the Federal
Reserve Discount Window and Federal funds borrowing lines from correspondent
banks. It is the opinion of management that these sources of liquidity are
sufficient to meet the needs of the Bank at present levels.

Shareholders' equity increased $986,000 million to $12.3 million, or 6.6% of
assets, at June 30, 2003, from $11.3 million or 6.3% of assets at December 31,
2002. The increase in the ratio was due to net income for the six months ended
June 30, 2003, the exercise of 16,315 stock options and an increase in
accumulated other comprehensive income resulting from unrealized gains on
investment securities available for sale.

LOANS

Outstanding loans are summarized below:

                                               June 30,            December 31,
                                                 2003                  2002
                                            -------------         -------------

Commercial                                     41,335,229         $  30,938,399
Agriculture                                    12,014,081             9,287,655
Real estate                                    61,284,462            53,159,804
Real estate-construction                       27,696,020            33,887,183
Installment                                    10,827,762             7,734,199

   Total loans                                153,157,554           135,007,240
Deferred loan fees                                285,193               264,983
Allowance for loan losses                      (1,465,952)           (1,306,309)
                                            -------------         -------------
   Total net loans                          $ 151,976,795         $ 133,965,914
                                            =============         =============

Changes in the allowance for loan losses were as follows:

                                                       Six Months Ended
                                                --------------------------------
                                                 June 30,           December 31,
                                                   2003                2002
                                                -----------         -----------

Balance, beginning of year                      $ 1,306,309         $ 1,171,608
Provision charged to operations                     260,000             158,000
Losses charged to allowance                        (101,383)           (110,463)
Recoveries                                            1,026                  --
                                                -----------         -----------
Balance, end of period                          $ 1,465,952         $ 1,219,145
                                                ===========         ===========

The following table summarizes non-performing assets of the Bank for the periods
indicated:

                                       9
<PAGE>
                                                     June 30,       December 31,
                                                       2003            2002
                                                     --------       ------------

Non-performing Assets:
Non-accrual loans                                    $130,000        $199,000
Accruing loans past due 90 days or more                    --              --
                                                     --------        --------
Total non-performing loans                            130,000         199,000
Other real estate owned                               130,000          49,000
                                                     --------        --------
Total non-performing assets                          $260,000        $248,000

Non-performing assets as a percentage of:
Total loans                                              .17%            .15%
Total assets                                             .14%            .14%

DEPOSITS

Deposits consisted of the following:
                                                June 30,            December 31,
                                                  2003                  2002
                                              ------------          ------------

Non-interest bearing                          $ 36,453,277          $ 30,697,547
Savings                                          5,482,018             6,574,174
Money markets                                   35,758,492            35,964,405
NOW Accounts                                    13,852,557            15,640,384
Time, $100,000 or more                          38,156,020            37,589,426
Other time                                      32,389,432            31,674,071
                                              ------------          ------------
                                              $162,091,796          $158,140,007
                                              ============          ============
Regulatory Capital
------------------

The Company's and the Bank's capital amounts (in thousands) and risk-based
capital ratios are presented below.

<TABLE>
<CAPTION>
                                                                                         To Be Well
                                                                                     Capitalized Under
                                                             For Capital             Prompt Corrective
                                         Actual            Adequacy Purposes         Action Provisions
                                  --------------------   ---------------------      --------------------
                                                          Minimum      Minimum      Minimum      Minimum
                                    Amount      Ratio     Amount       Ratio        Amount        Ratio
                                  ---------     -----    ---------     -------      -------      -------
<S>                               <C>           <C>      <C>              <C>         <C>          <C>
Company
As of June 30, 2003:
  Total capital
    (to risk weighted assets)     $  15,848     10.86%   $  11,671        8.00%        N/A         N/A

  Tier I capital
    (to risk weighted assets)     $  14,429      9.89%   $   5,835        4.00%        N/A         N/A

  Tier I capital
    (to average assets)           $  14,429      7.96%   $   7,254        4.00%        N/A         N/A

As of December 31, 2002:
  Total capital
    (to risk weighted assets)     $  16,497     11.4%    $  11,558        8.00%        N/A         N/A
  Tier I capital
    (to risk weighted assets)     $  13,588      9.4%    $   5,779        4.00%        N/A         N/A
  Tier I capital
    (to average assets)           $  13,588      8.1%    $   6,693        4.00%        N/A         N/A

Bank
As of June 30, 2003:
  Total capital
    (to risk weighted assets)    $  16,755      10.3%    $  13,055        8.00%     $  16,319    10.00%
  Tier I capital
    (to risk weighted assets)    $  15,289       9.4%    $   6,528        4.00%     $   9,791     6.00%
  Tier I capital
    (to average assets)          $  15,289       8.6%    $   7,092        4.00%     $   8,865     5.00%

As of December 31, 2002:
  Total capital
    (to risk weighted assets)    $  16,293      11.4%    $  11,529        8.00%     $  14,412    10.00%
  Tier I capital
    (to risk weighted assets)    $  14,617      10.1%    $   5,765        4.00%     $   8,706     6.00%
  Tier I capital
    (to average assets)          $  14,617       8.9%    $   6,690        4.00%     $   8,400     5.00%
</TABLE>

* The leverage ratio consists of Tier I capital divided by quarterly average
assets. The minimum leverage ratio is 3 percent for banking organizations that
do not anticipate significant growth and that have well-diversified risk,
excellent asset quality and in general, are considered top-rated banks.

                                       10
<PAGE>

ITEM 4. Controls and Procedures

The Company's Chief Executive Officer and Acting Chief Financial Officer, based
on their evaluation within 90 days prior to the date of this report of the
Company's disclosure controls and procedures (as defined in Exchange Act Rule
13a--14(c15(e) or 15d-15(e))), have concluded that the Company's disclosure
controls and procedures are designed to ensure that information required to be
disclosed by the Company in its periodic SEC filings is recorded, processed and
reported within the time periods specified in the SEC's rules and forms. Based
upon that evaluation, the Chief Executive Officer and Acting 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 are inherent limitations to the
effectiveness of any system of disclosure controls and procedures, including
cost limitations, judgments used in decision making, assumptions regarding the
likelihood of future events, soundness of internal controls, fraud, the
possibility of human error and the circumvention or overriding of the controls
and procedures. Accordingly, even effective disclosure controls and procedures
can provide only reasonable, and not absolute, assurance of achieving their
control objectives are adequate and effective for purposes of Rule 13a--14(c) in
timely alerting them to material information relating to the Company required to
be included in the Company's filings with the SEC under the Securities Exchange
Act of 1934.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of their evaluation.


                           Part II - Other Information


Item 1. Legal Proceedings

There are no material proceedings to which the Bank Company is a party of which
any of its property is subject.


Item 2. Changes in Securities and Use of Proceeds - None


Item 3. Defaults Upon Senior Securities - None


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

The Bank held its annual shareholders meeting on May 8, 2003 at the Bank's
office on 6. So. El Dorado St., Stockton, CA. 94501. The Shareholders approved
the following:


For (1) Elected to the Board of Directors, the shareholders elected: Michael
Dalton, Maxwell Freeman, Dr. Harold Hand, Dr. Patricia Hatton, Steven Kikuchi,
Yosh Mataga, Steven A. Rosso, Gary A. Stewart, Kathleen Verner and Phillip
Wallace. [MUST REPORT THE VOTE FOR, AGAINST AND ABSTAINING AS TO EACH
CANDIDATE.]

                                       11
<PAGE>

(2) Approved the Pacific State Bancorp 1997 Stock Option Plan. [MUST DISCLOSE
VOTE.]

(3) Voted to increase the number of shares reserved and available for issuance
under the Pacific State Bancorp 1997 Stock Option Plan by 114,533 shares. [MUST
DISCLOSE VOTE.]

The formation of a holding company, Pacific State Bancorp. 550,687 shares
approved the Plan of Reorganization, 2,000 shares voted to disapprove and 4,320
shares abstained.


Item 5. Other Information - None


Item 6. Exhibits and Reports on Form 8-K

        (a) See the List of Exhibits, which is incorporated here by reference.

        (b) No reports on Form 8-K were filed during the period covered by this
            report.


                                   SIGNATURES

Pursuant to the requirements of Securities and Exchange Act of 1934, the Bank
duly caused this report to be signed by the undersigned thereunto duly
authorized.


Date: August 14, 2003              BY: /s/ STEVEN A. ROSSO
                                      ------------------------------------------
                                           Steven A. Rosso
                                           President and Chief Executive Officer

                                       12
<PAGE>

                                LIST OF EXHIBITS

31          Certification pursuant to section 302 of the Sarbanes-Oxley Act.

32          Certification pursuant to section 906 of the Sarbanes-Oxley Act.



                                       13