| ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|-----------------------------------------------------------------------------------------|

| 0 | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

| California                                                    | 61-1407606                          |
|---------------------------------------------------------------|-------------------------------------|
| (State or other jurisdiction ofincorporation or organization) | (I.R.S. EmployerIdentification No.) |

| Title of Class                 | Shares outstanding as of November 10, 2009 |
|--------------------------------|--------------------------------------------|
|  Common StockNo Par Value |  3,722,198                            |

----

| PACIFIC STATE BANCORP AND SUBSIDIARY                                                                                                                 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                                |   |
| Unaudited                                                                                                                                            |   | September 30, |   |   | December 31, |   |
| (Dollars in thousands)                                                                                                                               |   | 2009 |   |   | 2008 |   |
| ASSETS                                                                                                                                               |   |   |   |   |   |   |
| Cash and due from banks                                                                                                                              |   | $ | 10,785 |   |   | $ | 16,700 |   |
| Federal funds sold                                                                                                                                   |   |   | 33,775 |   |   |   | 21,811 |   |
| Total cash and cash equivalents                                                                                                                      |   |   | 44,560 |   |   |   | 38,511 |   |
| Investment securities                                                                                                                                |   |   | 29,228 |   |   |   | 39,738 |   |
| Loans, less allowance for loan losses of $5,625 in 2009 and $6,019 in 2008                                                                           |   |   | 266,272 |   |   |   | 301,945 |   |
| Premises and equipment, net                                                                                                                          |   |   | 16,477 |   |   |   | 16,811 |   |
| Other real estate owned                                                                                                                              |   |   | 14,198 |   |   |   | 2,029 |   |
| Company owned life insurance                                                                                                                         |   |   | 6,960 |   |   |   | 6,751 |   |
| Accrued interest receivable and other assets                                                                                                         |   |   | 7,193 |   |   |   | 15,668 |   |
| Total assets                                                                                                                                         |   | $ | 384,888 |   |   | $ | 421,453 |   |
| LIABILITIES AND                                                                                                                                      |   |   |   |   |   |   |   |   |
| SHAREHOLDERS' EQUITY                                                                                                                                 |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                                                            |   |   |   |   |   |   |   |   |
| Non-interest bearing                                                                                                                                 |   | $ | 58,613 |   |   | $ | 69,874 |   |
| Interest bearing                                                                                                                                     |   |   | 268,417 |   |   |   | 271,106 |   |
| Total deposits                                                                                                                                       |   |   | 327,030 |   |   |   | 340,980 |   |
| Other borrowings                                                                                                                                     |   |   | 30,000 |   |   |   | 40,000 |   |
| Subordinated debentures                                                                                                                              |   |   | 8,764 |   |   |   | 8,764 |   |
| Accrued interest payable and other liabilities                                                                                                       |   |   | 3,851 |   |   |   | 4,425 |   |
| Total liabilities                                                                                                                                    |   |   | 369,645 |   |   |   | 394,169 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Shareholders' equity:                                                                                                                                |   |   |   |   |   |   |   |   |
| Preferred stock - 2,000,000 shares authorized; none issued or outstanding                                                                            |   |   |     - |   |   |   | - |   |
| Common stock – no par value; 24,000,000 shares authorized; issued and outstanding –3,722,198 shares in 2009 and 3,718,598 shares in 2008 |   |   | 10,809 |   |   |   | 10,767 |   |
| Retained earnings                                                                                                                                    |   |   | 6,081 |   |   |   | 18,814 |   |
| Accumulated other comprehensive loss, net of taxes                                                                                                   |   |   | (1,647) |   |   |   | (2,297 | ) |
| Total shareholders' equity                                                                                                                           |   |   | 15,243 |   |   |   | 27,284 |   |
| Total liabilities and shareholders' equity                                                                                                           |   | $ | 384,888 |   |   | $ | 421,453 |   |

----

| PACIFIC STATE BANCORP                                |   |
|------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS      |   |
| Unaudited                                            |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |   |
| (Dollars in thousands)                               |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Interest income:                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest and fees on loans                           |   | $ | 4,633 |   |   | $ | 6,321 |   |   | $ | 14,398 |   |   | $ | 18,998 |   |
| Interest on Federal funds sold                       |   |   | 23 |   |   |   | 85 |   |   |   | 55 |   |   |   | 341 |   |
| Interest on investment securities                    |   |   | 322 |   |   |   | 542 |   |   |   | 1,255 |   |   |   | 2,144 |   |
| Total interest income                                |   |   | 4,978 |   |   |   | 6,948 |   |   |   | 15,708 |   |   |   | 21,483 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest on deposits                                 |   |   | 1,541 |   |   |   | 2,587 |   |   |   | 5,126 |   |   |   | 8,245 |   |
| Interest on borrowings                               |   |   | 237 |   |   |   | 216 |   |   |   | 854 |   |   |   | 1,064 |   |
| Interest on subordinated debentures                  |   |   | 58 |   |   |   | 97 |   |   |   | 213 |   |   |   | 359 |   |
| Total interest expense                               |   |   | 1,836 |   |   |   | 2,900 |   |   |   | 6,193 |   |   |   | 9,668 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income before provision for loan losses |   |   | 3,142 |   |   |   | 4,048 |   |   |   | 9,515 |   |   |   | 11,815 |   |
| Provision for loan losses                            |   |   | 1,000 |   |   |   | 600 |   |   |   | 6,152 |   |   |   | 1,410 |   |
| Net interest income after provision for loan losses  |   |   | 2,142 |   |   |   | 3,448 |   |   |   | 3,363 |   |   |   | 10,405 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest (loss) income:                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service charges                                      |   |   | 151 |   |   |   | 196 |   |   |   | 471 |   |   |   | 656 |   |
| Gain on sale of loans                                |   |   | 44 |   |   |   | 37 |   |   |   | 122 |   |   |   | 188 |   |
| Gain on sale of assets                               |   |   | 32 |   |   |   | 471 |   |   |   | 32 |   |   |   | 471 |   |
| Gain on bank owned life insurance                    |   |   | - |   |   |   | 2,574 |   |   |   | - |   |   |   | 2,574 |   |
| Other than temporary impairment charge               |   |   | (746 | ) |   |   | (6,498 | ) |   |   | (2,930 | ) |   |   | (6,498 | )  |
| Other income                                         |   |   | 174 |   |   |   | 283 |   |   |   | 647 |   |   |   | 741 |   |
| Total non-interest loss                              |   |   | (345 | ) |   |   | (2,937 | ) |   |   | (1,658 | ) |   |   | (1,868 | ) |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest expenses:                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                       |   |   | 1,359 |   |   |   | 1,398 |   |   |   | 3,829 |   |   |   | 3,948 |   |
| Occupancy                                            |   |   | 281 |   |   |   | 316 |   |   |   | 832 |   |   |   | 881 |   |
| Furniture and equipment                              |   |   | 237 |   |   |   | 259 |   |   |   | 708 |   |   |   | 633 |   |
| Other real estate                                    |   |   | 186 |   |   |   | - |   |   |   | 2,315 |   |   |   | - |   |
| Other expenses                                       |   |   | 1,349 |   |   |   | 1,585 |   |   |   | 4,092 |   |   |   | 3,416 |   |
| Total non-interest expenses                          |   |   | 3,412 |   |   |   | 3,558 |   |   |   | 11,776 |   |   |   | 8,878 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss before (benefit) provision for income taxes     |   |   | (1,615 | ) |   |   | (3,047 | ) |   |   | (10,071 | ) |   |   | (341 | )  |
| Provision (benefit) for income taxes                 |   |   | 6,259 |   |   |   | (1,838 | ) |   |   | 2,662 |   |   |   | (805 | )  |
| Net (loss) income                                    |   | $ | (7,874 | ) |   | $ | (1,209 | ) |   | $ | (12,733 | ) |   | $ | 464 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic (loss) earnings per share                      |   | $ | (2.12 | ) |   | $ | (0.33 | ) |   | $ | (3.42 | ) |   | $ | 0.13 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted (loss) earnings per share                    |   | $ | (2.12 | ) |   | $ | (0.33 | ) |   | $ | (3.42 | ) |   | $ | 0.12 |   |

----

| (Unaudited)                                                                                                 |   | 2009   |    |   | 2008   |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Cash flows from operating activities:                                                                  |   |   |    |   |   |   |
| Net (loss) income                                                                                           |   | $      | (12,733 | )      |   | $      | 464 |   |
| Provision for loan losses                                                                                   |   |   | 6,152   |   |   |   | 1,410 |   |
| Net (increase) decrease in deferred loan origination costs                                                  |   |   | (143    | )      |   |   | 92 |   |
| Depreciation, amortization and accretion                                                                    |   |   | 713     |   |   |   | 271 |   |
| Stock-based compensation expense                                                                            |   |   | 42      |   |   |   | 256 |   |
| Gain on sale of loans                                                                                       |   |   | (122    | )      |   |   | (188 | ) |
| Gain on sale of assets                                                                                      |   |   | (32     | )      |   |   | (471 | ) |
| Company owned life insurance earnings                                                                       |   |   | (209    | )      |   |   | (249 | ) |
| Gain on company owned life insurance                                                                        |   |   | -       |   |   |   | (2,574 | )  |
| Unrealized (gain) loss on available for sale securities                                                     |   |   | (2,250  | )      |   |   | 1,431 |   |
| Other real estate impairment                                                                                |   |   | 1,877   |   |   |   | - |   |
| Other than temporary impairment                                                                             |   |   | 2,930   |   |   |   | 6,498 |   |
| Deferred tax valuation allowance                                                                            |   |   | 6,978   |   |   |   | - |   |
| Decrease (increase) in accrued interest receivable and other assets                                         |   |   | 2,049   |   |   |   | (7,837 | ) |
| Decrease in accrued interest payable and other liabilities                                                  |   |   | (574    | )      |   |   | (1,561 | ) |
| Net cash provided by (used in) operating activities                                                    |   |   | 4,678   |   |   |   | (2,458 | ) |
| Cash flows from investing activities:                                                                  |   |   |    |   |   |   |   |   |
| Decrease in interest bearing deposits at other banks                                                        |   |   | -       |   |   |   | 3,000 |   |
| Purchases of available-for-sale investment securities                                                       |   |   | (6,580  | )      |   |   | (31,082 | ) |
| Proceeds from the sale of available-for-sale securities                                                     |   |   | 7,351   |   |   |   | - |   |
| Proceeds from matured and called available-for-sale investment securities                                   |   |   | -       |   |   |   | 22,735 |   |
| Proceeds from principal repayments from available-for-sale government-guaranteed mortgage-backed securities |   |   | 9,174   |   |   |   | 899 |   |
| Proceeds from principal repayments from held-to-maturity government-guarantee mortgage-backed securities    |   |   | 8       |   |   |   | 24 |   |
| Purchase of FRB and FHLB stock                                                                              |   |   | (51     | )      |   |   | (14 | ) |
| Proceeds from the sale of other real estate                                                                 |   |   | 2,118   |   |   |   | - |   |
| Proceeds from company owned life insurance redemption                                                       |   |   | -       |   |   |   | 4,166 |   |
| Proceeds from loan sales                                                                                    |   |   | 4,211   |   |   |   | 3,906 |   |
| Net decrease (increase) in loans                                                                            |   |   | 9,434   |   |   |   | (19,121 | ) |
| Purchases of premises and equipment                                                                         |   |   | (344    | )      |   |   | (2,205 | ) |
| Net cash provided by (used in) investing activities                                                    |   |   | 25,321  |   |   |   | (17,692 | ) |
| Cash flows from financing activities:                                                                  |   |   |    |   |   |   |   |   |
| Net decrease in demand, interest-bearing and savings deposits                                               |   |   | (6,077  | )      |   |   | (6 | ) |
| Net (decrease) increase in time deposits                                                                    |   |   | (7,873  | )      |   |   | 3,351 |   |
| Proceeds from exercise of stock options                                                                     |   |   | -       |   |   |   | 79 |   |
| Net decrease in other borrowings                                                                            |   |   | (10,000 | )      |   |   | (5,000 | ) |
| Net cash used in financing activities                                                                       |   |   | (23,950 | )      |   |   | (1,576 | ) |
| Increase in cash and cash equivalents                                                                       |   |   | 6,049   |   |   |   | (21,726 | ) |
| Cash and cash equivalents at beginning of period                                                            |   |   | 38,511  |   |   |   | 45,674 |   |
| Cash and cash equivalents at end of period                                                                  |   | $      | 44,560  |   |   | $      | 23,948 |   |
|                                                                                                        |   |   |    |   |   |   |   |   |
| Supplemental disclosure of cash flow activities:                                                       |   |   |    |   |   |   |   |   |
| Real estate acquired at foreclosure                                                                         |   | $      | 15,063  |   |   | $      | - |   |

----

----

|                                                         |   |          |   |   |                 |   |   |                  |   |   |      |    |
|--------------------------------------------------------------|--------|---------------|--------|--------|----------------------|--------|--------|-----------------------|--------|--------|-----------|---------|
| (Dollars in thousands)                                       |   | AmortizedCost |   |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |    |
| Available-for-sale debt securities, September 30, 2009  |   |          |   |   |                 |   |   |                  |   |   |      |    |
|   U.S. Treasury securities and agency debentures   |   | $             | 7,010  |   |                 | $      | 101    |                  |   | $      | -         |    |   | $ | 7,111 |   |
|   Mortgage-backed securities:                      |   |          |   |   |                 |   |   |                  |   |   |      |    |   |   |   |   |
|   Agency MBSs                                      |   |          | 11,402 |   |                 |   | 398    |                  |   |   | -         |    |   |   | 11,800 |   |
|   Agency collateralized mortgage obligations       |   |          | 4,082  |   |                 |   | 83     |                  |   |   | -         |    |   |   | 4,165 |   |
|   Obligations of states and political subdivisions |   |          | 3,201  |   |                 |   | 15     |                  |   |   | (86       | )  |   |   | 3,130 |   |
|   Corporate bonds                                  |   |          | 5,143  |   |                 |   | 10     |                  |   |   | (2,168    | )  |   |   | 2,985 |   |
|   Total available-for-sale debt securities         |   | $             | 30,838 |   |                 | $      | 607    |                  |   | $      | (2,254    | )       |   | $ | 29,191 |   |

| (Dollars in thousands)                                           |   | AmortizedCost |   |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |    |
|------------------------------------------------------------------|--------|---------------|--------|--------|----------------------|--------|--------|-----------------------|--------|--------|-----------|---------|
|  Available-for-sale debt securities, December 31, 2008 |   |          |   |   |                 |   |   |                  |   |   |      |    |
|   U.S. Treasury securities                             |   | $             | 9,937  |   |                 | $      | 240    |                  |   | $      | -         |    |   | $ | 10,177 |   |
|   Mortgage-backed securities:                          |   |          |   |   |                 |   |   |                  |   |   |      |    |   |   |   |   |
|   Agency MBSs                                          |   |          | 22,345 |   |                 |   | 318    |                  |   |   | (2        | )       |   |   | 22,661 |   |
|   Agency collateralized mortgage obligations           |   |          | 10     |   |                 |   | -      |                  |   |   | -         |    |   |   | 10 |   |
|   Obligations of states and political subdivisions     |   |          | 3,154  |   |                 |   | 11     |                  |   |   | (130      | )  |   |   | 3,035 |   |
|   Corporate bonds                                      |   |          | 8,143  |   |                 |   | 4      |                  |   |   | (4,338    | )  |   |   | 3,809 |   |
|   Total available-for-sale debt securities             |   | $             | 43,589 |   |                 | $      | 573    |                  |   | $      | (4,470    | )       |   | $ | 39,692 |   |

----

|                                                                            | Three Months Ended September 30, 2009 |   |
|---------------------------------------------------------------------------------|--------------------------------------------|--------|
| (Dollars in thousands)                                                          | Corporate bonds                            |   |
| Total other-than-temporary impairment losses (unrealized and realized)          |                                       | $      | (980 | ) |
| Less: Unrealized other-than-temporary impairment losses recognized in OCI  |                                       |   | 234 |   |
| Net impairment losses recognized in earnings                                    |                                       | $      | (746 | ) |

|                                                                            | Nine Months Ended September 30, 2009 |   |
|---------------------------------------------------------------------------------|-------------------------------------------|--------|
| (Dollars in thousands)                                                          | Corporate Bonds                      |   |
| Total other-than-temporary impairment losses (unrealized and realized)          |                                      | $      | (3,164 | ) |
| Less: Unrealized other-than-temporary impairment losses recognized in OCI  |                                      |   | 234 |   |
| Net impairment losses recognized in earnings                                    |                                      | $      | (2,930 | ) |

| (Dollars in thousands)                                                                                                       |   | Three Months EndedSeptember 30, 2009 |   |   | Nine Months EndedSeptember 30, 2009 |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|--------|----------------------------------------------------|--------|
| Balance, beginning of period                                                                                                 |   | $                                                   | -      |   |                                               | $      | - |   |
| Additions for the credit component on debt securities in which other-than-temporary impairment was not previously recognized |   |                                                | 234    |   |                                               |   | 234 |   |
| Balance, September 30, 2009                                                                                             |   | $                                                   | 234    |   |                                               | $      | 234 |   |

|         |   | 2010   |   |   | 2011   |   |   | 2012 |   |
|--------------|--------|--------|--------|--------|--------|--------|--------|------|--------|
| Default rate |   |   | 6.4    | %      |   |   | 2.1    | %    |   |   | 0.5 | % |

----

|                                                                                              |   | Less than twelve months |    |   | Twelve months or longer |   |    | Total     |   |
|---------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|--------|----------------------------------------|--------|---------|-----------|--------|
| (Dollars in thousands)                                                                            |   | FairValue                              |    |   | GrossUnrealizedLosses                  |   |    | FairValue |   |   | GrossUnrealizedLosses |   |   | FairValue |   |   | GrossUnrealizedLosses |   |
|   Temporarily-impaired available-for-sale debt securities as of September 30, 2009 |   |                                   |    |   |                                   |   |    |      |   |   |   |   |   |   |   |   |   |   |
|    Obligations of states and political subdivisions                                |   | $                                      | -       |   |                                   | $      | -       |      |   | $ | 1,718 |   |   | $ | (86 | ) |   | $ | 1,718 |   |   | $ | (86 | ) |
|    Corporate/Agency bonds                                                          |   |                                   | -       |   |                                   |   | -       |      |   |   | 1,957 |   |   |   | (1,934 | )  |   |   | 1,957 |   |   |   | (1,934 | )  |
| Total temporarily-impaired available-for-sale debt securities                                     |   |                                   | -       |   |                                   |   | -       |      |   |   | 3,675 |   |   |   | (2,020 | )  |   |   | 3,675 |   |   |   | (2,020 | )  |
|   Other-than-temporarily impaired available-for-sale debt securities                    |   |                                   |    |   |                                   |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Corporate bonds                                                                 |   |                                   | -  |   |                                   |   | -  |      |   |   | 20 |   |   |   | (234 | ) |   |   | 20 |   |   |   | (234 | ) |
| Total temporarily-impaired and other-than-temporarily impaired available-for-sale securities      |   | $                                      | -       |   |                                   | $      | -       |      |   | $ | 3,695 |   |   | $ | (2,254 | ) |   | $ | 3,695 |   |   | $ | (2,254 | ) |
|   Temporarily-impaired available-for-sale debt securities as of December 31, 2008  |   |                                   |    |   |                                   |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Agency MBSs                                                               |   |                                   | 10      |   |                                   |   | (1      | )         |   |   | 433 |   |   |   | (1 | ) |   |   | 443 |   |   |   | (2 | ) |
|    Obligations of states and political subdivisions                                |   | $                                      | 1,325   |   |                                   | $      | (130    | )         |   | $ | - |   |   | $ | - |   |   | $ | 1,325 |   |   | $ | (130 | ) |
|    Corporate bonds                                                                 |   |                                   | -       |   |                                   |   | -       |      |   |   | 2,726 |   |   |   | (4,338 | ) |   |   | 2,726 |   |   |   | (4,338 | ) |
| Total temporarily-impaired available-for-sale debt securities                                     |   |                                   | 1,335   |   |                                   |   | (131    | )    |   |   | 3,159 |   |   |   | (4,339 | )  |   |   | 4,494 |   |   |   | (4,470 | )  |

|                                                 |    | September 30, 2009                          |
|------------------------------------------------------|--------------|--------------------------------------------------|
|                                                 |    | Due in one year or less |   | Due after one year through five years |   | Due after five years through ten years |   | Due after ten years |   |   | Total |
| (Dollars in thousands)                               |    | Amount                                           |   | Yield (1) |   |   | Amount |   | Yield (1) |   |   | Amount |   | Yield (1) |   |   | Amount |   | Yield (1) |   |   | Amount |   | Yield (1) |   |
| Fair value of available-for-sale debt securities     |    |                                             |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |
| U.S. Treasury securities and agency debentures       |    | $                                                | 5,092 |    | 2.35 | % |    | $ | - |    | - | % |    | $ | - |    | - | % |    | $ | 2,019  |    | 3.55 | % |    | $ | 7,111   |    | 2.70 | % |
| Mortgage-backed securities:                          |    |                                             |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |
| Agency MBSs                                          |    |                                             | 304 |    | 3.46 |   |    |   | - |    | - |   |    |   | - |    | - |   |    |   | 11,496 |    | 5.31 |   |    |   | 11,800 |    | 5.26 |   |
| Agency collateralized mortgage obligations           |    |                                             | - |    | - |   |    |   | - |    | - |   |    |   | - |    | - |   |    |   | 4,165 |    | 3.61 |   |    |   | 4,165 |    | 3.61 |   |
| Obligations of states and political subdivisions     |    |                                             | 206 |    | 3.50 |   |    |   | - |    | - |   |    |   | 342 |    | 4.27 |   |    |   | 2,582 |    | 4.73 |   |    |   | 3,130 |    | 4.60 |   |
| Corporate bonds                                      |    |                                             | - |    | - |   |    |   | - |    | - |   |    |   | - |    | - |   |    |   | 2,985 |    | 4.46 |   |    |   | 2,985 |    | 4.46 |   |
| Total available-for-sale debt securities             |    | $                                                | 5,602 |    | 2.46 |   |    | $ | - |    | - |   |    | $ | 342 |    | 4.37 |   |    | $ | 23,263 |    | 4.65 |   |    | $ | 29,191 |    | 4.26 |   |
| Amortized cost of available-for-sale debt securities |    | $                                                | 5,512 |    |   |   |    | $ | - |    |   |   |    | $ | 340 |    |   |   |    | $ | 24,986 |    |   |   |    | $ | 30,850 |    |   |   |

|   (1)   | Yields are calculated based on the amortized cost of the securities. |
|-----------------------------|----------------------------------------------------------------------|

----

|                                 |   | September 30,  |    |   | December 31, |   |
|--------------------------------------|--------|----------------|---------|--------|--------------|--------|
|                                 |   | 2009           |    |   | 2008         |   |
|                                 |   | (In thousands) |    |
|                                 |   |           |    |   |         |   |
| Commercial                           |   | $              | 72,470  |   |         | $      | 81,284 |   |
| Agricultural                         |   |           | 9,583   |   |         |   | 13,153 |   |
| Real estate - commercial mortgage    |   |           | 155,570 |   |         |   | 135,013 |   |
| Real estate - construction           |   |           | 20,253  |   |         |   | 64,762 |   |
| Installment                          |   |           | 13,735  |   |         |   | 13,609 |   |
| Gross loans                          |   |           | 271,611 |   |         |   | 307,821 |   |
| Deferred loan origination costs, net |   |           | 286     |   |         |   | 143 |   |
| Allowance for loan losses            |   |           | (5,625  | )      |         |   | (6,019 | ) |
| Net loans                            |   | $              | 266,272 |   |         | $      | 301,945 |   |

----

|                                                                                     |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |   |
|------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|---------------------------------|--------|
| (in thousands)                                                                           |   | 2009                             |   |   | 2008                            |   |   | 2009 |   |   | 2008 |   |
| Net (loss) income                                                                        |   | $                                | (7,874 | )      |                            | $      | (1,209 | ) |   | $ | (12,733 | ) |   | $ | 464 |   |
| Other comprehensive loss:                                                                |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|      Change in unrealized loss on available for sale securities |   |                             | (878   | )      |                            |   | (4,108 | ) |   |   | (2,280 | ) |   |   | (5,079 | ) |
|      Reclassification adjustment                                |   |                             | 746    |   |                            |   | 4,255 |   |   |   | 2,930 |   |   |   | 4,244 |   |
| Total other comprehensive (loss) income                                                  |   |                             | (132   | )      |                            |   | 147 |   |   |   | 650 |   |   |   | (835 | ) |
| Total comprehensive (loss) income                                                        |   | $                                | (8,006 | )      |                            | $      | (1,062 | ) |   | $ | (12,083 | ) |   | $ | (371 | ) |

----

| Options                                                  |   | Shares |     |   | Weighted Average Exercise Price |   | Weighted Average Remaining Contractual Term |   | Aggregate Intrinsic Value ($000) |   |
|----------------------------------------------------------|--------|--------|----------|--------|---------------------------------|--------|---------------------------------------------|--------|----------------------------------|--------|
| Outstanding at January 1, 2009                           |   |   | 645,869  |   |                            | $      | 7.73                                        |   | 4.8 Years                        |   | $ | - |   |
| Granted                                                  |   |   | -        |   |                            |   | -                                           |   | -                                |   |   | - |   |
| Exercised                                                |   |   | (3,600   | )      |                            |   | 5.42                                        |   | 3.6 Years                        |   |   | - |   |
| Cancelled                                                |   |   | (123,200 | )      |                            |   | 7.42                                        |   | 4.5 Years                        |   |   | - |   |
| Outstanding at September 30, 2009                        |   |   | 519,069  |   |                            | $      | 7.82                                        |   | 4.0 Years                        |   | $ | - |   |
| Options vested or expected to vest at September 30, 2009 |   |   | 519,069  |   |                            | $      | 7.82                                        |   | 4.0 Years                        |   | $ | - |   |
| Exercisable at September 30, 2009                        |   |   | 501,069  |   |                            | $      | 7.40                                        |   | 3.9 Years                        |   | $ | - |   |

----

----

| Description                                           |   | Fair ValueSeptember 30, 2009 |   |   | Fair Value Measurementsat September 30, 2009 using             |   |
|-------------------------------------------------------|--------|------------------------------|--------|--------|----------------------------------------------------------------|--------|
|                                                  |   |                         |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Assets and liabilities measured on a recurring basis: |   |                         |   |   |                                                           |   |   |   |   |   |   |   |
| Available-for-sale securities                         |   | $                            | 29,191 |   |                                                           | $      | 11,568 |   |   | $ | 17,573 |   |   | $ | 50 |   |
| Total                                                 |   | $                            | 29,191 |   |                                                           | $      | 11,568 |   |   | $ | 17,573 |   |   | $ | 50 |   |

| (Dollars in thousands)                           |   | Investment Securities |   |
|--------------------------------------------------|--------|-----------------------|--------|
| Balance, January 1, 2009                         |   | $                     | -      |   |
| Assets added during the period                   |   |                  | 368    |   |
| Unrealized loss included in comprehensive income |   |                  | 318    |   |
| Balance, September 30, 2009                      |   | $                     | 50     |   |

----

| Description                                              |   | Fair ValueSeptember 30, 2009 |   |   | Fair Value Measurementsat September 30, 2009 using             |   |
|----------------------------------------------------------|--------|------------------------------|--------|--------|----------------------------------------------------------------|--------|
|                                                     |   |                         |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Assets and liabilities measured on a nonrecurring basis: |   |                         |   |   |                                                           |   |   |   |   |   |   |   |
| Impaired loans                                           |   | $                            | 45,661 |   |                                                           | $      | - |   |   | $ | 41,000 |   |   | $ | 4,661 |   |
| Other real estate owned                                  |   |                         | 14,198 |   |                                                           |   | - |   |   |   | 14,198 |   |   |   | - |   |
| Total                                                    |   | $                            | 59,859 |   |                                                           | $      | - |   |   | $ | 59,859 |   |   | $ | - |   |

|                        |   | September 30, 2009 |    |   | December 31, 2008 |   |
|-----------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                        |   | Carrying           |    |   | Fair              |   |   | Carrying |   |   | Fair |   |
| (Dollars in thousands)      |   | Amount             |    |   | Value             |   |   | Amount |   |   | Value |   |
| Financial assets:           |   |               |    |   |              |   |   |   |   |   |   |   |
| Cash and due from banks     |   | $                  | 10,785  |   |              | $      | 10,785 |   |   | $ | 16,700 |   |   | $ | 16,700 |   |
| Federal funds sold          |   |               | 33,775  |   |              |   | 33,775 |   |   |   | 21,811 |   |   |   | 21,811 |   |
| Investment securities       |   |               | 29,228  |   |              |   | 29,228 |   |   |   | 39,738 |   |   |   | 39,738 |   |
| Loans, net                  |   |               | 266,272 |   |              |   | 260,947 |   |   |   | 301,945 |   |   |   | 305,257 |   |
| Accrued interest receivable |   |               | 1,295   |   |              |   | 1,295 |   |   |   | 1,349 |   |   |   | 1,349 |   |
|                        |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:      |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                    |   | $                  | 327,030 |   |              | $      | 328,995 |   |   | $ | 340,980 |   |   | $ | 343,084 |   |
| Other borrowings            |   |               | 30,000  |   |              |   | 30,594 |   |   |   | 40,000 |   |   |   | 40,019 |   |
| Subordinated debentures     |   |               | 8,764   |   |              |   | 5,258 |   |   |   | 8,764 |   |   |   | 2,918 |   |
| Accrued interest payable    |   |               | 1,456   |   |              |   | 1,456 |   |   |   | 2,102 |   |   |   | 2,102 |   |

----

----

----

----

----

|                                                 |   | Three Months Ended September 30, |   |
|------------------------------------------------------|--------|----------------------------------|--------|
| (Dollars in thousands, except per share data)        |   | 2009                             |   |   | 2008 |   |   | Dollar Change |   |   | Percentage Change |   |
| Interest income:                                     |   |                             |   |   |   |   |   |   |   |   |   |   |
| Interest and fees on loans                           |   | $                                | 4,633  |   |   | $ | 6,321 |   |   | $ | (1,688 | ) |   |   | (26.7 | )% |
| Interest on Federal funds sold                       |   |                             | 23     |   |   |   | 85 |   |   |   | (62 | ) |   |   | (72.9 | ) |
| Interest on investment securities                    |   |                             | 322    |   |   |   | 542 |   |   |   | (220 | ) |   |   | (40.6 | ) |
| Total interest income                                |   |                             | 4,978  |   |   |   | 6,948 |   |   |   | (1,970 | ) |   |   | (28.4 | ) |
|                                                 |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                    |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest on deposits                                 |   |                             | 1,541  |   |   |   | 2,587 |   |   |   | (1,046 | ) |   |   | (40.4 | ) |
| Interest on other borrowings                         |   |                             | 237    |   |   |   | 216 |   |   |   | 21 |   |   |   | 9.7 |   |
| Interest on subordinated debentures                  |   |                             | 58     |   |   |   | 97 |   |   |   | (39 | ) |   |   | (40.2 | ) |
| Total interest expense                               |   |                             | 1,836  |   |   |   | 2,900 |   |   |   | (1,064 | ) |   |   | (36.7 | ) |
| Net interest income before provision for loan losses |   | $                                | 3,142  |   |   | $ | 4,048 |   |   | $ | (906 | ) |   |   | (22.4 | )% |

----

| PACIFIC STATE BANCORP                              |                                 |
|----------------------------------------------------|--------------------------------------|
| Yield Analysis                                     |                                 |
|                                               | For Three Months Ended September 30, |   |
| (Dollars in thousands)                             | 2009                                 |   |   | 2008 |   |
|                                               |                                 |   |   | Interest |   |   | Average |   |   |   |   |   | Interest |   |   | Average |   |
|                                               | Average                              |   |   | Income or |   |   | Yield or |   |   | Average |   |   | Income or |   |   | Yield or |   |
| Assets:                                            | Balance                              |   |   | Expense |   |   | Cost |   |   | Balance |   |   | Expense |   |   | Cost |   |
| Interest-earning assets:                           |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans(1)(2)                                        |                                 | $ | 278,220 |   |   | $ | 4,633 |   |   |   | 6.61 | % |   | $ | 324,548 |   |   | $ | 6,321 |   |   |   | 7.75 | % |
| Investment securities(2)                           |                                 |   | 33,182 |   |   |   | 322 |   |   |   | 3.85 | % |   |   | 50,733 |   |   |   | 541 |   |   |   | 4.24 | % |
| Federal funds sold                                 |                                 |   | 29,710 |   |   |   | 23 |   |   |   | 0.31 | % |   |   | 17,752 |   |   |   | 85 |   |   |   | 1.90 | % |
| Interest bearing deposits in banks                 |                                 |   | - |   |   |   | - |   |   |   | - |   |   |   | 10 |   |   |   | 1 |   |   |   | 40.22 | % |
| Total average earning assets                       |                                 | $ | 341,112 |   |   | $ | 4,978 |   |   |   | 5.79 | % |   | $ | 393,043 |   |   | $ | 6,948 |   |   |   | 7.03 | % |
|                                               |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-earning assets:                                |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                            |                                 |   | 11,809 |   |   |   |   |   |   |   |   |   |   |   | 13,343 |   |   |   |   |   |   |   |   |   |
| Bank premises and equipment                        |                                 |   | 30,315 |   |   |   |   |   |   |   |   |   |   |   | 15,450 |   |   |   |   |   |   |   |   |   |
| Other assets                                       |                                 |   | 18,835 |   |   |   |   |   |   |   |   |   |   |   | 16,615 |   |   |   |   |   |   |   |   |   |
| Allowance for loan loss                            |                                 |   | (5,940 | ) |   |   |   |   |   |   |   |   |   |   | (3,784 | ) |   |   |   |   |   |   |   |   |
| Total average assets                               |                                 | $ | 396,131 |   |   |   |   |   |   |   |   |   |   | $ | 434,666 |   |   |   |   |   |   |   |   |   |
|                                               |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                               |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Shareholders' Equity:              |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                      |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                           |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand                            |                                 | $ | 63,359 |   |   | $ | 157 |   |   |   | 0.98 | % |   | $ | 73,380 |   |   | $ | 427 |   |   |   | 2.31 | % |
| Savings                                            |                                 |   | 24,384 |   |   |   | 68 |   |   |   | 1.11 | % |   |   | 6,108 |   |   |   | 8 |   |   |   | 0.52 | % |
| Time deposits                                      |                                 |   | 187,137 |   |   |   | 1,316 |   |   |   | 2.79 | % |   |   | 215,303 |   |   |   | 2,152 |   |   |   | 3.98 | % |
| Other borrowings(3)                                |                                 |   | 38,763 |   |   |   | 295 |   |   |   | 3.02 | % |   |   | 35,496 |   |   |   | 313 |   |   |   | 3.51 | % |
|                                               |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total average interest-bearing liabilities         |                                 | $ | 313,643 |   |   | $ | 1,836 |   |   |   | 2.32 | % |   | $ | 330,287 |   |   | $ | 2,900 |   |   |   | 3.49 | % |
|                                               |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities:                   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                    |                                 |   | 55,409 |   |   |   |   |   |   |   |   |   |   |   | 64,817 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                  |                                 |   | 4,157 |   |   |   |   |   |   |   |   |   |   |   | 4,119 |   |   |   |   |   |   |   |   |   |
| Total average liabilities                          |                                 |   | 373,209 |   |   |   |   |   |   |   |   |   |   |   | 399,223 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                               |                                 |   | 22,922 |   |   |   |   |   |   |   |   |   |   |   | 35,443 |   |   |   |   |   |   |   |   |   |
| Total average liabilities and shareholders' equity |                                 | $ | 396,131 |   |   |   |   |   |   |   |   |   |   | $ | 434,666 |   |   |   |   |   |   |   |   |   |
|                                               |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                |                                 |   |   |   |   | $ | 3,142 |   |   |   |   |   |   |   |   |   |   | $ | 4,048 |   |   |   |   |   |
|                                               |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin(4)                             |                                 |   |   |   |   |   |   |   |   |   | 3.65 | % |   |   |   |   |   |   |   |   |   |   | 4.10 | % |

| (1)   | Net loan (costs) fees included in loan interest income for the three month periods ended September 30, 2009 and 2008 amounted to $(64,000) and $307,000, respectively. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | For the purpose of this table the interest expense related to the Company’s junior subordinated debentures is included in other borrowings. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                               |   | Three Months ended September 30, |                                                                 |
|------------------------------------|--------|----------------------------------|----------------------------------------------------------------------|
|                               |   | 2009 over 2008                   |                                                                 |
|                               |   | Net                              |                                                                 |   |   |   |   |   |   |
|                               |   | Change                           |                                                                 |   | Rate (1) |   |   | Volume (2) |   |
| (In thousands)                     |   |                             |                                                                 |   |   |   |   |   |   |
|                               |   |                             |                                                                 |   |   |   |   |   |   |
| Interest Income:                   |   |                             |                                                                 |   |   |   |   |   |   |
| Loans and leases                   |   | $                                |      (1,688                                 | ) |   | $ |       (786 | ) |   | $ |        (902 | ) |
| Investment securities              |   |                             |         (219                 | ) |   |   |         (32 | ) |   |   |        (187 | ) |
| Federal funds sold                 |   |                             |          (62            | ) |   |   |       (119 | ) |   |   |           57 |   |
| Interest bearing deposits in banks |   |                             |            (1 | ) |   |   |             - |   |   |   | (1 | ) |
| Total interest income              |   | $                                |      (1,970                                 | ) |   | $ |       (937 | ) |   | $ |      (1,033 | ) |
|                               |   |                             |                                                                 |   |   |   |   |   |   |   |   |   |
|                               |   |                             |                                                                 |   |   |   |   |   |   |   |   |   |
| Interest Expense:                  |   |                             |                                                                 |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand            |   | $                                |         (270                 | ) |   | $ |       (212 | ) |   | $ |          (58 | ) |
| Savings                            |   |                             |           60       |   |   |   |          36 |   |   |   |           24 |   |
| Time deposits                      |   |                             |         (836                 | ) |   |   |       (554 | ) |   |   |        (282 | ) |
| Other borrowings                   |   |                             |          (18            | ) |   |   |         (47 | ) |   |   |           29 |   |
| Total interest expense             |   | $                                |      (1,064                                 | ) |   | $ |       (777 | ) |   | $ |        (287 | ) |
| Net interest income                |   | $                                |         (906                 | ) |   | $ |       (160 | ) |   | $ |        (746 | ) |

| (1)   | The rate change in net interest income represents the change in rate multiplied by the current year’s average balance. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The volume change in net interest income represents the change in average balance multiplied by the current year’s rate. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------|

----

|                           |   | Three Months Ended September 30, |   |   |   |   |   |          |   |
|--------------------------------|--------|----------------------------------|--------|--------|--------|--------|--------|---------------|--------|
| (In thousands)                 |   | 2009                             |   |   | 2008   |   |   | Dollar Change |   |   | Percentage Change |   |
| Non-interest expenses:         |   |                             |   |   |   |   |   |          |   |   |   |   |
| Salaries and employee benefits |   | $                                | 1,359  |   |   | $      | 1,398  |          |   | $ | (39) |   |   |   | (3 | )% |
| Occupancy                      |   |                             | 281    |   |   |   | 316    |          |   |   | (35) |   |   |   | (11 | ) |
| Furniture and equipment        |   |                             | 237    |   |   |   | 259    |          |   |   | (22) |   |   |   | (8 | ) |
| Other real estate              |   |                             | 186    |   |   |   | -      |          |   |   | 186 |   |   |   | N/A |   |
| Other expenses                 |   |                             | 1,349  |   |   |   | 1,585  |          |   |   | (236) |   |   |   | (15 | ) |
| Total non-interest expenses    |   | $                                | 3,412  |   |   | $      | 3,558  |          |   | $ | (146) |   |   |   | (4 | )% |

----

|                                                 |   | Nine Months Ended September 30, |   |
|------------------------------------------------------|--------|---------------------------------|--------|
| (Dollars in thousands, except per share data)        |   | 2009                            |   |   | 2008 |   |   | Dollar Change |   |   | Percentage Change |   |
| Interest income:                                     |   |                            |   |   |   |   |   |   |   |   |   |   |
| Interest and fees on loans                           |   | $                               | 14,398 |   |   | $ | 18,998 |   |   | $ | (4,600 | ) |   |   | (24 | )% |
| Interest on Federal funds sold                       |   |                            | 55     |   |   |   | 341 |   |   |   | (286 | ) |   |   | (84 | ) |
| Interest on investment securities                    |   |                            | 1,255  |   |   |   | 2,144 |   |   |   | (889 | ) |   |   | (41 | ) |
| Total interest income                                |   |                            | 15,708 |   |   |   | 21,483 |   |   |   | (5,775 | ) |   |   | (27 | ) |
|                                                 |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense:                                    |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest on deposits                                 |   |                            | 5,126  |   |   |   | 8,245 |   |   |   | (3,119 | ) |   |   | (38 | ) |
| Interest on other borrowings                         |   |                            | 854    |   |   |   | 1,064 |   |   |   | (210 | ) |   |   | (20 | ) |
| Interest on subordinated debentures                  |   |                            | 213    |   |   |   | 359 |   |   |   | (146 | ) |   |   | (41 | ) |
| Total interest expense                               |   |                            | 6,193  |   |   |   | 9,668 |   |   |   | (3,475 | ) |   |   | (36 | ) |
| Net interest income before provision for loan losses |   | $                               | 9,515  |   |   | $ | 11,815 |   |   | $ | (2,300 | ) |   |   | (19 | )% |

----

| PACIFIC STATE BANCORP                              |                                |
|----------------------------------------------------|-------------------------------------|
| Yield Analysis                                     |                                |
|                                               | For Nine Months Ended September 30, |   |
| (Dollars in thousands)                             | 2009                                |   |   | 2008 |   |
|                                               |                                |   |   | Interest |   |   | Average |   |   |   |   |   | Interest |   |   | Average |   |
|                                               | Average                             |   |   | Income or |   |   | Yield or |   |   | Average |   |   | Income or |   |   | Yield or |   |
| Assets:                                            | Balance                             |   |   | Expense |   |   | Cost |   |   | Balance |   |   | Expense |   |   | Cost |   |
| Interest-earning assets:                           |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans(1)(2)                                        |                                | $ | 294,187 |   |   | $ | 14,398 |   |   |   | 6.54 | % |   | $ | 325,004 |   |   | $ | 18,998 |   |   |   | 7.81 | % |
| Investment securities(2)                           |                                |   | 37,859 |   |   |   | 1,255 |   |   |   | 4.43 | % |   |   | 49,956 |   |   |   | 2,100 |   |   |   | 5.62 | % |
| Federal funds sold                                 |                                |   | 25,748 |   |   |   | 55 |   |   |   | 0.29 | % |   |   | 19,930 |   |   |   | 341 |   |   |   | 2.29 | % |
| Interest bearing deposits in banks                 |                                |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,391 |   |   |   | 44 |   |   |   | 4.23 | % |
| Total average earning assets                       |                                | $ | 357,794 |   |   | $ | 15,708 |   |   |   | 5.87 | % |   | $ | 396,281 |   |   | $ | 21,483 |   |   |   | 7.24 | % |
|                                               |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-earning assets:                                |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                            |                                |   | 11,939 |   |   |   |   |   |   |   |   |   |   |   | 13,435 |   |   |   |   |   |   |   |   |   |
| Bank premises and equipment                        |                                |   | 24,271 |   |   |   |   |   |   |   |   |   |   |   | 14,956 |   |   |   |   |   |   |   |   |   |
| Other assets                                       |                                |   | 19,126 |   |   |   |   |   |   |   |   |   |   |   | 16,194 |   |   |   |   |   |   |   |   |   |
| Allowance for loan loss                            |                                |   | (6,186 | ) |   |   |   |   |   |   |   |   |   |   | (3,609 | ) |   |   |   |   |   |   |   |   |
| Total average assets                               |                                | $ | 406,944 |   |   |   |   |   |   |   |   |   |   | $ | 437,257 |   |   |   |   |   |   |   |   |   |
|                                               |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                               |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Shareholders' Equity:              |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                      |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                           |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand                            |                                | $ | 67,416 |   |   | $ | 550 |   |   |   | 1.09 | % |   | $ | 70,421 |   |   | $ | 1,215 |   |   |   | 2.30 | % |
| Savings                                            |                                |   | 15,973 |   |   |   | 128 |   |   |   | 1.07 | % |   |   | 5,623 |   |   |   | 22 |   |   |   | 0.52 | % |
| Time deposits                                      |                                |   | 191,918 |   |   |   | 4,448 |   |   |   | 3.10 | % |   |   | 214,583 |   |   |   | 7,008 |   |   |   | 4.36 | % |
| Other borrowings(3)                                |                                |   | 45,368 |   |   |   | 1,067 |   |   |   | 3.14 | % |   |   | 44,109 |   |   |   | 1,423 |   |   |   | 4.31 | % |
| Total average interest-bearing liabilities         |                                | $ | 320,675 |   |   | $ | 6,193 |   |   |   | 2.58 | % |   | $ | 334,736 |   |   | $ | 9,668 |   |   |   | 3.86 | % |
|                                               |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities:                   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                    |                                |   | 56,546 |   |   |   |   |   |   |   |   |   |   |   | 63,101 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                  |                                |   | 4,281 |   |   |   |   |   |   |   |   |   |   |   | 4,245 |   |   |   |   |   |   |   |   |   |
| Total average liabilities                          |                                |   | 381,502 |   |   |   |   |   |   |   |   |   |   |   | 402,082 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                               |                                |   | 25,442 |   |   |   |   |   |   |   |   |   |   |   | 35,175 |   |   |   |   |   |   |   |   |   |
| Total average liabilities and shareholders' equity |                                | $ | 406,944 |   |   |   |   |   |   |   |   |   |   | $ | 437,257 |   |   |   |   |   |   |   |   |   |
|                                               |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                |                                |   |   |   |   | $ | 9,515 |   |   |   |   |   |   |   |   |   |   | $ | 11,815 |   |   |   |   |   |
|                                               |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin(4)                             |                                |   |   |   |   |   |   |   |   |   | 3.56 | % |   |   |   |   |   |   |   |   |   |   | 3.98 | % |

| (1)   | Net loan (costs) fees included in loan interest income for the nine month periods ended September 30, 2009 and 2008 amounted to $(110,000) and $677,000, respectively. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Not computed on a tax-equivalent basis. |
|-----------------|-----------------------------------------|

| (3)   | For the purpose of this table the interest expense related to the Company’s junior subordinated debentures is included in other borrowings. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Net interest income divided by the average balance of total earning assets. |
|-----------------|-----------------------------------------------------------------------------|

----

|                               |   | Nine Months ended September 30, |                                                      |
|------------------------------------|--------|---------------------------------|-----------------------------------------------------------|
|                               |   | 2009 over 2008                  |                                                      |
|                               |   | Net                             |                                                      |   |   |   |   |   |   |
|                               |   | Change                          |                                                      |   | Rate (1) |   |   | Volume (2) |   |
| (In thousands)                     |   |                            |                                                      |   |   |   |   |   |   |
|                               |   |                            |                                                      |   |   |   |   |   |   |
| Interest Income:                   |   |                            |                                                      |   |   |   |   |   |   |
| Loans and leases                   |   | $                               |      (4,600                      | ) |   | $ |     (2,799 | ) |   | $ |      (1,801 | ) |
| Investment securities              |   |                            |         (845      | ) |   |   |       (336 | ) |   |   |        (509 | ) |
| Federal funds sold                 |   |                            |         (286      | ) |   |   |       (386 | ) |   |   |         100 |   |
| Interest bearing deposits in banks |   |                            |          (44 | ) |   |   |             - |   |   |   | (44 | ) |
| Total interest income              |   | $                               |      (5,775                      | ) |   | $ |     (3,521 | ) |   | $ |      (2,254 | ) |
|                               |   |                            |                                                      |   |   |   |   |   |   |   |   |   |
|                               |   |                            |                                                      |   |   |   |   |   |   |   |   |   |
| Interest Expense:                  |   |                            |                                                      |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand            |   | $                               |         (665      | ) |   | $ |       (613 | ) |   | $ |          (52 |   |
| Savings                            |   |                            |          106 |   |   |   |          66 |   |   |   |           40 |   |
| Time deposits                      |   |                            |      (2,560                      | ) |   |   |     (1,820 | ) |   |   |        (740 | ) |
| Other borrowings                   |   |                            |         (356      | ) |   |   |       (397 | ) |   |   |           41 |   |
| Total interest expense             |   | $                               |      (3,475                      | ) |   | $ |     (2,764 | ) |   | $ |        (711 | ) |
| Net interest income                |   | $                               |      (2,300                      | ) |   | $ |       (757 | ) |   | $ |      (1,543 | ) |

| (1)   | The rate change in net interest income represents the change in rate multiplied by the current year’s average balance. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The volume change in net interest income represents the change in average balance multiplied by the current year’s rate. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------|

----

|                           |   | Nine Months Ended September 30, |   |   |   |   |   |          |   |
|--------------------------------|--------|---------------------------------|--------|--------|--------|--------|--------|---------------|--------|
| (In thousands)                 |   | 2009                            |   |   | 2008   |   |   | Dollar Change |   |   | Percentage Change |   |
| Non-interest expenses:         |   |                            |   |   |   |   |   |          |   |   |   |   |
| Salaries and employee benefits |   | $                               | 3,829  |   |   | $      | 3,948  |          |   | $ | (119 | ) |   |   | (3 | )% |
| Occupancy                      |   |                            | 832    |   |   |   | 881    |          |   |   | (49 | ) |   |   | (6 | ) |
| Furniture and equipment        |   |                            | 708    |   |   |   | 633    |          |   |   | 75 |   |   |   | 12 |   |
| Other real estate              |   |                            | 2,315  |   |   |   | -      |          |   |   | 2,315 |   |   |   | N/A |   |
| Other expenses                 |   |                            | 4,092  |   |   |   | 3,416  |          |   |   | 676 |   |   |   | 20 |   |
| Total non-interest expenses    |   | $                               | 11,776 |   |   | $      | 8,878  |          |   | $ | 2,898 |   |   |   | 33 | % |

----

| (Dollars in thousands)            |   | September 30, 2009 |    |   | December 31, 2008 |   |    | Dollar Change |   |   | Percentage Change |   |
|-----------------------------------|--------|--------------------|---------|--------|-------------------|--------|---------|---------------|--------|--------|-------------------|--------|
| Commercial                        |   | $                  | 72,470  |   |              | $      | 81,284  |          |   | $      | (8,814            | )      |   |   | (10.8 | )% |
| Agricultural                      |   |               | 9,583   |   |              |   | 13,153  |          |   |   | (3,570            | )      |   |   | (27.1 | ) |
| Real estate - commercial mortgage |   |               | 155,570 |   |              |   | 135,013 |          |   |   | 20,557            |   |   |   | 15.2 |   |
| Real estate – construction  |   |               | 20,253  |   |              |   | 64,762  |          |   |   | (44,509           | )      |   |   | (68.7 | ) |
| Installment                       |   |               | 13,735  |   |              |   | 13,609  |          |   |   | 126               |   |   |   | 0.9 |   |
| Gross loans                       |   | $                  | 271,611 |   |              | $      | 307,821 |          |   | $      | (36,210           | )      |   |   | (11.8 | )% |

----

----

|                                        |   | Three Months Ended |   |   | Nine Months Ended |   |
|---------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
| (Dollars in thousands)                      |   | September 30,      |   |   | September 30,     |   |
|                                        |   | 2009               |   |   | 2008              |   |   | 2009 |   |   | 2008 |   |
| Beginning Balance:                          |   | $                  | 5,716  |   |              | $      | 3,427 |   |   | $ | 6,019 |   |   | $ | 3,948 |   |
| Provision for loan losses                   |   |               | 1,000  |   |              |   | 600 |   |   |   | 6,152 |   |   |   | 1,410 |   |
| Charge-offs:                                |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                  |   |               | 1,042  |   |              |   | - |   |   |   | 2,533 |   |   |   | 1,290 |   |
| Real Estate                                 |   |               | -      |   |              |   | - |   |   |   | 3,893 |   |   |   | - |   |
| Other                                       |   |               | 53     |   |              |   | 135 |   |   |   | 210 |   |   |   | 190 |   |
| Total Charge-offs                           |   |               | 1,095  |   |              |   | 135 |   |   |   | 6,636 |   |   |   | 1,480 |   |
| Recoveries:                                 |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                  |   |               | -      |   |              |   | - |   |   |   | - |   |   |   | 13 |   |
| Real Estate                                 |   |               | 4      |   |              |   | - |   |   |   | 88 |   |   |   | - |   |
| Other                                       |   |               | -      |   |              |   | - |   |   |   | 2 |   |   |   | 1 |   |
| Total Recoveries                            |   |               | 4      |   |              |   | - |   |   |   | 90 |   |   |   | 14 |   |
| Net Charge-offs                             |   |               | 1,091  |   |              |   | 135 |   |   |   | 6,546 |   |   |   | 1,466 |   |
| Ending Balance                              |   | $                  | 5,625  |   |              | $      | 3,892 |   |   | $ | 5,625 |   |   | $ | 3,892 |   |
| ALL to total loans                          |   |               | 2.07   | %      |              |   | 1.19 | % |   |   | 2.07 | % |   |   | 1.19 | % |
| Net Charge-offs to average loans-annualized |   |               | 1.56   | %      |              |   | 0.05 | % |   |   | 2.97 | % |   |   | 0.49 | % |

----

----

|                                     |   | Actual |   |   | For Capital Adequacy Purposes |   |   | To Be Well Capitalized Under Prompt Corrective Action Provisions |   |
|------------------------------------------|--------|--------|--------|--------|-------------------------------|--------|--------|------------------------------------------------------------------|--------|
| September 30, 2009                       |   | Amount |   |   | Ratio                         |   |   | Minimum Amount                                                   |   |   | Minimum Ratio |   |   | Minimum Amount |   |   | Minimum Ratio |   |
| Company:                                 |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets)  |   | $      | 28,600 |   |                          |   | 9.2    | %                                                                |   | $ | 24,984 |   |   |   | 8.0 | % |   |   | N/A |   |   |   | N/A |   |
| Tier 1 capital (to risk weighted assets) |   | $      | 21,802 |   |                          |   | 7.0    | %                                                                |   | $ | 12,492 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| Tier 1 capital (to average assets)       |   | $      | 21,802 |   |                          |   | 5.5    | %                                                                |   | $ | 15,817 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| Bank:                                    |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets)  |   | $      | 28,655 |   |                          |   | 9.2    | %                                                                |   | $ | 24,962 |   |   |   | 8.0 | % |   | $ | 31,203 |   |   |   | 10.0 | % |
| Tier 1 capital (to risk-weighted assets) |   | $      | 24,731 |   |                          |   | 7.9    | %                                                                |   | $ | 12,481 |   |   |   | 4.0 | % |   | $ | 18,722 |   |   |   | 6.0 | % |
| Tier 1 capital (to average assets)       |   | $      | 24,731 |   |                          |   | 6.3    | %                                                                |   | $ | 15,793 |   |   |   | 4.0 | % |   | $ | 19,742 |   |   |   | 5.0 | % |
|                                     |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008:                       |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Company:                                 |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets)  |   | $      | 41,903 |   |                          |   | 11.5   | %                                                                |   | $ | 29,143 |   |   |   | 8.0 | % |   |   | N/A |   |   |   | N/A |   |
| Tier 1 capital (to risk weighted assets) |   | $      | 37,336 |   |                          |   | 10.3   | %                                                                |   | $ | 14,562 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| Tier 1 capital (to average assets)       |   | $      | 37,336 |   |                          |   | 8.6    | %                                                                |   | $ | 17,310 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| Bank:                                    |   |   |   |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets)  |   | $      | 41,275 |   |                          |   | 11.3   | %                                                                |   | $ | 29,107 |   |   |   | 8.0 | % |   | $ | 36,384 |   |   |   | 10.0 | % |
| Tier 1 capital (to risk-weighted assets) |   | $      | 36,708 |   |                          |   | 10.1   | %                                                                |   | $ | 14,554 |   |   |   | 4.0 | % |   | $ | 21,830 |   |   |   | 6.0 | % |
| Tier 1 capital (to average assets)       |   | $      | 36,708 |   |                          |   | 8.7    | %                                                                |   | $ | 16,819 |   |   |   | 4.0 | % |   | $ | 21,023 |   |   |   | 5.0 | % |

----

| (Dollars in thousands) |   | September 30, 2009           |   |
|------------------------|--------|------------------------------|--------|
| Change in Rates        |   | Adjusted Net Interest Income |   |   | Percent Change From Base |   |
|                   |   |                         |   |   |   |   |
| Up 300 basis points    |   |  $                      | 14,037 |   |   |   | 5.4 | % |
| Up 200 basis points    |   |                         | 13,804 |   |   |   | 3.7 | % |
| Up 100 basis points    |   |                         | 13,567 |   |   |   | 1.9 | % |
| Base Scenario          |   |                         | 13,316 |   |   |   | - |   |
| Down 100 basis points  |   |                         | 13,304 |   |   |   | (0.1 | )% |
| Down 200 basis points  |   |                         | 13,374 |   |   |   | (0.4 | )% |
| Down 300 basis points  |   | $                            | 13,448 |   |   |   | (1.0 | )% |

----

----

| 31.1 | Certification of Chief Executive Officer (section 302 of the Sarbanes Oxley Act)           |
|------|--------------------------------------------------------------------------------------------|
| 31.2 | Certification of Chief Financial Officer (section 302 of the Sarbanes-Oxley Act)           |
| 32.1 | Certification of Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act |
| 32.2 | Certification of Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act |

|                    | Pacific State Bancorp                 |
|-------------------------|---------------------------------------|
| Date: November 13, 2009 | By: /S/ Rick D. Simas                 |
|                    | Rick D. Simas                         |
|                    | President and Chief Executive Officer |

|                    | Pacific State Bancorp                      |
|-------------------------|--------------------------------------------|
| Date: November 13, 2009 | By:/S/ Justin R. Garner                    |
|                    | Justin R. Garner                           |
|                    | Vice President and Chief Financial Officer |

----